Yields a Plenty

By Dian Vujovich

Yesterday, when I got an email advertising a 6 percent yield on a bank checking account, my first thought was, “Yah, right.” Ever since Bernie Madoff allegedly “made off” with billions, who isn’t ultra-skeptical when higher-than-the-norm returns are offered on your money these days. Particularly when 1-year CDs are yielding around 2.5 percent.

But after doing some research, I found out that the 6 percent return was real provided, and this is where “read carefully” comes in — you understand Reward Checking, are into electronic banking at a community bank and/or are a member of a credit union.

Reward Checking accounts pay considerably higher rates to their banking customers because they are cheaper to operate for customers willing to agree to certain terms. Such as: make monthly direct deposits into their accounts, pay their bills online, agree to accept electronic statements instead of paper ones, maintain a specified balance, and use their bank credit or debt cards a number of times during each month. The amount of card activity and bank account balances vary by the community bank or credit union offering them.

Like credit unions, community banks aren’t located on every corner — you’ve got to seek them out. But, they have long been a great spot to do business, are regulated and insure monies in your accounts. For a good piece about credit unions, check out Bankrate.com story “Deposit Insurance Increases at Credit Unions.”

Back to that email. It came from a p.r. company representing Banc Vue, a Texas bank that makes Reward Checking programs available to financial institutions like community banks and credit unions. As of January 12, 2009, a few of the firms offering a 6.01 percent yield included Florida Central Credit Union (FL), First Robinson Bank (IL) and Union State Bank/Bank of Atchison (KS).

Some offering a 5.01 percent return were available at United Heritage Credit Union (TX), Legence Bank (IL) and at Community Bank of Raymore (MO).

As always, we’ve all got to do our homework before handing our hard-earned cash over to any institution. And realize that while the yields may be tempting a community bank or credit union might not be a fit for any or all of our financial needs. But they sure could be worth investigating.

Two online sources for yield information, in addition to that found at Bankrate.com mentioned earlier, are Money-rates.com and Checkingfinder.com.