Rewards checking accounts

Everything to know and consider before opening an account.

Woman handing a First Tech debit card to a barista at a coffee shop.

Checking accounts are an important tool in your personal finance toolbox. And beyond standard features like mobile banking and remote check deposit, some financial institutions take these perks one step further by offering customers a checking account with a rewards program.

What is a rewards checking account?

A rewards checking account is a checking account that allows account holders to earn money by meeting a few qualifications, such as simply making a certain number of everyday purchases. In addition to earning from debit card transactions, account holders may be able to set up direct deposits from an employer, for example, to earn even more. These accounts may also be referred to as high-yield checking accounts or cash-back checking accounts. Account holders may enjoy other benefits from these accounts, such as ATM fee rebates and free checking overdraft protection.

How does a rewards checking account program work?

Rewards checking account programs vary, so you can expect each program to have its own process and requirements. Most accounts have minimum requirements to earn rewards. This can include a minimum deposit, minimum account balance, minimum monthly transaction balance or a monthly direct deposit amount. If you have a loan through the same financial institution, you might also be able to receive a discount for using your rewards checking account to pay your bill.

Rewards checking versus traditional checking accounts

Rewards checking accounts offer the ability to earn more with money by holding an account balance, whereas traditional checking accounts only offer the convenience of paying bills online and making debit card purchases. Traditional checking accounts might also be referred to as basic checking accounts or standard checking accounts.

What is a high-yield checking account?

A high-yield checking account allows account holders to earn interest or dividends on their checking account balances. These accounts are similar to rewards checking accounts but are specifically known for offering high interest rates or dividends for maximum earning potential. Like other checking accounts, high-yield checking accounts also provide account holders with debit card and ATM access.

Every account varies, but this is a general overview of the difference between the three types of checking accounts:

	Traditional checking account	Rewards checking account	High-yield checking account
Monthly maintenance fees	Possible	Possible	Possible
Monthly minimum balance	Possible	Possible	Possible
ATM fee reimbursements	Not likely	Usually	Usually
Cash back, interest, or dividends	Usually under 0.10%	Usually between 1.00% and 4.00%	Can be up to 5.00%
Other perks or rewards	Not likely	Usually	Not likely

Do all rewards checking accounts offer the same perks?

Each rewards checking account that you come across might have something different to offer. First off, it’s important to understand that not all banks and credit unions offer rewards checking accounts or high-yield checking accounts. If they do, you need to be aware of the requirements and the benefits that come with each account.

With any rewards or high-yield checking account, it’s a good idea to make sure that your deposits are insured by either the National Credit Union Administration (NCUA) or the Federal Deposit Insurance Corporation (FDIC). These organizations were designed to promote stability in the financial system of the United States and are backed by the government.

When opening a rewards or high-yield checking account, you’ll want to be mindful of the fees that come with the account and how that compares to the value that they offer. Some banks and credit unions that offer rewards checking accounts also offer complementary savings accounts to give members even more benefits. Other banks and credit unions may have different incentives. You’ll also need to review the qualifications the financial institution has set into place. Qualifications can include a daily minimum balance and a specific number or type of transactions per month. Start by comparing a few options to see which new account is right for you:

	First Tech Rewards Checking®	Example A: Bank Rewards Checking	Example B: Online Checking Account
Annual percentage yield (APY)*	Up to 4.00% APY up to $15,000; 0.10% $15,000+	Up to 3.30% APY	Up to 1.20% (Up to 4.00% APY with savings account)
ATM fee reimbursements	Up to $15 per month	Unlimited	None
Cash back rewards	0.5% cash back on credit card purchases up to $15 per month and $10 streaming subscription rebate on your First Tech credit card; 0.25% cash back on minimum loan payment from other First Tech accounts up to $15 per month.	None	Up to 15% when you make debit card purchases at qualifying local businesses
Complementary savings account	Yes	No	Yes—required to open both
Fee for overdraft transfers	No	Yes	Yes
NCUA or FDIC insured	Yes	Yes	Yes

How to find the best rewards checking account for you

Like many financial products, to find the best rewards checking account for you, you need to consider your financial habits as well as your needs. For example, if you come across a rewards checking account that requires a monthly direct deposit amount that is higher than your monthly income, that account probably isn’t the best one for you.

Your lifestyle should also be taken into consideration. Some rewards checking accounts offer a flat reimbursement fee for ATM withdrawals. If you don’t use ATMs often, this might not matter to you, but if you do, it can help you save a significant amount of money over time. If you use ATMs often, you may already be using ATMs in the same network. Many credit unions belong to what’s called the Co-Op Network of over 30,000 ATMs nationwide. These ATMs can be used fee-free by members of Co-Op Network credit unions.

How to get the most out of your rewards checking account

The first step to getting the most out of your rewards checking account is reading through account documents and fine print. Checking account rewards programs usually offer a few ways to earn rewards, so you’ll want to make sure you’re aware of all your options. Then, take some time to think about how you can manage your monthly finances in a way that will allow you to maximize the benefits.

It’s also important to keep in mind that your rewards checking account or high-yield checking account should be used as part of a long-term financial strategy. You might not be able to earn the maximum amount of rewards when you first open the account, but you can add in other opportunities later. For example, if your rewards checking account gives you access to a discount on interest rates for loans, you can take advantage of that the next time you need an auto loan or a personal loan. Check to see that the financial institution is competitive on loan rates, too.

With any new account, you’ll want to make sure you’re aware of any qualifications that the account must meet to waive surcharges or earn certain rewards. Then you can take the steps to ensure your checking account meets the daily or monthly requirements, which might include minimum balance requirements or minimum direct deposit requirements. If these are not considered, you could find yourself paying unnecessary account fees or missing out on the rewards of the account.

Next steps if you're interested in a rewards checking account

When looking for a checking account with a rewards program, keep your future goals in mind. For example, if you’re hoping to buy a house in the future, a rewards checking account that allows you to earn a discount on a mortgage loan interest rate might be a good fit. There is a wide variety of financial products, so it’s important to choose the one that will provide the best value for you. To start comparing your options, take a look at the First Tech Rewards Checking account that we offer. Money Magazine just awarded it Best Rewards Checking account for 2022-2023.

*Rates effective as of 4.1.23 and are subject to change at any time. Membership Savings has a 0.05% APY. First Tech Rewards Checking (FTRC) Qualified APY is 4.00% on the first $15,000 and 0.10% on remaining balance; FTRC Non-Qualified APY is 0.01% on all balances. Terms and conditions apply.

Membership is required and subject to approval.

Truth in Savings Disclosure for First Tech Rewards Checking and Savings Accounts

Section I. Payment of Dividends

1. Nature of Dividends: The frequency and conditions upon which dividends are paid on all accounts are in accordance with the Bylaws of this Credit Union, the Federal Credit Union Act, and relevant laws (including the Truth-in-Savings Act and Regulations). Dividends are paid from current income and available earnings after required transfers to reserves at the end of a dividend period.

2. Rate Information: For all dividend bearing accounts, the dividend rate and Annual Percentage Yield (“APY”) may change daily as determined by the Credit Union’s Board of Directors. Please refer to the Rate Sheet provided in addition to this Truth in Savings Disclosure for additional information, including the dividend rate and APY. You may also obtain current rate information by calling the Credit Union or visiting our website.

3. Minimum Balance Requirements: We list the minimum balance required to open an account on our Rate Sheet.

4. Compounding and Crediting for All Accounts: For all dividend bearing accounts, dividends will be compounded monthly and will be credited monthly. For these accounts, the dividend period is monthly. For example, the beginning date of the first dividend period of the calendar year is January 1, and the ending date of such dividend period is January 31. All other dividend periods follow this same pattern of dates. The dividend declaration date is the ending date of a dividend period, and for this example is January 31. If you close any of your dividend earning accounts before dividends are credited you will not receive the accrued dividends.

5. Fees and Charges: Please refer to the Fee Schedule provided in addition to this Truth in Savings Disclosure for fees and charges which may be assessed against your account.

6. Balance Computation Method: Dividends are calculated by the daily balance method, which applies a daily periodic rate to the balance in the account each day.

7. Accrual of Dividends: Dividends will begin to accrue on the business day you deposit non-cash items (e.g., checks) to your account if deposited before the close of business.

8. Bylaw Requirements: You must complete payment of one share in your Membership Savings Account, in accordance with the Membership and Account Agreement, as a condition of your membership.

Section II. Terms and Conditions Applicable to First Tech Rewards Checking Accounts

1. Limit: You are limited to one (1) First Tech Rewards Checking Account or one (1) Dividend Rewards Checking Account per primary account owner.

2. Eligibility: Account must be a personal account. Trust, Business, and Organization accounts are not eligible.

3. Rate Information: The First Tech Rewards Checking Account is a tiered rate account. The dividend rate and corresponding annual percentage yield (APY) will be either the qualified or non-qualified rate, as determined by the qualification requirements per monthly cycle (listed below). If qualifications are met, the dividend rate and APY specified for a tier will apply only to the portion of the account balance that is within the tier. The dividend rates and range of APY(s) may vary depending on account balance and are listed for each tier in our Rate Sheet.

a. Failure to Qualify: If you don’t meet the requirements for a qualification period, you’ll earn the non-qualified rate and corresponding APY.

4. Qualification Requirements Per Monthly Cycle: In order to qualify, you must meet all of the following qualification requirements:

a. Have a combined total of at least twenty (20) qualifying transactions with an aggregate spend of at least $500 per month posted to the applicable accounts. Qualifying transactions include:

i. Posted debit card purchases to the First Tech Rewards Checking account.

ii. Posted credit card purchases on a First Tech credit card account. Credit card purchases must be made on a First Tech credit card account with the same primary account owner as the First Tech Rewards Checking account.

b. Have ACH deposits and/or withdrawals totaling at least $1,000 per cycle (either multiple aggregate ACHs equal to $1,000 or one $1,000 ACH) to the First Tech Rewards Checking account.

c. Enrollment in electronic statements and notices for the primary account owner.

All qualification requirements must be completed and posted to your account prior to the last day of the month. For example, the last day of January is January 31. At least twenty (20) debit and/or credit card purchases must post to your account by January 30 for purposes of this example. Keep in mind that debit and/or credit card purchases can take several days to post and depend on merchant processing times.

5. Rebates: The following rebates will be credited to the First Tech Rewards Checking account if the qualification requirements are met for the monthly cycle in which the transaction posted. The offered rebates may change at any time, as determined by the Credit Union’s Board of Directors. Rebates will be posted within 3 business days after the end of the month.

a. Reimbursement of any out-of-network U.S. ATM fees, up to a maximum of $15 per month

b. 0.25% cash back on minimum scheduled payment amount made from another First Tech account to your First Tech consumer loan(s) and/or HELOC, up to a maximum of $15 per month. Primary account owner of the First Tech Rewards Checking account must be listed as primary borrower on the First Tech consumer loan(s) or home equity line of credit (HELOC). Regular payments to credit cards, closed-end mortgages, and commercial loan products are not eligible for this product offering and do not qualify for the above mentioned cash back rebates. Prepayments, late payments, and payoffs not included. Loans must be in good standing (active, current, not delinquent).

c. 0.50% cash back on all posted credit card purchases made on your First Tech credit card account, up to a maximum of $15 per month. Credit card purchases must be made on a First Tech credit card account with the same primary account owner as the First Tech Rewards Checking account.

d. Reimbursement of monthly online streaming subscription services charged to your First Tech credit card account, up to a maximum of $10 per month.

i. Merchant category codes that qualify for the reimbursement of online streaming subscriptions include: 4899 - Cable, Satellite, and Other Pay Television and Radio Services; 5735 - Record Shops; and 5968 - Direct Marketing - Continuity/Subscription Merchants.

ii. First Tech does not have the ability to control how a retailer chooses to classify their business and therefore reserves the right to determine which purchases qualify. Merchants who accept Mastercard® credit cards are assigned a merchant code which is determined by the merchant or its processor in accordance with Mastercard® procedures based on the kinds of products and services they primarily sell. First Tech groups similar merchant codes into categories for purposes of making offers to you. Please note that First Tech makes every effort to include all relevant merchant codes in our categories. However, even though a merchant or some of the items that it sells may appear to fit within a category, the merchant may not have a merchant code in that category.

iii. Credit card purchases must be made on a First Tech credit card account with the same primary account owner as the First Tech Rewards Checking account.

6. Opening this checking account does not guarantee approvals on loan accounts. Lending qualifications still apply.

Section III. Terms and Conditions Applicable to First Tech Rewards Savings Accounts

1. Limit: You are limited to one (1) First Tech Rewards Savings account per primary account owner.

2. Eligibility: Account must be a personal account. Trust, Business, and Organization accounts are not eligible. The First Tech Rewards Savings account requires a corresponding First Tech Rewards Checking account. The primary account owner of the First Tech Rewards Savings account must be the same as that listed on the First Tech Rewards Checking account.

3. Rate Information: The First Tech Rewards Savings is a tiered rate account. The dividend rate and corresponding annual percentage yield (APY) will be either the qualified or non-qualified rate as determined by the First Tech Rewards Checking qualification requirements per monthly cycle (listed above). If the qualifications are met, the First Tech Rewards Savings dividend rate and APY specified for a tier will apply only to the portion of the account balance that is within that tier. The dividend rates and range of APY(s) may vary depending on account balance and are listed for each tier in our Rate Sheet.

a. Failure to Qualify: If you don’t meet the requirements for a qualification period, you’ll earn the non-qualified rate and corresponding APY.

4. Transaction Limitations: Withdrawals or transfers out of your Share Savings accounts are limited. On all Share Savings accounts, we will allow you to make up to six (6) preauthorized, automatic, telephonic, audio response or online banking transfers to another of your accounts or to the account of any other person or organization during each statement period.

a. The date we use to determine the number of transactions is the date a transaction is posted to your account, rather than the date you initiate the transaction. If you exceed these limitations in any statement period, we can refuse or reverse the transfer, close your account, and charge a fee as stated in the Fee Schedule.

b. Transactions that are not covered by these limitations include: (1) transfers from your account to pay a loan with us; (2) transfers to your other accounts with us or withdrawals (payments directly to you) from the account when such transfers or withdrawals are made by mail, messenger, ATM or in person; and/or (3) withdrawals made by telephone if a check is mailed directly to you. and First Tech Rewards Savings® accounts. In addition to all the other ways to get more from your money.