Fickle Alliances

As of this weekend an alliance is hanging by a thread - that would be my relationship with my bank. I had been banking for quite some time with a major bank. Lets call it Bank of Turmeric-a. I had no major problems with this bank except for the dismal interest rate on their money market savings account in which I had parked my very thrifty savings. But something else had been bugging me for a while now.

You see when I signed up with them, they had a promotion going where they'd give both the person referring you and the new customer $25 for signing up with them. That would have been $50 for us considering that I was referred by my husband. And that was quite a bit of money for us when we signed up more than 2 years ago.

What you say? Why am I hung up over $50 from over 2 years ago? Well it's not the dollar amount. I'm stupefied by their usually decent customer service. Right after I signed up, I kept checking in with them (multiple times as I recall) to find out when they'd make those deposits. But each time I was told that it would take some time for this or that reason, and that it would post eventually. Well it never got posted.

Last year with the economy as it was, I remembered the $50 they owed me and called the BofTurmeric-a customer service. After I explained the situation, the guy at the end of the line says that I need to go to one of their banks and have the staff from their premises call them to locate some information. (Why he couldn't call them himself was beyond me!) So I skip lunch and go to my local banking center. The lady I met with carefully goes over my records and say that yes, there was no indication of any such deposit, but that their system had screwed up and deleted some records, so, get this: I need to contact the person who signed me up!

Needless to say, I cannot even remember the gender of the person who signed me up, let alone their name! Were they giving me the runaround or what? I decided enough was enough. I looked around for savings accounts at other banks, but the rates were all kind of stagnant and hopeless.

This was the time I had just started devouring PF blogs and coincidentally I came across a post on Consumerism Commentary about Alternatives to High-Yield Savings Accounts and read about the Move Your Money movement. It was a very interesting concept that advocated moving your money out of big national banks and into community banks. I have to confess that it did not motivate me at that time, but when I read the comments, I noticed a comment about a "reward checking account that paid 4% interest".

Since I had never heard of a "reward checking" concept before, I thought it was a typo and asked for a clarification from that commenter. It was then that Andy Hough of Tight Fisted Miser directed me to a couple of links where I was ultimately able to find a local Bank (right down the street from where I live I might add!) that offered 4.01% APY up to $25000. So after some quick investigation, that's where my savings live these days.

Besides one of the highest APYs today, the benefits of my new reward checking account are pretty enticing:

1. no minimum daily balance required                                                                                                            
   
2. no monthly maintenance charges                                                                                                                   
   
3. refunded ATM fees nationwide                                                                                                                       
   
4. one point for every $2 you spend, redeemable for gifts, gift-cards or travel                                                       
   

To maintain a 4.01% APY interest rate, you are required to:

1. perform at least 12 debit card transactions
2. receive monthly online statements
3. access online banking
4. singing up for a direct deposit or a recurring ACH (automatic withdrawal by a vendor)

Out of these, my only doubt was if I could maintain 12 debit card transactions a month. But hubby has that covered since he buys his lunch every day (yes, not very thrifty of him sadly)

I am very excited to see how much interest we can get by the end of this year. In case your deposit is significantly large, they pay you 0.25% APY for any amount over the $25000 limit. It almost seems too good to be true, doesn't it? So I inquired how they managed to pay that high of an interest rate and was told that it was a combination of not having to spend on paper statements, and revenue from MasterCard due to their high number of debit card transaction requirements.

I don't know if I buy that response entirely. But they assured me that they were FDIC insured up to $250000 until 2013 (and up to $100000 thereafter) and any amount over that is insured by DIF - a private industry-sponsored insurance fund for Massachusetts-chartered savings banks. So that quelled any traces of doubt I had.

Overall I'm pretty pleased with my new bank which will function as a joint expense account for us. I'll probably still keep my checking account at BoTurmeric-a to avoid having to waste my time with ATM refunds. And in the end, I'm glad they didn't deposit the $50 they promised because if it wasn't for their lack of action, I would still be blissfully ignorant about reward checking accounts!

If you'd like to find a local bank with a high interest checking or savings account, check out the following links helpfully provided by Andy Hough of Tight Fisted Miser. Thanks Andy!

   www.highyieldcheckingdeals.com

   www.checkingfinder.com

Happy banking!