High-yield checking: Demand more for your money


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How valuable are you to your bank? If you have a high-yield checking account, the answer may be “very.”

High-yield checking

High-yield, or rewards, checking accounts offer higher rates than traditional checking but carry more requirements, such as having to make 10 to 15 debit card transactions a month.

Banks want engaged customers who maintain high balances and make frequent debit card purchases, and that’s especially true for the types of community banks and credit unions that typically offer high-yield checking accounts.

That means if you’re not reaping the benefits you want, it’s time to speak up. After all, over the course of a year, a difference of a few percentage points of yield can mean real money.

Return on $5,000 high-yield account balance

Interest rate Return after one year
0.5% $25
1% $50
1.5% $75
2% $100
2.5% $120
3% $150
4% $200
5% $250

Here’s how to take action to maximize your high-yield rewards.

1. Take a close look at your account and your account history. High-yield checking often comes with several requirements, such as a minimum number of debit card transactions each month and a direct deposit. If you fall short of those requirements by even one debit card transaction, you’ll earn a much lower rate for that month.

Check the terms of your account, and then review your transactions and balance for the past several months. If you find you haven’t been keeping up with the requirements, that may be what’s dragging your rewards down.

You also want to know where your balance cap is. Most high-yield accounts have a cap on the balance on which you can earn the high yield. If your balance is above that cap, you’re probably earning a lot less interest.

2. Know your options. If you’re meeting your requirements but want more benefits, shop around. Check interest rates on high-yield checking accounts at other banks and set a reasonable goal for a better deal.

“You may find that you actually have a pretty good deal,” says Ed Snyder, co-founder of Oaktree Financial Advisors in Carmel, Indiana. “Or, you may find that, indeed, you could do better.”

3. Talk to the bank. Meet with your relationship manager.

“Ask the bank if there are other benefits available with your current checking account that you may not be taking advantage of,” Snyder says.

In addition to better rates with high-yield checking, you might be able to get a discount on lending products or a better rate on a savings account at the same bank, explains Ryan Bailey, head of retail deposit products and unsecured lending for TD Bank in Cherry Hill, New Jersey.

You also might have access to perks such as no foreign exchange transaction fees for items bought with your debit card while traveling.

“We give relationship discounts,” Bailey says.