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$12K in checking? You’re Lemon-ing

By Claes Bell, CFA · Bankrate.com
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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234 Comments
Brutus
March 11, 2013 at 1:53 am

"There is $902 billion sitting in American checking accounts"

The population for the US is roughly 314 million...which brings the average to $2872 in savings per person. Now, I realize that this is for every man, woman, and child, but that doesn't sound like a problem to me.

Wise One
March 11, 2013 at 1:10 am

The stock market will be the downfall of the US. Why? Simple, you invest your money in the stock market, right, so what do you expect to get from that investment? A high return on your money, right? Do you care how they got that return? No, you just want a good return, regardless of how they got it. If a company doesn't give you a good return on your money, you will take it back and invest it somewhere else. The company is in a bad spot...they need to make the shareholders happy or they might lost their jobs or go out of business, so what do they do? They invest the money overseas. They move their operations to some Asian country where the labor is cheap, that way they can show a decent profit. That puts Americans out of work, but the company and investors don't care, they made money. The recession we are in the midst of today is due to this fact, so keep investing in the stock market and watch your friends, neighbors and relatives lose their jobs and their houses. YOU are to blame for this.

Wise Young One
March 10, 2013 at 7:55 pm

*below

;)

Wise Young One
March 10, 2013 at 7:55 pm

LOL! Look at all of the paranoid morons in the comments above.....

My personal favorite is what DJ said.....

"If I had $12k in my checking account that got there from my own hard labor, I wouldn't be able to even sleep at night. I'd be camping out in front of my local coin shop to convert FRNs to physical silver and/or gold in my own possession.........

I had a terrible boating accident the other day, and all my silver and gold is now at the bottom of a very deep lake."

No wonder you don't have 12k you freakin' goofball!

Willy Beamon
March 09, 2013 at 7:55 am

Rex code... How the hell did u lose 20% in market when s&ps are up almostb20 % in 2 years. Put the money under ur mattress

DJ
March 08, 2013 at 8:13 pm

When will people realize that if you can't get an interest rate on un-backed fiat paper federal reserve notes (FRNs) that is higher than the rate of inflating prices (after the taxes you have to pay on the interest), that the currency is worthless? Bernanke can create an UNLIMITED number of FRNs with a few computer keystrokes. No labor or resources required. Anybody wonder about the insanity of that while you have to actually get up in the morning and work all day for minimum wage for a take-home paycheck that buys less every week?

C'mon, people, and WAKE the hell up. You were educated in a gov't run school system that, in its own best interest, kept you stupid.

If I had $12k in my checking account that got there from my own hard labor, I wouldn't be able to even sleep at night. I'd be camping out in front of my local coin shop to convert FRNs to physical silver and/or gold in my own possession.

Disclaimer: I had a terrible boating accident the other day, and all my silver and gold is now at the bottom of a very deep lake.

Keith
March 08, 2013 at 4:16 pm

Kasasa enables credit unions to offer high interest checking. I'm currently with Pelican State Credit Union in Baton Rouge, Louisiana, and even though I don't live in the state I get 4% interest on checking balances up to $10k.

David Funk
March 08, 2013 at 10:09 am

Navy Army Community Credit Union offers 3.51% on checking accts as long as the balance stays below 25,000, you have at least 10 debit card transactions a month, sign up for direct deposit, and agree to online statements.

Rex Code
March 07, 2013 at 11:01 pm

I wish I'd kept my money in checking instead of losing 20% in the stock market over the past 2 years.

Research
March 07, 2013 at 7:45 pm

All of the so called high yield checking accounts on the sites mentioned here are offering less than 1% interest! The best is .98% and requires a $50k min deposit. 2% returns on checking for less than $100k deposit is un-heard of these days.