bank rates

Farmers & Merchants 4.51% Checking

If you have lots of money to invest in a high-interest checking account, you need one with that pays a good rate on a big balance.

That’s what makes Platinum Rewards Checking at Farmers & Merchants Bank stand out.

It’s paying 4.51% on balances up to $50,000. (Deposits over $50,000 earn 1.54%).

Some banks, such as Malvern Federal Savings Bank and First State Bank offer high rates — but not with a $50,000 limit.

Others, such as Allegiance Bank pays its top rate on balances up to $250,000 — but that top rate is only 3.10%.

Farmers & Merchant strikes a nice balance, paying a good rate on a bigger-than-average balance. We know it was a slightly better interest rate last fall, but that just goes to show how the terms on this kind of account can change.

The offer is available nationwide. (Many of the community banks offering high-interest checking accounts limit them to local customers).

Farmers & Merchant also provides unlimited, free use of other banks’ ATMs. (Most accounts only reimburse customers for $20 or $25 a month in ATM fees.)

To qualify for the top rate you need to make 10 Visa Check Card purchases, and have at least one automatic deposit or debit, every month.

Farmers & Merchants has eight branches in northwest Virginia, earns four of five stars in Bankrate’s Safe & Sound rating system and your money is FDIC insured.

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Comments (17)
1 Star2 Stars3 Stars4 Stars5 Stars (9 votes, average: 3.67 out of 5)
17 Existing Comments
  1. BloggingBanks said:
    on April 1st at 06:20 am

    This seems like a decent deal. Few banks offer their high rates for amounts highr than 25K. In fact I am aware of only 60 which offer rewards checkign accounts with limits up to 50K..

  2. maggie said:
    on April 1st at 11:22 am

    what is the motivation of banks in setting a cap on deposit amt. if they are looking to increase funds on deposit for their balance sheets, why do they pay lower interest on amounts greater than $50K. I see this with lots of offers but I cant understand the logic. help!

  3. DealMaven said:
    on April 1st at 11:51 am

    The banks offering these accounts are making money off the debit card transactions you’re required to make — and they hope you’ll make more debit card purchases than the minimum. (You don’t pay those transaction fees. The stores you shop at pay them everytime you swipe your debit card and enter a PIN number.) But there’s only so much money a bank can make this way. So to make sure they make a profit on these accounts the banks have to limit how much they pay in interest each month, and one way to do that is to offer a high rate but on only a limited amount of money. Some banks offer a higher limit, but a lower maximum interest rate. It all comes down to how much income these accounts generate and how much of that the banks can afford to share with you in the form of interest payments, and still turn a profit.

  4. lee said:
    on April 1st at 02:49 pm

    I’ve just applied for an acct last night. Today the bank rep. emailed me to mail her a copy of my state ID because I’m out of state. Hope this goes well.

  5. DealMaven said:
    on April 1st at 04:54 pm

    Lee: Please let us know what happens. You’re the test case for a nation of rate-starved savers.

  6. lee said:
    on April 2nd at 10:42 am

    I spoke to the bank rep. about transferring money from my local bank to Farmers & Merchants acct. She said their online acct doesn’t have features like HSBC or FNBODirect where you can easily initiate money transfer from local bank to this bank. I would have to initiate transfer by visiting local branch using the routing number & acct number. This sounds really inconvenient. What you all think?

  7. maggie said:
    on April 2nd at 02:47 pm

    i think that the rate may justify it. if you arent planning to do too many of these transactions. way I see it, parking your $ to get max interest…and leave that pile alone. if you have to transfer $ regularly then maybe it’s not the right account for you.

  8. lee said:
    on April 2nd at 02:59 pm

    The thing is we don’t even know how long this rate gonna last. I’m not sure if I wanna go through such hassle to setup this acct with the fact that it’s lacking convenient features of FNBOdirect, HSBC. SmartyPig may sound like a better deal.

  9. DealMaven said:
    on April 2nd at 04:55 pm

    Yeah. The Farmers & Merchants Bank seems to be operating with oh-so-out-of-date 20th Century technology.

    When it receives an online application, it does a credit check and then lets you know you’ve been approved. The next step is to send a notarized copy of your driver’s license. The bank will then send you paperwork. When you get it you fill it out and send it back with a check (preferably a cashiers check).

    This isn’t as convenient as electronic transfer, but considering the benefits, it seems well worth the effort. Thanks for bringing this to our attention.

  10. walt said:
    on April 2nd at 05:25 pm

    F&M site: ”
    *Annual Percentage Yield. Rate effective December 17, 2008. We may change the interest rate and APY at any time after account is opened. Check our Rate Sheet for current rates.”
    rate sheet: $5,000 – $24,999 .15%
    $25,000 – $49,999 .35%
    walt: bait and switch

  11. lee said:
    on April 3rd at 09:01 am

    Whaz bait and switch, Walt ?

  12. Gabriella said:
    on April 3rd at 03:57 pm

    Spoke with the people @ the bank, everything looks good, except for the fact that the rate can be changed at any time…so, after all the hassle to open the account the rate can drop…

  13. Debbie said:
    on April 8th at 08:07 am

    Gabriella, I think these banks have in their rules that the rates can be changed at any time, but when they do lower them, it’s still usually much higher than you would normally get. So, I think it’s worth a little hassle. You can always cancel the account if it gets too low.

  14. Andy said:
    on April 10th at 12:32 pm

    I’ve recently opened two reward checking accounts, both earning 5.01% apy. They’ve both maintained these rates for over a year. Malvern Federal Savings in PA has a max of $35,000 and Coulee Bank of WI has a max of $25,000. Both are rated four stars by and Bauer Financial. Simple sign-up and money transfer for both done all on line. Each has 10 debit card purchases and one auto deposit or debit requirement. Great customer service with a personal account rep.

    I did a lot of research and these are far and away the best offers out there. I recommend them highly.

  15. Andy said:
    on April 10th at 01:40 pm

    I just learned that Malvern has limited enrollment to those states in proximity to PA. I guess I got in just in time.

  16. DealMaven said:
    on April 10th at 02:11 pm

    Andy: True deal. A bank executive told us that Bankaholic, and USA Today all did stories about its reward checking account within a few days of each other and Malvern was swamped with applications. It had to do something, so it stopped offering the deal nationwide. We’ll check out Coulee Bank.

  17. anon said:
    on September 3rd at 04:26 pm

    I signed up with malvern, been a customer for the past four months. The interest rate has kept going down: 5%, 5% then, 3.5%, now 3% as of today. What a rip from their advertisment, but it’s still tough to beat that rate right now. They must be paying a lot of interest for a small bank.