Online bank Capital One 360 has a few specials for Independence Day that (for some reason) are only good until midnight on Friday, July 2nd. In all cases, they are slightly better versions of offers that they regularly offer. Not a bad time to pounce if you’ve been on the fence. Thanks to reader Terry for the tip.

Perkstreet Financial is relatively new, but they’ve already tried a bunch of different ways to make their online checking account attractive, from sign-up bonuses to coffee awards. However, I think they’ve stumbled onto something with their new cashback debit card rewards structure that beats out any other online bank currently:

• Earn 2% cash back on all non-PIN debit card purchases when your checking account balance is $5,000 or more. For new accounts, you will earn 2% cash back no matter what your balance is for the first 3 months, starting on the day that your account is opened. (Otherwise if your balance that day is below $5k, you earn 1% cash back.)
• Earn 5% cash back at a rotating set of retailers. This appears to be the new trend amongst many rewards cards. For October 2012, you can get 5% cash back at The Cheesecake Factory®, Pottery Barn®, Pottery Barn Kids®, PotteryBarn.com, Ace Hardware®, AceHardware.com.
• PowerPerks 2.0 with deals updated every week
• There is no limit to the amount of cashback you can earn.

Fees. The account has no minimum balance requirement, but does require you to have some sort of activity each month to avoid a $4.50 inactivity fee. Be sure to have some sort of deposit/withdrawal (electronic transfer is fine), debit card purchase, online billpay, or a cleared check every month.

The checking account earns no interest, so you’ll have to account for that based on your usual average balances. On the website, it advertises that you could earn $600 in rewards each year. Here’s their rationale:

Making $601 in weekly non-PIN purchases will earn you $625 in perks annually (when you maintain a balance of $5,000). According to the U.S. Bureau of Labor Statistics, the average American household spends $601 per week on purchases that could be put on a debit card, including stuff like utility bills or rent.

I’d adjust your expectations according to your own situation. I’ve never had a landlord that let me charge my rent on a debit/credit card, although I’m sure some are out there. 🙂 Example: Charging $500 a month at 2% back would be $120 a year.

Opening an account. They do try to make it easy… you only need $25 to open, and you can even do your initial funding on a credit card for up to $500; they promise to run it as a purchase to avoid cash advance fees.

For folks who already have a their preferred set of cashback credit cards, this might not be enough to switch. However, this does serve as a nice alternative for the subset of folks who choose to avoid credit cards for whatever reason. I have lots of friends that prefer debit cards due to the sheer simplicity of it – they buy something, and the money gets taken out direct from the checking account. Done. No extra bills to pay. I just read that 50% of all charge card purchases this year will be done on debit cards, so they aren’t alone.

Here are four places to stash your cash that aren’t advertised very heavily, so your co-workers probably haven’t heard of them. They are all FDIC-insured, and offer higher yields than most of their direct competitors. Each one is best depending on your investment time frame and deposit size.

Free Rewards Checking at DanversBank

DanversBank offers their Free Rewards Checking account paying 4.01% APY on balances up to $25,000, provided you satisfy the following each month:

* perform at least 12 debit card transactions (excluding ATMs);
* receive their monthly statement electronically;
* access Online Banking, and
* sign up for direct deposit or receive a recurring ACH.

There are no minimum balance requirement or fees, and ATM fees are refunded as well if you meet the above requirements. The branches are located in the Boston area, but accounts are open to anyone in the US. If you can be diligent every month (otherwise you get piddly interest), these types of account are great interest boosters.

Ally Bank 5-Year CD with Small Early-Withdrawal Penalty

Okay, so Ally does spend a lot of money on advertising, but a feature they rarely mention is actually the best reason to open an account with them. They only hit you with a early withdrawal penalty of 60-days of lost interest if you “break” a CD with them. The Ally Bank 5-year CD currently yields 1.60% APY (as of 10/25/13). Rates change constantly, but let’s assume you have a certificate of deposit from any bank paying 2.99% APY with an early withdrawal penalty of the last 60 days of interest. (2.99% APY ~= 2.95% rate compounded daily.) Here’s how your actual annualized interest rate would fluctuate given your holding period.

If you look carefully at this charts, you’ll see some great deals:

• After only 4 months, your annualized rate is 1.48%. (Essentially you 2 months out of 4, which is half of 3.04%). This isn’t bad at all, considering their liquid online savings account is currently paying 0.85% APY.
• After 1 year, your annualized rate is 2.49%. You can’t find a better rate than this at any other bank for a 1-year CD. Likewise, after 2 years, your annualized rate is 2.87%, compared to Ally’s current 2-year CD at 1.05% APY, although it does have a “raise your rate” feature that lets you bump it up once if rates rise.
• After 3 years, your annualized rate is 2.83%, again a top rate. Thus, even opening a 5-year CD and holding for anywhere between four months and 3 years gets you a better rate than any other bank currently out there (including Ally itself). There’s also no minimum deposit required to open, so you can make each CD as small as you like!

SmartyPig FDIC-Insured Online Piggy Bank

I reviewed SmartyPig.com a while back when they had just broke onto the scene, but they have made a lot of improvements in response to customer feedback since then. You can think of them like an online piggy bank that helps you towards savings goals, but they’ve added so much flexibility that you can pretty much use them like any other savings account. The best part? They currently pay 2.15% APY on balances up to $50,000 (FDIC-insured). That’s better than any other savings account out there, with no additional requirements. No minimums, no maintenance fees.

An added feature is that if you set a savings goal and reach it, they offer “boosts” if you redeem your cash for a gift card in their mall. My favorite is the 4% boost at Amazon, which for example will get you a $260 gift card for $250 cash. Other highlights include Macy’s at 12% and Travelocity at 10% boost.

Sallie Mae Bank – Online Savings Account

Sallie Mae is best known as the huge student loan originator and servicer. Their new Sallie Mae Bank is an FDIC-insured bank that offers a very competitive 1.40% APY in their online savings account. Not a bad deal to lend out money to captive students at high interest rates, and pay much less as a bank! Hopefully this means that they can keep their rates higher than other banks.

The quickest way to describe it is as another clone of Capital One 360 (currently paying 0.75%). That means… liquid, no minimum balance, no minimum fees, and no deposit caps or tiers (just the $250k FDIC insurance limit to worry about). It’s designed to complement your existing accounts. You can link an unlimited amount of other bank accounts for easy online transfers, which take the usual 2-3 days to complete. Interest is compounded daily and credited monthly.

Also, if you have an account at Upromise, you can link your Sallie Mae account and have your Upromise earning deposited there. You can even get a 10% extra bonus if you do one of the following:

To be eligible for the 10% annual match on your Upromise earnings from Upromise you must link your High-Yield Savings Account to your Upromise Account and, within 90 days of opening your High-Yield Savings Account, either: (1) set up an Automatic Savings Plan with a monthly deposit of $25 or more, or (2) fund the account with $5,000 or more. Upromise will match 10% of your Upromise earnings posted as “funded” to your Upromise Account during the calendar year of January 1 through December 31. Your 10% annual match will be deposited into your High-Yield Savings Account in February of the following year provided that both accounts remain active and are in good standing at the time of transfer.

(The promo below was discontinued after 3 days. Sorry, I warned you guys!)

The online division of Wilmington Trust Bank, WT Direct, is running another promotion for new customers. You can get up to a $500 cash bonus on top of the standard interest rate (currently 1.16% APY) if you open a new account and maintain a certain balance for 3 months. Here is the offer text:

Join WTDirect now and for every $10,000 that you deposit, we’ll give you a $100 cash bonus, up to $500!* Just open and fund your account by June 15th, maintain your initial deposit for three months, and you’ll receive a cash bonus.

The Numbers: Like a 3-month CD paying over 5% APY
This offer is basically a 1% flat bonus on your deposit after only 3 months if you deposit a multiple of $10,000. How does this work out when converted to an interest rate? To start, you are already getting 1.16% APY. On $10,000 for 3 months, you’ll get $28.40 interest and $100 bonus. That’s roughly 5.15% APY during that time.

Therefore, you can treat this bonus as a 3-month CD paying over 5% APY, more than 3% higher than any other available 3-month CD out there, and works for deposits up to $50,000:

Application Process and Setup

I’ve already opened a WTDirect account for a previous bonus, so here a quick summary of what to expect when applying. First, they gather the personal info. Second, they use the now-popular Equifax ID check questions to verify your identity. Third, you can fund electronically with account and routing numbers, although you must come back and verify trial deposits later. Finally, you can electronically sign the application and disclosures. There were no physical forms to send in, although a welcome packet does arrive by mail. They state explicitly that there is no credit check.

As for practical matters, WT Direct’s online transfer system allows unlimited linked banks, and transfers to external accounts are free both in and out with a 2-3 day transfer time.

Final Details
You must click through the promotional page and not the regular front page, so that the promotion code of dxxxc01 should already be filled in for you. WT Direct offers can be pulled early (and have been in the past), so don’t dawdle too long if you’re interested…

The fine print:

This offer is available to new WTDirect clients only. Primary account holder must NOT have held a WTDirect account in the past 12 months. WTDirect account must be opened and funded via electronic (ACH) transfer received by 6/15/10. Bonus is based upon the lowest daily balance during the promotional period of 6/15/10 – 9/15/10. Bonuses will be paid approximately 2 weeks after the end of the promotional period to clients whose accounts are open and in good standing. Wilmington Trust employees and their family members are not eligible. WTDirect reserves the right to cancel or modify this promotion at any time without notice.

It’s one thing to find a bank with a high interest rate, and another thing to have that rate stay high. Many banks post teaser-like rates to attract deposits, and then hope you’ll be lazy and stay while they gradually become uncompetitive. A post yesterday on the NY Times Bucks blog explored ways to counter this.

Bankrate does a quarterly ranking of top banks with consistently high yields, which is “based on the number of times within the quarter that an institution’s yield was among the top 20 for the product category and the relative position of the yield in relation to the others in the product category.” But that’s only one quarter. So the Times asked them which banks have been on top for every single of the last eight consecutive quarters (Q1 2008 to Q4 2009). Good idea!

The next natural question: Which of these banks has the highest rates now? So I visited each site and found the current rates (as of 11/12/13) for their highest yielding savings account (or money market) and their 12-month CD. Since some of the rates were tiered, I picked the rate for a $10,000 deposit and also included the minimum balance needed to avoid fees. Here are the results, sorted by top overall yield:

Banks	Online Savings / Money Market	12-month CD
EverBank	0.86% APY / 0.86% Intro ($5k+)	0.60% APY
Discover Bank	0.85% APY / 0.70% ($10k+)	0.95% APY
Ally Bank	0.85% APY (No min)	0.98% APY
Stonebridge Bank	1.25% APY ($1k+)	1.50% APY
Intervest National Bank	1.13% APY ($500+)	1.50% APY
American Bank	0.90% APY ($10k+)	1.30% APY
MetLife Bank	0.85% APY ($10k+)	1.15% APY
First National Bank of Baldwin County	0.50% APY ($5k+)	1.35% APY
M&T Bank, NA	0.50% APY (No min)	1.10% APY
UmbrellaBank (now Beal Bank)	0.50% APY ($1k+)	1.06% APY
BankDirect	0.15% APY ($10k+)	1.11% APY