Interest-bearing checking accounts do exist.
Why consider them?
For one, it’s smart to have a bank account buffer—an extra cushion of cash in your checking account just in case. Still, you don’t want so large of a buffer that you worry about interest you’re not earning.
So, if you’ve optimized the rest of your finances, you can turn your sights on your checking account to see if you can earn a buck or two. As you consider an interest checking account, consider the following:
- Some interest checking accounts require big minimum balances. If your average balance dips below this level, you’ll be charged a steep monthly fee, quickly eating away any interest you earned. Take Bank of America’s Tired Interest Checking Account. It’s available fee-free to anybody with $10,000 in combined assets with Bank of America (otherwise there’s a $25 monthly fee).
- Interest checking accounts rarely pay as much as high yield savings accounts. Even now that savings accounts yields are crumby, checking accounts paying interest usually lag.
With these caveats, here are a few of the best interest checking accounts. (Note: The accounts here are affiliates, meaning we get some change in our online tip jar if you open an account. If you choose to support us in this way, thanks!)
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$50 Bonus ING Direct’s Electric Orange is the most staright-forward no-minimum balance interest-bearing checking account.
Electric Orange comes with a debit card and free ATMs at places like Targets, drug stores, and gas stations. You’ll also get checks and super simple online account access. Balances up to $49,999 earn 0.20%. See site for additional interest tiers.
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Best APR The FNBO Direct Online BillPay Account is a unique checking account alternative that pays an attractive interest rate. There are no monthly fees and no minimum balance requirements. You get a free Visa Debit Card and can pay anyone securely and quickly through FNBO’s Website.
On the downside, you don’t get paper checks and there is no nationwide network of free ATMs.
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2% Cash Back on Debit Card Purchases PerkStreet is a free online checking account. Although PerkStreet doesn’t pay interest on account balances, they pay either 1% or 2% cash back every time you use your debit card for non-PIN trasnactions with no limit to what you earn. (To earn 2% you need a $5,000 minimum balance, otherwise you earn 1% back). You get free paper checks and they have a network of nationwide free ATMs in places like Target and Walgreens stores.
If you already prefer using a debit card to a credit card for most of our everyday purcahses, you may be able to make more money with PerkStreet than with an interest-bearing checking account.
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