Reward checking accounts have been under a lot of pressure lately.
Banks are finding it harder to make a profit with the accounts, and they've made it harder for some customers to work the system.
Bankdeals reports that the accounts are under even more pressure - this time from regulators. The FDIC is limiting how much interest banks can pay if they're "less than well capitalized".
The idea is that troubled banks may try to soak up assets by offering extremely high rates. If things don't work out, the FDIC has to cover all the funds that gushed into the bank (and stronger banks suffer when their customers jump ship for artificially high rates). Of course, the definition of a troubled bank can be fuzzy.
Reward checking accounts seem to be in the FDIC's crosshairs. If you're looking to open a new account, stick to stronger banks. You're less likely to get an email telling you the reward rate is no longer allowed.
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