A high-yield checking account is a day-to-day bank account with high-interest rates and restrictions that do not generally apply to regular bank accounts.
High-yield accounts are available to both US residents and foreign nonresidents who can overcome the opening conditions imposed on them by US banks.
In our experience, the people who benefit the most from high-yield checking accounts want to maintain reasonable deposits, be able to access their funds, and still earn some interest.
In this article, we’re going to share everything you need to know about finding the best high-yield checking account based on the experience of our team and our members.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- High-Yield Checking Account
- High-Yield Checking vs High-Yield Savings Account
- Frequently Asked Questions
- Ready to Open Accounts With Banks in the USA?
High-Yield Checking Account
A high-yield checking account refers to a checking account that has a high APY (annual percentage yield) applied to the balance. In exchange for the high interest rate, banks require a minimum balance, limit transactions, and charge fees for opening and maintaining the account.
That said, in addition to the benefits of higher interest, opening a high-yield checking account in the United States has the added benefit of FDIC insurance.
Before diving in any further, if this is your first time visiting GlobalBanks, don’t forget to download your FREE US Banking Starter Guide. It’s designed to help non-residents with opening bank accounts at top financial institutions in the US.
What Are High-Interest Accounts?
High-interest accounts refer to a wide range of financial accounts available from commercial where the account holder expects to receive a high-interest rate on their deposit.
These high-interest accounts may also be referred to as high-yield accounts. The benefit of a high-interest account is that it allows the account holder to compound interest faster.
Due to the high interest offered by financial institutions, these accounts typically have restrictions on transaction activity and how often funds can be withdrawn, if at all.
Of course, a high-yield checking account is not the only option to choose from when exploring bank account opening options. In fact, it is not one of the highest-earning accounts available.
Instead, savings accounts, money market accounts, fixed deposit accounts, and CDs (certificates of deposit), all tend to offer significantly higher interest rates.
High-Yield Checking vs High-Yield Savings Account
The main difference between a high-yield checking account and a high-yield savings account is that high-yield check accounts tend to have fewer restrictions and lower interest rates, while high-yield savings accounts have more restrictions and higher interest rates.
With this in mind, most individuals who want to maintain access to their funds and be able to transact on a day-to-day basis, find that high-yield checking accounts are better suited to their needs. On the other hand, individuals who do not need short-term access to their funds may prefer higher interest rates.
That said, there are many differences between high-yield checking and high-yield savings accounts, including their general purpose, use cases, interest rates, balance requirements, permitted transaction activity, and even how you can access your funds.
Here’s a closer look at high-yield checking and high-yield savings accounts for comparison.
High-Yield Checking Account
A high-yield checking account refers to a bank account that offers the same day-to-day support as a standard checking account but also features an attractive interest rate. In other words, account holders have ongoing access to funds, support for a wide range of transactions, and the ability to write checks. But, they also receive a competitive interest rate in exchange for limiting their transactions and maintaining a reasonable deposit at all times.
High-Yield Savings Account
A high-yield savings account refers to a bank account that offers the same basic bank account features of a savings account but offers a higher than usual interest rate. In most cases, high-yield savings accounts are specifically designed to encourage saving, so they restrict withdrawals, how funds can be accessed, and transaction activity. As a result, any activity outside of the permitted amounts often has high fees applied.
Frequently Asked Questions
Below are seven of the most common questions we receive from people looking into opening a high-yield checking account. If you have further questions you would like to ask our team, don’t hesitate to get in touch.
Are High-Yield Checking Accounts Worth It?
High-yield checking accounts could be worth it to you if you are looking for a way to earn some interest on your deposit while maintaining complete access to your funds. In other words, if you need access to funds in the short to medium term, a high-yield checking account could be worth considering. That said, there are other options worth considering as well, including laddering fixed deposits, savings accounts, and more.
How Does a High-Yield Checking Account Work?
High-yield checking accounts work similarly to any other checking account with a few exceptions. They typically have higher minimum account balances and have more restrictions on transactions (withdrawals). Additionally, while a high-yield account does offer interest, it is often much lower than the interest available from savings accounts, fixed deposits (CDs), and money market accounts.
Is There Such Thing as a High-Yield Checking Account?
Yes, there is such a thing as a high-yield checking account. However, high-yield checking accounts are less common and typically have interest rates that are lower than savings accounts and money market accounts. In most cases, account holders also have to meet requirements, including minimum deposits, restrictions on transactions, and more.
Where Can I Get 7% Interest On My Money?
You can get a 7% interest on your money from a wide range of banks and credit unions around the world. In fact, there are many jurisdictions where you can obtain even higher interest rates on fixed deposits. In most cases, this involves depositing funds in USD with local banks in foreign jurisdictions. That said, higher interest rates are often available when depositing local currency.
Who Pays the Highest Interest Rate on Checking Accounts?
The financial institutions that typically pay the highest interest rate on checking accounts include credit unions, certain online banks, and even online brokerages. That said, the interest rates offered by these different financial institutions can vary widely. So, it’s always best to compare any of the financial institutions you are considering before applying for accounts. Additionally, while most credit unions are FDIC insured up to USD 250,000, not all deposits held with online banks or brokerages are insured.
What Is the Highest Yield Bank Account?
The highest-yield bank account that an account holder can access is typically a deposit in a long-term high-interest account. Examples of long-term high-interest accounts include a certificate of deposit, term deposit, or fixed deposit. These accounts typically earn higher interest because the account holder commits to maintaining their funds for longer.
Which Are the Highest Yield Checking Accounts?
The highest-yield checking accounts are often those offered by credit unions, online banks, and certain online brokerages. These financial institutions typically have less overhead and are able to offer customers a higher return on their deposits.
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