Feel like your money is earning a measly interest rate? Some bank and credit union customers get surprisingly good interest on checking accounts.
These are referred to as high-yield or rewards checking accounts, and they are legitimate. Fail to meet the requirements for each statement cycle, however, and the attractive interest rate disappears. Rates and terms are usually subject to change without notice.
Typically, the customer must:
• Make a certain number of signature-based debits each statement,
• Set up direct deposits for one or more payments, and
• Receive on-line statements.
On the plus side, high-yield checking accounts typically:
• Do not require a minimum balance
• Rebate ATM fees
• Have a maximum limit (like $25,000) when the interest rate drops.
• Have no monthly service charges.
“It can really pay off for a customer, but the key is to manage your account,” said Dianne Taylor, management consultant for the Iowa Credit Union League. “Typically what happens is someone will not make the required number of debit transactions, and then the account doesn’t earn the higher interest that month.”
Some financial institutions offering high-yield checking are WestBank and Premier Credit Union in Des Moines, Linn Area Credit Union and Cedar Rapids Bank & Trust in Cedar Rapids, Green Belt Bank & Trust in Iowa Falls, Dubuque Bank & Trust, and Quad City Bank & Trust.