How to Find the Best Checking Account Rates
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I spend a great deal of time investing, researching, and creating deals. What we often neglect is what our money is earning in between deals, in between major purchases, when its sitting in your checking account. I recently came across a great website - checkingfinder.com.
The website allows you to search for high-yield checking accounts in your area. Recently I was very close to opening a checking account at a local bank that was paying 4%. I spotted the offer on a billboard near my wife’s work. After going to checkingfinder.com I found a bank paying 5.51% or 38% more than what I had found.
Your search will return a list of banks which you can sort by distance or rate. I did rate. the highest paying bank paid 5.51%, but was 400+ miles away, no problem in this modern internet banking era.
After you get your list you can click on “learn more” and get more details and restrictions on the offer with a link to the bank’s website.
I highly recommend the website. Check out Checkingfinder.com for yourself.
**UPDATE: 8/22/2008
Shortly after I posted this, I received an email about a 7.01% checking account. I thought it would be some offshore bank, but it turned out to be Midwest America Federal Credit Union. I’m going to be opening an account there. This bank didn’t show up in checkingfinder.com, but then again there are thousands of banks in the U.S. and all of them don’t have big marketing budgets to get their name out.
There are some caveats:
- 7.01 apy is only for the first $25,000 in deposits.
- Must make 10 debit card transactions for that month
- Must have 1 ACH debit or credit transaction for that month (a bill pay or direct deposit for example)
- Sign up for e-statements. You should do this anyways to save paper and for security.
These caveats are not too bad. You could make a series of small debit card transactions quite easily. Pay a bill and sign up for e-statements. Not bad. Considering this account would pay me $62.70 more per month than the 4% account I found locally I can make due with a little bit of extra effort each month to get this juicy yield.
7 Comments on this post
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Rizzo said:
7% = must be an undercapitalized bank that needs to raise cash fast
August 25th, 2008 at 6:14 pm -
Dax Desai said:
There are many other options for an undercapitalized bank so I’m not sure how they manage this. My guess is they count on people like me not doing their 10 transactions and getting the sub 1% rate. That would make up for it. I wonder what rates they loan money out at?
I’ll try to see if I can get one of my contacts that owns a bank to check on this bank’s status with the Feds.
August 26th, 2008 at 8:59 am -
Dividend Growth Investor said:
Wow nice catch. My rewards checking only pays me 6.01% APY. The bank earns because you use your debit card more often directly out of your checking account instead of using a credit card. There will be people spending more than they have in their accounts..which triggers fees for the bank. In addition to that they don’t have to print out and mail statements - its all done electronically.
Another way that the bank makes its money is that not everyone will remember to make 10-12 transactions/ month so not everyone will be earning the big fat yield.September 16th, 2008 at 7:24 am -
Nirav said:
http://www.highyieldcheckingdeals.com/ has a pretty thorough list of deals in your area (and those available nationwide marked with a *). Assuming you’re earning 3.25% (HSBC’s current rate) in a money market account for any excess over the max of the “rewards” account, a 5% rewards account with a max of $50k yields about the same as a 7% account with $25k limit if you have $50k in savings. Personally, I think the 7% deal won’t last anyway since a lot of Fatwallet people are signing up for it. So I’m steering clear of the Midwest America account (and it’s kind of a hassle to open anyway compared to others). So with the same assumptions as before, a 5% account with $50k max will be better than a 6% account with a $25k max if you’re saving more than around $40k.
The moral of the story? Don’t chase APY alone. Look at http://www.westbankiowa.com/ for example for a 5% $50k max account available to everyone.
September 25th, 2008 at 7:15 pm -
Nirav said:
I found a bank near me whose rewards account gives 5% APY up to $50k and has free ATMs WORLDwide which could my nice for an upcoming trip. Most that I’ve seen only refund nationwide.
September 25th, 2008 at 7:19 pm -
Nirav said:
Told ya so! Midwest America dropped their rate from 7.01% to 6.31%.
http://bankdeals.blogspot.com/2008/10/reward-checking-account-rates-fall.html
October 3rd, 2008 at 3:45 pm -
Butler Motors Automobile Buyer’s Service said:
I always have the best luck at Credit Unions
November 5th, 2008 at 1:30 pm
