Consumers Credit Union Free Rewards Checking Review: Up to 4.09% APY on up to $10,000

Updated May 2020. Consumers Credit Union (CCU) has a Free Rewards Checking account that offers a high interest rate between 2.09% and 4.09% APY if you meet certain requirements. As with similar accounts elsewhere, the catch is if you don’t jump through all of the hoops, you effectively won’t earn any interest at all that month (0.01% APY).

Membership
To open a Rewards Checking account, you must be a member. However, CCU has a very open membership policy; basically anyone nationwide can join if they do the following:

• Join the Consumers Cooperative Association with a one-time $5 fee.
• Open and maintain a share savings account with a minimum $5 deposit.

Earn 2.09% APY on up to $10,000 + ATM Fee Refunds if you:

• Make at least 12 debit card purchases each month. (Reduced to 6 during April and May 2020.) Don’t use your personal identification number [PIN]. In stores, select to run it as a “credit” purchase.
• Direct deposits, mobile check deposits, or ACH credits totaling $500 or more monthly.
• Receive e-Documents (enroll and accept the disclosure)

Earn 3.09% APY on up to $10,000 + ATM Fee Refunds if you:

• Complete all of the tier requirements above, plus
• Make $500 or more in CCU VISA Credit Card purchase transactions (no minimum number of transactions)

Earn 4.09% APY on up to $10,000 + ATM Fee Refunds if you:

• Complete all of the tier requirements above, plus
• Make $1,000 or more in CCU VISA Credit Card purchase transactions (no minimum number of transactions)

A nice feature is that their online interface has a progress tracker, updated daily, telling you number of debit card transaction and the total spend on your CCU credit card. Tracking is also available via their smartphone app (Apple/Android).

All tiers will also receive:

• Unlimited reimbursement for any and all ATM fees + 30,000 surcharge-free ATMs nationwide.
• No minimum balance. No monthly service fees.
• Free online Bill Pay.
• Mobile check deposit via smartphone app.

Qualifying Credit Cards
If you don’t have a CCU credit card, the best you can do is the 2.09% APY tier. Here is a list of their credit cards. It looks like the best one is their Visa Signature Rewards card, which offers a 3% cash rebate on up to $6,000 in “Grocery/Convenience Store” purchases annually, 2% cash rebate for “Gas” purchases, and 1% cash rebate for all other purchases. No annual fee.

Note that I would try to take advantage of the Grocery 3% and Gas 2% cash back categories in order to not miss out on the potential cash back from a 2% cash back card.

Cost/Benefit Analysis
Keep in mind that most checking accounts pay very little, leaving you to try maximizing your savings balance while avoid overdrafts. So you might not max out that savings account rate completely.

• $10,000 times 2.09% APY would be $209 per year, or $17.40 per month in interest.
• $10,000 times 3.09% APY would be $309 per year, or $25.75 per month in interest.
• $10,000 times 4.09% APY would be $409 per year, or $34.08 per month in interest.

An extra $100 to $300 a year in interest sounds pretty good. Note that to qualify for the top two tiers, you’d also have to apply for a new credit card, which would entail a credit check. There is an opportunity cost here, as there are other new credit cards that offer close to $500 in sign-up incentives within a few months. You can apply for multiple new credit cards, but once you reach a certain number it will hurt your chances for getting the next one.

These types of checking accounts are not for everyone. Not only do you have to jump through hoops each month to get a reward (higher interest than no-hassle account), if you don’t you’ll actually get punished in a way (lower interest than a no-hassle account). Try to create a reliable system where you satisfy the requirements early on in the month, for example putting some automatic insurance, phone, or utility bills on the credit card. My favorite feature is their qualification tracking; I wish all rewards checking accounts had this feature. CCU has been running this rewards checking account now for well over 10 years (with several tweaks), so hopefully they have crunched the numbers and set the rates at sustainable levels.

Bottom line. Consumers Credit Union (CCU) has a Free Rewards Checking account that offers a high interest rate if you meet certain requirements. This is a unique account, but CCU has been running it for nearly a decade now. It would work well if you want to one single high-interest checking account and your balance rarely exceeds $10,000.