Consumer Banking

Consumer Banking

CONSUMER BANKING What's the catch? Community banks, credit unions offering higher deposit yields By Gail Liberman and Alan Lavine Last update: 2:05 p.m. EST Feb. 16, 2009 *PALM BEACH GARDENS, Fla. (MarketWatch*) -- Smaller banks and credit unions may be offering the highest deposit yields lately, but watch for the strings attached. You can search high yields in your area by typing in your ZIP code at www.checkingfinder.com or at www.bankingmyway.com. Examples: The 6.01% yield offered on checking by First Robinson Savings Bank, in Illinois, which also promises to reimburse ATM fees. Or, the 5% checking yield, offered by FirstAtlantic Bank, Jacksonville, Fla., available exclusively in its local market. That yield, however, is slated to drop on Feb. 21 to 4% Compare those with nationwide yields averaging below 2% on bank savings accounts and below 0.5% on money market mutual funds. The catch: To qualify for high checking yields and reimbursement of ATM fees, there are several requirements you typically need to meet. At First Robinson, the account is limited to Crawford County Illinois and Knox County, Indiana, and contiguous counties. To qualify for its high yield, you must: Make a minimum of 10 debit card purchases, excluding ATM withdrawals, monthly. Deposit less than $25,000. Balances over that threshold earn a piddling 1.01 percent. Make one automatic payment or bill pay transfer monthly. Receive your account statement electronically. Fail to meet all those terms, as some 30% of accountholders do, and you wind up with a free checking account yielding 1.01%, says First Robinson Savings Bank President Rick L. Catt. Meanwhile, customers who do meet requirements are helping to offset the bank's interest charges via lower overhead, lucrative debit card income and additional account relationships. Among the nearly 585 banks and credit unions that offer what's called a "RewardChecking" program, 15% to 25% of accountholders on...

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