What To Look For In A High-Yield Checking Account
posted
November 15, 2022
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Banking Tips
Most checking accounts that you let your money sit in aren’t earning you any interest. This is because, most often, checking accounts are used as a place to keep cash that you plan to spend soon. Even if your credit union is paying you interest on your deposits, it’s likely very minimal. Savings accounts have traditionally been better-known for earning interest, however there is a type of checking account – referred to as high-yield checking account – that earns interest.
The highest yields on these accounts most often come from your local credit unions, although there are usually reasonable requirements that need to be met. Typically, these types of checking accounts require that you do at least some of the following things:
- Make a certain number of (non-PIN) debit card transactions every month
- Pay one bill or other type of recurring transaction each month
- Set up direct deposit
- Receive e-statements
These requirements help ensure that you are using your high-yield account like you would a normal checking account. Usually, these requirements are seen as easy-to-meet and are well worth the tradeoff of the interest you are earning.
When searching for the best high-yield account, there are some things to look for. Here are a few.
Make sure they have a reasonable balance cap.
Most of the high-yield checking accounts you will come across have a balance cap. The balance cap is the amount at which the high rate you’re earning is replaced with one that’s a fraction of it. Some credit unions will entice you with a high APY and may require a very low number of transactions each month. The catch with these accounts is often that the interest rate only applies to the first $500 in your account.
Other credit unions, like Greater Iowa, have much more reasonable balance caps. Look for ones that range anywhere from $5,000 to $20,000.
Make sure they refund your ATM fees.
You will want to look for an account with a credit union that will refund at least a portion of your ATM fees. This is important because if you have to use an ATM outside of your credit union’s network it can come with a fee – from both that financial institution and from your own.
Make sure the new account matches your spending habits.
Some people prefer to use a credit card rather than a debit card for purchases. If you are one of those people, a high-yield checking account may not be the best option for you. The rewards you are earning on your credit card may be equal in value to the interest you would earn on a high-yield checking account.
High-yield checking accounts are very appealing in today’s world. They often make sense with the way you may be using your cards and spending your money. If they do, these accounts can be a great way to make your money work harder for you!
If you are considering a high-yield checking account, check out GICU’s GreaterCheckingTM. You can see the full details and read more about the account offerings by clicking here. If this sounds like a good fit for you, give us a call or stop by one of our branch locations. We’d love to get you in to GreaterCheckingTM!