Cash Back Checking Accounts

Hearing the term “cash back” associated with a checking account may seem like a novel concept because 99 percent of the time, the term is directly tied with a credit card. However, some banks are using this rewards structure with checking accounts now as an outside-the-box way of rewarding their customers.

For almost a year now, all forms of traditional savings accounts have seen their interest rates sink to historically low levels and many banks and credit unions have been scrambling to find new ways to reward their account holders. Just last week we focused on the way in which checking accounts have been able to reward their new and existing customers with extra cash in our post, “The Top 10 Checking Account Promotions in 2010.” Today we’d like to reiterate the way in which a cash back checking account provides recurring cash rewards.

As the name suggests, cash back checking accounts provide you with cash back every time you spend. PerkStreet Financial recently went live with their online cash back checking account which provides a whopping 2% cash back on all purchases for the first 6 months, followed by 1% cash back thereafter. Unlike savings accounts, these accounts essentially reward you to spend, so if you are after a traditional CD (certificate of deposit) or high yield savings account, then this may not be ideal for your situation.

What Type of Consumer Would Benefit Most from a Cash Back Checking Account?

In short, someone who spends a good chunk of change every month. Given the PerkStreet Financial offer we mentioned above, one would be able to receive cash dividends of $50 per month if they were to spend $2,500/month from this account (2.0% X $2,500 = $50.00).

M&I Bank’s Cash Back Checking Account Bonus: $100

BankVibe reader Justin submitted a pretty sweet checking account bonus over the weekend. It comes from M&I Bank and is available to residents in Arizona, Florida, Illinois, Indiana, Kansas, Minnesota, Missouri, Nevada and Wisconsin.

From now until Februrary 12, 2010, when you open a M&I Bank “Cash Back Checking Account” you’re entitled to a $100 bonus. Plus, in addition to the bonus there is also a cash back option that will help you earn a little extra. Here’s how it works:

• 0.25% cash back on signature based check card purchases.
• $0.25 for every deposit made up to maximum of $2 per billing cycle.
• $0.25 for every monthly online statement you receive.
• Plus, $0.05 for every online payment made from your account for up to $2 per billing cycle.

Although these aren’t drastic payouts, it’s still a nice kicker to have on a checking account!

Here’s the catch -  a $10 monthly fee will be imposed if you don’t do one of the following – make 3 transactions per statement cycle, maintain at least $1,000 in your account, or if you’re under the age of 25.

About M&I Bank:

M&I Bank operates under Marshall & Ilsley corporation, a diversified financial services company based in Wisconsin. Marshall and Ilsley provide comprehensive financial products and services and to personal, business, corporate and institutional customers nationwide. They are a publically traded company on the New York Stock Exchange under the ticker “MI.”

Fun Fact: M&I was founded in 1847 in one half of a cobbler shop. They have been in business for over 160 years. 

Compass Bank Checking Account

Compass Bank currently has a cash back checking account promotion which is running all summer long!

From May 18, 2009 until July 31, 2009 you can pay for gas, groceries and utilities with your BBVA Compass Visa Check Card (free with your new checking account) and receive 5% cash back. Within a couple days of each payment, you’ll receive your 5% cash back automatically deposited into your checking account.

Compass Bank Checking Account Promotion Details:

(as seen on the BBVA Compass Bank promo page)

• Utilities. Pay online, over the phone or in person using your Check Card. You can earn a rebate on just about all your household utilities, including electric, gas and water.
• Groceries. Load up your cart & swipe your Check Card.
• Gas. Save every time you use your Check Card to fill up your tank and grab a few snacks.
• $50 max per month. You can only earn up to $50 per month from this promotion
• $25 minimum for opening a new checking account
• Offer valid through July 31, 2009
• Cash back will be credited to your checking account 2 business days after the qualifying purchase has been posted