A traditional checking account is a useful tool for paying bills, buying necessities and transferring funds between accounts. A rewards checking account goes one step further by making those day-to-day tasks a bit more satisfying by adding perks, such as cash back on purchases made using a debit card.

Some rewards checking accounts also pay interest, earning you a bit of money each month, depending on the account balance, or reimburse out-of-network ATM fees — or offer a combination of cash back, interest and ATM rebates.

Regular checking accounts, meanwhile, typically pay no or very little interest, and don’t reimburse ATM fees or offer cash back.

Consumers who make frequent purchases using a debit card are good candidates for a rewards checking account, provided the account has a cash back program. Fees are another important consideration. A rewards checking account that also charges a monthly fee reduces the potential amount you can earn through cash back or interest accrued.

Best rewards checking accounts

The best rewards checking accounts give you either cash back on debit card purchases or a high APY on balances.

Bank Cash back APY
Discover Bank Cashback Debit account 1% cash back on up to $3,000 in debit card purchases each month N/A
LendingClub Bank Rewards Checking 1% cash back on debit-card purchases 0.15%*
Meriwest Smart REWARDS Checking N/A 2% on balances up to $15,000
All America Bank Ultimate Rewards Checking N/A Up to 0.70%
USAA Cashback Rewards Checking** 10 cents for each qualified purchase N/A

*APY paid on balances of $100,000 or more; balances of more than $2,500 and less than $100,000 earn 0.1 percent APY.

**The USAA Cashback Rewards Checking account is available to residents of Alabama, Arkansas, Arizona, Colorado, Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Kansas, Louisiana, Maryland, Michigan, Minnesota, Montana, North Dakota, New Mexico, Nevada, New York, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas and Washington.

Pros of using a rewards checking account:

  • Cash back: A rewards checking account can put money back in your pocket each month when you make purchases using a debit card.
  • No annual fee: Rewards checking accounts typically charge no annual fee, unlike some credit cards that also offer cash back.
  • Earn interest: Some rewards checking accounts pay interest on the monthly balance, providing you with another form of cash back

Cons of using a rewards checking account:

  • Limits on perks: Some rewards checking accounts put a cap on the amount of cash back that can be earned. Some accounts pay competitive annual percentage yields (APYs) on balances only up to a certain balance, above which the APY paid is significantly lower.
  • Better perks elsewhere: Some credit cards may offer a higher amount of cash back than a rewards checking account.
  • Barriers to entry: A rewards checking account may require a higher minimum balance than other accounts or require direct deposit. Also, the rules for earning perks aren’t always easy to understand and can be confusing.
  • Fees: Like all banking products, a rewards checking account may charge fees, including a monthly maintenance fee. Some accounts charge no fees or offer ways to easily avoid them, so it pays to shop around.
  • Credit cards offer better purchase protections: The liability for not reporting an unauthorized debit card transaction within two business days could cost you up to $500, but for credit card purchases, the maximum liability is $50.

Bottom line

Consumers looking to earn cash back on day-to-day purchases using a debit card are good candidates for a rewards checking account. Accounts that pay interest and reimburse ATM fees may provide additional ways to earn and/or save money. What’s more, some banks offer an account bonus for opening a rewards checking account, providing yet another way to put some cash back into your pocket.