(1) They have a limit of $1500 on incoming online transfers in an entire *month*! They don’t tell you about this anywhere except when you actually try to move money into your account. When I called them about it, they said that they have this restriction for new customers and I was still in my first month. After a couple more calls, I realized that they will increase this limit to $2500 after six months.

Stated reason: Security.
Suspected motive: To limit the amount of money you can spend to get cashback.

(2) They have a limit of $500 on outgoing online transfers. So, say you move $5000 into your account to get 2% cashback. You are stuck with that money with them for the rest of the month (unless you adopt a slower paper check route).

(3) They have a limit of $1500 on daily expenses and explicitly say on their website that it can be waived simply by making a phone call. I had to book two one-way international flight tickets that cost a total of over $1500. I booked these and called them to waive the limit. They refused to do so because I was still in my first month. There is no notice about waivers not being allowed in the first month anywhere. As a result, I have to now spend much more money re-booking that ticket just because PerkStreet does not allow me to spend my own money.

Stated reason: Security for new customers. They claim that all banks have spending limits on debit cards. Really? Bank of America did not.

Suspected motive: Limiting spending => limiting cashback.

(4) When I tried to circumvent the limitation in (1) above to move more money into my account using FedEx, there was another surprise! The first FedEx check takes not 1 day as stated, but about 9 days for some reason. Again, some vague security reason that is incomprehensible to rational beings is given as an explanation.

Bottomline: It is not easy to get much cashback because of their restrictive policies on what you can do with your money. And they make it harder to move money out of the account while not giving any interest on it. As for the 5% cashback, they are on such specific and tiny items that I have never been able to get 5% cashback so far.

I’m Jenna Walker and I work for PerkStreet Financial. While many people choose a checking account based on interest rate, the truth is, without a ridiculously high balance it’s nearly impossible to earn anything meaningful. Also, your checking account balance goes up and down as you spend, so the interest you’re earning on your account is on a smaller balance than you might think.

In checking bankrate.com today I see that the highest advertised APY for an internet-based checking account is 1.1%. With an average balance of $5k, this will only get you $55/year. At PerkStreet, you’d only have to spend $250/month to get the same amount back every year. The average American spends more than this and would get a better deal with PerkStreet. On top of that PerkStreet gives customers access to the largest surcharge-free ATM network in the country and the account is free.

I’d love to know what you think.

“The downside with maintaining a $5,000 balance in their account is that it earns no interest.”

That would kill any increase from 2% rewards for me.

5% cash back at the Apple Store is pretty good money.

As for the people saying free checking is going away: I definitely see reward checking accounts hanging around for a while.

Basically, big banks are getting red of basic free checking.

Use your PerkStreet FinancialSM Visa® Debit Card to make a non-PIN debit card purchase at any Apple® Store between Thursday,June 24 and Sunday, June 27th, 2010 and get 5% cash back.

What is the interest rate on the checking account? That is important since you need to tie up at least $5000 in order to get this 2% cashback.