2010 High-Yield Checking Study
2010 High-Yield Checking Study
checking
High-yield checking perks have strings

Bankrate's survey found that the most common balance cap is about $25,000. Any additional dollars in the account that exceed the balance cap earn the default rate rather than the high-yield rate.

Customers should keep balance caps in mind rather than simply looking for the highest yield.

See survey results:
Find the results for individual banks and credit unions in Bankrate's exclusive high-interest checking account survey.

For example, BECU, a credit union, offered the sweetest yield of the bunch in Bankrate's survey -- 6.17 percent. However, BECU imposes a $500 balance cap. That means you'll earn 6.17 percent on only the first $500 you keep in the account.

Three of the accounts surveyed have no balance cap. Of those, two offer their rates nationwide.

Who benefits?

Greg McBride, senior financial analyst at Bankrate.com, believes the smartest banking customers treat high-yield checking accounts as a place to stash savings.

"The people that will use this most effectively will not be using this debit card to purchase a big screen TV," he says. "They'll make the required purchases with incidental transactions, a tank of gas here and there. It is a checking account but the savvier people will use it as a savings account."

While customers benefit when they play by the rules, so do community banks and credit unions, says Gabe Krajicek, CEO of BancVue, an Austin, Texas-based product development and marketing company for small financial institutions and the company responsible for REWARDChecking-branded programs.

"Reward checking is typically twice as profitable as free checking and the attrition rate is half of what you would see with free checking accounts," he says.

In other words, the banks make more money and their customers stick around longer.

Other features push customers toward less expensive delivery channels such as online banking and e-statements. Further requirements, such as direct deposit, ensure some customer inertia once they're set up, according to Bert Ely, principal at Alexandria, Va.-based Ely & Co., a consulting firm to financial institutions.

"They have these requirements for the stickiness, it's a bit of a hassle to set up direct deposit or bill pay," Ely says. "The more people do that the stickier they are, because it's more of a bother to switch away."

News alert Create a news alert for "checking"

advertisement

Show Bankrate's community sharing policy
          Connect with us
advertisement
CD & INVESTING NEWSLETTER

Learn the latest trends that will help grow your portfolio, plus tips on investing strategies. Delivered weekly.

advertisement

Blog

Allison Ross

CFPB adds its warning on bitcoins

Add the CFPB to the list of agencies warning consumers about the perils of cryptocurrencies.  ... Read more

Partner Center
advertisement

Connect with us