Bank of the West is paying a $100 bonus for opening a new checking account.

Although the offer is available nationwide, we wouldn’t recommend it to anyone outside the 20 states where Bank of the West has more than 700 branches.

That’s because it doesn’t provide free use of ATMs at other banks — a great perk many of the best checking accounts now offer.

Without a Bank of the West machine nearby, ATM fees could gobble up your bonus in a matter of months.

To quailfy you must deposit at least $100 that is not currently in a Bank of the West account, establish a monthly direct deposit of at least $250, or pay 10 bills online, all within the first 60 days of opening the account.

You can choose from one of two types of personal checking accounts, and “Free Checking” seems like the best deal to us. No monthly fee. No minimum balance. Free online bill payment.

The other option is a “Choice Interest Checking Account,” which offers the same benefits, but in order to have the $10 per month service fee waived you have to:

• Establish a monthly direct deposit of at least $250.
• Maintain a $2,500 average monthly balance.
• Maintain a $5,000 average monthly balance in all Bank of the West accounts, including personal savings, CDs and IRAs.
• Make five or more online bill payments per statement cycle.

That seems like a lot of effort to get the miserly interest rates this checking account pays — 0.10% APY on balances below $10,000, 0.25% APY, for balances from $10,000 to $50,000, and 0.50% APY for balances above $50,000.

If you want to earn serious interest on your checking account balance, look into the rewards checking programs from Bank of the Sierra or Royal Banks of Missouri.

Bank of the West’s bonus offer ends Dec. 11.

This is where you loan money directly to worthy borrowers through a Web site, rather than putting your money in a bank and allowing its loan officers to pick the investments.

It’s possible to earn a better return than you’d ever get from a bank.

Lending Club, for example, says the net annualized return for its investors has been over 9.5% since 2007 — and yes, that includes the losses on loans that don’t get repaid.

For the rest of November, Lending Club is also offering a $50 bonus to Bankaholic readers who sign-up to be new lenders. (Use the link above and the money will be placed in your account as soon as you register.)

Then you can start reviewing applications and choose which loans to fund.

You won’t want to risk your hard-earned dollars on just one person. You can invest as little as $25 per loan and spread your money around to scores or even hundreds of loans.

The terms of each loan, including the interest rate, are established by Lending Club based on the creditworthiness of each borrower.

But its rigorous credit policy requires borrowers to have a minimum FICO score of 660 and maximum debt-to-income ratio of 25%, which has led to a low 3% annualized default rate.

Now, let’s be clear. This is not for everyone.

These loans are not insured by the FDIC or anyone else, and you shouldn’t commit more money than you can afford to lose.

Lending Club is pretty up-front about the risk and sets minimum financial standards for all lenders, requiring them to have:

• An annual gross income of at least $70,000 and a net worth of at least $70,000 (exclusive of home, home furnishings and automobiles). California residents must have $100,000 in gross income and net worth.

• Or, a net worth of at least $250,000.

Lending Club also limits investors from lending more than 10% of their net worth through the site.

If you know someone who needs to borrow money, Lending Club says its rates are up to 30% lower than similar loans at traditional financial institutions.

Its Momentum Savings account pays 2.50% APY on balances between $2,500 and $50,000.

That beats the best nationally available savings account rate, 2.25% APY from SFGI Direct, and matches the best deals on 24-month CDs.

To qualify for that rate you also have to open a Momentum Checking account and:

• Make eight transactions per month, which includes any checks you might write and debit card transactions.
• Automatically have at least $100 a month transferred from your checking to your savings account.
• Receive your combined savings and checking statements via the bank’s Web site.

If you don’t make the eight transactions, the interest rate on your savings account falls to 0.25% APY for that month.

Anything over the $50,000 maximum in the savings account earns 1.0% APY.

If this is starting to sound very much like the typical rules on high-yield or rewards checking accounts, that’s because they are.

Think of the Momentum accounts as Ridgestone’s riff on that concept — and the similarities don’t end there.

There are no monthly fees for either account and you can use your debit card free of charge at any MoneyPass ATM. (Click here to see if there’s a MoneyPass ATM near your home or work.)

You can also earn a $50 bonus by adding one direct deposit to your checking account.

Although this offer is available nationwide, you can’t sign up online. You’ve got to call one of the bank’s two branches in suburban Chicago (847-805-9520) or suburban Milwaukee (262-789-1011) to have an application e-mailed to you.

Click here to compare Ridgestone’s deal with the best savings and money market rates from dozens of other banks in our extensive database.

SFGI Direct is paying 2.25% APY with a minimum deposit of only $500.

SFGI Direct is the online division of Summit Community Bank, headquartered in Moorefield, W.Va., which has branches throughout the state and in northern Virginia.

Its rate is just a little less than Tennessee Commerce Bank was paying when it led our late-August ranking of top savings accounts.

While Tennessee Commerce is still paying 2.30% APY on its savings accounts, it stopped opening new accounts a few weeks ago so we can’t include it this month.

The return on SFGI savings accounts is also comparable to what you’d get with the best 12-month CDs, and its far more flexible, allowing investors to reduce or add to their balance anytime they’d like.

The downside, of course, is that yields on all savings accounts are variable. In better economic times, they could go up. In today’s market, they’re far more likely to go down.

The other top rates on savings accounts are:

2.15% APY with a minimum deposit of $1 from ShoreBank, which has branches in Chicago, Detroit and Cleveland.

2.00% APY with a minimum deposit of $100 from 1st Constitution Bank, which has 11 branches in central New Jersey.

That rate is only guaranteed for the first three months. After that it drops to 1.95% for accounts with balances of over $10,000 and 1.60% for accounts with balances below $10,000.

1.85% APY with a minimum deposit of $2,500 from Discover Bank, which is owned by the credit card company.

Compare these deals with the best savings and money market account rates from other banks in our extensive database.

It’s Royal Banks of Missouri, a 40-year-old institution with six branches in the St. Louis area.

It’s Majestic Checking Account is offering 4.30% APY on balances up to $25,000.

That’s the second-best rate we know of on a nationally-available checking account, topped only by Bank of the Sierra, which pays 4.51% APY.

If you’re not familiar with how these accounts work, “The ABCs of High-Yield Checking Accounts,” will fill in the details.

If you know all about high-yield or reward checking accounts, you’ll find the terms from Royal Banks are pretty standard.

To qualify for the 4.30% rate you must make 10 point-of-sale debit card transactions and one direct deposit or automated payment every month. Customers are reimbursed for up to $25 in service charges for using other banks’ ATMs.

If you fail to meet the requirements you’ll earn only 0.15% for that month and ATM usage will not be reimbursed. Your privileges will resume the next month that your obligations are met.

Balances over $25,000 earn 1.40% APY

Online applications through the bank’s Web site are available to some, depending on zip code. Others will be sent to: CheckingFinder, where you put in your zip code, find Royal Banks in the Missouri listing, and hit “learn more.” You’re in.

As with any deposit account, the 4.30% interest rate is variable, but Royal Banks of Missouri have offered this rate since May 7, 2009.

AmericaNet Bank, Redneck Bank, and Evantage Bank are all paying 2.0% APY on their “Mega Money Market” accounts.

That’s the best, nationally-available deal since EverBank cut the yields on its MMAs from 2.15% to 1.77% this month.

Readers couldn’t say enough bad things about customer service and technical problems last spring when AmericaNet, Redneck and Evantage had the best MMA rates.

“This bank is horrible,” Dave wrote of Redneck in April. “As many others, I had to call to get my account number. This website appears to have been built by my 2.5 year old nephew… Redneck bank is a big fat dud!”

The banks are owned by Todd and Wade Huckabay, whose family has been involved in Oklahoma banking since the ’30s.

But the brothers weren’t prepared to deal with hundreds of new customers a day when their online banks began offering some of the best MMA and checking account rates in the country earlier this year.

“I think we’ve gotten most of the problems fixed,” Todd says.

“We were handling requests (some 20,000 to 30,000 hits a month) manually and we couldn’t keep up. But now our accounting procedures are automated.”

The only delay you might still encounter is making bank-to-bank transfers, Todd says. “Now it takes about three days, but we are turning it into an overnight situation, which should be in place by January.”

If you want to give the Huckabay banks another chance, you’ll earn 2.00% APY on investments up to $35,000 and 1.00% APY on balances greater than that. But like all MMAs, those rates are variable and can go down.

There’s no minimum balance, no maintenance fee, and a Visa Check Card to make up to six, free withdrawals a month. There’s a $5 charge for each additional withdrawal.

You can use our extensive database to compare this deal with the best money market rates from scores of other banks.

How much is too much?

A letter from Sandra Thompson, director of the FDIC’s Division of Supervision and Consumer Protection, infers that she doesn’t want to find Ally products among the top-paying CDs or savings accounts, or even paying much more than average.

If Ally follows the FDIC’s edict it will be yet another blow to savers struggling to earn even a modest return on their money.

All of the online banks certificates of deposits and savings accounts have consistently ranked among the two or three best-paying in the country.

Here’s what seems to be going on.

The Treasury Department allowed Ally’s troubled owner, auto financing giant GMAC, to become a bank holding company earlier this year so that it could qualify for a $20 billion federal bailout — $14.5 billion in capital and $4.5 billion to guarantee GMAC debt.

Washington couldn’t let GMAC fail because it desperately needed the Detroit-based lender to keep financing the purchase of new cars and trucks at General Motors and Chrysler dealerships across the country.

On May 21, the Federal Deposit Insurance Corp. finalized the agreement to guarantee GMAC’s debt so that it could continue to borrow some of the money it needed to make those loans.

According to a letter from Thompson dated on June 4, that agreement required GMAC to reduce Ally Bank’s “overall deposit costs.” Translation: Stop paying top dollar for CDs and savings accounts.

But GMAC was just launching a big advertising campaign to introduce Ally Bank — the new name for what had been called GMAC Bank. Touting Ally’s high interest rates was a big part of that campaign, which also accused other banks of abusing customers with sneaky fees and terms.

Those other banks were not amused.

After they’d taken billions in federal bailout money, they’d slashed the interest rates on their CDs and savings accounts to record lows.

The American Bankers Association wrote a letter to the FDIC on May 27 complaining that Ally was pursuing “risky financial strategies” by paying top-dollar for deposits.

On June 4, Thompson told GMAC that it would decide how much of its debt the federal government would guarantee based on how much it was paying to raise money through Ally Bank.

It wanted Ally to report the interest rates it was paying on every type of deposit, whether those rates ranked among the 10 best rates, and how much those rates exceeded the average rates in Bankrate’s weekly survey of major banks and thrifts.

(Full disclosure: Bankaholic is part of Bankrate and the average rates we quote are from that survey.)

While GMAC has lowered its rates twice since it got that letter, it’s still paying well above average rates, placing third on yesterday’s ranking of the best savings accounts.

How long that will last, we don’t know. But it seems that the government (and the big banks that dominate the ABA) is out to make savers pay a huge price for a financial crisis they did nothing to create.

Yet that’s the case.

Hundreds of community banks across the country are paying 4% APY or more on high-yield checking accounts at a time when savings accounts, money market accounts and certificates of deposit are paying half that much.

Some banks limit these accounts to local customers. Others accept new accounts from anywhere in the country.

But the fact that the nearest branch might be hundreds of miles away is no big deal because of the other primo benefit these accounts offer — you can use any ATM for free.

Each month you’re reimbursed for the ATM fees you incur, usually up to a limit of $20 or $25. But that allows you to tap the most convenient ATMs for cash eight to 10 times a month.

The most generous of these accounts have no limit. Go every day if you want.

So, the best interest rate around and the ability to use any ATM you want for free — there must be a catch, right?

There is.

These accounts have more rules than regular checking accounts. The most common:

• You must make a minimum number of debit card purchases each month, usually 10 or 12. And they have to be the kind of transactions where you enter a personal identification number, not sign for purchases like a credit card.
• You have to receive all of your statements electronically. Some banks actually require you to log into your account once a month.
• You must make at least one direct deposit or regularly scheduled electronic withdrawal — to pay your gym membership, for example — each month.
• The interest rates are adjustable, and as for the rates on all types of deposits, the return on many of these accounts has been coming down. For example, many accounts that were paying 6% last summer are paying 5% now.
• There is a cap on how much money can earn the highest interest rate. The first $10,000 to $50,000 in the account usually qualifies. Balances over that earn a much lower interest rate, sometimes as little as 1.01% APY.

If you don’t follow the rules, banks can’t make enough money on these accounts to pay such high interest rates.

They hold down the cost of maintaining the account, and the mandatory debit card purchases generate extra revenue. Supermarkets, gas stations and other stores pay the bank a transaction fee every time you swipe your debit card and enter a PIN.

But there’s a limit to how much profit the banks can make with this clever scheme, which is why there’s a limit to how much money can earn the super-high rate.

It’s also why there are severe penalties if you fail to abide by any of these rules.

Mess up, and your interest rate for that month plunges to something like 0.30% and your ATM fees aren’t reimbursed.

So, is a rewards account right for you? It might be, if:

• You already use a debit card regularly. It’s not hard to use a debit card 10 times a month — breaking it out for groceries and gas will probably do it. But if you’re not in the habit, it does require a new way of thinking.
• You’re organized. You need to remember to meet all the bank’s requirements every month, so it helps if you’re good at keeping all your ducks in a row.
• You’re comfortable with Internet banking and have the patience to work with small banks that don’t always have the most up-to-date software.
• You have enough money to make the effort worthwhile.

At the time, ShoreBank was paying 2.45% APY and Heartland 2.30% APY.

We aren’t sure any savings account paying less than 3% should be considered a high-yield savings account, but that’s what ShoreBank calls theirs. (Heartland uses “Performance Savings.”)

And we couldn’t argue with the fact that they had the best rates on savings accounts that are available nationwide.

Then, over the past couple of days, ShoreBank reduced its interest rate to 2.05% APY and Heartland Bank to 2.10% APY.

Now Tennessee Commerce Bank in Franklin, Tenn., and Ally Bank, which used to be GMAC Bank before last week’s name change, have the best high-yield savings accounts — 2.30% APY and 2.25% APY.

How long will it be before those banks lower their rates?

We had hoped rates would bottom out this spring.

But the average interest rate for virtually every type of savings we track with our weekly surveys fell another tenth of a point over the past month.

That’s about how much those rates fell the previous month. And the month before that.

If this is the bottom, we can’t see it yet.

It continues to have one of the top-paying money market accounts in the country, and back in 2006 we praised the awesome 5.51% it was offering on 6-month CDs.

But the online division of AmTrust Bank in Cleveland is overhyping its current CD rates when it says: “Apply online today for some of the best Certificate of Deposit (CD) rates in the nation!”

Amtrust Direct is offering one decent deal: a 6-month CD for 2.00% APY. Although that’s well above the national average for 6-month CDs, it’s not high enough to make our latest ranking of the best rates for 6-month CDs.

Every other CD — from 9-months to 60-months — only earns:

• 0.75% for deposits of $10,000 or less.
• 0.85% for deposits of $10,000 to $25,000.
• And 1.00% for deposits over $25,000.

All of those rates are well below the national average for those CDs.

The bank also urges its customers to “fund a new CD account with ease by simply moving money from your existing AmTrust Direct e-Money Market or e-Savings account.”

That would be a mistake with it’s MMA paying 2.25% — or more than twice as much as any of its CDs.

We think AmTrust Direct needs to raise its CD rates or rewrite its promotional copy.