(Update 3/1/19. Orion has announced another change to their high-interest checking account. Effective April 1, 2020, instead of 8 debit transactions per month, you must spend at least $500 on your Orion debit or credit card each month. All signature and PIN based purchases count. Updated review below.)

Orion Federal Credit Union (FCU) has a Premium Checking account that offers 3% APY on balances up to $15,000 if you meet certain direct deposit and debit card transaction requirements. However, if you don’t meet the requirements, you’ll get basically no interest and be charged a monthly fee. Their membership is now open nationally. Details below.

Membership eligibility. Orion FCU is based in Memphis, Tennessee and has a field of membership open to nearby residents and employers of local companies. However, you can also join as a “volunteer” for one of their affiliated nonprofit organizations:

Volunteers for Orion Gives Back organizations are eligible for membership in Orion. You can qualify as a volunteer fundraiser simply by choosing an organization and asking us to make a $10 donation.

Yes, you read that right – they will even make the donation for you! Choose from Habitat for Humanity Greater Memphis, Hope House, Porter-Leath, Ronald McDonald House, and Wolf River Conservancy.

You will need your Social Security number and Driver’s License number. In addition, reader Bill reports that they will perform both a ChexSystems inquiry and a hard credit check through Equifax.

Premium Checking requirements. To qualify for the 3% APY on balances up to $15,000 and up to $10 in ATM fee rebates per month, you must have the following:

  • Electronic deposits totaling at least $500 per month. Electronic deposits include: direct deposit, mobile deposit, and electronic transfers from another financial institution.
  • Spend at least $500 on your Orion debit or credit card per month. All signature and PIN based purchases will count toward the $500 minimum.

Note that amounts in excess of $25,000 but under $100,000 will earn 2.01%. If you meet these requirements, there is no monthly fee. If you don’t, then there is a $5 monthly fee and your rate goes down to 0.05% APY.

It is nice that the deposit requirement is not restricted to “payroll direct deposits”. You can set up an automated monthly transfer from another bank account.

Worth it? Like many other such “rewards checking” accounts, you have to be ready for continuous changes. These financial institutions are constantly tinkering to see how they can get you to make this your main checking account, but not lose too much money on the perks.

Previously, you just had to make any 8 debit-card purchases per month. You might just make a bunch of $2 purchases at the convenience store. Some people who were making many small purchases will balk at the new $500 total requirement, but others might like the simplicity of the new terms.

Let’s make some rough calculations. An online savings account earning 2% would earn $300 of interest on a $15,000 balance. At 3% APY, you would earn $450 instead. That’s a difference of $150 per year in extra interest ($12.50 per month). Missing out on 2% cash back on credit card purchases of $500 per month works out to $10 per month. But the bank interest is taxable, while the credit card rewards are not. If you keep significantly less than $15,000, you might even come out behind with Orion.

Note: Some grocery stores allow you to get up to $200 cash back when making a purchase with a debit card with a PIN. However, this would depend on your cash needs as you’d still be missing out on credit card rewards if you are spending cash instead. You could technically deposit this cash back into a bank somewhere, but that also takes time and effort.

Bottom line. Orion FCU has a Premium Rewards checking account available to anyone nationwide that pays 3% APY on balances up to $15,000 if you meet certain direct deposit and debit/credit card transaction requirements. However, if you don’t meet those requirements, you will earn virtually no interest and be subject to a $5 monthly fee. The latest change replaces the 8 debit card transactions with a least $500 in monthly spending on an Orion debit/credit card.

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Orion FCU Premium Checking Review: 3% APY (Up to $15k) w/ New Activity Requirements from My Money Blog.

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