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.
Best interest-bearing checking accounts
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.
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