NEW YORK, April 12, 2016 /PRNewswire/ -- Twenty-one checking accounts offered by U.S. banks and credit unions yield 2% or more, according to Bankrate.com (NYSE: RATE). Compared to the average money market account which is yielding just 0.11%, high-yield checking accounts can bring in substantially higher gains than conventional savings accounts. In fact, the average yield across all 56 accounts surveyed was 1.65%. These accounts offer the top yield among all liquid, federally insured deposit products and the highest risk-free return available in the investment realm. The full study can be found here:
"The reason consumers look to high-yield checking accounts are the yields they pay. Even in this low rate environment, consumers can generate hundreds of dollars in interest earnings per year with these accounts," said Bankrate.com Chief Financial Analyst, Greg McBride, CFA.
In order to qualify for the highest rates, certain conditions must be met on a monthly basis. These conditions vary by account, but typically include:
- Designated number of debit card transactions each month (the most common is 10)
- Receiving your checking statements electronically
- Direct deposit going into the account
- Paying bills online
Failing to meet the requirements in a given month will trigger a much lower default interest rate. The average default rate is only 0.06%, so it's important to be mindful that account terms are met.
Another stipulation is that high-yield checking accounts have balance caps which can range from $500 to $25,000. The study found the average balance cap to be $16,336. Earning 2% on that amount would bring in an extra $327 per year for the account holder.
"It is important to consider the balance cap in conjunction with the yield to determine the account that will generate the most interest earnings for you. Case in point, of the 15 highest yielding accounts, only one has a balance cap above $15,000. For a $25,000 balance, the best option is actually the 12th-highest," McBride added.
About half of the 56 high-yield checking accounts that Bankrate.com analyzed are available nationwide.
The Bankrate.com high-yield checking account survey consisted of 56 accounts, surveyed between Feb 16-22, 2016, from a sampling of federally-insured banks and credit unions around the country.
Bankrate.com provides consumers with the expert advice and tools needed to succeed throughout life's financial journey. For over two decades, Bankrate.com has been a leading personal finance destination. The company offers award-winning editorial content, competitive rate information, and calculators and tools across multiple categories, including mortgages, deposits, credit cards, retirement, automobile loans, and taxes. Bankrate aggregates rate information from over 4,800 institutions on more than 300 financial products. With coverage of over 600 local markets, Bankrate generates rate tables in all 50 U.S. states. Bankrate develops and provides web services to more than 100 cobranded websites with online partners, including some of the most trusted and frequently visited personal finance sites on the internet, such as Comcast, Yahoo!, CNBC and Bloomberg. In addition, Bankrate licenses editorial content to more than 500 newspapers on a daily basis including The Wall Street Journal, USA Today, The New York Times and The Los Angeles Times.
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SOURCE Bankrate, Inc.