4% APY Checking Accounts

[Green456]

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@CBartowski wrote:

So does anyone else have heartburn about keeping large amounts of money in checking accounts that are linked to a debit card you have to use in order to get the high interest rate? 

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Yeah it’s not worth the extra 1.5% to me.   But that’s just me.

[601flyguy]

I only use my debit cards one place... Amazon reloads lol

[Revelate]

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@Green456 wrote:

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@CBartowski wrote:

So does anyone else have heartburn about keeping large amounts of money in checking accounts that are linked to a debit card you have to use in order to get the high interest rate? 

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Yeah it’s not worth the extra 1.5% to me.   But that’s just me.

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Hrm I don't know, it's only like 3x the interest rate after inflation is factored in, and better than Treasuries or IG bonds.

That adds up over time, though the amount of work required to get it meh.  Those 4% options after factoring in inflation still don't beat simply paying off my autoloan at 3.85% (though arguably my auto loan gets cheaper over time cause of that same inflation which is why I'm really not in a rush to pay off my mortgage) but if you're keeping a bunch of liquid cash especially like 40k in that one case I think there's something to be said for jumping through the awkward hoops.

Me though if I have more than call it $200 in my checking account other than when the mortgage autopayment is coming up, I feel like I'm doing something wrong honestly: my paychecks clear early Friday morning Pacific time, soon as I wake up I start shuffling money either to pay off credit cards, put in the market, or kick to my auto loan which I've started doing more of lately as a defensive hedge towards lowering my expenses if this all comes crashing down in the future.

Also to be clear I can finance any financial emergency to the tune of 27k and change at 5.25% currently within a couple of days if not immediately by writing a check off the HELOC directly, and so I don't follow the conventional wisdom of a cash reserve. 

YMMV.

[CBartowski]

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@Revelate wrote:

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@Green456 wrote:

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@CBartowski wrote:

So does anyone else have heartburn about keeping large amounts of money in checking accounts that are linked to a debit card you have to use in order to get the high interest rate? 

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Yeah it’s not worth the extra 1.5% to me.   But that’s just me.

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Hrm I don't know, it's only like 3x the interest rate after inflation is factored in, and better than Treasuries or IG bonds.

That adds up over time, though the amount of work required to get it meh.  Those 4% options after factoring in inflation still don't beat simply paying off my autoloan at 3.85% (though arguably my auto loan gets cheaper over time cause of that same inflation which is why I'm really not in a rush to pay off my mortgage) but if you're keeping a bunch of liquid cash especially like 40k in that one case I think there's something to be said for jumping through the awkward hoops.

Me though if I have more than call it $200 in my checking account other than when the mortgage autopayment is coming up, I feel like I'm doing something wrong honestly: my paychecks clear early Friday morning Pacific time, soon as I wake up I start shuffling money either to pay off credit cards, put in the market, or kick to my auto loan which I've started doing more of lately as a defensive hedge towards lowering my expenses if this all comes crashing down in the future.

Also to be clear I can finance any financial emergency to the tune of 27k and change at 5.25% currently within a couple of days if not immediately by writing a check off the HELOC directly, and so I don't follow the conventional wisdom of a cash reserve. 

YMMV.

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I'm in a simlar boat, makes sense to me.

[Anonymous]

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@CBartowski wrote:

Was curious if anyone has heard of this 4% APY checking account up to $50k. Only 2 requirements are 1 DD/ACH/bill pay per month and 15 debit card purchases per month from Tab Bank - Kasasa Cash Checking.

I guess TAB stands for Transportation Alliance Bank, Inc.

They have verbiage that sounds like they're looking for folks automating the 15 xactions as well which I found interesting.

"Commensurate with the spending activities identified above, we expect the account’s debit card to be used frequently throughout each month and for transaction amounts to reflect a wide dollar range. Small debit card transactions conducted on the same day at a single merchant and/or multiple transactions made during a condensed time period particularly near the end of a Monthly Qualification Cycle are not considered normal, day-to-day spending behavior. These types of transactions appear to be conducted with the sole purpose of qualifying for the account’s rewards and thus will be deemed inappropriate transactions and will not count toward earning the account’s rewards. "

According to DoC Orion FCU also has a 4% APY with less required xactions but only open to a few areas.

Anyone have any experiences with either bank?

DoC has an article and You Tuber AskSebby did a short piece on Tab Bank. 

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Blue highlighted sentense basically means they can give you 4% APY whenever they want to, and they can give you 0% APY whenever they want to as well, regardless of what you actually do with their debit card.

While I can understand where they might be coming from, I feel that they are fundamentally mistaken about:

1. the current market landscape (are we in a market where people can't find any banking service and are desprately trying to get into their door?)

2. the reason people would bother to even consider them at all (serious hoop jumping for 1.5% or -2.5% with no gaurantee?)

To put the "1.5% or -2.5% with no gaurantee" idea more bluntly, they will have to approach what other stand up banks can sustainably (i.e. not a teaser rate which drops to 0.01% once you sign up) offer, namely, same ballpark as 2.5% offered by red neck bank. 

What does this mean? 62.5% of the people would get 4%, the rest will get 0%, that is, if they are a principled bank and willing to go that far (doesn't look like so from their terms of 'we can do whatever we want to you').