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What Exactly Is a High-Yield Investor Checking Account?

A checking account is a must in day-to-day life. Without a checking account, you would neither be able to deposit the paychecks nor pay your bills, rent and credit card balances. A major part of your life revolves around your checking account. The convenience makes it easy for the bank to sell it. Therefore, the banks don’t have the urge to add some additional perks to it. The rates of interest associated with checking accounts have been quite disappointing over the years. However, the banks have recently started to offer attractive products, that is, banking options that can hand over a considerable return to the users. Get to know more about checking accounts below.

What Is a High-Yield Checking Account?

It’s a checking account that boasts an APY or an annual percentage yield that’s comparatively higher than the ones furnished by normal checking accounts.  An ordinary checking account doesn’t offer any interest. This signifies that the annual percentage yield is 2% or higher.

The best offer that you can get is 3% and 4%. It can get higher on certain occasions. Yes, it’s different from a high-yield savings account. Since high-yield checking accounts happen to be an attractive financial product, there are certain issues that you need to consider.

Requirements for Opening a High-Yield Checking Accounts

A high-yield checking account that you have will offer you a return on the investment that you make. However, this doesn’t at all imply that you can consider it as your savings account. The bank might set forth some criteria for you to qualify for a high-yield checking account. You might have to do quite a few activities like making a required number of check or debit card transactions every month, having a recurring direct deposit, or withdrawing money from the ATM for the required number of times every month.

If you know how exactly you should treat your checking account, then carrying out these activities shouldn’t pose a problem for you at all. If you don’t maintain the minimum balance in your APY checking account, you might have to incur a fee.

Moreover, you might lose the high annual percentage yield as well. Ensure that you go through the fine print that your bank provides before opening a checking account. That will help you understand which term signifies what.

Does a High-Yield Checking Account Charge Fees?

Most of the time, a high APY checking account comes with zero or low monthly fees. With that said, do check for the other charges which you might have to shell out. This includes fees for the ATM, maintenance, card services, etc. While you might find several brick-and-mortar banks offering such checking accounts, you would find a majority of them in banks that operate online. Since these online banks don’t have an existing physical location, they don’t have personal ATMs, and you can visit to withdraw cash.

You might have to use the ATMs that belong to other banks. As a result, you will have to shell out $2 to $4 as the ATM fee. This amount will keep on increasing as you continue your transactions. Therefore, you need to go through the terms and conditions for your checking account carefully. It will help you understand if your bank would refund or waive the ATM fees or not.

Where Can You Find High-Yield Checking Accounts?

Banks that don’t have a large geographical reach and small credit unions are the ones that offer the best APYs. Before opening a high-yield checking account with these financial institutions, think about your prospects. Take into consideration where you want to be in the years to come. If you are planning to move abroad or move from one city to another within the country, you might have to change your bank. That can pose problems.

If you are more into a nomadic lifestyle and keep moving from one place to another, you can opt for a major bank. That’s because it has customers spread across the country. You can also choose an online bank that is operational across the United States.

High-yield checking accounts can be profitable as you can earn quite a good interest on your expenses. However, do read the documents and carry out proper research before you go ahead.

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