6.01% APY on your Checking Account! Wait, it is too good to be true.

So... this seemed too good to be true. I just found out, it is. The offer is only available for people who live in the bank's county in Illinois. So much for 6% APY. There's nothing like that around here!

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I was listening to my favorite talk radio program - The Ray Lucia Show - yesterday, and a guy called in to ask about a 5% APY checking account he saw advertised on the Internet. He wanted to know if it's legit.

Since I haven't seen any set APY rates of 5% since three years ago, when I saw those rates on a CD, I was intrigued. The "Brain Trust" team at the radio station did a little research and found out that, indeed, this offer was through an FDIC insured bank and it was legit. Of course there was a catch - you have to 1, have direct deposit and 2, use your debit card at least 10 times per month/billing cycle.

That left me with the question - what happens if you don't. So I did some research online and found that many smaller banks are offering up these high interest checking accounts to lure in new customers. Smart for them.

I just opened a 6.01% APY (!!!) checking account with First Robinson Savings Bank. Read through the fine print, and so far it seems pretty straight forward. The rewards are only on cash under $25,000 -- but that's ok, I'm not ready to save more than $25,000 in a checking account anyway. You do need direct deposit (I'll have to get my work account to switch over from my Bank of America - thank goodness I'm now a full time employee!), and you do need to make 10 transactions a month (I could buy gum ten times and that'd be fine.)

Some other banks are offering similar rates, more in the 5% range...

Union State Bank is offering 5.01% APY with similar rules and AmericaNet is offering 5.25% APY.

I'll admit, I'm a little nervous opening up a bank account at a small bank in some random Midwestern state (not that I have anything against the midwest!) but these rates might not be too good to be true, just too good to pass up.

Given that my Chase Freedom card rewards are about $20 a month, on month's I spend a lot, I figure I could probably make a similar amount in this checking account and not risk forgetting to pay my bills on time and getting hit with late fees.

From the fine print, it looks like if you fail to make your 10 transactions per month you just get only .25% apy for that month - so basically, you don't get any interest. But you can start over the next month.

Considering I barely ever use cash, my debit cards always get a lot of action. This sounds like a good way to earn at a good rate while also starting to exit Bank of America. Right now I have a checking account, savings account, and CD at BoA. If this 6.01% rate turns out to be legit, I'll move my CD over there once it expires, and possibly move the cash I've been saving at ING there too -- since it's only earning like, 2%.

Have any of you opened up / used one of these high interest checking accounts before? Any horror stories I or my readers should be aware of?