You can Avoid Checking Fees and Even Make Money on Your Checking

While the big banks have dropped the idea of charging monthly fees for using your own debit card, there are still some nasty charges out there for checking account customers.
To compete with the big boys, many smaller banks around the country are not only skipping the fees, they’re offering substantial dividends. Are there any catches in order to access this largess? You bet. But if the requirements to access these returns are within – or close to – your normal banking behavior, it’s no big whoop.
Let me give you an example. In California, where I live, Community West Bank is offering a 2.53 percent yield on up to $15,000. The requirements? Each month you:
• Must complete 10 debit card transactions;
• Have a direct deposit or automatic debit transaction;
• Receive an electronic statement
• Access online banking.

At Bank of the Sierra, the qualifications to earn 2.09 percent on up to 25 grand are:
• Minimum 12 Sierra Check Card purchases per qualification period
• Minimum one direct deposit or automatic payment from your account per qualification period;
• Make at least one payment using Sierra BillPay per qualification period;
• Enroll and receive electronic statements.

Financial institutions in almost every state have similar deals, some with rates above four and five percent.
In a recent survey by, just 45 percent of the banks in the 25 largest markets are offering free checking. In 2009 76 percent of these banks offered free checking.
To qualify for the high interest rates, you typically must be a resident of the state where the bank operates. And they all have restrictions similar to the ones above.
You can find banks in your state at the web site, run by Ken Tumin.
Credit unions sometimes offer competitively high rates as well, and, like banks, they have account insurance. If you tend to keep only relatively small amounts in your checking account, as I do, then I favor credit unions. And since I don’t use a debit card because it’s like carrying cash in your wallet if anyone obtains your PIN, I favor credit unions. But if you do a lot of debit card purchasing, the high-rate checking accounts may be just right for you.
The Consumer Gal and I make most purchases with a credit card and earn two percent back on those transactions. We pay off the entire balance each month. That’s the only way credit cards work to your advantage.
If you are looking for a credit union in your area, check out the web site above or
Happy holidays. And remember:
Whoever holds the money has the power.