These days, there are so many ways to invest and save for the future. Modern investment accounts like HSAs, CD’s, and 401Ks not only help diversity your investment portfolio, but can also offer a ton of benefits meant to multiply your earnings and help you save big.
With all these available options, a checking account may seem like an atypical investment account choice. How can an account, designed to help you spend your money, help you save it and even earn more though spending?
Related Article: WHAT TO LOOK FOR IN A CHECKING ACCOUNT COMPARISON
What is a High Interest Checking Account?
A high interest checking account is not your standard checking account. Most ordinary checking accounts function like metaphorical wallets, serving as a means to store your money, keep it secure, and facilitate spending. They offer easy access for spending but generate little to no interest, typically around 0.01% APY. APY stands for Annual Percentage Yield, which reflects the interest earned on your deposits.
In contrast, a high interest checking account, also known as a high yield checking account, stands apart. These accounts provide APYs starting at 2.00%, with some of the top accounts reaching up to 5.00% APY. This significant increase in interest enables users to earn more on the funds they keep in their accounts, rather than just letting it sit idle.
Benefits
Some of the benefits you can expect from a High interest checking account include:
- Zero to no monthly fees
- APY of 2.00%-5.00%
- Often come with a free debit card
- Free access to funds within the account
Requirements
While a high interest checking account may help you save money like a savings account, it’s important to know there’s a difference between the two. In order to provide their high APY’s, high interest checking accounts typically come with a list of requirements users must meet to collect their interest. Each account will have different requirements and may include:
- Balance minimums
- Direct deposit
- Monthly fees
- A certain number of credit card transactions
- Electronic statements
- Balances in other types of accounts
- Maximum account balances
- Account activation fees
- Monthly minimum number of transactions
- ATM fees
Where do I find one?
Due to the stringent legal requirements often linked to high interest checking accounts, these accounts are typically available through smaller credit unions and local banks. Larger national banks generally deem it too costly and redundant to provide such accounts, given their extensive customer base. Conversely, smaller financial institutions tend to be more open to covering these costs in order to attract more business and clientele.
If you're considering opening an account, check with your local credit union or community bank to find out if they offer a high interest checking account that suits your needs.
For additional information about the high interest checking accounts available at Liberty Savings Bank, or if you're thinking about opening an account, visit our website HERE to start maximizing your spending potential.
