Opening a checking account is almost a rite of passage. The thrill of watching your checking account balance fluctuate with check deposits, loan payments, and debit card transactions are one of the first steps toward adulting. The next step is making sure your checking account works for you. Grow your bottom line by switching to a high-yield checking account, paying high-interest rates instead of the low to no interest you get from your regular checking account.
What is a High-Yield Checking Account?
A high-yield checking account, also referred to as a high-interest checking account or a rewards checking account, offers a higher annual percentage yield (APY) than regular checking accounts. The higher APY comes with strict account requirements, like making a certain number of debit card transactions or maintaining a minimum balance.
The high APY interest will only be added to the account when the account holder meets all transaction requirements. Otherwise, the interest earnings will be lower.
Are High-Yield Bank Accounts Worth It?
The right high-yield checking account can help you grow your spending money without doing anything different. Before you open a new account, review your number of withdrawals, ATM fees, interest earnings, and the average monthly balance of your traditional checking account. Do you have recurring direct deposits? Do you use your debit card regularly at ATMs or for point-of-sale transactions?
Since most rewards accounts have deposit requirements and qualifying guidelines tied to your debit card purchases and balance, a high-yield account can make a difference if you meet the requirements. However, if you use cash or credit cards for purchases and your checking account to pay your bills, you are better off sticking with a traditional checking account.
What to Look for in a High-Yield Checking Account
The best checking account works with your spending and saving habits. Look for high-yield checking accounts with the following:
Low fees. Enroll in accounts with low or no fees so the ATM fees, transaction fees, and other extra costs do not eat into your interest earnings.
Waived fees. While many accounts come with monthly maintenance fees, some institutions will waive them when you meet minimum balance or monthly transaction requirements.
Rewards or perks. Find a financial institution offering special perks such as refunds on your out-of-network ATM fees or an automatic upgrade of your existing savings account to a high-yield savings account.
Competitive interest rates. The account with the highest APY may also come with more requirements. Look for a competitive rate that follows the market.
Are High Yield Checking Accounts Safe?
Yes, if you use a federally insured credit union or bank. Banks are FDIC-insured, whereas credit unions are backed by the National Credit Union Administration (NCUA). The protected amount is limited to $250,000 per account holder, bank, and account category.
TDECU Makes Saving Money Easy
TDECU makes it easy for our Members to grow their money. We have checking and savings accounts designed to work with you. Open a free checking account offering online banking, access to more than 55,000 ATMs, our Visa® debit card, and no minimum balance requirements.
High-Yield Checking from TDECU currently features these benefits:
- $0 Monthly Fee
- Up to 1.00% annual percentage yield (APY)
- $0 minimum balance