February 24, 2020

Common Requirements for a High Yield Checking Account

High Yield Checking AccountsWith interest rates being as low as they are on checking accounts these days, many people are opting for the higher rates (and higher stakes) of high yield checking accounts. These types of accounts are offered by banks and credit unions and, under certain circumstances, their rates of interest can be as much as ten times greater than that of a normal checking or savings account. Of course the only way to earn such amazing rates is by meeting all of the standard requirements on the account. If you cannot meet those then your profits will be as low as a standard checking account. Below are a few of the most common requirements placed on high yield checking accounts.

Regular Use of a Debit Card

There is likely a minimum number of times customers must use their debit cards each month in order to meet account requirements. Some banks and credit unions require a debit card be swiped up to ten or fifteen times each month to qualify for the higher rates. And these purchases must be ones in which a signature is required, versus simply entering your personal identification number (PIN). This requirement allows people to skip the hassle of carrying checks and cash, and fosters a closer relationship between individual and financial institution.

Automatic Deposits

Another way banks are inspiring consumers to use their accounts more and earn higher interest is by requiring that automatic payments be made in some shape or fashion each month. This can be as simple as having your paychecks being automatically deposited into your savings account. For people how cannot set up direct deposit through their employer, or for those who don’t receive regular paychecks, many banks will allow an automated clearinghouse (ACH) form of payment. This is a credit or debit transfer from another type of account to satisfy the automatic deposit requirements.

Use Online Banking

Another requirement that comes with a lot of high yield checking accounts is that customers must log on and view their bank account online at least once a month. This shouldn’t be an issue for a lot of people, especially younger customers, as the Internet is the main way they view and utilize their bank account anyways.

Keep Higher Account Balance

This isn’t about staying above the minimum balance requirement (which is something that all checking accounts require), but rather about maintaining a higher balance in your account. Interest rates are often calculated, at least partially, by how much money you have in your account. Thus more money equals better rates. Some banks put more stock in balance increases, while others will reward for balance stability. Some will even reward you for reaching a certain amount and then penalize you for going over that amount, something which is done to encourage more transactions on high yield accounts.

Opt for Electronic Statements

How to Get Better RatesA lot of banks and credit unions are now requiring customers to sign up for electronic statements over paper statements to get the very best rates of interest. Online banking is where the business is going, and banks are trying to encourage that direction. Banks are benefiting because they can cut costs on paper and postage expenses. It’s also more beneficial for customers, who get their statements quicker and easier, and many are signing up for it without even realizing the interest rate perk.