Good deal but worth the hassle?

**Preston** · 12-17-2009, 01:04 PM

I recently opened a checking account with a local credit union -- I already have a regular checking account through a commercial bank. The CU checking account will pay 3.5% APY but I have to make a few obligations each month to get this amount.

First, I have to have direct deposit -- already got that taken care of. My paycheck gets split between old and new account.

Second, I have to use online banking and go paperless. Not a problem.

Third (and the kicker), I must do at least 12 'credit' transactions a month on the debit card. ATM withdrawals do not count.

I figure I can keep $1000 EF in this account and just use what's above that for my everyday/monthly expenses. I have netflix, gamefly, timeshare maintenance fee, cell phone, internet bill I already pay right now by CC (pay in full every month) so that would be five right now. I figure between gas and groceries that ought to cover the rest of 'em. Thing is, this would negate the envelope system.

Good idea? If I don't make the obligations, it pays .25%, which is really pathetic.

**ladytoysdream** · 12-17-2009, 01:14 PM

That sounds like a lot to keep track of.

Our checking account is free through the bank where we have our mortgage payment. No extra money to worry about getting interest on. What goes in, basically goes back out.

**TigerGirl1226** · 12-17-2009, 01:29 PM

Sounds like a good deal to me. If you already have 5, you only need roughly 2 more a week. Just gas and groceries would cover it. I'm sure you use your card more often than you think you do, I know I do.

**Palooka** · 12-17-2009, 01:44 PM

Sounds good to me.

What Tigergirl said.

**mauimagic** · 12-17-2009, 02:13 PM

It sounds so tempting, but it might be too stressful for me, personally, to keep track of - in addition to everything else. let us know how it works out for you!!

**Josephhgoins** · 12-17-2009, 02:45 PM

Do you have to average 12 transactions a month or do you get the 3.5% only on months you hit 12? Eiter way, what does your other checking account pay? I think mine with my credit union pays .1%. If your other accounts pays little to nothing I would go for it. Worst case is that you don't make as much interest.

Also, keep in mind that if you are talking about the $1,000 you would be making $35.00 per year in interst at the 3.5% rate verses $2.50 at the 1/4% rate.

I'd probably cancel one checking and just have the ones that pays the most interest.

**monkeywrangler71** · 12-17-2009, 02:53 PM

Do you pay a service charge for the transactions? Because that would negate any of the interest savings.

Personally I wouldn't be able to do it, way too much to try to keep track of.

**dcompton** · 12-17-2009, 06:04 PM

I did exactly this deal in October, moving my substantial EF into the account, since the interest was almost three times higher than my online account. Mine required 15 debit purchases.

I have kept the account because the online statement, that I would do anyway, and the direct deposit, also not a problem, make it free. But after one month of it, I decided to abandon the interest I would get with the debit card for several reasons:

1. There are months when I would have to generate purchases to get that many, and that is pointless. I considered topping off the gas tank weekly, but that's a nuisance since normally I only put gas in about every three weeks. This was just going to be too much work.

2. I was nervous about having my EF in an account I was using a debit card with. There is too much fraud.

3. I really like my rewards CC that I put monthly ordinary expenses on and prefer to use it. Since I pay it off monthly it doesn't cost me anything.

So I've moved my EF back into the online account. The difference in the interest wasn't worth the nuisance. I set my electric and phone bill to debit out of credit union account so that it is used, but will continue using my Chase account for most things. Unlike some of you, I have had only positive experiences with Chase.