LendingClub has launched a new checking account that rewards customers in multiple ways and could mean greater savings for many of its members.
LevelUp Checking is available to those who have another LendingClub product. The new account pays cash back on many everyday purchases as well as on-time loan payments, and offers a higher interest rate than LendingClub’s previous checking account. However, only certain spending categories earn cash back rewards.
Known for offering a range of loan products and for paying high interest rates on savings accounts and CDs, LendingClub says the new LevelUp Checking account rewards customers for making smart financial decisions and encourages them to spend money they have instead of what they borrow.
“Our emphasis on rewards is intentional,” says Mark Elliot, chief customer officer at LendingClub. “We fundamentally believe that our members should be rewarded for making smart everyday financial choices, and we’re building that idea into everything we do.”
Here’s a look at what customers can expect from LendingClub’s LevelUp Checking account.
[Read: Best Checking Accounts.]
Who Can Open a LevelUp Checking Account?
The LevelUp Checking account replaces LendingClub’s Rewards Checking. Like its predecessor, LevelUp is only available to LendingClub “members.” Essentially, this means you’ll need to open another account with LendingClub to be eligible for the checking product.
For example, you could open a LevelUp Savings account, which pays above 4% annual percentage yield, or you could take out a personal loan with the bank.
Quick Details of LevelUp Checking
— Minimum opening deposit: None
— Monthly fees: None
— APY: 1.00% on balances of $2,500 and above
— Requirements to earn cash back: At least one direct deposit per month.
[SEE: Best Free Checking Accounts]
Benefits and Perks of LendingClub’s LevelUp Checking
Earn 2% Cash Back on Loan Payments
One of LevelUp Checking’s standout features is the opportunity to earn 2% cash back when you use your checking account to make an on-time payment on a personal loan with LendingClub.
“Many of our lending competitors do not have a bank with the ability to reward their customers with a compelling checking offering — we do,” says Elliot. “We are investing in our members’ financial health by rewarding them for making on-time payments, which we don’t see our competition doing.”
To qualify for cash back on loan payments, you must have direct deposit set up in your checking account and receive at least one direct deposit each month. Payments on your loan must be made on time and from your LevelUp Checking account.
Unlimited 1% Cash Back on Certain Everyday Purchases
You can earn unlimited 1% cash back on gas, groceries and pharmacy purchases made with your LevelUp Checking debit card. To qualify for cash back, you must choose “credit” when you swipe or enter your card.
Debit cards that earn cash back are relatively uncommon, and many banks that offer them still impose monthly caps on what you can earn. LevelUp Checking’s unlimited 1% cash back is an appealing feature, especially for higher spenders.
You’ll need to receive at least one direct deposit each month to qualify for debit card rewards.
Checking Earns Higher Interest Than Before
LevelUp Checking accounts will earn 1.00% APY on balances of $2,500 and above. While this rate falls short of the top high-yield checking accounts, it improves on the rate that members previously received with Rewards Checking. It’s also fairly uncommon for a checking account to offer both cash back and a decent interest rate.
Other Pros of LevelUp Checking
— Free ATM Use. LendingClub doesn’t charge a fee to use other banks’ ATMs, and it reimburses customers for any fees charged by other banks or ATM operators.
— No fees or minimums. The account charges no monthly fees and has no minimum balance requirements, although you’ll need a balance of $2,500 to earn the top APY.
Potential Drawbacks to LevelUp Checking
Only Available to Those with Another LendingClub Product
You’ll need to open another type of account or take out a loan with LendingClub to become eligible for the checking account. So this may not be a great option for those looking to solely open a new checking account.
Elliot says the bank thinks of the checking product as a “free benefit to our members.”
“LevelUp Checking is designed to deliver more value when used with our other products,” he says. “So having a member requirement ensures our members are getting the very most out of their relationship with us.”
Cash Back Limited to Certain Spending Categories
In-store gas, groceries and pharmacy purchases qualify for the unlimited 1% cash back. While this accounts for some of the most common everyday spending many people do, it does eliminate some major purchases from potential cash back opportunities.
[Read: Best Online Banks.]
Who Should Open a LevelUp Checking Account
LevelUp Checking is an ideal option for those who already have a loan with LendingClub or who plan to take out a new personal loan, as the 2% cash back on monthly payments is a nice perk you won’t find at many institutions.
It’s also a great option for someone shopping around for both a high-yield savings account and a checking option, since pairing LevelUp Savings and LevelUp Checking gives you multiple ways to earn cash back and high interest. It’s also a strong option if you prefer to use a debit card for many of your daily purchases.
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LendingClub’s New Digital Cash Back Checking Account Includes a Unique Benefit originally appeared on usnews.com
