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$12K in checking? You’re Lemon-ing

By Claes Bell ·
Thursday, February 21, 2013
Posted: 5 pm ET

We are all Liz Lemon.

In one of the early episodes of the recently concluded NBC series "30 Rock," Jack Donaghy, played by Alec Baldwin, asks Tina Fey's character Liz Lemon where she invests her money. She replies, sheepishly, "I have like 12 grand in checking."

But the latest numbers from the Federal Reserve reveal that Liz is far from alone in keeping a big chunk of her money in checking. Checking account balances have risen sharply since the financial crisis rocked markets and interest rates on certificates of deposit have fallen to all-time lows. Now, there is $902 billion sitting in American checking accounts, the highest it's been since the Fed began collecting data in 1959.

In fact, the amount of money sitting in checking accounts actually has exceeded the total amount in CDs since late 2011, which hasn't been the case since the early '70s.

Of course, you could always put your savings into a balanced portfolio of stocks and bonds designed to grow wealth over the long term. But if you're committed to keeping a ton of cash in a checking account, there are ways to earn a return.

Many online banks and credit unions offer high-yield checking accounts that can pay up to 2 percent annually on your checking account funds as long as you meet a few conditions such as making a minimum number of transactions per month.

If that doesn't work for you, you can always link your checking account to a high-interest online savings account.

What do you think? Do you have most of your money in a checking account? Are you earning any interest on it?

Follow me on Twitter: @ClaesBell

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March 30, 2013 at 9:49 pm

It is nice to know you can write a check to buy a car or boat if you get the yen. I always write checks for my new cars, it is simpler than getting a loan. Haven't financed a car since 1979 and the most I ever made is about 50K, but then again I have no kids that I cannot afford.

K. Lee
March 30, 2013 at 4:23 pm

I must have missed the boat. I only have a few cents left in checking at the end of the month. I'd have to be reincarnated 12,000 times to reach $12,000. What I do save, the kids take as lunch money for school.

March 29, 2013 at 2:56 pm

Lake Michigan Credit Union Max Checking. It pays out 3.00% yield on the first $15,000 of your balance and refunds up to $15 in out-of-network ATM surcharge fees. Like most credit unions, Lake Michigan does not charge monthly maintenance or debit fees.

Is there a catch? Sort of. To earn the high interest rate, you’ll need to use your account pretty frequently. Here’s what you’ll need to do each month:
■Use direct deposit
■Log into online banking at least 4 times
■Make at least 10 debit card purchases
■Sign up for e-statements and e-notices

March 29, 2013 at 12:49 pm

$12K in checking is a lot of money? Is this the 60's? I do keep too much in checking (six figures) because I get more interest there then anywhere else (0.9%.) $12K - $20K is a good liquid emergency fund that should not be put into stocks or any investment. Also why is there an article posted on bankrate saying you can get 2% interest but when you search bankrate nothing even close is listed?

March 29, 2013 at 12:36 pm

"High Yield" at 2%. Wow. That $12,000 would get a big $20 a month, or in real terms about 5 gallons of gas. interest rates are low because if the Feds had to pay interest on our debt at anything higher we would really be in a mess.

Boondoggle Keychain
March 29, 2013 at 11:18 am


March 29, 2013 at 10:30 am

Oh, yeah? I keep 14 trillion in my checking. That's how I like it.
And, I keep 9 billion in my pocket for shopping.

March 29, 2013 at 9:41 am

Show me anything that returns 2% interest on savings, checking online or Bricks and Mortar and im there, I havent seen anything over 1% let alone 2%. Stock market has become a casino where the high rollers get to move it up and down, while the rest of us are feeders.

March 29, 2013 at 8:43 am

Oh yeah...well I keep Millions in my checking. That's how I like it!

March 29, 2013 at 3:33 am

I definitely keep too much in my checking account. Hundreds of thousands of dollars. I just like it that way.