Several weeks ago I did a post about High-Yield Savings Accounts. The post has been so popular that I thought I’d review High-Yield Checking accounts for Money Matters this week.
What is a High-Yield Checking Account?
This is an account that has the same benefits of a regular checking account except you earn interest while your money is sitting there. Most of these accounts get at least 3% and some as much as 6%. Unlike Money Market accounts, these funds are FDIC insured.
What’s the Catch?
If you remember my High-Yield Savings Account post I told you that the higher the interest rate, the higher the risk. Period. The risk here isn’t that you will lose your money, the risk is that you won’t earn the interest. These checking accounts have all kinds of requirements that must be met each month in order to receive the interest payment. Typically you much have a direct deposit set up to the account and use your debit card for a specified number of transactions per month. There are usually higher than normal initial deposit requirements and if your account balance reaches a certain limit, the interest rate drops to a much lower rate.
But, if it wouldn’t be a problem for you to meet all the requirements, you wouldn’t be tempted to spend all your money and you don’t have enough to bump you into the lower rate bracket, then this would be a great savings tool for you. To find a bank near you and/or with the highest rate, go HERE.
Do you use a High-Yield Checking Account?
Shellie loves to share her frugal living tips as well as deals and bargains to help you get more with less. A spender at heart, she balances her frugal lifestyle with the occassional splurge. 