For most consumers, this means they’ll need to have this account operate as their main checking account, so it can be a rather large commitment to make if you’re already deeply entangled with your current financial institution.

While the APY’s are still more than twice that of a traditional money market or interest checking account, we’ve seen them drop sharply throughout the last quarter of 2011. In fact, just in November of 2011 we saw interest rates on these accounts at over twice the APY in which they currently sit!

Below are the highest yielding “Rewards Checking Accounts” still offered today:

1) Community Bank of Pleasant Hill is featuring a Rewards Checking Account yielding 2.01% APY on balances up to $25,000.

2) Community Bank of Raymore is featuring a Rewards Checking Account yielding 2.01% APY on balances up to $25,000.

3) Atlantic Coast Bank is featuring a “iKasasa Checking Account” yielding 2.01% APY on balances up to $15,000.

4) Connexus Credit Union is featuring a “Xtraordinary Checking Account” yielding 2.0% APY on balances up to $25,000.

5) Heritage Bank is featuring a “eCentive Account” yielding 1.71% APY on balances up to $25,000.

For those of you that are unfamiliar with these, rewards checking accounts are similar to money market accounts but provide much more lucrative interest rates in exchange for a few monthly obligations by the consumer. Generally there are 3 requirements you, the consumer, must meet to earn the advertised interest rate. They are 1) enroll to receive e-statements 2) make between 10-15 purchases per month with your debit card 3) set up an automatic deposit.

If you can meet these obligations, you can usually garner an interest rate that blows the national average(s) away. Today, for example, the top APY for one of these accounts is a whopping 5.01%.

Top 5 Rewards Checking Accounts (2011):

*Interest rates accurate as of November 2011.

1) Southern Bank (Missouri and Arkansas) is offering the top annual percentage yield on a rewards checking account – featuring a 5.01% APY on up to $15,000. You must make 12 check or debit card transactions, 1 direct deposit or auto ACH, and receive e-statements to receive the advertised rate. Available in Missouri and Arkansas only.

2) Union Square Federal Credit Union (Texas) is offering 4.51% APY with their rewards checking account on balances up to $25,000. The requirements are the same as with Southern Bank (above).

3) Florida Central Credit Union (Florida) is offering 4.50% APY with their rewards checking account on balances up to $15,000. As with the two accounts featured above you’ll need 12 debit card transactions, 1 direct deposit, e-statements, AND a loan account with an outstanding balance of $5,000 or more. If you don’t have the loan account, but meet all the other requirements you’ll get an APY of 3.51%.

4) Consumers Credit Union (Illinois) is offering 4.09% APY with their rewards checking account on balances up to just $10,000. You’ll need to first become a member, then make 12 debit card transactions monthly, as well as set up a direct deposit and enroll in e-statements.

5) Pelican State Credit Union (Louisiana) is offering 4.01% APY with their rewards checking account on balances up to $20,000. You’ll need to make 15 debit card transactions monthly with a cumulative value of at least $300. You’ll also need to set up a direct deposit and receive e-statements. As with all credit unions you’ll need to first be a member, and with PSCU this means you’ll need to open a “e-Xtra Bonus Checking” account along with your rewards checking account.

If you’ve been thinking of swapping out your big bank for a new, smaller, locally-owned credit union, you might want to keep these accounts in mind.

Currently, Del-One Federal Credit Union, based out of Wilmington, Delaware, is providing this promotional checking account (which also comes with free checking) to it’s members that can meet 3 monthly qualifications. Compare that to the best CD rates in Delaware.

Here are the requirements…

1) Log-in to their online banking to receive free e-statements.

2) maintain 10 debit transactions per month. Any transaction conducted with your debit card other than cash withdrawals qualify as one debit transaction.

3) Establish at least 1 direct deposit per month. This can be a pay check deposit, social security deposit or regular wire transfer from another account.

Important terms and conditions regarding this account:

- ATM transactions are credited up to $25 per month. Therefor if you use another bank’s ATM which charges $2 per withdrawal, you’ll be able to conduct up to 12 of these per month before needing to pay out of pocket for using the ATM.

- You need to stop by one of Del-One Federal Credit Union’s 7 branches within the state of Delaware. This account cannot be opened online.

- Membership eligibility is excluded to a select group of employers within the state of Delaware. If you have a family member who is already a member, then you may also be eligible for membership.

In today’s CD rate environment, any account yielding above 2.0% APY is remarkable and like bank deposits, this account is FDIC insured.

Summary of Account:

• No monthly fee, no minimum balance—ever
• Earn 3.50% APY* on balances up to $40,000
• Earn 0.75% APY* on amount of balance above $40,000
• Earn 0.10% APY* on entire balance if qualifications are not met
• ATM fees refunded nationwide (up to $20 per monthly cycle)
• Unlimited Check Writing
• Can link to Green Rewards Savings to build savings automatically
• Free MasterCard debit card
• Free online banking with bill pay
• Free e-Statements
• Free telephone banking
• Free first order of recycled paper checks
• Personal accounts only
• $100 minimum deposit to open (no minimum thereafter)
• FDIC insured

Requirements to earn the 3.50% APY:

each month you must do the following…

• Make 12 debit card purchases
• Have at least one direct deposit or automatic payment
• Receive free e-Statements

To learn more about this account or to open one online visit hancockbankonline.com.

Rewards checking accounts are essentially high interest checking accounts that come with a few strings attached. They made a lot of noise in 2009 and 2010 when CD rates began to nose dive into the abyss and have since seen their rates drop significantly as well. They are primarily offered by credit unions but can also be obtained by larger banks now as they’ve grown in popularity.

Here’s what you’ll typically get: an incredible interest rate (check out the one we’ve highlighted below which is paying a whopping 4.09% APY on balances up to $25k), a maximum balance allowance to earn the high APY, a few withdrawal allowances per month (similar to a money market account) and free ATM usage.

Here’s what you’ll typically have to do to obtain the bank or credit union’s advertised rate: set up a recurring payment from the account. This can be used to pay for any monthly bill (ie mortgage, auto loan, credit card debt, etc). Make a certain amount of transactions per month with your debit card from the account (usually around 10 or 15), and conduct your banking online with e-statements and other online banking tools.

Featured Account:

Thanks to BankVibe.com reader Tony for forwarding us a fantastic example of one of these accounts available today. Consumers Credit Union (out of Illinois) has a rewards checking account paying an incredible 4.09% APY on balances up to $25,000 PLUS a still respectable 1.59% APY on balances exceeding that amount. To keep earning this interest on your balance you’ll have to:

• Complete at least 12 Debit/Check Card Point-of-Sale Transactions (transactions must be made without using your Personal Identification Number, or PIN, to count towards the minimum of 12 and must be posted to your account on or before the last day of the calendar month).
• Each month, make one direct deposit OR one ACH debit OR pay one bill using Consumers Credit Union’s free online bill payment system
• Enroll in online banking
• Opt for electronic statements rather than paper

Check out their promo page for this offer here.

We also made note of Consumers Credit Union last week for offering one of the best credit cards from a credit union.

Thanks to BankVibe.com reader Jenn for tipping us off on a great “rewards checking account” offered through MB Financial Bank. If you happen to be in the market for an interest bearing checking account and plan on maintaining a balance of $10,000 or less you may want to consider the 4.0% APY MB is offering customers. Generally, these types of accounts offer substantially higher savings rates than the current market warrants providing you (the customer) can comply with the monthly requirements. These requirements typically include enrolling to receive “e-statements” setting up a recurring payment AND making a specified number of monthly transactions with the account.

Although the 4.0% APY is worth getting excited about given the current market for savings rates, the $10,000 maximum balance is somewhat low compared to similar products offered through other institutions. With the Red Checking account you’ll earn just 0.25% APY on balances exceeding $10k.

Visit mbfinancial.com for further details regarding this offer.

Before you proceed with one of these accounts remember that interest checking accounts or “Rewards Checking Accounts” are not for every one. They come with fairly rigid monthly requirements which must me met or exceeded to earn the exceptional interest rate. Typically, you will be required to make a certain amount of debit transactions from the account (usually between 10 and 15) as well as set up at least one recurring transfer during the 30 day period and use their online banking system. The requirements vary with each banking institution, so make sure they can be met with ease on your part before opening one.

Lake Michigan Credit Union is offering a rewards checking account which they refer to as a “Max Checking Account.” It comes with an industry best 4.0% APY on balances up to $15,000.

Account Features:

-  No fees, and no minimum balance requirements.

-  It pays 4% APY* on balances up to $15,000

-  Refunds up to $15 per month in surcharge ATM withdrawal fees at non-LMCU ATMs when you withdraw from your Max Checking account.

Requirements to earn 4% APY:

- Direct deposit into any LMCU account

- Minimum of 10 debit card purchases per month

- Minimum of 4 logins to home banking per month

- Be eligible for and sign up to receive eStatements/eNotices

Visit their Max Checking page for further details.

Account Details:

To earn the Maximum Rate and nationwide refund of ATM fees, the account must – during the eligibility cycle – have: 12 posted debit card purchases, (excluding ATM’s), receive account statement electronically (when available); access online banking once and receive a recurring direct deposit of a payroll, pension or government issued credit.  If these conditions are not met during the eligibility cycle, the account will earn the Standard Rate of 0.25% APY, and will not receive the nationwide refund of up to $5.00 in ATM fees. The eligibility cycle starts the day after the third Wednesday of each month and ends the day before the third Wednesday of the next month.
The rate on their “max savings product,” although coming with a few strings, blows away the other savings rates offered on their liquid savings/checking accounts. Below are their checking, money market and savings account offers with their accompanying interest rates.

Requirements to earn the $200 bonus:

- Sign up to receive monthly e-Statements
- Receive at least one direct deposit per statement cycle
- Make at least 15 debit card purchases per statement cycle (excluding ATM transactions)
- Sign up for Home Banking and use Bill Pay at least once per statement cycle

PLUS – Earn a whopping 3.64% APY on all balances between $10 and $24,999!

Terms and Conditions of this special offer:

If requirements are met, SSSB will refund up to $10 per statement cycle for another bank’s ATM surcharges and will not charge a foreign ATM fee for using another bank’s ATM. If you do not meet the requirements per statement cycle, your account will still function as a no monthly fee checking. No minimum balance required to maintain account. Minimum deposit to open account is $10.00. Minimum deposit to earn interest is $10.00. Offer may be withdrawn at anytime. One account per tax reporting owner. A statement cycle ends the last business day of a calendar month.

Features of Rewards Checking Account from FNFCU:

• 4.10% APY – This is a variable rate and is subject to change without notice.
• ATM Refunds – $25 in ATM refunds per cycle IF requirements are met.
• No fees or minimum balance requirements.