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Are you missing out on interest?

By David McMillin · Bankrate.com
Saturday, October 27, 2012
Posted: 6 am ET

A new study from Connecticut-based technology company Pitney Bowes offers a state-by-state look at the average amount of money that consumers keep in their savings and checking accounts. With data from more than 100 million accounts in all 50 states and Washington, D.C., the average savings balance was $5,293, and the average checking account balance was $3,100.

The Pitney Bowes press release subtly highlighted some of the potential political implications that personal finances may have in the November election. For example, the study shows that the average savings balance declined in four key swing states: Nevada, Colorado, Ohio and Florida.

No interest in interest earnings?

Politics aside, the study shows that many account holders are missing valuable opportunities to capitalize on today's banking landscape. The checking account figures in this survey are from noninterest checking accounts. While we are in a low-interest-rate climate, there are plenty of opportunities to actually earn money on your deposits. Greg McBride, CFA, Bankrate senior financial analyst, says that consumers should search for opportunities to maximize their earnings potential.

"There's no sense in letting money pile up in a traditional checking account that's paying little or no interest," McBride says.

McBride recommends looking for a free checking account without a minimum-balance requirement and moving excess cash into an online savings account with a competitive interest rate. If you can satisfy a few additional requirements, a high-yield checking account may be your best bet.

"If you're someone who uses your debit card enough to qualify for a high-yield checking account, a high-yield account can become more than just your everyday spending account," McBride says. "You can store your emergency savings in the account where you'll be rewarded with increased interest earnings."

Do the math

Every dollar counts. With an average interest rate of 2.05 percent, the Bankrate 2012 High-Yield Checking Survey shows that account holders can earn some extra cash. Let's consider the averages in New Jersey, which ranked highest in savings and checking balances: $7,872 and $4,465, respectively. If the average account holder combined these two figures into a high-yield checking account, the balance would yield an estimated $252 in one year.

Are you keeping a large balance in your standard checking account? Find out how much more you could be earning with Bankrate's interest calculator.

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