Looking for better returns on your idle savings, without sacrificing safety? Who isn't? Consumers who consistently use debit cards and are comfortable with electronic transactions will find that high-yield checking accounts are the most attractive federally insured, liquid cash investments. After surveying 56 high-yield checking accounts offered by banks, thrifts and credit unions, Bankrate.com found that the average yield for these accounts is 1.64 percent.
However, account holders typically need to meet a few requirements each month. All of the accounts Bankrate.com surveyed mandate electronic statements and almost all require 10 or more debit card transactions each month. Most also require direct deposit and/or automated bill payments. Failing to meet the monthly requirements drops the average yield to a very pedestrian 0.07 percent.
Another caveat is that the above-market yield only applies up to a certain limit, known as the balance cap. The average balance cap is a little over $17,000, but none of the 14 highest-yielding accounts are available nationwide with a balance cap above $15,000. Savers looking to maximize interest earnings on these accounts must do more than pursue the highest-yielding offer. They also need to factor in the balance cap on which that higher yield is paid.
For consumers who consistently use debit cards and are comfortable with electronic statements and direct deposit, high-yield checking accounts remain the cream of the crop among cash investments.