High Interest Checking Account Basics

There is a wide assortment of options for consumers to choose from when selecting banking accounts for both deposit and transactions. From CDs to savings accounts to checking accounts to high interest checking accounts, there is some basic information consumers need to know before committing themselves to opening one account versus another.

If you are interested in opening a high interest checking account, there are some things you need to know. Like all checking accounts, a high-interest checking account is considered a transactional account. With a transaction account, a consumer deposits money into a bank account and they will then be able to access their money in a number of ways. The depositor will be able to transfer money either via electronic online banking or by completing information on a paper check and providing it to a creditor or a person, who would then deposit the note into their bank account.

The biggest advantage to a high interest checking account is that it will earn a guaranteed rate of return while the money is on deposit. But typically the benefit is outweighed by what is required to set up a high interest checking account. Most high interest checking accounts require larger than average deposits, the interest paid is nominal, and many times to qualify for a higher interest rate banks may charge additional fees for ATM withdrawals. (See checking account and ATM safety withdrawals.)

High interest checking accounts are a way for depositors to partake in a low-level investment strategy. It is certainly not advisable to store all your money in a checking account as it will not be living up to its fullest money making potential. However, a penny saved is a penny earned and a high interest checking account will certainly earn you a couple of cents here and there.