How to Compare High Interest Checking Accounts

If you’re already planning to open a checking account, find an interest bearing checking account to earn a little extra cash as you save. Although it may not garner as much as a high yield savings account if you’re constantly lowering the balance by writing checks, the account will offer great rewards for a service you’d sign up for anyway. Before you open a new account, however, consider these tips to compare high interest checking accounts to ensure you get the best return each month.

Difficulty: Moderate

Instructions

1. Find information on interest bearing checking accounts by calling local bank branches or comparing high interest checking account rates through websites such as DepositAccounts.com or BankRate.com. Although you may find a great deal with your existing bank branch, you can also discover better deals through websites that feature lists of current rates for high yield saving and checking accounts.

2. Research required minimum balances when trying to compare high interest checking accounts. Although some institutions may offer rates up to five percent, if you have to maintain a balance of several thousand dollars, you may wish to put that money toward another stable investment such as a high yield savings account or CD that will accrue even more interest.

3. Look into online interest bearing checking accounts that offer higher interest rates since they don’t have the overhead costs associated with brick-and-mortar branches. While some offer outstanding rates (some up to seven percent) without minimum balances, they may have other requirements such as a requisite number of debit transactions each month or the use of paperless account statements. You’ll also forfeit the opportunity to visit a local branch if you have problems or questions.

4. Compare high interest checking accounts by researching the fees charged in the event your account falls below the minimum balance. If you intend to actively use the account to write checks, you’ll need to keep an eye on the balance so the penalties won’t cut into what you earn in interest.

5. Ask if the high interest checking accounts through local branches or Internet checking accounts have a maximum balance. Some establishments restrict the amount of the account to twenty-five or fifty thousand. If you’re planning to use the interest bearing checking account as your primary savings account, be aware that you won’t receive the high rate on the amount that goes over the maximum balance.

Tips & Warnings

• Ensure the bank or savings group is FDIC-insured before you open a checking account, particularly if it’s a newer, smaller or not nationally recognizable association. The Federal Deposit Insurance Corporation will often protect your money up to two hundred and fifty thousand dollars.