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CU "special" checking account w/3% APY

CreditMarathoner
New Contributor

CU "special" checking account w/3% APY

My CU has offered a special interest (dividend) earning checking account for the past few years.  Previously, it earned 2% APY, now it just went up to 3%.  But, of course, there's conditions, which is why I haven't jumped as of yet.  But at 3%, it's getting tempting.

 

It earns up to 3% APY on balances up to $10,000.  But, in order to earn this rate, I would have to:

 

1.  Direct deposit at least $1k/month.  No problem there.

2.  Log into online banking at least once per month.  No problem there.

3.  Make at least $500 per month in point-of-sale or online purchases using my debit card.

 

It's no. 3 that gives me hesitation.  Security concerns mainly.  Keeping $10K in a checking account (to maximize earnings) and then having to use the debit card in a bunch of places to earn the higher APY, sounds like a great way to get cleaned out if the debit card info gets hacked/stolen/compromised.

 

I use credit cards almost exclusively for all non-cash purchases, since if those get compromised, I'm only out that card/credit line and not my checking account I pay all my bills out of.  Also, I earn cash back on my cards, which I'd lose some if I had to shift a bunch of spend to the debit card.  I'd have to weigh if $300/year (probably closer to $200 after taxes) is worth losing a chunk of CC rewards and security over.

 

Also, my spend isn't always super consistent and there is no one thing (even groceries) that consistently exceeds $500/month.  If I had one thing I spent that much on every month, it would be easy.  And if I miss the target, the account only earns 0.05% that month.

 

If online bill pay counted toward the $500 debit card spend, it would be a no brainer.  But no, it has to be purchases/swipes on the debit card.  I don't even know if a recurring subscription/payment would count.

 

I miss the old days when you could just put money in a savings account and earn interest on it without having to jump through hoops.

 

Message 1 of 18
17 REPLIES 17
SouthJamaica
Mega Contributor

Re: CU "special" checking account w/3% APY


@CreditMarathoner wrote:

My CU has offered a special interest (dividend) earning checking account for the past few years.  Previously, it earned 2% APY, now it just went up to 3%.  But, of course, there's conditions, which is why I haven't jumped as of yet.  But at 3%, it's getting tempting.

 

It earns up to 3% APY on balances up to $10,000.  But, in order to earn this rate, I would have to:

 

1.  Direct deposit at least $1k/month.  No problem there.

2.  Log into online banking at least once per month.  No problem there.

3.  Make at least $500 per month in point-of-sale or online purchases using my debit card.

 

It's no. 3 that gives me hesitation.  Security concerns mainly.  Keeping $10K in a checking account (to maximize earnings) and then having to use the debit card in a bunch of places to earn the higher APY, sounds like a great way to get cleaned out if the debit card info gets hacked/stolen/compromised.

 

I use credit cards almost exclusively for all non-cash purchases, since if those get compromised, I'm only out that card/credit line and not my checking account I pay all my bills out of.  Also, I earn cash back on my cards, which I'd lose some if I had to shift a bunch of spend to the debit card.  I'd have to weigh if $300/year (probably closer to $200 after taxes) is worth losing a chunk of CC rewards and security over.

 

Also, my spend isn't always super consistent and there is no one thing (even groceries) that consistently exceeds $500/month.  If I had one thing I spent that much on every month, it would be easy.  And if I miss the target, the account only earns 0.05% that month.

 

If online bill pay counted toward the $500 debit card spend, it would be a no brainer.  But no, it has to be purchases/swipes on the debit card.  I don't even know if a recurring subscription/payment would count.

 

I miss the old days when you could just put money in a savings account and earn interest on it without having to jump through hoops.

 


I agree with you 100%. Which is why I consider that type of account worthless.

 

Using a debit card for purchases is really dangerous, unless the accounts to which the card is linked have an insignificant balance, in which case the 3% interest is meaningless.

 

You could get 3.5% interest in a completely safe savings account at Affinity FCU (up to $5k).


Total revolving limits 699000 (597000 reporting) FICO 8: EQ 732 TU 721 EX 698

Message 2 of 18
creditfan
Established Contributor

Re: CU "special" checking account w/3% APY

alternative https://orionfcu.com/checking/#Premium_Checking_Alert

debit transactions is optional

 

below is my primary banking, meeting their requirements is a piece of cake

https://www.bcu.org/Banking/Checking/Powerplus-Checking

Message 3 of 18
SweetCreditObsession
Valued Contributor

Re: CU "special" checking account w/3% APY

I agree with you wholeheartedly. 

 

I don't even carry debit cards with me these days and do not pay anything from my checking account other than credit card bills if I can help it.


(+74) | (+94) | (+143) | TU Fico 9: 704 | Exp Fico 9: 734

Goal: Min. 740 w/all CRAs - Met
Next Goal: Amex BCE
Subsequent Goal(s): Min. 780 w/all CRAs
Gardening Until: ??/??/202?| Last App: 7/21/2021
Message 4 of 18
ThomasJNewton
New Contributor

Re: CU "special" checking account w/3% APY


@SouthJamaica wrote:

Using a debit card for purchases is really dangerous, unless the accounts to which the card is linked have an insignificant balance, in which case the 3% interest is meaningless.

There are debit card transactions that are pretty secure and not likely to be a problem, especially if the counter party has deep pockets and can be sued if there is a problem.

For example: Filling one’s Apple Cash Card with $500 a month and then spending from there. Paying part of one’s rent. In other words, things where your card does not leave your hands.

Not sure it is worth it any way, but there are options. :-)

You could get 3.5% interest in a completely safe savings account at Affinity FCU (up to $5k).


If one has the money to put $10,000 in one account, then one could put $5,000 in the Affinity and at least the remaining $5,000 (or the full $10,000) in the other one and get more. :-)

Message 5 of 18
SouthJamaica
Mega Contributor

Re: CU "special" checking account w/3% APY


@creditfan wrote:

alternative https://orionfcu.com/checking/#Premium_Checking_Alert

debit transactions is optional

 

below is my primary banking, meeting their requirements is a piece of cake

https://www.bcu.org/Banking/Checking/Powerplus-Checking


Yes both of those seem much better.

 

But both credit unions are geofenced.  And the requirements for the BCU account wouldn't be a piece of cake for me.


Total revolving limits 699000 (597000 reporting) FICO 8: EQ 732 TU 721 EX 698

Message 6 of 18
SouthJamaica
Mega Contributor

Re: CU "special" checking account w/3% APY


@ThomasJNewton wrote:

@SouthJamaica wrote:

Using a debit card for purchases is really dangerous, unless the accounts to which the card is linked have an insignificant balance, in which case the 3% interest is meaningless.

There are debit card transactions that are pretty secure and not likely to be a problem, especially if the counter party has deep pockets and can be sued if there is a problem.



I disagree


Total revolving limits 699000 (597000 reporting) FICO 8: EQ 732 TU 721 EX 698

Message 7 of 18
creditfan
Established Contributor

Re: CU "special" checking account w/3% APY


@SouthJamaica wrote:

@creditfan wrote:

alternative https://orionfcu.com/checking/#Premium_Checking_Alert

debit transactions is optional

 

below is my primary banking, meeting their requirements is a piece of cake

https://www.bcu.org/Banking/Checking/Powerplus-Checking


Yes both of those seem much better.

 

But both credit unions are geofenced.  And the requirements for the BCU account wouldn't be a piece of cake for me.


Sorry if my statement was confusing you. I was referring to checking acount high rate earning. However, to gain membership at BCU is not that difficult at all. If you can get a temp job at either Target or CVS, or  even any family member who is working at these locations can still get you in.

 

small note: BCU has one of the feature really is surprisingly me when I do mobile deposit, even big 4's don't have it ( e.g: nfcu, state employees, penfed and becu). When do deposit, it's automatic populate the amount without me actual manually put it in. I know it's not a big of the deal, but it's good to have, convenience and avoid human error. Recently, it did a full upgrade to their website and app. I am still trying to get used to it.

 

I remembered when I signed up, the following day one of their member csr personally called and welcome me and asked if there anything I need help with. Also fairwinds CU did the same with me last week. It's small thing but make a big different. Hopefully other CUs will be following suite including banks.

 

Orion FCU is nationwide according post from DoC https://www.doctorofcredit.com/tn-ms-ar-orion-federal-credit-union-premium-checking-4-apy-on-balance...

Message 8 of 18
CreditMarathoner
New Contributor

Re: CU "special" checking account w/3% APY


@ThomasJNewton wrote:

@SouthJamaica wrote:

Using a debit card for purchases is really dangerous, unless the accounts to which the card is linked have an insignificant balance, in which case the 3% interest is meaningless.

There are debit card transactions that are pretty secure and not likely to be a problem, especially if the counter party has deep pockets and can be sued if there is a problem.

For example: Filling one’s Apple Cash Card with $500 a month and then spending from there. Paying part of one’s rent. In other words, things where your card does not leave your hands.


Using a debit card online isn't safe either.  It's even less safe than physical card transactions since you have to provide the actual numbers, not an encrypted chip read.  Sites get hacked all the time.  The same is true for credit cards, but the latter offers zero liability protection and it doesn't put my money at risk, only the bank's.  Even then, I keep low limits on the CCs I use online to minimize the damage a thief can get away with.  A debit card tied to an account with $10K kept in it is like carrying $10K cash in your pocket and walking through the seedy part of town.

 

Having to apply for membership at multiple CUs just to get a decent return on savings is a hassle too.  I hope with rising rates my CU starts offering better options for savings.

Message 9 of 18
ThomasJNewton
New Contributor

Re: CU "special" checking account w/3% APY


@SouthJamaica wrote:

@ThomasJNewton wrote:

There are debit card transactions that are pretty secure and not likely to be a problem, especially if the counter party has deep pockets and can be sued if there is a problem.



I disagree


Just to be clear, you are saying that you think that Apple Pay is not secure and that you could not trust loading $500 a month on to your Apple Cash card?

Message 10 of 18
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