Mixed (overall negative) changes to Consumers Credit Union Rewards Checking
/I wrote recently over at my personal finance blog about my favorite high-interest checking account, the Rewards Checking account offered by Consumers Credit Union. In case any readers are as big of fans of the account as I am, I wanted to discuss some upcoming changes, and my reaction to them.
The bad: rates are dropping
I’m putting this first because there’s no sugar-coating these changes: each interest rate tier is dropping by one percentage point: the lowest tier from 3.09% to 2.09% APY, the next from 4.09% to 3.09%, and the highest from 5.09% to 4.09%. For an account with a maxed out $10,000 balance, this will drop your annual interest income by $100.
If you only meet the lowest tier requirements each month (or have more than $10,000 in cash savings), then you should seriously consider moving your balance over to a competitor like Western Vista, which offers 4% interest on balances up to $15,000 (for now).
If you’re meeting the highest interest tier requirements, then while the reduction in rates is painful, there’s little you can do about it: 4.09% APY is still significantly higher than any other current offers I’m aware of.
The good: deposit and transaction requirements are changing
There are a couple moving pieces here but all three changes are positive:
in April and May, you need only make 6, instead of 12, signature debit transactions in order to meet your debit transaction requirement.
Beginning immediately and going forward, your total signature debit transactions do not need to add up to $100 per month.
Beginning immediately and going forward, you can meet the $500 monthly deposit requirement through mobile check deposit, in addition to direct deposit.
The 3.09% and 4.09% interest rate tiers will still require $500 and $1,000 in Consumers CU credit card spend, respectively.
Conclusion
On balance, these changes are negative: the reason to use a high-interest checking account is to earn as much interest as possible, so any reduction in the interest you earn is a negative change!
But they’re not entirely negative: I meet my debit transaction requirement using the Plastiq bill payment service, which previously meant making eleven $1 payments and one $89 payment to reach the $100 monthly transaction requirement. Starting in June I’ll be able to make twelve $1 payments, which will make both my Fee-Free Dollars and my student loan balances last longer.
I use my Consumers Rewards Checking account as my primary bank account since it offers unlimited ATM fee reimbursement in addition to the high interest rate, and I’ll probably continue to do so for now, although I’ll continue to re-evaluate as the situation evolves, and will of course keep my beloved readers updated.
