Banking Explained

–> Does your money just sit in a checking account that pays no interest, and possibly even costs you to maintain it? Why would you leave your money there when it could be working for you in an interest bearing checking account? High interest checking accounts are easy to find these days. You only have to know where to look to find the best deals.

You may have left your money sitting there all this time because of complacency. It is always easier to just leave everything as it is. However, these days banks and credit unions are really competing for your idle cash. They are offering great rates on interest checking to lure you away from competitors, and they are making it as easy as possible. Most banks will set you up with free checks to get you started. They may also offer high rates of interest on an introductory term to make it worth your while to switch banks.

One of the best sources for interest bearing checking is internet only banks. These banks do not have the overhead that traditional bank branches have. They have no buildings to pay for, real estate taxes, or overlapping teller positions. Internet banks can pass their savings on to the consumer to widen their customer base. These banks can often afford to pay 1 or 2 percentage points higher in interest than traditional banks. Most internet banks will reimburse you for atm withdrawals. One negative to internet banks is the fact that you can not send in cash through the mail, but you can combat this by keeping a free local checking account and linking the two together to transfer money between them.

Traditional banks have started to come up with ways to fight the online banks by getting creative with their accounts. Many banks are offering high rates on checking accounts by requiring the account user to make a minimum amount of purchases on their debit card. These banks are using the businesses that accept these cards to subsidize the higher interest rates they are paying.

So make sure you shop around for banks and do not assume just because you have been a long time customer of your bank that you are getting their best rate on your checking account. Especially consider an internet only bank that pays high rates of interest. These banks can be a little more inconvenient, but the rates you can earn on your money are well worth the hassles you may encounter.

Today it is hard to find a checking account that pays any interest at all. But if you look hard enough, you can still find banks that are willing to pay above average interest rates to either keep you as a customer or lure you away from a competitor.

Some smaller community banks are offering larger interest checking by having you use their debit cards at select merchants. You have to be careful when using these types of accounts. If you do not meet the required minimum purchases at these institutions, then you will get the minimum interest rate. You really have to keep track of your purchases with these accounts.

You will often find that the majority of the higher paying banks are strictly online banks with no branches. These banks are perfectly safe to do business with as long as they are FDIC insured. Always look for the FDIC symbol on their website. If you do not see the symbol, make sure you call the institution to verify they are a participating member.

Also, when you are searching for an online checking account, make sure to read the fine print that states the interest rate you will be receiving. Often time banks use teaser rates that are only good for a limited time, such as three or six months. After that the rate will reset to a lower fixed rate. It can be very annoying to go to the trouble of switching banks and reorganizing your bill pay and having new checks printed only to find out you are receiving the same or lower interest rate you had before.

Speaking of bills, make sure the institution you are considering offers free bill pay as one of their services. Most banks these days do offer it and if they don’t you can surely find one that does. Also, many banks these days offer you a free box of checks to make your transition to their facility even easier.

If you look hard enough you can find some excellent interest rates on checking. Some checking accounts pay more than the online savings accounts these days. If you are lucky, you may find a bank that offers a great rate on a savings account that also allows easy transfers to your checking account. That way you can get a higher rate on the savings or money market and move money into your checking whenever you need it.