If you’re searching for a place to stash your money that allows the flexibility of full banking functionality plus a strong annual percentage yield (APY), a high-yield checking account might make sense. The best accounts combine an APY that rivals savings accounts with minimal fees.
Here are our picks for the best high-yield checking accounts, what you need to know about them and how to pick between different accounts.
Axos Bank Rewards Checking
Monthly maintenance fee
$0
Minimum deposit requirement
$50
On Axos Bank’s Website
Methodology
Our team of experts at CNN Underscored Money analyzed dozens of accounts from more than 40 financial institutions to determine the rankings for the best high-yield checking accounts. This included accounts from a mix of traditional banks, online banks and credit unions available nationally. We heavily emphasized fees and APY. You can read more about our methodology below.
All America Bank Ultimate Rewards Checking
![All America Bank Ultimate Rewards Checking](/cnn-underscored/money/images/uploads/2023/12/11093451/all-america-bank-1.png?width=1000&fit=cover&format=webp#038;fit=cover&format=webp)
Why we picked it
At 5.15% APY, All America Bank offers one of the highest returns we’ve found through its Ultimate Reward Checking account. Monthly requirements for this account are shockingly lax, with account holders only needing to make ten debit card transactions per month and enroll in paperless statements to qualify for the advertised rate.
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In addition to earning a high APY, Ultimate Reward Checking account holders who meet the monthly requirements also qualify for unlimited ATM fee reimbursement in the U.S. and up to $25 in global ATM fees reimbursed per month.
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While new customers need to make a minimum deposit of $500 when opening their Ultimate Rewards Checking account online, there’s no ongoing minimum account balance or maintenance fee.
Pros
- Offers up to 5.15% APY
- Easy to meet high APY requirements
- Domestic and global ATM fee reimbursement
Cons
- Only 7 branches, all located in Oklahoma
- $500 minimum deposit to open online
- ATM fees apply if monthly requirements aren’t met
Who should use it
All America Bank’s Ultimate Rewards Checking account is a great all-around account with high yields and relatively few strings attached. You might particularly value the global ATM fee reimbursement perk if you travel abroad frequently and need convenient access to cash, no matter where you are.
Ideal Credit Union High Yield Checking
Best for debit card rewards
![Ideal Credit Union High Yield Checking](/cnn-underscored/money/images/uploads/2023/12/11085425/ideal-credit-union.png?width=1000&fit=cover&format=webp#038;fit=cover&format=webp)
Why we picked it
At 5.00%, the maximum APY from Ideal Credit Union’s High Yield Checking account is one of the highest currently available. And while some of the more lucrative checking accounts come with a laundry list of monthly requirements, Ideal Credit Union keeps things fairly simple: Account holders must only receive at least $1,500 in direct deposits and use their debit card at least 20 times each month, in addition to signing up for electronic statements.
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The high APY is capped on balances of up to $20,000 (it drops to 0.05% APY if you don’t meet these requirements.)
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Ideal Credit Union also offers a selection of upgraded debit cards with rewards comparable to what you’d get from a credit card. This allows account holders to earn additional points and cash back on top of interest returns.
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If you don’t live in one of the 13 eligible Minnesota counties, you can join Ideal Credit Union with a $5 donation.
Pros
- Earn 5.00% APY on balances up to $20,000
- Countrywide shared branch and ATM access
- No monthly maintenance fee
Cons
- APY drops to 0.05% if monthly requirements are not met
- Limited customer service hours
- High overdraft and NSF fees ($36)
Who should use it
If you have a steady paycheck totaling at least $1,500 per month and can commit to making a minimum of 20 monthly purchases on a debit card, a High Yield Checking account from Ideal Credit Union may be the most effective way to maximize returns on your earnings.
Axos Bank Rewards Checking
![Axos Bank Rewards Checking](/cnn-underscored/money/images/uploads/2023/11/09101430/axos-bank-e1604074846989-removebg-preview-e1711610292297.png?width=1000&fit=cover&format=webp#038;fit=cover&format=webp)
Why we picked it
Some high-yield checking account providers charge a handful of hidden fees that can quickly eat away at interest earnings. Axos Bank, on the other hand, boasts $0 fees for account maintenance, ATM withdrawals and even overdrafts with its Rewards Checking account. The bank will even reimburse unlimited ATM fees no matter where you withdraw cash in the U.S.
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This account employs a scaled reward system, offering a range of APYs depending on the requirements you meet each month. The benefit is that you’ll never lose the totality of your interest earnings in any given month for failing to meet one requirement. Just keep in mind that earning the full 3.30% APY can be difficult; you’ll need to open two types of investment accounts and maintain a minimum balance of $2,500 in each to qualify.
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Axos Bank also offers frequent sign-up bonuses to new customers. However, make sure to read the fine print as these bonuses are often contingent upon spending a certain amount over the first several months that the account is open.
Pros
- No fees, plus reimbursement of all domestic ATM fees
- Scaled APY rewards
- Offers signup bonuses
Cons
- $5,000 minimum investment account balance to earn highest APY
- No physical branches
- Can be difficult to qualify for sign-up bonus
Who should use it
Investors willing to move at least $5,000 into investment accounts with Axos Bank can simultaneously earn up to 3.30% APY on funds kept in a Rewards Checking account.
Credit Union of Denver Interest Rewards Checking
Best for balances under $10,000
![Credit Union of Denver Interest Rewards Checking](/cnn-underscored/money/images/uploads/2023/12/11085640/credit-union-denver.png?width=1000&fit=cover&format=webp#038;fit=cover&format=webp)
Why we picked it
The Interest Rewards Checking account from Credit Union of Denver carries a notable APY of up to 5.00% while keeping requirements manageable. Account holders only need to receive one direct deposit, mobile deposit or electronic transfer each month, make at least 15 debit card transactions, and receive electronic statements.
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The 5.00% APY is available for balances up to $10,000 and then it drops to 0.20% for higher balances.
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Since this account is offered by a credit union, you need to be a qualifying member to sign up. Residents of certain counties in Colorado and government agency employees can open an account without taking any further steps. If you don’t meet these criteria, you can qualify by joining the Consumers United Association for a one-time fee of $25 or $5 annually.
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Interest Rewards Checking account holders can also get cash back from popular retailers like Target and Starbucks through Credit Union of Denver’s CUDeals program.
Pros
- Up to 5.00% APY with reasonable monthly requirements
- Access to nationwide shared branches and ATMs
- Cash back rewards partnership with some retailers
Cons
- APY drops to 0.20% for balances over $10,000
- Limited reimbursement of ATM fees
- Low app ratings
Who should use it
Those with variable income may find it easier to qualify for the maximum APY on this account each month thanks to looser restrictions on monthly deposits. If you don’t get regular direct deposits from an employer, you can still meet the requirements by making a mobile deposit or receiving any other electronic transfer.
Consumers Credit Union Rewards Checking
Best for credit card spenders
![Consumers Credit Union Rewards Checking](/cnn-underscored/money/images/uploads/2023/12/11085151/consumers-credit-union.png?width=1000&fit=cover&format=webp#038;fit=cover&format=webp)
Why we picked it
At first glance, it may seem that Consumers Credit Union puts a lot of red tape around the impressively high 5.00% maximum APY on its Rewards Checking account. However, unlike with other providers, failing to meet the full list of requirements doesn’t necessarily mean you’ll forfeit your returns entirely for that month. Additional tiers with APYs of 4.00% and 3.00% are available, with rules becoming progressively less strict at each level.
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It’s also important to note that the APY drops to 0.20% for balances over $10,000.
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Higher APY tiers require certain amounts of spending on Consumers Credit Union credit cards each month. This might be a bonus for anyone interested in supplementing high-yield checking account earnings with additional cash back rewards.
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Account holders can benefit from unlimited ATM fee reimbursement, eliminating the need to find the nearest in-network ATM. Also, Consumers Credit Union’s membership in the Co-op Network ensures fee-free withdrawals from over 30,000 ATMs at any rewards tier.
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Anyone is eligible to join Consumers Credit Union with a $5 membership fee to the Consumers Cooperative Association, which Consumers Credit Union will reimburse.
Pros
- Tiered rewards up to 5.00% APY
- Unlimited ATM fee reimbursement
- Nationwide network of shared branches and ATMs
Cons
- Complex requirements to earn the maximum returns
- Higher APY tiers require significant monthly credit card spending
- APY drops to 0.20% for balances over $10,000
Who should use it
The Consumers Credit Union Rewards Checking account is great for families with high levels of credit card spending each month (and who pay this spending off in full), particularly those who don’t mind taking a hands-on approach towards managing their finances to maximize rewards.
Redneck Bank Rewards Checkin’ Account
![Redneck Bank Rewards Checkin’ Account](/cnn-underscored/money/images/uploads/2023/12/08102536/redneck-bank-e1702276604825.png?width=1000&fit=cover&format=webp#038;fit=cover&format=webp)
Why we picked it
Redneck Bank’s 5.15% APY on its Rewards Checkin’ Account is one of the highest rates we’ve seen among high-yield checking accounts, and while the name might give you pause, Redneck Bank is the online banking division of All America Bank and is FDIC-insured. Account holders are only asked to use their debit card at least 10 times per month and receive electronic statements to qualify for the maximum APY. This rate applies to balances of up to $15,000, a higher limit than some competitors.
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While it’s an online bank with no brick-and-mortar locations or in-network ATMs, Redneck Bank prides itself on providing live customer service via phone and chat. The bank also covers all ATM fees within the U.S. and reimburses up to $25 in foreign ATM fees per month.
Pros
- Earn 5.15% APY on balances up to $15,000
- Easy rewards requirements
- Live customer service
Cons
- $500 minimum opening deposit
- No physical locations or ATMs
- Only offers two types of accounts
Who should use it
If you prefer the convenience of online banking and don’t want to bother with complicated rewards schedules, Redneck Bank is a great choice with high returns. The Rewards Checkin’ Account pays one of the best rates on the market with few restrictions.
Presidential Bank Advantage Checking Account
Best for balances over $25,000
![Presidential Bank Advantage Checking Account](/cnn-underscored/money/images/uploads/2023/12/11094446/presidentialbank.png?width=1000&fit=cover&format=webp#038;fit=cover&format=webp)
Why we picked it
Most high-yield checking accounts set a limit on balances that qualify for their maximum APY, often in the range of $10,000 to $25,000; the APY for additional funds typically drops to less than 0.50%. Presidential Bank, however, offers high-balance account holders the opportunity to continue earning returns on balances over $25,000 at a 3.62% APY. Balances under the $25,000 benchmark earn a 4.62% APY when requirements are met.
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Advantage Checking Account customers can withdraw cash for free from any one of 88,000 in-network ATMs, and unlike most competitors, ATM withdrawals count toward the account’s monthly debit card usage requirement. Only seven withdrawals or transactions must be made each month to qualify for the maximum APY, and the account must receive at least $500 per month in direct deposits.
Pros
- 4.62% APY on balances up to $25,000, plus 3.62% APY on balances over $25,000
- Over 88,000 in-network ATMs
- ATM withdrawals count toward monthly transaction requirement
Cons
- $5 monthly service charge for balances below $500
- Out-of-network ATM fee credit limited to $8 per month
- Only operates branches in the Washington, D.C. area
Who should use it
Checking account holders whose average balances exceed the limits of most high-yield accounts might be able to get better returns from Presidential Bank’s Advantage Checking Account. In addition to a healthy 4.62% APY on funds up to $25,000, the rate for excess balances remains fairly high at 3.62% APY.
Lake Michigan Credit Union Max Checking Account
Best for no minimum deposit
![Lake Michigan Credit Union Max Checking Account](/cnn-underscored/money/images/uploads/2023/12/11094639/lake-michigan-credit-union.png?width=1000&fit=cover&format=webp#038;fit=cover&format=webp)
Why we picked it
The most competitive high-yield checking account rates tend to come from online institutions that don’t need to pay overhead costs to operate physical branches. Lake Michigan Credit Union is one of few providers with widespread locations that still boasts a competitive rate.
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The Max Checking Account offers up to 3.00% APY on balances up to $15,000, with no minimum balance required to open or maintain the account. However, there are a few monthly requirements to know about. In addition to receiving a monthly direct deposit and using the account’s debit card at least 10 times per billing cycle, account holders are required to log in to online or mobile banking a minimum of four times each month.
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While Lake Michigan Credit Union is local to Michigan and Florida, their 55,000 in-network ATMs can be found nationwide. Account holders can also get up to $10 per month in out-of-network ATM fees reimbursed.
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If you don’t meet one of the LMCU’s eligibility requirements, you can join with a one-time $5 donation.
Pros
- Extended customer service hours, including live chat
- Network of 55,000 ATMs plus several dozen branches in Michigan and Florida
- No minimum balance
Cons
- Maximum APY of 3.00% falls short of competitors
- Long list of monthly requirements to earn highest APY
- Low app ratings
Who should use it
Residents of Michigan and Florida who aren’t comfortable with online banking should consider Lake Michigan Credit Union’s Max Checking Account for returns that far exceed most high-yield checking options from other brick-and-mortar banks.
Bank5 Connect High-Interest Checking
Best for easy-to-earn APY
![Bank5 Connect High-Interest Checking](/cnn-underscored/money/images/uploads/2023/11/09102035/bank5-e1710741015160.png?width=1000&fit=cover&format=webp#038;fit=cover&format=webp)
Why we picked it
While high-interest checking accounts can provide lucrative rewards, you always run the risk of losing out on returns should you fail to meet ongoing requirements such as regular direct deposits and regular debit card spending. Bank5 Connect’s High-Interest Checking account does away with these requirements, only asking account holders to maintain a minimum balance of $100 to qualify for the maximum APY of 2.70%.
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Although Bank5 Connect is an online bank, face-to-face customer service is still available via video banking. Chat support is also available, and phone lines are open seven days a week.
Pros
- Only requirement to earn 2.70% APY is a minimum balance of $100
- No maximum balance for full APY rewards
- Offers video banking
Cons
- Lower returns than other online banks
- Not available to residents of Massachusetts or Rhode Island
- Cash deposits not accepted
Who should use it
If you’re concerned about staying on top of a high-yield checking account’s strict monthly requirements, the High-Interest Checking account from Bank5 Connect is a good solution. No ongoing direct deposits or debit card transactions are required to earn the maximum 2.70% APY. This account is a great place to stash an emergency fund for quick access in a pinch.
NBKC The nbkc Everything Account
Best for no overdraft fees
![NBKC The nbkc Everything Account](/cnn-underscored/money/images/uploads/2023/11/09102311/nbkc-bank-logo-1-e1712215333240.png?width=1000&fit=cover&format=webp#038;fit=cover&format=webp)
Why we picked it
As its name implies, NBKC’s The nbkc Everything Account is a high-yield checking account and savings account rolled into one. While the account’s APY of 1.75% falls short of online competitors, there are no criteria to qualify for this rate each month, making it a low-risk option for anyone who can’t meet consistent requirements.
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NBKC’s digital banking platform helps account holders learn good financial habits by tracking spending and working towards savings goals. The bank doesn’t charge fees for overdrafts or account maintenance, and ATM withdrawals within its extensive network are free. Out-of-network ATM fees are reimbursed up to $12 per month.
Pros
- No monthly requirements or minimum balance to earn full APY
- No extra fees
- Built-in savings features
Cons
- 1.75% APY is low for a high-yield checking account
- No option for separate checking and savings accounts
- Only four brick-and-mortar locations, all in Kansas City, MO
Who should use it
First-time account holders and young adults learning to manage their finances can get started easily with this account from NBKC. Funds kept in the account earn a respectable 1.75% APY without the need for ongoing management.
What are high-yield checking accounts?
A high-yield checking account is a special type of account with an annual percentage yield (APY) that’s significantly more than a standard checking account. Traditional checking accounts typically provide little to no interest earnings.
Some high-interest checking accounts are free of maintenance fees and minimum balance requirements, but you can shop around for features that fit your needs.
What to look for in a high-yield checking account
If you’re looking for the best high-yield checking account, the interest rate you earn will be a big factor. But it shouldn’t be the only one. A good strategy for picking the right account is to find the ones that provide the features and benefits that you need most and then select the one with the highest yield.
Regardless of your process, here are some of the factors that you should consider when picking a high-yield checking account:
Fees
If you have to pay a fee for your high-yield checking account, you could end up paying more than you earn. For this reason, it’s best to seek out high-yield checking accounts that have no monthly service fees. Beyond this, however, it’s important to dig into the fine print to see if any other fees may catch up with you, from overdraft and ATM fees to per-transaction or wire transfer fees.
Services provided
A checking account with a high yield isn’t going to do you much good if it doesn’t provide you with the right services. Depending on your financial needs, you might need an account that allows incoming and outgoing wire transfers, unlimited ATM transactions or other features. Pick and choose among accounts that provide what you need without charging you excessive fees to do so.
Accessibility
Access to funds is an important characteristic of a good checking account. You’ll generally want to find one that offers check writing and ATM access, particularly of the no-fee variety, or one that rebates ATM fees. Banks that charge no fees for incoming and outgoing wire transfers are harder to find, but they do exist.
Maintenance or transaction requirements
Some checking accounts require you to maintain minimum balances or make a certain number of monthly transactions to waive the monthly fee. In most cases, you’ll want to try to avoid these types of accounts in favor of those with no fees, minimums or other requirements.
Yield
A high-yield checking account wouldn’t live up to its name if it didn’t pay interest. You’ll ultimately want to look for the account that meets all of your banking needs and pays the highest available yield.
The benefits of high-yield checking accounts
These are the key benefits of opening a high-yield checking account:
- Earn interest on your spending money: You’ll receive interest based on your balance, and some banks offer a higher APY for keeping a large balance. Interest rates may even rival certain types of savings accounts.
- Motivate yourself to spend less: You might have to keep a higher balance to earn more interest. That can also help you build a cash cushion for emergencies.
- Easily access your cash: Unlike other interest-earning accounts such as savings accounts and CDs, high-yield checking accounts don’t restrict when or how you can withdraw funds. In fact, making a minimum number of monthly debit card transactions is a common requirement.
The drawbacks of high-yield checking accounts
These are the main drawbacks of high-yield checking accounts to keep in mind:
- Account requirements: These accounts often come with transaction requirements. If you can’t meet the requirements, then you may earn little to no interest.
- Fees that could eat into earnings: Make sure you’re aware of fees such as monthly maintenance, overdraft, NSF and 3rd party ATM fees upfront, and how to avoid them.
- Variable returns: The interest rate you receive when you open an account won’t stick around forever: Rates fluctuate with market conditions. Also, make sure you’re aware of the APY that applies if you don’t meet all of the monthly account requirements. This rate tends to be low.
How to choose a high-yield checking account
- Look at different types of financial institutions. High-yield checking accounts are available from both banks and credit unions, which may operate locally in your area or exclusively offer services online. Try to evaluate rates and features at a variety of institutions.
- Check minimum balance requirements. Many high-yield checking accounts only award the maximum APY to account holders who meet minimum balance requirements each month. It’s a good idea to check your existing statements and rule out any accounts with requirements that exceed your average historical balance.
- Consider ATM locations. Make sure you have sufficient access to fee-free cash withdrawals by checking ATM locations around your home and work. Some high-yield checking accounts reimburse some or all out-of-network ATM fees as an additional account perk.
- Compare rates. Once you’ve identified what you need from a high-yield checking account, look for the account that offers the highest APY and meets all your requirements.
Who are high-yield checking accounts right for?
There’s more to high-yield checking accounts than simply sitting back and watching interest accrue on your monthly statement. These accounts aren’t for everyone due to the care and maintenance that goes into earning the maximum possible rate.
You may be a good candidate for a high-yield checking account if you:
- Are comfortable tracking your finances. High-yield checking accounts tend to come with requirements like a minimum balance or number of monthly debit card transactions to qualify for the advertised rate. You’ll need to monitor your account activity regularly to ensure you’re getting the maximum potential returns.
- Can meet minimum balance requirements. Only open a high-yield checking account with a minimum balance requirement that falls within your means.
- Use a debit card to make everyday purchases. The interest rate on your high-yield checking account may be tied to the number of debit card purchases you make each month. If you typically use a rewards credit card or cash for daily expenditures, you’ll need to either adjust your spending habits or reconsider whether a high-yield checking account is the right fit for you.
Maximizing returns with high-yield checking accounts
To get the best possible rate from your high-yield checking account, you may need to meet these conditions:
- Earn regular income. Many banks ask for monthly deposits to be made into your account, typically via direct deposit or automated clearing house (ACH) payment.
- Make debit card transactions. Check the fine print on your high-yield checking account to see whether your interest rate is conditional upon monthly debit card transactions, and if so, how many are required.
- Receive electronic statements. As many banks make a push to go paperless, several have made electronic statements a requirement for high-yield checking account holders. This is typically a simple one-time process that involves giving your consent to receive monthly statements in your online banking platform instead of by snail mail.
- Manage your account online. While not a common requirement, some banks offering high-yield checking accounts look to make sure you’re logging into your online banking account via computer or smartphone at least once each month. Failing to do so may cause your account to earn interest at a lower rate for that statement period.
Opening a high-yield checking account
- Do your research. Compare high-yield checking account APYs at a variety of banks, taking note of each account’s requirements. Ask about fees and other limitations.
- Fill out an application. Most banks will allow you to apply for a high-yield checking account online, although you may wish to visit a bank in person. You’ll typically be asked to provide personal information, including name and address; proof of address, such as a utility bill; government-issued photo ID, such as a driver’s license; and Social Security or tax identification number.
- Deposit funds into the account. The bank may require a certain minimum opening deposit. You may want to move funds from another account into your new high-yield checking account or reroute direct deposits.
- Track your spending habits. Keep a close eye on your account’s balance and keep track of how often you swipe your debit card to make sure you continuously meet ongoing minimums.
- Set monthly reminders. Make a note in your calendar to review your account in depth at least once each month, ensuring you’ve met all requirements and interest has been credited to your account at the correct rate. Keep an eye out for changes to your account’s APY, which the bank may change at any time.
How to make the best of your high-yield checking account
The best way to use your high-yield checking account is to enjoy the features and benefits it offers while collecting some additional interest. You shouldn’t generally keep a large cash balance in your checking account, as it’s mainly used for daily transactions, so the yield isn’t as important as you might think. Your excess cash should be stashed in a high-yield savings account or investment account, both of which will generally offer higher returns than a high-yield checking account.
How often do high-interest account rates change?
High-yield checking accounts, like their savings account cousins, offer variable interest rates, which means rates can change at any time at the bank’s discretion. It’s up to the bank to decide when to change rates, but as a general rule, savings rates are tied to the federal funds rate set by the Federal Reserve. When the Fed rate goes up, you can expect interest rates in your high-yield checking account to go up as well. When the Fed rate drops, your interest rate will also drop.
That’s why it’s a good idea to keep an eye on what the Federal Reserve is signaling when it comes to interest rates. Not all banks change rates at the same time, but once the Fed makes a move in either direction, the interest rate on your account will likely change soon after.
With high-yield checking accounts, your interest rate might also rise or fall depending on factors such your average daily balance, number of monthly transactions, whether you have direct deposit or whether you sign up for e-statements.
Tips for managing a high-yield checking account
As with any bank account, it’s a good idea to understand the fine print with your high-yield checking account. According to the FDIC, bank rules are sometimes “unclear or ambiguous” about what customers must do to maintain the highest rates.
For example, if your bank requires a certain number of debit transactions to get the highest rate, you need to know what that number is and when it is calculated. In some cases, it will be calculated within the statement cycle. In other cases, it might be calculated during the bank’s qualification period. Part of managing your high-yield checking account properly is familiarizing yourself with the bank rules
Here are some other tips for managing a high-yield checking account:
- Check your balance often: Because some high-yield checking accounts require a minimum balance to earn the best interest rate, you should review your balance regularly to ensure it stays above the minimum.
- Make sure you meet transaction requirements: Some high-yield checking accounts require that you make a certain number of transactions each month or statement period to get the highest rate. Keeping up with your number of transactions can help you meet the requirement.
- Check your direct deposits: If your high-yield checking account requires a minimum dollar amount tied to direct deposits each month, you want to reach that minimum to keep the highest interest rate.
- Review the fee schedule: Some high-yield checking accounts charge monthly maintenance fees if you don’t meet balance or other requirements. Review the fee schedule regularly so you don’t get hit with unexpected costs.
Alternatives to high-yield checking accounts
Standard checking accounts
High-yield checking accounts set themselves apart from standard checking accounts by offering a more favorable APY, leading to higher interest earnings over time. However, standard checking accounts can be much easier to manage due to fewer ongoing requirements and lower fees.
Savings accounts
If you don’t need immediate access to the funds you plan to deposit in a high-yield checking account, a savings account could provide more lucrative returns. High-yield savings account rates tend to exceed those of high-yield checking accounts.
CDs
While high-yield checking account rates are variable and subject to change at any time, CDs provide returns at a fixed rate that remains guaranteed for their term. If your checking account balance far exceeds what you need for ongoing expenses, it might be a better idea to start investing some of that money in CDs.
Money market accounts (MMAs)
Money market accounts offer many of the same benefits of a high-yield checking account. Both pay interest at a higher rate than standard checking accounts, and MMAs also let account holders access their funds by using a debit card and writing checks.
However, MMAs generally limit the number of transactions you can make monthly without incurring fees. This makes them less than ideal for everyday expenses.
High-yield checking account key terms
Annual percentage yield (APY)
High-yield checking accounts list the rate at which they pay interest in terms of annual percentage yield, or APY. This can tell you the amount of interest your account will earn over the course of a year.
APY is slightly different from a simple interest rate. An interest rate tells you how much interest you’ll earn on your principal balance in your account. But the APY factors in compounding interest as well as how frequently it is paid. For example, if interest is compounded monthly, you’d earn interest not just on the principal, but also on the interest you earned the previous month. APY calculates that compounding interest to give you a more accurate picture of your annual returns.
Annual percentage yield is what makes high-yield checking accounts unique. By definition, these accounts offer a higher APY than standard checking accounts.
Monthly maintenance fee
It’s common for high-yield checking accounts to be charged a monthly maintenance fee in exchange for their higher returns. However, most institutions allow you to waive this fee by meeting certain ongoing requirements. The most common requirements are a minimum account balance, a minimum number of monthly debit card transactions, or both.
Minimum deposit requirement
When you open a high-yield checking account, the bank might require you to make a minimum initial deposit. This minimum deposit requirement may be as low as $0 or as high as a few hundred dollars.
Minimum balance requirement
In addition to an initial minimum deposit requirement, high-yield checking account holders often need to pay attention to ongoing minimum balance requirements. This is a monthly average account balance that must be reached in order to qualify for certain benefits, such as the maximum advertised APY or a waiver of the monthly maintenance fee.
Methodology
Our team of experts at CNN Underscored Money analyzed dozens of accounts from more than 40 financial institutions to determine the rankings for the best high-yield checking accounts. This included accounts from a mix of traditional banks, online banks and credit unions that are available nationally. We ranked each account on 17 data points across six categories.
Here are the categories we analyzed and how we weighted each:
APY (40%)
The amount of interest you earn on your money is the most important part of choosing a high-yield checking account for many consumers, so we weighted this highest of all factors.
Fees (25%)
Fees are a critical factor to consider with your high-yield checking account because they can eat away at any interest earnings, especially if an account has a high monthly maintenance fee.
Customer experience (10%)
It’s important to have a bank that’s trustworthy and easy to reach when you need help.
Digital experience (10%)
You’ll want a bank with a usable app and plenty of online features so that it’s easy to bank from anywhere.
Minimums (10%)
A high minimum deposit makes an account less accessible, so we rewarded accounts that more people can use. We also rewarded accounts that don’t make you carry a minimum balance to avoid fees.
Access (5%)
Having more branches and ATM locations makes it easier access to your funds.
We also considered several other factors like sign-up bonuses and online features.
Frequently asked questions (FAQs)
Most checking accounts earn little to no interest, but high-yield checking accounts pay higher-than-average returns. You’ll typically have to meet certain ongoing requirements to qualify for a higher APR.
High-yield checking accounts may require a specific initial deposit, and you may need to keep a certain balance to earn the best rate or avoid fees.
Online banks have lower overhead costs, which means they may be able to offer higher-interest checking accounts than traditional banks. However, it’s still wise to compare APYs at several banks before choosing an account.
When you open a high-yield checking account, you risk missing out on interest earnings if you fail to meet the account requirements. If you can’t consistently meet the requirements, you might want to keep your funds in an interest-earning savings account with fewer conditions.
Deposits up to $250,000 are protected at FDIC-insured banks. If you’re not sure whether a bank is FDIC-insured, check the BankFind online database.
Additional reporting by John Csiszar and Vance Cariaga
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