Interest checking accounts are bank checking accounts that can earn you high interest returns on the money you have deposited. Banks and credit unions across the nation offer rates typically between 3% and 6% and usually have a cap on the balance you can earn interest on (usually $25,000 – $50,ooo).
Interest Checking Accounts allow you to earn interest on your balance while providing easy access to your money.
Interest Checking Accounts have terms in which you must follow in order to receive the high interest. It is important that you read the terms and understand the requirements so you stay within good standing and earn high interest. Three common requirements are:
- A certain amount of transactions must take place every month for your account to remain in good standing. Usually about 5 – 15 transactions.
- An automatic withdraw or transfer must be set up. Usually any monthly online bill payment, like a car payment, will work.
- You must receive E-Statements from your bank or credit union.
There may be more terms you have to follow so again read the fine print carefully.
If you fail to meet these requirements in any given month your high earning interest rates may drastically reduce, therefor reducing the money you earn.
Typically you will see the CD (certificate of deposit) accounts, which have a fixed term during which you cannot withdraw your money, have higher yielding APY, but with the CD Rates recently dropping we are seeing interest checking accounts becoming a more enticing investment. The security that CD rates provides is that there are no conditions in which your rate can be reduced. While most rates are fixed for term, penalties can enforced on early withdraw.