What You Need to Know About High Yield Checking Accounts
Interest rates are gradually increasing, but if you fulfill certain requirements, you can get twice the yield ~ two percent compared to large banks by switching to a high yield checking account.
Offered by smaller regional banks and credit unions to attract customers, high-yield, rewarding checking accounts offer rates of up to five percent. To qualify, you usually have to be below a certain balance sheet threshold (say, $ 10,000 to $ 25,000, although it may be lower); subscribe to direct deposit; and make a certain number of debit transactions every month. If you do, you will benefit from higher interest rates and FDIC coverage.
It is this last part that makes the account especially attractive to some people. CD and money markets can also offer relatively low rates but high levels of security; these checking accounts have the same levels of security and higher yields. Deposit accounts, which track interest rates, say rates have hit a five-year high.
“Anyone who needs some sort of contingency back-up account can definitely consider these types of vehicles,” Diane Pearson, a wealth consultant and certified financial planner, told Bankrate .
There are obviously other things to consider besides interest rates. You will want to check the ATM fees associated with any potential new account, as well as online bill payment options, account maintenance fees, etc. (Fees, in particular, can wipe out the interest you earn.) Are eligible for membership in every credit union, although some do this relatively easily, requiring a one-time donation to join. Just make sure you check their bank trail if access to a physical branch is important to you and that you understand the interest rate requirements. Also check your bank or credit union’s history of interest rate changes before signing up (you can probably find this with a Google search).
But if you have some money that you’d like to earn some interest on, these accounts are a good option. Find the best options here .