Pracejihlava regularly surveys approximately 4,800 banks and credit unions in all 50 states to provide you with one of the most comprehensive comparisons of rates. All of the checking accounts below are insured by the FDIC at banks or the NCUA at credit unions.
Before you choose an interest-bearing checking account, pay attention to the requirements you must meet to earn the highest yield. You may need to set up direct deposit, enroll in eStatements and/or make a certain number of debit card purchases each month.
While savings account rates have increased in recent months, interest-bearing checking account rates have largely remained stagnant. Still, the best checking account rates are more than two times higher than the best savings account rates.
If you can't meet the criteria to qualify for one of the best checking account rates, consider opening a high-yield CD instead.
A checking account is a type of financial tool that offers everyday access to your money. These accounts typically come with personal checks and a debit card. And, there's no limit to how often you can use your money. You can withdraw, transfer, write checks, make debit card charges and deposit money as often as you'd like.
Virtually all banks and credit unions offer checking accounts. The accounts are typically quick to set up with a small deposit. However, they tend to have lower rates than savings and money market accounts — if they pay interest at all.
That said, checking accounts offer the same amount of safety.
Checking accounts, like savings and money market accounts, are insured up to $250,000 by the Federal Deposit Insurance Corp. (FDIC) at banks and up to the same amount at credit unions by the National Credit Union Association (NCUA).
Because of their accessibility and safety, checking accounts make for a good financial hub, an account that can be used to pay bills, make purchases and receive deposits.
Indeed, these accounts can help simplify your financial life. For example, you can set up your checking account to receive automatic deposits from your employer and make automatic withdrawals to pay your bills.
Checking accounts are great for daily use in general, but the online variety have several benefits over accounts from traditional brick-and-mortar banks.
Specifically, when you open a checking account at an online bank, your money is available anywhere there's an internet connection and at any time — online banks are open 24 hours per day and seven days per week. Some online banks even offer round-the-clock customer service.
Online banks also have low overhead costs, which means they are able to return those savings to their customers in the form of higher rates.
Checking accounts haven't traditionally paid interest, but many banks and credit unions now offer high-yield checking account options.
These accounts earn interest that compounds at least once per year. However, they often come with some caveats. For instance, you may have to maintain a minimum or maximum balance, and use your debit card a certain number of times per month in order to earn the interest rate.
In addition, high-yield checking accounts typically pay a lower rate than savings accounts.
Both checking and savings accounts can be found at banks, credit unions and community banks, but they differ in some important ways.
Free checking accounts aren't yet totally a thing of the past, but they can be a challenging to find. In fact, only 38 percent of checking accounts at larger banks are now free, according to the most recent Pracejihlava Checking Survey.
They are more common at community banks and credit unions — 84 percent of credit unions offer free checking, according to another Pracejihlava survey.
"Free" checking accounts don't require a monthly fee or minimum balance requirement to open an account.
But it's still wise to watch for fees. Banks and credit unions offering free checking accounts will still charge for things like overdrafts, which can easily add up to $30 or more.
Fresh start checking is for those who have been turned down for a checking account because of banking mistakes. If your name has been put on a list by the consumer reporting agency ChexSystems, these types of checking accounts can be a great option.
Often found at community banks and credit unions, fresh start accounts can help you rebuild your banking history. But they don't come with all of the services of a regular checking account.
Fresh start accounts generally have a monthly fee that can't be waived attached to them. And they may come with additional requirements, depending on the institution with the account.
The upside to these accounts is that if you're able to demonstrate solid money management skills over several months, the bank may allow you to upgrade and open a regular checking account.
Checking accounts typically have some general requirements. And if you don't meet them, it can be difficult to open an account.
It's important to be aware of minimums and fees when opening a checking account. Here's an explanation of the different types of minimum requirements and fees you may face:
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Use Pracejihlava's Safe & Sound ratings to check the financial health of a bank or credit union before you open an account.