Posted by Chuck on November 21, 2017
Checking Accounts

Published on November 21st, 2017 | by Chuck

403

Northpointe 5% Interest Checking Account on Balances Up To $10,000 [No Longer Accepting New Applications]

Update (11/21/17): As pointed out by readers Dan & Jeff S Northpointe is no longer accepting new applications for this account. I got in contact with Bill Clancy (VP/Deposit Banking at Northpointe) asking if this was permanent and what would happen to existing account holders and he provided the following statement:

Yes, correct – our 5.00% APY Ultimate Checking has been closed to new account holders.  This is a permanent decision.

There are no changes at this time to any existing Ultimate Checking accounts.  As with any business and any product, we’re continually evaluating our products and services to ensure they continue to meet both the organization’s and its customers’ needs.  Our Ultimate Checking falls into this process as do all our other products and services.  If or when a change may occur, it will of course be done thoughtfully and with significant consideration for what’s best for the bank, its shareholders and its customers.

Northpointe still offer their UltimateSavings (1.12% APY) & Money Market (1.5% on balances $25,000-$1,000,000) accounts. If you’re in the market for a high interest savings account, we’d strongly recommend reading our dedicated post here.

Offer at a glance

  • Interest Rate: 5.00% APY
  • Minimum Balance: none  ($100 initial deposit)
  • Maximum Balance: up to $10,000 (beyond that the rate is .10% APY)
  • Availability: Nationwide
  • Direct deposit required: No
  • Additional requirements: Yes, see below 
  • Hard/soft pull: Soft
  • Credit card funding: Yes, up to $100
  • Monthly fees:  None 
  • Household limit: None (one per SSN/ITIN)
  • Insured: FDIC

The Offer

Direct Link

  • Open the UltimateAccount checking account at Northpointe Bank and receive an interest rate of 5% APY on balances up to $10,000.

Any portion of the balance which is above $10,000 will earn an interest rate of .10%. (The first $10,000 will still earn the full 5% interest.)

northpointe

Requirements

There are three requirements necessary in order to be eligible for the 5% interest rate:

  • Must enroll in e-statements.
  • Must make 15 debit card purchases. (The 15 transactions must post and settle during the statement period to qualify.) More details on this below.
  • Must set up an automatic withdrawal or direct deposit of $100 each month.

These requirements must be met based on the statement period, not based on the calendar month. If you don’t meet these three qualifications, then the interest rate is just .05%.

Meeting the Debit Card Requirement

Initially, this account had a 15 transaction + $500 debit requirement; since May 2017, the $500 requirement has been removed and you just need to hit 15 debit purchases of any amount.

That said, Northpointe has added terms indicating that they’ll switch or close any account that isn’t using the debit card in an ordinary manner for things like gas, groceries, and similar. We wrote more about this in a dedicated post.

Meeting the Deposit/Withdrawal Requirement

The direct deposit requirement is pretty typical, but here they gave us more leeway and allowed an automatic withdrawal as well. The main goal here, apparently, is that you should actually use the account and not just park $5000 in it, so they’re okay as long as they see some regular account activity such as a direct deposit or automatic withdrawal of $100.

Based on my correspondence with the bank:

  • The $100 withdrawal requirement can be fulfilled, for example, by making a $100 credit card payment, initiated by the credit card.
  • Making ACH transfers from another bank account may work in many cases to fulfill the requirement of a direct deposit, but it can vary by the bank as to whether it gets coded as a direct deposit.

Making an ACH withdrawal should probably work in any case since that doesn’t require a special ‘direct deposit’ coding to qualify. Thus, it should work for you to just have an automatic transfer of $100 from your regular checking account to your Northpointe account and another transfer back. Even if the transfer to the Northpointe account would not come up as a ‘direct deposit’, the subsequent withdrawal should presumably be considered an automatic withdrawal and suffice to make you eligible for the 5% interest rate.

Signup Bonus

There isn’t any signup bonus on this account.

At one point there was a $50 or $100 signup bonus offer, but it’s unlikely that will come back. At another point there was a $25 referral bonus offer which gives each party a $25 referral; also unlikely to come back.

The Fine Print

  • Rates are subject to change after the account is open.

Funding the Account

The bank requires an initial funding of at least $100. The funding can  be done via ACH transfer from your existing checking or savings account or via a credit card.

Avoiding Fees

This checking account does not come with any monthly fees.

The only fee to be aware of is a 12-month dormancy fee of $5 (more details here). If you are using the account for the 5% interest, this won’t apply to you as you’ll have activity when meeting the other criteria, but it’s worth keeping in mind. There is also an early account termination fee of $10 if closed within 120 days.

ATM Fee Waiver

Not only is the account fee-free, they’ll actually reimburse you for up to $10 in ATM fees charged by the ATM owner. (Northpointe themselves will never charge you any ATM fees from their end.)

This is a really nice benefit of having this account as you can always fall back on it to withdraw money at any ATM nationwide (or even internationally, perhaps) and get the fees reimbursed. Since you’ll already have $5000 in the account, you won’t have to worry about making sure the account has funds which you can withdraw.

Our Verdict

Since the account requires ‘ordinary’ debit card usage, it’s not nearly as valuable as a straight 5% APY account. That said, 5% on $10,000 is from the best high-yield options around, and some people will find it worthwhile to use their debit card regularly so as to get the rate.

Check our post on Best High Interest Savings Accounts for other high-yield options.



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gary
gary

I have the northpointe acount. they recently changed the requirements and added the 500 requirement.
There is one thing to keep in mind that i still havent figured out to fully interpret. Not all debit card transactions counted. my first month there were a few transactions they didnt count. after asking via message why i didnt qualify i was told that those transactions did not count but they gave me credit for that month only. they were pinless debit but still counted a withdrawal not debit. SO not sure if bluebird would work, with evolve there will be the 3% fee

Logan
Logan

That’s interesting. I could see all of this working if I was able to get the redbird transactions to work but who knows.

Fiby

I mean technically we have basically nothing to lose (just one month’s worth of interest if it doesn’t work) because it’s a soft pull to open the account and there are no monthly fees.

Still though, it’s pretty sleazy that all they say with respect to debit card transactions is “15 or more debit card purchases in the aggregate amount of $500.00 or greater that post and settle per the statement period” and then later tell a customer nope, not all debit card purchases will count.

Steve
Steve

It could be that only “Signature” transactions count, and the Pinless Debit might not be processed as such.

Paul
Paul

I have had this account open for about 4 months now and can confirm that doing small $1 RedCard loads did NOT count as qualifying purchases for earning the 5% rate. You can tell if you’ve made 15 qualifying purchases by logging into your account and looking at your transaction history and seeing what your current interest rate is up in the top box of the screen. When you reach the 15 qualifying transactions it will switch from showing 0.10% to 4.99% if I recall.

Tanya
Tanya

I am curious to know if doing small $1 RedCard loads will show up as a transfer or a cash withdrawal in their system. I just emailed a rep at Northpointe and they assured me that most any times the debit card is used will count EXCEPT a transfer or a cash withdrawal.

Betsy

Now I know who the brainy one is, I’ll keep loonikg for your posts.

gary
gary

as a follow up the charges that didnt count were my cable bill payments. it shows on northpoints system as a chk purchase despite me paying under card payment

Vince
Vince

For why banks offering rewards checking accounts are starting to require more use of debit cards (beyond the obvious of trying to make these accounts profitable for them), see Growth of PINless Debit Card Transactions May Impact Reward Checking as to why some are imposing a minimum transaction amount of $50.01 (the article explains why the 1¢ in addition to the $50.00 in the same transaction is important).

W D
W D

Do online expenses with the debit card (such as internet/tv bill) count as one of the 15?

Adam
Adam

maybe I’m reading this wrong but 5% APY is compounded monthly on $5k, aint it? then this would be worth $3k every year if you met all the requirements every month.

I guess minus the $120 opportunity cost of using the debit card instead of using a 2% CB CC for the monthly $500 usage.

the net aint 3%, $3k – $120 still = ~4.8% profit!

Fiby

You grossly misunderstand what 5% APY means.
You did .05*5000*12 = $3000 because you think you earn 5% of $5000 every single month, right?

APY is annual percentage yield. As in, $5000 held in a 5% APY account will yield 5% BY THE END OF THE YEAR. So 5% of $5000 is $250.
http://www.investopedia.com/articles/basics/04/102904.asp

You DO NOT earn 5% of $5000 every month. You earn the x that solves the equation 1.05 = (1+x)^12, which is 0.407%, every month. So over 12 months, your final balance is
1.0047^12 = 1.05 times the original value.

Superchurn
Superchurn

thanks for explaining this. I’ve always known APY and APR are a bit different, but never bothered to look into the difference as it seemed fairly minimal.

this also explains why the monthly yield from some of my high rate accounts never is quite what i approximate it to be with x=(balance x APY)/12

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[…] we did a review of the Northpointe 5% rewards checking account, they received a positive response from our readers and asked about advertising options. As always […]

Frugal_juan
Frugal_juan

Too much work if you’re touting this as a backdoor savings account. The bank has carefully structured the deal so that it would only appeal to someone who needs a checking account (or someone with a lot of free time who can stay on top of meeting the requirements).

Great checking account, but too many hoops otherwise.

Mimi
Mimi

^^THIS^^

this is just too much to keep track off for very little gain on $5K. I’d rather do a load and drain to my prepaid at $2.5K twice a month using a 2% card.

Fat Chance
Fat Chance

You could never maintain a $5000 balance – more like you’d always be bouncing around between $4k – $5k because money is in constant transit out of the account.

Get at NetSpend card, earn 5% and be done with it.

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[…] Northpointe 5% Interest Checking Account […]

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[…] LMCU for 3% on up to $15k, GLCU for 3% on up to $10k, and numerous prepaid cards on up to $5k, and Northpointe on up to […]

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[…] Northpointe 5% Interest Checking Account, Up to $5k […]

Packetslinger
Packetslinger

I’m not a Noob. But, this may be a noob question – Does anyone have thoughts about automating the 15 required debit transactions?

David
David

You can use Serve to automate debit loads.

Jeff
Jeff

NORTHPOINTE CLOSED MY ACCOUNT! I tried to login today, and found my account closed. After receiving the $100 DOC promotion, I haven’t used the account since mid-April ($0 balance). I had been waiting a few months before moving my money over. Bill Clancy and everyone else mentioned dormancy would not come into effect until 12 months! Chatted with representative who said was closed after 30 days with $0 balance. This is outrageous. Nowhere in the terms does it mention this. Waiting for a call from a supervisor. Has anyone had a similar experience? Check your logins people.

Binny
Binny

Mine was closed too, also signed up for the bonus and never used it. No big deal for me, I just signed up again.

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[…] Read our post on Northpointe here […]

Bill
Bill

My wife and i just signed up for this and so far so good, it appears we hit our 15 transactions and the $500. it’s too bad their system didn’t tell you for sure if the debits count, but then again they are a bank and are trying to make money. I am not sure if my cable bill was allowed or not, it is the only one of my bills that allows using a debit card. And for now I keep track of what I spend for groceries then transfer that money over from my local bank to NP, it takes about 3 days to credit. I think once we are in it a few months will have a better grasp, but we figure if we make money off it then it is worth juggling.

Jeff
Jeff

you can tell if they counted by looking at your interest rate the day after the 15th debit posts. remember you also need $100+ withdrawal

Bill
Bill

Thanks Jeff, my wife has her car insurance set up as the automatic withdrawal. It did show an interest rate but at 4.199 percent so we were scratching our heads on that, because when we signed up it said it was still at 5% but is subject to change. So that is good to know that once we hit the 15th debit and, $500/$100 requirements when we log in to account it will show the full rate?

Jeff
Jeff

yes. I once saw a strange interest rate similar to that but it usually says 4.8888% which is the interest rate, but compounded over time leads to 5% APY

Bill
Bill

I have to say their system seems weird. Last week after we hit the monthly requirement we hit the 4.888% threshold, and held that for 6 days, now it is showing 4.03. I mean we are making some nice interest compared to my bank with a crappy .27 rate, so can’t complain too much!

Bill Clancy

Hi Bill,

Not counting the debit transactions is a system limitation without a work-around, not a “bank trying to make money intention.” We’re planning a significant overhaul to Online and Mobile Banking later this year and including an automated tracker is on our ‘Must Haves’ list.

Sincerely,

Bill Clancy, Northpointe Bank

Jordan
Jordan

Hi Bill,

So is there still a $500 spending requirement per month or not?
I would also like to know whether the timing of meeting the 15 transactions matter (e.g. interest only becomes 5% APY for the month after requirements are met), or is it just a matter of meeting it or not?

Thank you!

Revil
Revil

The limit is up to $10,000 now, and the $500 total in debit card purchases requirement is gone as well (although the 15 debit card transactions part is alive and well).

William Charles

Yup, just waiting for confirmation that the $500 debit card transaction has been lifted.

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