Who wouldn’t be interested in high interest checking account? Even in these tough times, you can get more than 5% interest from a checking account.
[Note: When I wrote this article, getting a high interest checking account was fairly easy. Now rates have come down quite a bit. I currently recommend EverBank, which is one of the better banks out there.]
When I went to Finovate Start-up a few months ago, one of the companies that caught my eye was CheckingFinder. Their web application was nice, but I didn’t realize that it was possible to get 5-6% interest from a checking account. I figured if I was going to get that kind of money, I’d have to sink in more money than I’d have or want to. That’s simply not the case.
Getting more than 5% from an account I can write checks from is not something to laugh at. I used CheckingFinder’s “Find My Best Return” feature and found the Bank of Tipton will give me 5.26% interest… if I meet some requirements…
I know what you must be thinking, “Here is the catch. Watch the hammer drop on this one.” Actually, the restrictions aren’t so bad. For many banks, you don’t have to keep a minimum balance. Usually the requirement is to make 10-12 debit card purchases a month, sign up for paperless statements, and/or sign into your account once a month. With the bank I mentioned above, you have to do all three. Looking at a few of the banks that came up on my search, they seemed competitive in features that you’d want in a bank. For instance, many provided free online bill pay and most reimburse ATM fees.
How I might play the high-yield account game…
It seems relatively easy except that for the debit card purchases. I like to use credit cards to rack up the reward points. Giving up the reward points to earn more interest may still be a financial win, but it might not be optimal. A good plan might be to use your debit card on small transactions such as cheap lunches at McDonalds. That way you could get the best of both worlds. It might even be worth it to you to have 10 $1 transactions for a something on a value meal and then tell McDonalds to keep the food. Another idea would be to go to grocery store during off hours and use their self-checkout option to buy 10 things in small transactions. I’m sure that they’ll think you have lost your marbles, but then again, it wouldn’t be the first time. If I were to do this, I’d have a paper explaining what I’m doing and why. If they looked at me odd, I’d just hand it over and hope they let me continue about my business.
Has anyone gotten one of these extremely high-yielding checking accounts? If so, would you please share your experiences in the comments below.