Maybe There is Yield Out There!

by Evan

When I first started to actually looking at my personal finances, even prior to the creation of this blog I was heavy into yield chasing and bank bonuses.  I thought I was doing myself a favor by squeezing out that extra half a percentage point, little did I know that the CC debt I was carrying destroyed any such gain and not mention when you actually do the math on yield chasing it just doesn’t make sense.  I didn’t have enough cash in the bank to make a dent, but no one would have been able to convince otherwise.

As saving rates started to drop banks came up with this brilliant idea to connect your rate with a money maker for the bank – swipe fees!  It was a win for everyone except small businesses.  The saver gets a higher rate, and banks get an income stream (swipe fees) to offset that rate they have to pay.  In most cases I bet the small business wasn’t even effected all that much since the person who would jump through these hoops probably didn’t use cash anyway.

Regardless, it was around that time I just stopped paying attention to that world. However, I couldn’t ignore a recent article from CNBC on the topic titled, “4% Interest, Without Fees: Too Good to be Checking.”

The article highlights a new type of checking account that works with local banks and credit unions,

Imagine if you could earn 3 or 4 percent interest on a “free” checking account – with no minimum balance requirement, no monthly fees and free transactions at any ATM in the country?

It sounds too good to be true, but it’s not.

The Kasasa checking account (pronounced kah-sah-suh) offered by dozens of community banks and credit unions across the country is for real. Right now, 29 of these institutions are paying 3 to 4 percent APY to those who qualify.

For 4%, I tried out my zip code.  Only local credit union came back and it was no where near 4%

Kasasa Search

Don’t get me wrong 1.51% is a lot more than what I am getting now, just not enough to make me start moving money and dealing with the hoops I have to jump through to get that rate.

Ever use this tool or any other type of bonus checking?

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slug February 12, 2013 - 12:00 pm

There’s one 73 miles from me where I could get 3%. That’s $37.50/mth on $15k. What’s to stop me from searching all the zip codes until I find a 4% one and just going for that though? I don’t get the geographic search when all I care about is online banking.

I HATE the idea of a minimum # of debit card transactions. Makes me want to go to the grocery store and buy 10 pieces of gum through self-checkout in 10 separate transactions. Or better yet can I get a Square card reader or PayPal reader for my phone and charge myself 10 debit transactions. Just not sure if those swipes can count as debits?

Evan March 14, 2013 - 10:12 pm

If you are moving enough money 10 gas stops is worth it – but anything less than 50K or 100K just is silly

Grayson February 12, 2013 - 7:42 pm

I have checked out this tool, but it didn’t come back with anything to jump to. Ally roofers the same rate for a savings account and my interest checking from Alliant is small, but has no minimum requirements.

Integrator February 12, 2013 - 11:06 pm

Wow. I assume free atm’s are only the Kasasa atm’s otherwise this really is too good to be true! 4% is pretty exceptional for an on demand checking account.

slug February 13, 2013 - 2:16 pm

I did some more digging. There’s a list of great online high yield accounts here that go beyond the Kasasa list.|26|10000|false,false,true,true,true,true,true|US|Apy%20desc

Also, another technique to get your debit transactions is to buy a few pennies of gas several times when you fill up. As long as there isn’t a line, this might be the easiest approach. A few minutes/mth. of your time for 4% or more. Not bad.

The key complaint with these accounts is the terms can change on you quickly, then you need to chase up the next good opportunity. I would like to find one with some stability and no direct deposit.

Brian February 14, 2013 - 6:59 pm

Ah, see now this list is something useful. I’m definitely not getting anything of value out of the old B of A checking account. But, like you said, these guys can change the rates pretty quickly. Makes me cautious…

Evan March 14, 2013 - 10:14 pm

There was a whole set of bloggers like in 06, 07 and 08ish that thrived on figuring out how to maximize these types of deals. Never made any sense to me b/c the savings market is efficient everything will eventually even out and then you need to search for the next one (with transaction time delays)


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