Consumer Reports Money Adviser says there are checking accounts that pay much higher interest - higher than most savings accounts. Are they right for you?
Like many of us these days, Katrina Wright wishes she could bulk up her savings. But the interest rates on her checking account aren't doing much to make that happen.
"I only get one percent interest rate, which is not very good. It is convenient to use the checking account, but I'm not going to make any money from it," Wright said.
Consumer Reports Money Adviser looked at some community banks and credit unions that are paying much higher rates.
"Some of these checking accounts are paying four or even five percent yields. That's higher than many savings accounts or long-term CDs," Greg Daugherty said.
Of course, like most great offers there are some catches.
"The rates plummet if you don't meet the bank's monthly requirements. Some drop to as low as .04 percent," Daugherty said.
To get the high interest rate on your checking account, requirements can include - making 10 to 15 debit-card purchases a month, paying some of your bills online, and receiving online statements. There are also balance limits.
"Some of the accounts we looked at had balance limits of 25-thousand dollars. Once you exceed that amount, the annual rates go down to around one percent," Daugherty said.
Consumer Reports says those high-interest rates may be worth the restrictions. But they're not for everyone.
"I can't be sitting here counting, oh I need one more transaction to get a high interest rate. People just don't have time," Wright said.
But if you can play by the rules, your money will grow a lot faster.
Consumer Reports says you can find a list of banks offering high-interest checking accounts and read all the requirements at two websites - kasasa.com and checkingfinder.com.
All the banks listed on the sites carry federal deposit insurance.
