Iowa State Bank 3.25% APY on up to $25k [Iowa, Nebraska, MN, SD]

Update: Online account opening no longer possible.

Offer at a glance

  • Interest Rate: 3.25% APY on balances up to $25k
  • Additional Benefits: ATM fee refunds
  • Minimum Balance: None
  • Availability: Iowa, Nebraska, Minnesota or South Dakota – can be opened online
  • Direct deposit required: No, see below
  • Additional requirements: Yes, see below
  • Hard/soft pull: Hard (Transunion)
  • Credit card funding: None
  • Monthly fees: None
  • Insured: FDIC

The Offer

Direct Link to offer

  • Iowa State Bank offers a rewards checking account that earns 3.25% APY on balances up to $25,000 when doing qualifying actions (below)
  • An additional benefit of the checking account is that domestic ATM fees incurred will be reimbursed when doing the qualifying actions

This account can be opened online for residents of Iowa, Nebraska, Minnesota or South Dakota.

Qualifying Actions

To be eligible for the 3.25% rate, you need to do three things each qualification cycle:

  • Have at least 10 debit card purchases post and settle
  • Have at least one ACH payment or direct deposit post and settle
  • Be enrolled and review eStatements

Basically, after the initial setup, you’ll have to make 10 debit card purchases (of any amount, apparently) and have one payment or direct deposit post and settle. Any ACH should work for direct deposit so you can automate a transfer from your regular checking account on a monthly basis. Sounds like you also have to review the eStatement sent monthly.

“Monthly Qualification Cycle” means a period beginning one day prior to the first day of the current statement cycle through one day prior to the close of the current statement cycle.

The Fine Print

  • If qualifications are met, balances above $25k earn an interest rate of .3% APY
  • If qualifications are not met, all balances earn 0.05% APY
  • Qualifying transactions must post to and settle during monthly qualification cycle; transactions may take one or more banking days from the date transaction was made to post to and settle account
  • APYs accurate as of 7/16/15; rates may change after account is opened
  • If qualifications are met, Domestic ATM fees incurred during qualification cycle will be reimbursed and credited to account on the last day of monthly statement cycle, max of $20

Our Verdict

There are quite a few 3% rewards checking accounts in various regional areas – we hope to have up a list with more of these options – but this one is unique in that it’s 3.25% on up to $25k; most of the others max out at $10k or $15k.

The question remains if it will result in a hard pull, which is obviously a deterrent. Let us know if you find out more on this.

Check out our post on which high-interest savings account to get as there are a few options that offer 5% APY with easy requirements and some other 3% options; check it out to see what’s best for you. Also, see this post for some ideas on how to meet the debit card requirements.

Notify of

oldest most voted

Rich Williams
Rich Williams (@guest_1245193)
August 27, 2021 10:43

Rate is now 1.75%

Rosco (@guest_1127156)
January 13, 2021 21:30

Rate lowered to 2.0%

Jon K
Jon K (@guest_1117235)
December 26, 2020 11:53

The rate on this looks to be lowered to 2.75% now.

fancypants (@guest_1042123)
August 24, 2020 11:38

Noticed they reduced the rate from 3.25% to 3.00%. Max is still $25k.

Lokesh Puri
Lokesh Puri (@guest_1032125)
August 7, 2020 17:53

Iowa state bank accounts are only offered in local marketing area and limited to IOWA state customer only. Accounts can only be opened in branch and not online.

Rosco (@guest_572688)
March 21, 2018 18:23

Received this email today from Iowa State Bank:

March 21, 2018

Dear Kasasa Customer,

We are writing to inform you of the account disclosure changes for your Kasasa account. It is Iowa State Bank’s expectation that your Kasasa account will be used as your primary checking account where transactions are to be conducted through the use of a debit card. A primary checking account would function as a “main account” and would include most of a customer’s daily spending transactions.

It is the Bank’s expectation that a Kasasa Cash account holder will conduct the majority of their spending through debit card transactions. Debit card transactions are essential to Kasasa Cash accounts functioning as they are designed. When used as designed, Iowa State Bank is able to save on operating costs and return these savings to you, our customer in the form of attractive rewards. Therefore, while customers are free to write checks, debit cards are encouraged to be utilized as the primary method for conducting day-to-day spending transactions. ATM transactions do not count as debit card transactions.

While a portion of day-to-day debit card transactions may be small (less than $10.00), most transactions are expected to be greater than $15.00 each, due to the described nature of a primary checking account. Furthermore, numerous, small debit card transactions to the same merchant on the same day for amounts less than $10.00 are not considered normal, day-to-day spending habits. Small transactions of this kind that appear to serve solely to meet the minimal required POS transactions for a monthly qualifying cycle go against the intended use of the Kasasa Cash account.

Iowa State Bank reserves the right to determine if a Kasasa Cash checking account is being maintained for a function other than day-to-day, primary use. Customers whose transactions are small, at one merchant and/or only meet the minimum number of POS transactions will be further encouraged to use their account in the primary manner described and to utilize their debit card as their main method of conducting transactions. Customers who persist in making debit card transactions in a calculated and limited fashion in order to meet monthly qualification requirements may have their accounts converted to a regular checking account or the account may be closed.

If you have questions on this information, please feel free to contact your local branch or email Iowa State Bank at [email protected].


Iowa State Bank

jtizzle (@guest_609155)
June 27, 2018 10:23

That sucks. What did you do? Do you think they really would shut you down? I’m looking for alternatives now that Insight is down.

Rosco (@guest_609520)
June 28, 2018 08:40

I only use my debit card for $.50 payments at Amazon to meet the minimum requirements and ACH deposit $1 each month. No shut down yet, but imagine it’s coming someday.

joE (@guest_719471)
February 8, 2019 15:54

Rosco Did that someday come?

Rosco (@guest_719752)
February 9, 2019 09:43

Not yet. The bank sent me a second warning letter late last year. No change in my behavior or further action from the bank since then.

Matt K
Matt K (@guest_562144)
February 20, 2018 15:04

Confirming this is a Transunion hard pull. Applied yesterday, rep emailed today saying it’s under review and just now noticed the Credit Karma hit.

William Charles
February 20, 2018 18:38

Thanks, will update.

Emporio (@guest_638568)
September 4, 2018 10:14

The link to open this checking account online has been removed from the bank website. Per a “New Accounts Coordinator” at the bank, “We are no longer offering online account opening. To open an account you would need to go to a branch.”

William Charles
September 4, 2018 20:14

Thanks, added to post.

MLS (@guest_450207)
July 31, 2017 17:44

I opened an account with this bank last year when I unexpectedly ended up with a chunk of money I wanted to park safely. It was a pain in the neck to open….Lots of paperwork: copy of my drivers license and social security card, and pages of papers that had to be signed and each signature notarized individually but each signature line did not have the proper space for a notary stamp. I considered giving this the go-by, but soldiered through. (On the other hand, the CSR was very helpful.)
Once established, I haven’t had any issues. My smaller debit transactions have not been questioned. I am now looking into opening the companion Kasasa Savers account (1.25% APY no extra qualification requirements) to sweep the interest payments into.

MLS (@guest_450226)
July 31, 2017 18:09

Oops, make that 1.15% on the Kasasa Saver account.

M (@guest_249206)
April 21, 2016 15:59

No credit card funding – the only option to fund online is to ACH from another account. I got a hard pull on TransUnion.

Rick (@guest_274956)
July 11, 2016 15:53

I agreed. I just called one of the branches. I was told that it will be a hard pull on TU.

Joe (@guest_249121)
April 21, 2016 13:18

Do they accept Money Order deposit via the smart phone APP?