High-yield checking benefits

After the Great Recession, the Federal Reserve chopped interest rates to the lowest levels ever seen. More recently, the Fed has been raising rates to more normal levels, but the interest paid on savings hasn't budged much.

This is what makes high-yield checking so appealing. The accounts can pay an APY, or annual percentage yield, of 1% or more. For example, Axos Bank is currently offering up to 1.25% APY on its Rewards Checking Account, which has no monthly maintenance fees or minimum balance. That's certainly not too shabby.

High-interest checking accounts can also come with other benefits, such as a one-time sign-up bonus, reimbursements of ATM fees, cash back or airline miles.

Applying for an account may seem like a no-brainer, but to reap the rewards you'll need to meet some requirements.

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High-yield checking account requirements

If you want to earn high interest, collect a signing bonus or get other goodies, you may have to do a few things for the bank.

You may have to maintain a big balance. You might also be required to make a certain number of purchases with your debit card each month, sign up for direct deposit and automatic bill pay, and opt for electronic statements rather than paper ones. Be sure to check the fine print to see what your requirements are – it’s worth the effort!

With high-yield checking, you need to maintain all of the requirements as long as your account is open. If you slip and make too few debit card transactions, for example, you might lose your super-high interest rate.

Is a high-interest checking account right for you?

The rewards from rewards checking can be sweet, but you'll have to crunch some numbers to determine whether high-yield checking could work for you.

Some accounts come with high monthly fees, as much as $20, if you're unable to maintain a minimum balance. You wouldn't want fees to essentially wipe out your interest.

Could you make enough debit transactions each month to qualify, or would you feel pressured to overspend to meet your quota? And what does the fine print say about how long your high interest rate is likely to last?

The potential benefits are worth vetting.

More: Get a high-yield rewards checking account from Axos Bank

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MoneyWise

MoneyWise

MoneyWise Editorial Team

These articles were created by the MoneyWise editorial team.

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