Checking Account

The Importance Of A Checking Account

Checking accounts have advanced from being just temporary stops for money that is on transit to become one of the highest interest earners in the financial sector. High interest checking accounts, as they are referred to, enable one to earn a high yield on their account minimum balance. If you are still using a non-interest checking account, perhaps it is time to make the big switch and move with the flow.

A high interest checking account is easy to get. You will first need to identify the bank you wish to get the account from. Since you are looking for the highest interest possible, you will need to do a bit of comparison. Your bank or a website like this is a good starting point. Check its interest rates against those of other banks and go for the highest; do not feel disloyal about it. Other than the interest rate, compare also the monthly fees, terms and conditions. Different banks set different terms for people wishing to have a high yield checking account with them. Ensure that the terms are friendly to your financial situation. If you meet all the terms as outlined, you will earn the agreed percentage of interest rate. Should you default on any of these terms, your rates can easily drop to less than one percent.

For banks to pay high interest rates, they must invest in high yield market indices. This they cannot do if clients transfer all the money in their checking accounts to, say, high interest savings accounts. So they find a way to hold your money and this is where the terms come in. Most banks will ask you to link at least one of your regular bills (electricity, gas, water) to the checking account, for automatic payments. The bank may also request direct deposits, where your employer deposits your pay directly to the account instead of giving you a check. This way, your checking account will always have money every month.

These terms may seem harsh at first but when you consistently adhere to them, you will enjoy as high as 6% in interest rates on your minimum balance. It is pretty much like earning interest on your daily-expense-funds before giving them away to settle your bills.