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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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April 01, 2013 at 4:51 pm

Claes, one factor you didn't mention in your article was FDIC Insurance coverage. Through the end of 2012, money that was in non-interest bearing checking accounts had unlimited FDIC Insurance coverage (vs $250k for other accounts). Not a big deal for the average depositor, but corporations and some individuals with large balances had moved significant balances from Money Market accounts, etc. into checking accounts because of this. They were willing to forego the nominal interest rates for the security of unlimited coverage on their balances.

You may see that there will be some movement back into interest-bearing accounts now that FDIC coverage has reverted to standard coverage.

April 01, 2013 at 2:46 pm


If you are wanting to keep your money in checking accounts, you need to find a Community Bank of Credit Union. You can get around a 2% investment while not having to suffer from any of the investment norms: penalties on withdrawing, etc.

Using Community Banks and Credit Unions means you're money is always available to you and always gaining interest. Both of those institution types are allowed to offer much better return options than the Big Banks.

April 01, 2013 at 12:39 pm

Pretty much all of my money is in checking and savings accounts. My checking accounts earn better interest than most CDs and ensure I always have money on hand if a better investment comes along.

My local bank's checking account provides 2% interest, no fees, and reimburses any ATM charges.

I also have an online checking account and savings account that both earn about 1.5% interest.

These accounts used to be as high as 5%, but have fallen in the past year or so.

I would recommend to everyone to look at online accounts, credit unions, or local banks for the best returns. The larger, nationwide banks don't seem to offer the high interest rates that the smaller, local banks offer on checking and savings accounts.

April 01, 2013 at 12:37 pm

That's take home from 1 paycheck.

April 01, 2013 at 12:24 pm

Don't listen to all the pablum of balanced investing... what the hedge funds did to the stock market in 2008, I promise they will do it again. We all more concerned about return OF the money, not return on the money. The money advisers want to take a fee from you to in effect tell you, 'you should end up with more monies than you started out with'.... but they don't tell you, you could looooose ALOT of it.

March 31, 2013 at 8:05 pm


The best thing you can do is check that your 401k is balanced to the amount of risk you feel comfortable with and put as much of your money in the 401k up to the allowable limit ,then invest a percentage of your cash that you feel you can riskin a good solid stock.

March 31, 2013 at 5:42 pm

@ Don
I'm no expert but here is what I did.. my situation was similar to yours except I don't know what to much money is or even a lot of money.. anyway I wasn't making anything on checking so I thought I would open a savings account to at least get something .05%. not to good so I started searching for something else. I found a credit union close by that was paying 2.5% on checking accounts up to $5000 then 1.25% on anything over $5000. They also pay .3% for savings account balances over $1000. it won't make me rich with what I have but at least i'm getting something

March 31, 2013 at 4:44 pm

My checking pays more interest than savings so I put my money where it makes the most for me. I'll never get rich from the interest but it's better than nothing. We all have to look at what we have and what we can do with it. Nothing is ever guaranteed so reevaluate what you have do some research and make the best decisions you can make with the information you have and if something better comes along go for what gets you the most.. Not sure why everybody is making such a big deal with what account the money is in.

March 31, 2013 at 11:45 am

What's the sense of opening a CD that makes 1%???
After taxes, you make nothing and the bank gets to lock up your money for X number of months

March 31, 2013 at 10:30 am

I too keep too much money in my Checking accounts. I make no Interest.
I also try and Balance the Checking with my savings. Again, No Interest.
The only Accounts I have that make Money are my IRAs.
What Should I do?
I have NO Debt.