This blog is for informational purposes only and not an offer of any specific account or service. For current details on our checking accounts, including terms and fees, please visit midflorida.com or speak with a representative. Account features and conditions may change. Membership eligibility required.
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.
Start your account application with MIDFLORIDA Credit Union.
What is a high-yield checking account?
A high-yield checking account is almost the same as a traditional checking account. The only difference is that a high-yield checking account will pay you interest on the money you keep.
Even more impressive is that the interest rates on these high-yield checking accounts can rival those offered by high-yield savings accounts and certificates of deposit (CDs).
For instance, MIDFLORIDA’s High Yield Checking account pays 5.00% Annual Percentage Yield on balances up to $10,000.
How do high-yield checking accounts work?
Mostly, high-yield checking accounts work the same way traditional checking accounts work. You can use them to:
- Deposit money
- Withdraw money
- Make payments with a debit card
- Write paper checks
- Transfer money to and from other checking and savings accounts
Some high-yield checking accounts have certain conditions to earn a high-interest rate or avoid fees, such as:
- Make a certain number of withdrawals each month
- Use your debit card a certain number of times each month
- Maintain a minimum account balance each month
- Deposit a certain amount of money each month
- Have other accounts besides the high-yield checking account
Usually, your account won’t earn a higher interest rate, or could accrue monthly fees, if you haven’t met the conditions.
What are the benefits of opening a high-yield checking account?
There’s an obvious benefit to opening a high-yield checking account—you get to earn more interest on the balance in your account (but watch out for limitations).
Even if you’re unsure how much you’ll earn in interest, you’re likely to get more money back than you would from a traditional checking account.
It’s important to point out that in addition to the interest you’ll earn on your account, a high-yield checking account also gives you the same benefits as other 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
You need to follow a few guidelines to get the maximum advantage from a high-yield checking account.
The first guideline is pretty simple: know the conditions you’ll have to meet to avoid service fees and get the interest.
To maximize your earnings from a high-yield checking account, it's crucial to understand the requirements. At MIDFLORIDA Credit Union, for example, our High Yield Checking Account requires no minimum balance to earn the interest on balances up to $10,000, however the following are required to avoid a monthly fee:
- Make at least 10 debit card purchase transactions a month
- Make Direct Deposits of at least $1,000 a month
- Enroll in MIDFLORIDA’s online banking
- Maintain daily balance of $1,500
Regardless of the conditions, make sure you know what they are. While you’re reviewing the conditions, you should also think about whether you can meet them. If not, you might look for another high-yield checking account or just stick with the traditional one.
Once you’ve reviewed the guidelines, you’ll want to determine the optimum amount to keep in your high-yield checking account.
How much to keep in a high-yield account
While you shouldn’t put all your money in it, you should consider keeping your extra funds in the account to take advantage of the higher interest rate.
One of the best solutions is to keep an extra month’s worth of expenses in your checking account.
This will not only allow you to take advantage of the higher rate of interest but also provide a buffer against overdrawing your account or incurring monthly fees.
It’s also an excellent way to ensure your account will have the minimum balance necessary if that’s one of its conditions.
Meet your savings goals
Monitor your high-yield checking account daily. This will help you see the progress you’ve made towards fulfilling the conditions of the checking account each month. It can also help you know how much interest your account will earn.
It’s worth mentioning that your credit union or bank’s mobile app can make monitoring your account much more convenient.
You’ll also be able to transfer money to and from your account as needed and even access your online bill pay service. If you have the MIDFLORIDA mobile app, you can even deposit checks into your account right from your phone.
Get a high-yield checking account at MIDFLORIDA
A high-yield checking account is a great way to bring in extra monthly money. If you can meet the conditions your bank or credit union sets, your money will earn interest with a rate comparable to a high-yield savings account or a CD.
If you’d like to experience the benefits of a high-yield checking account, contact MIDFLORIDA today.
If you’re a new member or are looking for something other than a high-yield checking account, ask about the $200 bonus for opening a new Free Checking account and see if you meet the conditions.
No matter what account you get, you’ll be certain to get the services that big banks offer—with the personal service that so many big banks seem to lack.
