TAB Bank’s new checking account offers 3.50% APY plus 1% cashback – Forbes Advisor

Who said high-interest checking accounts are dead?

TAB Bank, an online financial institution based in Utah, recently launched a checking account called TAB Spend. The account partners offer attractive rewards and a decent 3.50% APR on all balances and 1% cash back on all debit card purchases.

The combination of high-interest checking accounts and cashback rewards with no minimum balance is rare and could be of interest to those looking to top up their checking account—or those who don’t qualify for the best cashback credit cards.

TAB Expense Account: The Details

The most attractive aspect of TAB Spend is the rewards: 3.50% APR on all balances and 1% cash back on all debit card purchases.

The yield compares favorably with the best high-yield checking accounts available, while 1.00% cashback rivals the best bonus checking accounts on the market.

Read more: Read our review of TAB Bank

You’ll earn 3.50% APY on all balances, whether it’s one cent or $1,000,000. Many of the best checking accounts only allow you to earn interest up to a certain balance or have strict interest payment requirements.

There are no account fees and no minimum opening balance requirements – a benefit for young savers. They enjoy full FDIC protection through the bank and have access to the full range of services, including online and mobile banking.

However, ATM fees will not be refunded.

Comparison of the TAB expenditure account

To get a feel for how TAB Spend fits into the market, let’s compare it to the top three in our rankings of the best high-interest checking accounts, which include Presidential Bank Advantage Checking, SoFi Checking and Saving, and Consumers Credit Union Rewards Checking.

APY

At first glance, TAB’s APY of 3.50% seems worse than our top 3 offerings. But if you look a little closer, it’s more competitive than you might think.

• Presidential Bank Advantage Account offers a 4.62% APR on balances under $25,000 and 3.62% above that amount. To get those rates, however, you’ll need to receive $500 monthly in direct deposits and make at least seven monthly withdrawals. Otherwise, you’ll be stuck with a measly 0.10% APR.
• SoFi checking and savings account is a combo account (you must have both) that offers 0.50% APY on checking accounts and up to 4.50% APY on savings accounts when you set up direct deposit or deposit at least $5,000 every 30 days.
• Consumers Credit Union Rewards Check offers a yield of between 3.00% and 5.00% APY on balances of up to $10,000 if you meet certain requirements. For example, you must sign up for electronic statements and make 12 debit card purchases each month, as well as receive $500 in direct deposits and spend at least $500 per month with a CCU Visa credit card to qualify for the 4.00% interest rate.

The compromise is obvious: with our winners you can achieve a higher return, but you have to meet a number of requirements.

And don’t forget the 1.00% cash back you get on all purchases – none of the top three high-interest checking accounts offer a comparable benefit.

Fees

TAB Spend doesn’t charge any account fees or have any account minimums, which isn’t the case with some of the other top offerings. However, it doesn’t reimburse ATM fees.

• Presidential Bank Advantage Account requires a minimum opening balance of $500 and charges a $5 administrative fee unless you have a $500 balance, but also reimburses up to $8 in monthly ATM fees.
• SoFi checking and savings account has no account maintenance fee or balance requirement to open the account. However, you will not be reimbursed for ATM fees if you use an out-of-network ATM.
• Consumers Credit Union Rewards Check has a nominal minimum deposit of $5 but does not charge a monthly account maintenance fee. All ATM fees are reimbursed, however you must be a member to join the credit union. You can do this by joining the Consumers Cooperative Association with a $5 fee.

TAB Spending Account: Should You Get One?

While the checking account is certainly attractive, you also need to consider what you will actually use it for. Finally, TAB also offers a savings account with a yield of 5.02%. Why not just park your money there or in another high-yield savings account?

That’s certainly a sensible strategy, as is choosing one of our high-yield checking accounts and getting the highest interest rate available on the market. You could also use one of the best credit cards that will give you more than 1% on your everyday expenses.

Nevertheless, TAB Spend makes sense for many types of savers.

For example, you may want to achieve a high return on your checking account without having to overcome many hurdles.

Or maybe your credit score isn’t high enough to qualify for one of the best cash back cards.

Maybe you always have a good chunk of cash in your checking account to pay your many monthly bills.

If any of these scenarios apply to you, TAB Spend is a valuable option.