PerkStreet Financial Online Checking is Shutting Down (What Happens to My Money?)

It’s a sad time for online checking.  PerkStreet Financial will be closing its doors for good on September 26th, 2013.

“Who is PerkStreet,” you might ask?

PerkStreet was (look I’m already using them in the past tense) an online bank that provided online checking accounts with fair fees.  And they weren’t just checking either.  They tried to make checking online rewarding for their customer by giving cash back and rewards when you used your PerkStreet debit card for purchases.

Many people loved PerkStreet as an alternative to credit cards.  It’s easy to rack up charges that are too big to pay off in full with a credit card (for some people).  With a debit card you can only spend what is in your account.  Using PerkStreet for purchases kept people accountable to their money — they couldn’t spend what they didn’t have.

Another aspect many loved with PerkStreet was their fees, or lack of.

They were part of an ATM network that had over 42k locations so it was pretty easy to find an ATM so you wouldn’t get hit with fees for being stuck with an out-of-network ATM.  They also offered up online checking with no monthly fees and no minimums to open an account.

PerkStreet was a breath of fresh air in an age where brick and mortar banks have been slowly taking more out of customer’s pockets with different fees.

But no more.

If PerkStreet is So Great Why Are They Closing?

Good question.

Basically the whole act of low fees and cash back rewards couldn’t sustain itself.  They were trying to find new outside funding to grow their business but weren’t able to find any.

What Happens to the Money That’s Already In My PerkStreet Account?

credit card on computer keyboardDon’t worry, your money is safe.  It won’t disappear come September 26th.  All of your money, up to $250,000, is FDIC insured.  But you do have to take a look at your account number to see which bank backs your account.  It will either be Bancorp or Provident based on the debit card and account numbers.

If your debit card number starts with 5519 or your account starts with 123 (basically if you opened your account before 3/6/2013) your account will continue to be serviced by The Bancorp Bank.  You’ll still have access to online banking at

Your account was always backed by Bancorp Bank.  Now your account is basically a Bancorp account that you will access through the PerkStreet portal.  You will still have an account with no minimums and you will have the option for overdraft protection.  And interestingly you will have a new promotional rate on your checking as well.

From 8/15/13 until 2/15/14, for account with $1,000 or less you will have a 1.0% interest rate.  Starting 2/16/14 your interest rate will drop to 0.01%.  I guess this is their way of trying to keep you with them.

Of course if you want to take your money out you can by transferring it to an external account, spending it down, or by requesting a check.  Otherwise your account still works like it did before.  You can still use your debit card and checks as you normally would.

Here’s where things get stickier…

If your debit card starts with 5507 or your account begins with 234 (basically if you opened your account on or after 3/16/13) well the news isn’t so good.  You need to get your money out of there by September 26th.  These are accounts that are help by Provident Bank.

Like those with a Bancorp account you can get your money out by transferring it to an external account, spending it down (but don’t overdraft because that’s no longer there), or request a check to be mailed to you.

Get moving on taking your money out of the account.  September 26th isn’t that far off.  Of course you won’t lose your money if you don’t close your account in time.  If you still have funds in the account after September 26th then you will have a check sent to your address on file.  But why wait for your money?  Get moving to get it out now!

One important note — make sure you cancel any recurring transactions you have going in or out of your account.  Look for things like recurring expenses that may have been automatically paid, paychecks that may be automatically going into your account (direct deposit), etc…  Get moving on that to make sure you aren’t adding more funds to the account (that you would have to take out) and to make sure any transactions that pull money out don’t leave you in an overdraft situation.  If you have a negative balance once the account closes then this will show on your credit history (not good).

This Sucks.  What About All Those Juicy Rewards I Earned?  Will I get Those?

If you have a Bancorp account then all of your rewards were cancelled as of August 12th.  Gone.  Zippo.  No more.  If you had a redemption request prior to August 12th then that will still go through.

Provident account holders get a little bit of good news.  On August 15th they will give you a statement credit for any remaining rewards balance you earned before August 12th.  Provident Bank has a long history of client advocacy and they want you to have the rewards that you earned (yay for little wins!).

This is Just Another Bank Closing, Why is It So Sad?

PerkStreet wasn’t just any other bank.  They tried to be good to customers at a time when people hated banks and it seemed some banks weren’t fond of its customers either.  They offered accounts with no minimums to open and no fees to maintain, lowering the barrier for the “unbanked” to have a place to put their money.  With their rewards program you had an incentive to spend only what you had rather than use a credit card.

Times have changed though and many banks are realizing the need for online checking that isn’t burdened with fees.  I remember when banking online seemed like this strange thing I didn’t quite trust and now I bank from my cell phone (without even having to call anyone!).  Online banking is growing and hopefully banks continue to add services that are good for customers.

I also liked them because they were always good people.  We ran some promotions with them as well as wrote a couple of articles for their blog.


If you have an account with PerkStreet then you have some homework to do.  If your account was with Bancorp then you can keep your account there if you want (though feel free to take your money out as well).  If you had a Provident account then you need to make arrangements to get your money out as soon as possible.  Also make sure you cancel any recurring transactions hitting your account.

Remember you vote with your dollars.  If you look for another account then find one that has a fair fee structure that’s also easy to use.

Here are some alternate online checking accounts to check out.

If you want more information regarding PerkStreet’s closing then check out their announcement page.

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Published or updated October 23, 2013.


  1. I was shocked when I first heard about this and while I now sorta understand why things have been done as they have been done, I still think that this is going to hurt similar business as the customer confidence will take a decent hit.

  2. Glen – Appreciate the article. However, you are not totally correct. PerkStreet was never a “bank”, They were never regulated by the FED or the state of MA as real online banks are, such as Ally Bank and EverBank. They did not have a “banking charter”.

    I think it’s dangerous to tell consumers that businesses such as PerkStreet and Simple are banks when in fact they are not and they do not give consumers the same protections the federal government gives to consumers of actual banks.

    • Glen Craig says:

      While you are correct in that PerkStreet wasn’t a bank as we would normally expect, you need to understand that the money in those accounts was protected with FDIC insurance. The debit cards that were issued were from Bancorp and Provident banks so the accounts consumers had were fully protected by those banks.

      • Glen – Yes. However, if a PerkStreet customer was to complain, would they file with the Consumer Financial Protection Bureau? Answer – No. Because PerkStreet was not regulated. The answer isn’t hard. PerkStreet is/was not a bank by definition – it is deceptive and untrue to use the word bank when describing PerkStreet’s business model.

What Do You Think?