Should You Open a High-Yield Checking Account in 2024?
Thinking about growing your money while still enjoying the convenience of a checking account? Consider a high-yield checking option. These accounts offer interest rates that are significantly higher than traditional checking accounts, potentially boosting your overall financial picture. It's important to consider all aspects of high-yield checking accounts, including the potential benefits of earning interest and any associated requirements. This blog post will explore the details of high-yield checking accounts, how they work, and if they might be a good fit for your financial goals.
This blog is for educational purposes only and does not constitute an offer of credit or advertisement for specific account terms. It does not provide legal or financial advice. For detailed information about our high-yield checking accounts, including current terms and conditions, please refer to our website or consult with a professional advisor.
You might think all checking accounts are created equal, but the truth is that several different types of checking accounts exist.
Student checking accounts are geared towards teens and college students, for instance, and second-chance checking accounts can help you recover after financial difficulty.
Then, there are high-yield checking accounts. These accounts offer a higher interest rate than traditional checking accounts, and you should think seriously about taking advantage of them in 2024.
Open a High Yield Checking Account at MIDFLORIDA Credit Union Today!
What is a high-yield checking account?
A high-yield checking account operates very similarly to a traditional checking account. The key difference is that a high-yield checking account earns you interest on the money you keep in the account.
Interest rates offered on these accounts can be comparable to those of high-yield savings accounts and certificates of deposit (CDs). For example, MIDFLORIDA's High Yield Checking Account offers a competitive interest rate of 5.00% Annual Percentage Yield on balances up to $10,000. ¹
How do high-yield checking accounts work?
High-yield checking accounts function very similarly to traditional checking accounts, offering the same basic features:
- Deposit money
- Withdraw money
- Make payments with a debit card
- Write paper checks
- Transfer money to and from other accounts
To qualify for the high-yield checking account, many banks and credit unions require you to meet certain criteria. These requirements can vary depending on the institution, but some common ones include:
- Maintaining a minimum balance each month
- Making a certain number of debit card transactions or direct deposits each month
It's important to understand the specific requirements for your chosen high-yield checking account to ensure you qualify for the account or to avoid a monthly fee. MIDFLORIDA Credit Union's High Yield Checking Account has its own set of requirements, which you can learn more about by visiting the High Yield Checking webpage or contacting a member service representative.
What are the benefits of opening a high-yield checking account?
There's a clear advantage to opening a high-yield checking account: you earn above-market interest on the money in your account. This can be a significant benefit compared to traditional checking accounts that typically offer minimal or no interest.
MIDFLORIDA Credit Union's High Yield Checking Account offers a competitive 5.00% Annual Percentage Yield (APY) on balances up to $10,000. While there's no minimum balance required to earn interest, you can maximize your earnings by keeping your daily balance as high as possible.
Even if your account balance fluctuates throughout the month, you can still earn interest on your money. High-yield checking accounts typically calculate interest based on the daily closing balance throughout the month. This means the more money you keep in your account on a daily basis, the more interest you'll potentially earn.
Beyond interest, high-yield checking accounts offer the same transaction features and flexibility as traditional checking accounts.
Checking account benefits include:
- Keeping your money safe
- Multiple ways to deposit money in your account
- Multiple ways to make payments, such as with a check, a debit card, or online bill pay
- Creating a record of your payments to prove you’ve settled a bill
How to get the most out of a high-yield checking account
To maximize the benefit of a high‐yield checking account, know the conditions to avoid a monthly fee. For example, MIDFLORIDA’s High Yield Checking account requires the following criteria:
- At least 10 debit purchases each month (ATM transactions do not qualify)
- Direct deposits totaling $1,000 or more monthly
- Enrollment in online banking
- Maintain daily balance of $1,500
Once you've familiarized yourself with the specific criteria for your chosen account, consider how much you can realistically maintain in your high-yield checking account. This will be your "ideal balance" for maximizing your interest earned.
How much to keep in a high-yield account
While a high-yield checking account offers a great way to earn interest on your money, it's not meant to store all your savings. However, consider keeping your emergency fund or easily accessible savings in this account to maximize the benefit of the higher interest rate.
A good rule of thumb is to keep one to two months' worth of living expenses in your high-yield checking account. This provides a buffer against unexpected costs and ensures you'll likely meet any minimum balance requirements.
Track Your Progress and Maximize Convenience
Regularly monitoring your high-yield checking account balance will help you track your progress towards meeting monthly requirements and estimate the interest you'll earn. Most banks and credit unions offer convenient mobile apps that allow you to:
- View your account balance and transaction history.
- Transfer funds between accounts.
- Pay bills electronically.
For instance, the MIDFLORIDA mobile app lets you deposit checks directly from your phone, saving you time and effort.
Make the Switch to a High-Yield Checking Account
High-yield checking accounts offer a smart way to grow your money. These accounts typically pay interest on your everyday balances at rates significantly higher than traditional checking accounts. This means you can potentially earn more on your money without sacrificing the convenience of a checking account for daily transactions.
Ready to start earning more on your money? Consider opening a High-Yield Checking Account at MIDFLORIDA Credit Union today! New members can also explore our other account options to find the perfect fit for their financial needs. At MIDFLORIDA, you'll receive the same essential banking services offered by larger banks, but with the added benefit of personalized service. For more information on our High-Yield Checking Account or other financial products, contact us today!
Further Reading Recommendations
1High Yield Checking: Offer and rate valid as of June 3, 2024, and may be canceled or changed without notice. MIDFLORIDA Credit Union membership and eligibility requirements apply. Limit 1 account per SSN. Fees may reduce earnings. Rates may change after the account is opened, without notice. Annual Percentage Yield shown is accurate as of June 3, 2024. Minimum to open is $1,500. No minimum balance to earn 5.00% APY on balances up to $10,000. Balances over $10,000 earn 0.00% APY. Contact employees for further information on fees and terms.