Most bank accounts pay little or no interest these days. Consumers seeking an extra (or any) return on their money could, however, check out high-yield checking accounts, some of which pay 2%, 3%, even 6% APY. But such accounts tend to come with peculiar requirements and restrictions—mandatory usage of a debit card 10 times a month, for example, or high interest rates only for deposits up to $500 or $1,000. Now, there’s another opportunity to earn well above average returns on a savings account, though it too is accompanied by limitations and hoops to jump through.
The account comes from Union Plus, and the main quirk is that in order to earn 5.1% APY, the savings account must be linked to a prepaid Visa debit card. The card must be initially loaded via direct deposit with at least $500, and you must also be enrolled in recurring direct deposit (from your employer, typically) in order to score the high interest rate. Finally, that 5.1% APY is only earned on balances up to $5,000; any amount in excess of that will earn a paltry 0.10%, which is much more typical for savings accounts nowadays.
Prepaid debit cards are notorious for being riddled with fees, but Union Plus’s product has a fee structure that’s far more reasonable than most: There are no activation fees or transaction fees, no fees for calling customer service (some charge for this, believe it or not), and a $2 monthly maintenance fee is waived if the card is loaded with at least $500 each month. An ATM withdrawal from a non-partner institution incurs a standard $1.50 fee.
(MORE: More Banks Hop on Debit Fee Bandwagon. Will It Last?)
Why would a financial institution offer a savings account that pays an APY upwards of 20 times the national average? Clearly, the push is on to get customers in the habit of using prepaid debit cards. Union Plus is also trying to attract new customers—ones who will stick with their accounts even if the savings account APYs are tweaked downward—and since the 5.1% rates are restricted to balances only up to $5,000, the amount paid out to customers in above-average interest rates is limited.
Finally, as Union Plus’s name indicates, its products are generally available only to members of a choice of nearly three dozen major unions. The StarTribune, however, notes that there’s a way around this requirement: Any consumer can be eligible for the Union Plus high-yield account and prepaid card by selecting the “Working America” option in the sign-up page’s “Choose Your Union” drop-down menu.
(MORE: Typical Checking Accounts Pay 0% Interest. But One Earns Upwards of 6% APY?)
Brad Tuttle is a reporter at TIME. Find him on Twitter at @bradrtuttle. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.
