Monday, 26 October 2020

The Best High Yield Checking Accounts in 2019

The Best High Yield Checking Accounts in 2019
03 May
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Checking accounts are like a pair of khakis slacks: You should have at least one, but shopping for them is a chore. You know you need a checking account—preferably one without fees—but most people think it’s not going to yield more than a token amount in interest.

These high yield checking accounts break this tired paradigm, featuring sky-high interest rates that can put even the best savings accounts to shame. In this article, we’ll help you make an informed decision about whether one of these high yield checking accounts are right for you and your financial goals.

How we picked the best high yield checking accounts

We followed a strict approach when selecting these accounts. We used the online rate finder for FDIC- or NCUA-insured rewards checking accounts on DepositAccounts.com, another LendingTree.com-owned site, to list the top 10 high yield checking accounts with the highest rates, assuming a deposit amount of $100.

Credit unions were only included if they allow membership to anyone (such as by making a donation to their chosen charity). Finally, we filtered out any high yield checking accounts that are not available nationwide, or that carry a health rating of below a B.

The best high yield checking accounts in 2019

Consumers Credit Union — Free Rewards Checking

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You must complete the following four things each month:
    1. Make 12 Debit card point-of-sale purchases without using the PIN (all 12 must post and clear the account on or before the last day of the calendar month)
    2. Have at least one direct deposit, ACH debit, OR bill payment (using Consumers Credit Union’s online bill pay system) post and clear the account on or before the last day of the calendar month.
    3. Sign into their Online Banking system at least once each calendar month
    4. Be signed up for eStatements
      • Keep in mind that Consumers Credit Union will add an additional requirement each time the balance grows to earn the higher APY.
    5. 5) spend $1,000 or more with a Consumers Credit Union Visa credit card each month.
  • Monthly service fee and how to waive it: No monthly service fee.
  • ATM fees: None
  • ATM refunds: Complete reimbursement for all ATM fees charged from ATMs outside of their surcharge-free ATM network as long as you meet the minimum requirements of their Rewards Checking Account.

La Capitol Federal Credit Union — Choice Checking

  • Minimum amount to open: $50
  • Requirements to earn the high APY: Make at least 25 debit purchases per month.
  • Monthly service fee and how to waive it: $2; waived if you enroll in eStatements.
  • ATM fees: None
  • ATM refunds: Up to $25 in out-of-network surcharges (the money the ATM’s owner charges you) per month if you are signed up for eStatements and make 25 debit purchases per month.

Premier Members Credit Union — Earn Big Free Checking

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You need to have a direct deposit of at least $500 each month, be enrolled in eStatements, and make at least 25 non-ATM debit card transactions.
  • Monthly service fee and how to waive it: None
  • ATM fees: None
  • ATM refunds: None — while the credit union won’t charge you a fee for using an out of network ATM, it also doesn’t provide any kind of reimbursement for third-party ATM fees you may incur.

Orion Federal Credit Union — Premium Checking

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You must make electronic deposits (which can be either a direct deposit, mobile deposit, or an electronic transfer from another financial institution) of at least $500 each month, in addition to making at least 8 signature-based debit card transactions each month.
  • Monthly service fee and how to waive it: $5, which is waived if you meet the requirements to earn the highest APY.
  • ATM fees: None for ATM withdrawls in Orion’s network, $1 for non-Orion ATMs.
  • ATM refunds: Up to $10 a month for fees charged by non-Orion financial institutions.

One American Bank — Kasasa Cash

  • Minimum amount to open: $50
  • Requirements to earn the high APY: You’ll need to do the following three things for each qualification cycle (be aware: their qualification cycles are not the same thing as a calendar month):
    1. Complete at least 12 debit purchases of $5.00 or more
    2. Be enrolled in eStatements
    3. Log into your Online Banking account
  • Monthly service fee and how to waive it: No monthly service charges.
  • ATM fees: None
  • ATM refunds: Up to $25 per qualification cycle if you meet the requirements to earn the high APY.

Market USA Federal Credit Union — VIP Checking Platinum Tier

  • Minimum amount to open: $0, but you must maintain at least $5 in your main savings account with this credit union in order to remain a member (and thus be able to bank with them).
  • Requirements to earn the high APY: Each month you’ll need to 1) make a direct deposit of at least $250 into the account, 2) remain enrolled in eStatements, 3) make at least 12 VISA debit card purchases of at least $5 each, 4) use Market USA’s Bill Pay service to pay three bills of at least $20 each.
  • Monthly service fee: None
  • ATM fees: $1 per transaction for ATMs not in the credit union’s network
  • ATM refunds: None

Partner Colorado Credit Union — High-Interest Checking

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You’ll need to do three things each month:
    1. Use your debit card to make at least 20 signature-based purchases of $5 or more
    2. Be signed up for eStatements
    3. Log into your Online or Mobile Banking account
  • Monthly service fee and how to waive it: $5; waived if you meet the requirements to earn the high APY.
  • ATM fees: None.
  • ATM refunds: All ATM surcharge fees are refunded.

Signature Federal Credit Union — Choice Checking

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You must complete the following things each month:
    1. Have at least one direct deposit into your account of $1,000 or more
    2. Be enrolled in e-statements
    3. Use your debit card to make at least 10 purchases per month
  • Monthly service fee and how to waive it: No monthly service fee.
  • ATM fees: None.
  • ATM refunds: Signature Federal Credit Union allows you to choose from either a higher interest rate, $10 in waived ATM fees, or debit card rewards points. If you choose the higher interest rate, they will not waive ATM fees.

Main Street Bank — Free Kasasa Cash Checking

  • Minimum amount to open: $100
  • Requirements to earn the high APY: You must make at least 1 direct deposit, ACH payment or bill pay transaction each month, along with at least 10 debit card purchases. In addition, you must be enrolled and agree to receive eStatements and enrolled in online banking, which you must log into at least one time.
  • Monthly service fee and how to waive it: None
  • ATM fees: $2 per transaction for all non-Main Street Bank ATMs
  • ATM refunds: If you meet the requirements that allow you to earn the highest APY, the bank offers unlimited refunds of third-party ATM fees.

Great Lakes Credit Union — Free Checking

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You must complete the following actions each month:
    1. have at least $500 in direct deposits into the account
    2. make at least 10 signature-based debit card purchases of $100 or more
    3. be signed up for eStatements
    4. use Bill Pay at least once or log into Mobile Banking at least once
  • Monthly service fee and how to waive it: None
  • ATM fees: $2.00 for non-Great Lakes Credit Union ATMs
  • ATM refunds: $10 per month if you meet the requirements to earn the high APY.

Andigo — High Yield Checking

  • Minimum amount to open: $0
  • Requirements to earn the high APY: Deposit at least $500 in the account every month via direct deposit and make at least 15 debit card purchases a month
  • Monthly service fee and how to waive it: None
  • ATM fees: None
  • ATM refunds: Up to $12 a month for third-party ATM fees so long as you meet the qualifications to earn the highest APY

How are these banks able to offer such a high APY?

Did you notice that most of the institutions offering high yield checking accounts tend to be smaller names that you’ve probably never heard of? It turns out there’s a good reason for that, and it all has to do with the Dodd-Frank Act, a set of sweeping financial regulations passed by Congress in the wake of the Great Recession.

Back when the Dodd-Frank Act was passed in 2010, a tiny legislative nugget called the Durbin Amendment was included in the text. This amendment limited the swipe fees that big banks can charge merchants for each purchase that one of their customers makes using a debit card.

Suddenly, big banks (defined as institutions with at least $10 billion in assets) could only charge half as much per swipe as they had been doing, and swipe fees became a lot more lucrative for smaller banks and credit unions instead.

That’s why so many smaller institutions have strict rules requiring you to use your debit card each month. According to the Federal Reserve, in 2016 smaller banks earned anywhere from 18 to 65 cents for each debit card swipe, compared to a maximum of just 22 cents plus 0.05% of the purchase price for larger banks.

Say, for example, a smaller bank requires you to make 10 debit transactions per month, and earns 65 cents from each transaction. Your bank would then earn $6.50 from your spending that month.

That is where the high interest rates come from. It’s also why the high interest rates are generally capped to smaller balances, so that you don’t earn too much money and negate all the swipe fees that the bank earns.

Is it worth meeting requirements to go after the high APY?

Some of these high yield checking accounts have a lot of requirements.

If you prefer to use debit cards, chances are you’ll be able to easily meet the minimum debit swiping requirements for most of these accounts. On the other hand, if you’re a cash or credit card junkie, you may find yourself frequently worrying at the end of the month about whether or not you’ve met the minimum debit swiping requirements. In this case, a high yield checking account might not be right for you.

Another thing to consider is that many of these banks require you to make a signature-based debit transaction, rather than a PIN-based debit transaction for it to count. Unfortunately, this is slightly less secure than using the PIN-based payment method.

You’ll also need to avoid making a rush of charges at the end of the month to meet the spending requirements. That’s because banks and credit unions will usually only count a charge that has finished posting to your account towards meeting the monthly swiping requirement. It can take a few days for debit swipes to post to your account, so it’s better to get these charges in early to make sure they post to your account in time to count.

The good news is that checking accounts aren’t designed to hold significant amounts of cash. That’s what a savings account is for, and you can still earn pretty good interest rates with a high yield savings account (although still nowhere close to these high yield checking accounts).

If you’re going to keep a smaller deposit in your checking account anyways, why not earn as much as you can from it—especially if you know you’ll have an easy time meeting the requirements?

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

James Ellis
James Ellis |

James Ellis is a writer at MagnifyMoney. You can email James here

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Source: https://www.magnifymoney.com/blog/earning-interest/best-high-yield-checking-accounts376922578/

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