What is High Interest Checking?
Just like the name suggests, it’s a marriage of two things: a checking account, and a high interest rate on your savings. You can write checks against the account, use a debit card for purchases, pay bills online, and earn interest in the account. Interest rates are higher than you’ll find with most savings accounts, and dramatically better than what you get from most checking accounts - nothing.
How Does it Work?
To qualify for the rewards, you’ll have to meet a few criteria. The rules are different everywhere, but banks want you to be profitable enough to cover the high interest you earn. It's unlikely that you can just park your cash - you'll have to be engaged. The most common requirements for high interest checking are:
- Direct deposit into your account
- At least 10 debit card purchases per month
- No paper statements; online only
If you don’t meet all the criteria in a given month, you’ll probably earn a much smaller return. However, you can usually qualify again in the following month.
Finding High Interest Checking
To get a high interest checking account, search for local banks, credit unions, and online banks offering the service. Small institutions seem to lead the way, but a few online banks have competitive high interest checking accounts. Look for terms such as 'reward checking' and 'high yield checking'.
Local banks and credit unions may advertise these accounts in papers and local news websites. You can also try the following for local and national accounts:
Is it Worth It?
High interest checking accounts are appealing; the rates are so high, you may be tempted to use them instead of savings accounts. However, you have to jump through some hoops to take advantage. For example, if you really won’t use your debit card as often as needed, high interest checking is about as good as any other checking account. It may not be worth the time it takes to open an account and learn the policies.
