First State Bank of Kansas Reward Checking Review

by Andy Hough on June 17, 2009 · 1 comment

A couple of months ago I opened a reward checking account with First State Bank of Kansas. I’ve been pleased with the results so far and I thought I would share my experience with those of you who are thinking of opening a high-yield checking account.

The application process was not as smooth as I would have liked. I was wary of problems with the application process before I started. I applied with First State because they are local to me and I could visit a branch if there were any problems. They only accept applications from the Kansas City area so if you don’t live here you will want to choose a different account.

I applied online and after finishing the application I was told I would be contacted shortly. The next day I received an email that my application had been received and was being reviewed. After a couple more days without hearing from them I checked my archived email and noticed they had sent me another email I had somehow missed and that there was a problem with my application and I would need to visit a branch to open the account.

The problem was with my identity verification questions. None of the questions had correct answers for me to choose. I’ve heard these questions are supposed to be pulled from your credit report but I don’t think that is true. It appears to me that the questions are pulled from a database based on your address. The questions I was asked appeared to be targeted at my GF who owns the house that is my current address. In the past when I was using my mother’s address as my permanent address I was given identity verification questions that seemed to be based on my mom’s data.

Anyway, when I visited the branch and showed my identification there was no problem opening the account. I made a small opening deposit and was given information to sign up for online banking. One disappointing piece of information I was told here was that they didn’t allow transfers to or from their bank account to other bank accounts. This doesn’t seem right. I haven’t had a need to do so yet but I might work around that using Paypal or the bank’s bill pay.

I also had a problem when trying to sign up for the online banking and bill pay. I wasn’t given my complete user name for the online banking and my bill pay hadn’t been activated yet. A phone call quickly cleared up both of these problems but it was still a little annoying to have to call.

The online banking and bill pay system is very basic but it works well enough for my simple needs. I would like to see some more features here and the simple design doesn’t isn’t too impressive but as long as the job gets done I can live with the current setup.

I didn’t keep track of how long it took me to receive my debit card and free order of checks. I believe I received them within a couple of weeks. I rarely use checks but it is nice to have some for those rare occasions when one is needed.

Their current interest rate for the reward checking account is 5.03% APY. I was told there was no guarantee on how long the rate would last but that the rate would always be at least 2% higher than their one-year CD rates.

To qualify for the 5.03% rate on their high-yield checking account and up to $25 in ATM refunds you need to have a direct deposit or automatic ACH, at least 10 debit card purchases, and receive your statement online. They automatically give you the higher rate on the checking account the first month. After that if you don’t meet the qualification you receive a lower rate of about 1%. These requirements are a little easier to meet than that of most other reward checking accounts which typically require 12-15 card purchases a month. I prefer to make most of my larger purchases on my reward credit card so the lower amount of card purchases required is beneficial.

I use this reward checking account as my primary bank account which is what they want you to do. Since they pay the high interest rate on balance up to $25,000 and my average balance has been about $15,000 this has worked well for me. I have enough money in there that the interest earned is worth the trouble of meeting the qualifications but I don’t have too much in there where I have to worry about not getting the high interest rate on all of my money.

If you are interested in opening a reward checking account there are two great resources that I recommend. One is High-Yield Checking Deals which has a list of reward checking accounts by state and list the interest rate paid and describes the requirements. Another is Checking Finder which doesn’t list as many banks but gives you the ability to open an high yield checking account online.

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{ 1 comment }

1 Finance Advisory Stop June 22, 2009 at 4:33 am

Neat post. I’m not from Kansas, but have a few friends there actually — I’ll pass this article on to them. I’ve bookmarked your site also — I’ll be back soon!

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