What Are Rewards Checking Accounts?

If you’re chasing rewards for your regular spending, you’re probably very familiar with the maze of credit cards that offer points, miles and cash back. However, if you’re worried about the potential for racking up debt while racking up rewards, there are rewards checking accounts that can help you score some extra perks like cash back on debit card purchases and interest on your balance.

Rewards checking accounts aren’t all upside, though. You may need to meet a number of requirements to actually qualify for your rewards, and you’ll need to be mindful of fees to ensure that you aren’t paying an extra cost to chase those benefits. Here’s what you need to know about how rewards checking accounts work and whether they’re right for your finances.

Best rewards checking accounts

The best rewards checking accounts offer either cash back on debit card purchases, a high annual percentage yield (APY) on balances, or a combination of both. Here are some top options.

Discover Bank Cashback Debit 

The Discover Bank Cashback Debit account offers 1% cash back on up to $3,000 in debit card purchases each month. This account has no monthly fees, no minimum balance requirements and provides free online banking and mobile app access. Discover also offers fee-free access to over 60,000 ATMs nationwide.

Read our review of Discover Bank.

SoFi Online Checking

SoFi’s Online Checking account offers an unlimited 0.50% APY on all balances, with no minimum balance requirements or monthly fees. This account also provides access to over 55,000 fee-free ATMs worldwide and offers free overdraft protection when you link your checking account to a SoFi Money savings account. Additionally, SoFi provides a range of financial tools and resources, such as budgeting tools and financial planning advice.

Read our review of SoFi Bank.

Axos Bank Rewards Checking

Axos Bank Rewards Checking offers up to 3.30% APY on balances up to $50,000, depending on your account activity. To earn the highest rate, you must receive monthly direct deposits of $1,500 or more, make 10 debit card transactions of $3 or more each month, and maintain an average daily balance of $2,500 per month in an Axos Invest Managed Portfolios Account. This account has no maintenance fees and offers unlimited domestic ATM fee reimbursements.

Read our review of Axos Bank.

LendingClub Bank Rewards Checking

LendingClub Bank Rewards Checking offers unlimited 1% cash back on debit card purchases, making it an attractive option for those who frequently use their debit card. This account also offers 0.10% APY on balances of $100,000 or less, with balances greater than $100,000 earning 0.15% APY. There are no monthly maintenance fees, and LendingClub Bank provides access to fee-free ATMs nationwide.

Read our review of LendingClub Bank.

Consumers Credit Union Free Rewards Checking

Consumers Credit Union Free Rewards Checking offers an exceptional 5.00% APY on balances up to $10,000 when you meet certain requirements. To earn this rate, you must make at least 12 debit card purchases per month, have at least one direct deposit or ACH credit per month, receive e-documents and log into online banking at least once per month. This account has no minimum balance requirements and offers unlimited ATM fee reimbursements.

Quontic Cash Rewards Checking

Quontic Cash Rewards Checking offers 1% cash back on debit card purchases, with a maximum of $50 in total rewards per month. This account has no monthly maintenance fees and provides access to over 90,000 fee-free ATMs nationwide. Quontic Bank also offers a high-yield savings account that can be linked to your Cash Rewards Checking account for easy transfers.

Read our review of Quontic Bank.

Pros of using a rewards checking account

When comparing a rewards checking account with a traditional checking account, the upsides are fairly straightforward.

• Cash back: One of the primary benefits is the ability to earn cash back on your debit card purchases. This allows you to earn money simply by using your debit card for everyday transactions, such as groceries, gas and dining out.
• No annual fee: Many rewards checking accounts do not charge an annual fee, making them a cost-effective alternative to some credit cards that offer cash back but charge annual fees.
• ATM fee reimbursements: Many rewards checking accounts offer to refund some or all of the fees you incur when using out-of-network ATMs. This can be particularly beneficial if you frequently need to withdraw cash from ATMs that aren’t part of your bank’s network. 
• Earn interest: Some rewards checking accounts pay interest on the monthly balance, providing you with another form of cash back.

Cons of using a rewards checking account

Rewards checking accounts aren’t without their flaws. Be sure to consider some of the potential trade-offs.

• Limits on perks: Some accounts may cap the amount of cash back you can earn each month or pay a competitive APY only on balances up to a certain amount. For example, an account may offer a high APY on balances up to $10,000, but any balance above that threshold earns a much lower rate.
• Better perks elsewhere: While rewards checking accounts can be advantageous, it’s essential to compare them with credit card offers. Many credit cards provide higher cash back rates or more lucrative rewards programs, which could be a better fit for your spending habits.
• Barriers to entry: Rewards checking accounts may have more strict requirements compared to traditional checking accounts. These can include higher minimum balance requirements, direct deposit mandates or confusing rules for earning perks.
• Fees: As with any banking product, it’s crucial to be aware of potential fees that come with rewards checking accounts. Some accounts may charge monthly maintenance fees, which can quickly offset the rewards you earn if you’re not careful.
• Limited purchase protection: When using a debit card, you may have less protection against unauthorized transactions compared to credit cards. It’s important to monitor your account regularly and report any suspicious activity promptly.

Requirements to open (and keep) a rewards checking account

Rewards checking accounts often have specific requirements you must meet to qualify for the advertised perks. These may include:

• Maintaining a minimum balance. Some accounts require you to keep a certain amount of money in your account at all times to avoid fees or earn rewards.
• Making a minimum number of debit card transactions per month. Many accounts require you to use your debit card a specific number of times each month to qualify for cash back or a higher APY.
• Enrolling in online banking or e-statements. To encourage paperless banking, some institutions require you to enroll in online banking or e-statements to earn rewards.
• Having a direct deposit set up. Some rewards checking accounts require that you have a recurring direct deposit, such as your paycheck or government benefits, to qualify for perks.

Bottom line

Consumers looking to earn cash back on day-to-day purchases using a debit card are good candidates for a rewards checking account. Accounts that pay interest and reimburse ATM fees may provide additional ways to earn and/or save money. What’s more, some banks offer an account bonus for opening a rewards checking account, providing yet another way to put some cash back into your pocket. Don’t open the first one you see, though: As with all decisions with your personal finances, it pays to shop around to make sure you’re finding the best deal.