Ask Money Under 30

Is this 4.01 percent APY checking account a good deal?

M. asks: My credit union is offering a 4.01 percent APY checking account. Back in the good old days my HSBC ‘high yield’ savings account had an interest rate a little higher than that, but now it’s just over one percent. Should I move my money to this checking account?

The account has the following stipulations to earn that rate: (1) You must use your check card 12 times each monthly cycle. (2) You must get either direct deposit or use their online bill payment to pay at least one bill. (3) You must enroll in their online banking program.

If the three conditions are not met you will earn something like 0.15% APY. I was thinking is it worth it for me to move my savings over there, sign up for bill payment and pay something stupid like a cell phone bill, and just used the check card to buy gum 12 times a month and get that good interest rate for my savings account. What do you think?

This looks like a good deal to me. You gotta love small banks and credit unions for stuff like this. This is where they really outshine the big guys.

The only catch I see (in the fine print) is that this rate is only good on balances up to $25k. So if you are looking to park more than that the interest rate drops to 0.75%. Otherwise, if you can meet their requirements (the hardest one being using the debit card 12 times a month), I’d say this is the best place to park your cash I’ve seen in a while.

Good luck!

David @MoneyUnder30

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