Published on June 5th, 2017 | by Chuck246
Northpointe 5% Checking Adds Restrictive Language Regarding Debit Card Usage
Northpointe Bank offers a rewards checking account with a 5% APY on balances up to $10,000. There are a few requirements necessarily to get the rate, chiefly the 15 debit transaction requirement. Previously, they required that the 15 transactions total $500, then they removed that requirement last month.
Today, Northpointe added language in the terms indicating that the 5% rate is only for those who use the debit card in an ordinary manner, not those who do so specifically for meeting the requirement. They reserve the right, at their discretion, to convert your account to another account or to close it if this requirement is not being met.
The new terms are in effect as of today for new accountholders, and will go into effect mid-July for existing accountholders. Email and mail notices will be sent out as well.
PDF Link (page 19) –
Purpose and Expected Use of Ultimate Checking Account
The Ultimate Checking account is intended to be the accountholder’s primary checking account in which payroll transactions and day-to-day spending activities including but not limited to grocery, gasoline, apparel, shopping, dining, sporting and entertainment transactions are posted and settled. We expect the account’s debit card to be used frequently throughout each month and for transaction amounts to reflect a wide dollar range. Small debit card transactions conducted on the same day at a single merchant and/or multiple transactions made during a condensed period of time, particularly near the end of a statement cycle are not considered normal, day-to-day spending behavior. These types of behaviors appear to be conducted with the sole purposes of qualifying for the account’s rewards, and thus will be deemed inappropriate transactions and will not count towards earning the account’s rewards.
Northpointe Bank reserves the right to determine if the account is being maintained for a purpose other than primary, dayto-day use. Accountholders who persist in making debit card transactions in a calculated and limited fashion in order to meet their monthly qualifications may have their account converted to a different checking account or closed altogether. We also reserve the right to convert the account to a different checking account if the Ultimate Checking account does not have consistent, active use of three (3) consecutive statement cycles.
We have the right to close this account at any time, with proper notice. Our decision to close the account will not affect your existing obligations to us, including any obligations to pay fees or charges incurred prior to termination. No deposits will be accepted and no checks will be paid after the account is closed. Upon termination of your Ultimate Checking account, any optional add-on products or services associated with this account will also be terminated at the same time.
It’s not surprising that they’ve added the limitation as it seemed too generous without that. I just wish there’d be some other sort of way to meet the requirement, such as bill pay activity and the like. I’d be willing to switch over my ordinary checking account to Northpointe which would result, often-times, in balances far greater than $10,000 (which would then be profitable for the bank). But I’m not willing transfer my ordinary spend from credit to debit since in the end I won’t be gaining from the high APY due to the loss of credit card rewards.
Since the previous requirement was to spend $500, we can venture to guess that $500 is ‘enough’ to satisfy the debit requirement. If you’re putting spend on a 2% card, you’d be losing $10 per month or $120 per year, and still netting a 3.5-4% APY on your money (after deducting the opportunity cost) which is still very good. Main question is how much effort you’re willing to put in for the gain and how easy it is for you to spend that amount (lots of us have most of our spend going toward minimum spend requirements or in bonus categories, etc.).
[Update: According to a bank representative in the comments, the main thing is to use the debit card 15 on varying dates, charge types, and amounts. You probably won’t need $500 in purchases, but will need to use it consistently throughout the months at various retailers.]
See also Best High Interest Savings Accounts for more high-yield options.