Despite popular belief, you can earn interest on your checking account — if you know where to look.
High-yield checking accounts, most commonly found at online banks or credit unions, can offer APYs that rival those of high-yield savings accounts. They also come with the standard checking account conveniences you need for everyday banking, such as ATM withdrawals, debit card access, and unlimited transfers or withdrawals from the account.
It seems like the best of both worlds. But there’s a catch.
Most high-yield checking accounts will make you work to earn that high interest rate. Some banks will require you to maintain a certain number of direct deposits or debit card transactions each month, or meet other requirements, to qualify for an elevated APY. Others may only pay interest on balances up to a certain amount.
If you’re willing to jump through a few hoops, a high-yield checking account is an excellent way to earn extra cash on your daily balances without locking your money in a savings account or certificate of deposit (CD). Here are our top picks for the best high-yield checking accounts, and what you should consider when choosing one.
Best High-Interest Checking Accounts of January 2023
Consumers Credit Union Rewards Checking
NextAdvisor’s take: Consumers Credit Union’s Rewards Checking account offers tiered APYs from 3% to 5% on balances up to $10,000. To get 3% APY, you must enroll in eDocuments, make 12 debit transactions per month, and have direct deposits, mobile check deposits, or ACH credits totaling $500 or more each month. To earn 4% and 5% APY, you must meet all the requirements for the 3% APY tier and spend at least $500 or $1,000, respectively, on a CCU Visa Credit Card each month. Accounts that don’t meet the monthly requirements earn 0.01% APY.
You can become a member of Consumers Credit Union by joining the Consumers Cooperative Association with a one-time membership fee of $5. The credit union’s physical branches are primarily located in the Chicago area.
High-yield APY: 3% (tier 1), 4% (tier 2), 5% (tier 3)
Max balance that earns high APY: $10,000
- No monthly maintenance fees
- $5 minimum deposit to open an account
- Access to Over 30,000 ATMs and over 5,000 shared branches
- Unlimited reimbursement for ATM fees if you meet the minimum checking account monthly requirements (3% APY tier)
- Get paid as much as two days early with early direct deposit
NextAdvisor’s take: Despite the name, you don’t have to be a T-Mobile wireless customer to get a T-Mobile Money account. Anyone can sign up for this fee-free online checking account and earn 2.5% APY on all balances with no limits or required activities. However, to qualify for the higher 4% APY, you must be enrolled in a qualifying T-Mobile plan, register for perks with your T-Mobile ID, and have 10 qualifying transactions with your debit card or peer-to-peer payments per month. In addition, you’ll only earn 4% APY on the first $3,000; balances above $3,000 earn the lower 2.5% APY. T-Mobile Money also offers a savings account with a 2.5% APY for all customers.
T-Mobile Money is an online-only banking platform, meaning there are no physical branches if you need in-personal service, although the company does offer customer service via phone. As with many online banking platforms, the bank services aren’t provided by T-Mobile itself. Instead, the accounts are provided by Customers Bank, an FDIC-insured online bank.
High-yield APY: 4%
Max balance that earns high APY: $3,000
- No overdraft fees or monthly maintenance fees
- Access to 55k+ no‑fee Allpoint ATMs
- Bilingual customer support 365 days/year
- Get paid up to two days early with payroll direct deposit
- $50 overdraft protection (only for qualifying T-Mobile wireless customers who sign up for perks)
- Instantly send money to other T-mobile Money customers with no fees
SoFi Checking and Savings
NextAdvisor’s take: SoFi offers an online checking and savings account (you’ll be automatically enrolled in both when you sign up) with APYs of 2.5% and 3.5%, respectively. There’s no cap on the balance you can earn that APY on, but qualifying for the higher APY on both the checking and savings account requires you to set up direct deposits (no minimum amount) to either your checking or savings account. Otherwise, you’ll earn 1.2% APY on all your account balances.
Unlike some online banking platforms, SoFi is an FDIC-insured, nationally chartered bank itself, instead of simply partnering with one. SoFi also offers personal and student loans, mortgages, insurance, and investing products. SoFi is an online-only bank, meaning there are no physical branches.
High-yield APY: 2.5% (checking)
Max balance that earns high APY: Unlimited
- No monthly maintenance fees
- Get paid up to 2 days early with direct deposit
- Fee-free overdraft protection up to $50 (with qualifying direct deposits)
- Up to 15% cash back at local establishments with your SoFi debit card
- Access to 55,000+ fee-free ATMs within the Allpoint Network
- Unlimited withdrawals/transfers between checking and savings accounts
- No minimum deposit required to open an account
- Access to SoFi membership benefits and membership rewards
- Periodically has special offers and sign-up bonuses for new members
Liberty Federal Credit Union Vertical Checking
NextAdvisor’s take: Liberty Federal Credit Union’s Vertical Checking Account (different from its Platinum Rewards checking account) offers 3.45% APY on balances up to $20,000. To qualify for the high APY, you need to have at least 15 debit card purchases and one direct deposit (no minimum amount) each month, one online or mobile banking login, and opt to receive electronic instead of paper statements. Otherwise, account balances do not earn interest. If you meet the minimum requirements to earn the APY, you’ll also get ATM fee reimbursements up to $15/month at any ATM worldwide.
You can become a member of Liberty Federal Credit Union if you qualify for membership through your employer, are affiliated with a qualifying organization, or make a $5 donation to the Mater Dei Friends & Alumni Association. Signing up for membership requires opening a savings account with a $5 deposit and keeping the deposit in the account at all times (but the money belongs to you). For those who want access to in-person banking, Liberty Federal Credit Union has branches in Alabama, Indiana, Kentucky, Mississippi, and Tennessee.
High-yield APY: 3.45%
Max balance that earns high APY: $20,000
- No monthly maintenance fees
- ATM fee reimbursement up to $15/month from any ATM worldwide (must meet the same qualifications required for earning APY)
- Loan rate discount on mortgages, personal, and auto loans from Liberty Federal Credit Union
- $25 minimum deposit to open
NextAdvisor’s take: Wealthfront is an investing platform, not a bank, but it offers a Cash Account with an APY of 3.8% and no restrictions on how much you can earn or requirements to earn it. The Wealthfront Cash Account works like a hybrid between a checking and savings account. You get access to all the basic checking features you need — a debit card, ATMs, bill pay, checks, and unlimited transfers to external accounts — plus a functionality in the app to divide your account balance into different savings buckets. You can also easily transfer your money to a Wealthfront investing account, though you do not have to be an investing customer to open a Wealthfront Cash Account.
Like many other non-bank financial services companies, Wealthfront offers its Cash Account by partnering with FDIC-insured banks, which actually hold the deposits. Wealthfront is able to provide up to $2 million of FDIC insurance — higher than the normal $250,000 limit per bank account — because it allocates users’ money across multiple banks. You can find a more detailed explanation of how Wealthfront accounts are FDIC-insured, as well as a list of Wealthfront’s partner banks on Wealthfront’s website.
High-yield APY: 3.8%
Max balance that earns high APY: Unlimited
- No monthly maintenance fees
- No overdraft fees
- Get your paycheck up to two days early with direct deposit
- FDIC insurance up to $2 million (as opposed to the standard $250,000)
- $1 deposit to open an account
- Access to 19,000 fee-free ATMs network
- Ability to deposit cash at select retailers (may incur a fee)
Because of how easy it is to transfer money between Wealthfront’s Cash Account and investment accounts, it’s extra important to remember the difference between deposits and investments. Deposit accounts — including checking accounts, savings accounts, money market accounts, and CDs — are insured by the FDIC, meaning the government will reimburse you for up to $250,000 of losses if the bank you’re holding your deposits at goes out of business.
Investments — which can include stocks, mutual funds, ETFs, cryptocurrency, REITs, and more — are not FDIC insured and could lose value. Most investment brokerages, including Wealthfront, are insured by the Securities Investor Protection Corporation (SIPC), which covers you if you’re holding assets at a brokerage account that goes bankrupt or out of business. SIPC does not cover you if an investment you buy goes down in value as a result of the natural volatility of the stock market. Both deposit accounts and investment accounts should have a place in your overall financial portfolio, but make sure you understand exactly where your money is being kept and what that entails.
Lake Michigan Credit Union Max Checking
NextAdvisor’s take: Lake Michigan Credit Union’s Max Checking account (different from its Free Checking, Investor Checking, and Advantage 50 Checking accounts) offers 3% APY on balances up to $15,000. To earn the elevated APY, you need to have direct deposits or ACH deposits into your Max Checking account, make 10 debit card or credit card purchases per month, and have four logins to online or mobile banking. You won’t earn any interest on balances over $15,000, or if you don’t meet the interest-earning requirements for the month.
Lake Michigan Credit Union membership is open to those who live, work, or worship in Michigan’s lower peninsula or anywhere in Florida, family members of LMCU members, and U.S. citizens who donate $5 to the ALS Foundation. Becoming a member also requires a one-time deposit of $5 into an LMCU account. The $5 must remain in the account for the duration of your membership, but it still belongs to you and will be returned if you close your account. The credit union’s physical branches are primarily located in Michigan and Florida.
High-yield APY: 3.00%
Max balance that earns high APY: $15,000
- No monthly maintenance fees
- Free access to LMCU ATMs and the 55,000 ATMs on Allpoint’s worldwide network
- ATM fee reimbursement for non-LMCU and non-Allpoint ATMs up to $10/month
- $5 deposit required for credit union membership
Paramount Bank Interest Checking
NextAdvisor’s take: The Interest Checking Account from Paramount Bank offers 3% APY on balances up to $100,000 with no fees and no hoops to jump through to receive the elevated APY. There are no minimum requirements for debit card transactions or direct deposits. Account balances over $100,000 will receive 0.1% APY. A minimum deposit of $100 is required to open the account, but there are no minimum balance requirements after the account is funded.
Paramount Bank is based in Hazelwood, Missouri, with physical branches located in Illinois, Ohio, Missouri, and California in addition to its online banking services available nationwide. The bank is FDIC insured.
High-yield APY: 3.00%
Max balance that earns high APY: $100,000
- No monthly maintenance fees
- $100 minimum deposit required at open
- Access to fee-free ATMs on the MoneyPass network
How We Chose the Best High-Yield Checking Accounts
We created this list of the best high-yield checking accounts, by analyzing more than 20 of the most commonly reviewed and searched-for high-yield checking accounts from banks and credit unions, as well as checking accounts from the top 25 commercial U.S. banks (if available). We evaluated the accounts based on factors including APY, activities required to earn interest, fees and minimum balance requirements, account features, and location availability. We then cut the list based on the following criteria:
- None of the banks we recommend charge any monthly service or maintenance fees. Banks were also not included if they charged a monthly maintenance fee that could be waived by meeting certain qualifications, such as having a certain amount of direct deposits each month. Because so many reputable banks offer good APYs on free accounts, we think people should take a hard pass on any banks that do charge a monthly maintenance fee to keep a checking account. Even if a bank’s maintenance fees are waivable under certain circumstances, that still limits your flexibility and puts you at risk for unexpected fees if you’re unable to meet the qualifications for a given month. We did include credit unions that charge a one-time, nominal fee or donation as a path to membership on our list, as the benefits of the account often outweigh the small, one-time fee.
- Local banks and credit unions, as well as affiliation-specific credit unions, can be a great way to access banking services in your community or find better rates than those offered by big banks. However, in order for this list to be applicable for the greatest number of people, we only included banks and credit unions that are available to everyone in the U.S., regardless of location or organizational affiliation. Some of the banks and credit unions on our list have regional branches providing in-person service to those living in the area, but all of them allow anyone in the country to sign up for an account online without having to visit a local branch. Some of the credit unions on our list may require a small donation to a partner charity in order to qualify for membership, if you aren’t able to qualify for membership based on location or organizational affiliation.
- For the greatest amount of accessibility, we also excluded accounts that require more than $100 as a minimum deposit. Many of the accounts on our list require much less or nothing at all as an opening deposit.
- Checking accounts are meant for everyday transactions, so all the accounts on our list must offer basic checking account features that let you easily access your money when you need it in order to be considered a high-yield checking account. We defined checking account features as debit card access, ATM access, the ability to deposit checks, and the ability to transfer funds in and out of the account at will with no limits. If you don’t need access to these features and just want a place to store your money while earning interest, a high-yield savings account may be better for your needs.
- All of the final picks are insured by the Federal Deposit Insurance Corporation (FDIC), which protects your money up to $250,000 in the event a bank goes out of business. Some of the online banking platforms on our list provide FDIC insurance by partnering with other banks, rather than being a bank themselves.
- While all the accounts we chose offer competitive interest rates compared to traditional checking accounts, we didn’t set any hard criteria for APY. This is because interest rates are constantly in flux and can change based on market conditions. Keep in mind that many high-yield checking accounts require you to perform certain actions — such as having direct deposits or debit card transactions every month — in order to earn an elevated APY. We did not exclude checking accounts from our list based on these conditions, so long as they were clearly detailed and failure to fulfill them did not incur any additional penalties (such as a monthly maintenance fee) beyond not earning any interest.
What Is a High-Interest Checking Account?
Where most checking accounts offer little to no interest on deposits, high-interest checking accounts offer a competitive return on your cash. The best high-yield checking accounts also offer additional benefits like no monthly fees, fee-free ATM withdrawals, or fee-free overdraft protection. Most high-yield checking accounts are offered by online banks and local credit unions, which compete for customers by offering a higher return on their cash.
While some high-yield checking account APYs can rival those of high-yield savings accounts, the APY isn’t the main factor that differentiates checking accounts from savings accounts. Checking accounts give you easier access to your money and typically include features such as debit card access, ATM withdrawals, bill pay, check writing, and unlimited withdrawals or transfers from the account. By contrast, savings accounts typically have fewer options for accessing your money and may limit how many withdrawals you can make per month before incurring fees.
Because of this, checking accounts are best for regular spending and everyday use, while savings accounts are best for parking cash you won’t need on a regular basis, such as your emergency fund.
Pros and Cons of a High-Interest Checking Account
High-Yield Checking Account Advantages
- Earn a competitive yield on cash you keep on hand. Most run-of-the-mill checking accounts offer almost nothing in terms of returns on checking balances, but high-yield checking accounts let you earn some interest on your money. Depending on the bank, the APY may be similar to — or in rare cases, higher than — what you’d get on a high-yield savings account.
- Other perks like ATM fee reimbursements and getting your paycheck early. Depending on the bank you choose, your high-yield checking account may offer additional perks like ATM fee reimbursements and early access to direct deposited paychecks. Some of these perks may be dependent on performing certain activities each month, typically the same activities required to earn the elevated APY.
- Many high-yield checking accounts have no monthly fees and no minimum balance requirements. This makes it easier to open an account and start earning interest right away. Although not every high-yield checking account has no monthly fees, and not every fee-free checking account offers a high APY, all the accounts on NextAdvisor’s best high-yield checking accounts list have both a high APY and no monthly fees.
- You may qualify for special offers or a welcome bonus. Offering a high interest rate on checking accounts is one way for banks to compete with each other and attract new customers. Sign-up bonuses are another common way. Sometimes, you may find a high-yield checking account offering a lucrative sign-up bonus (typically dependent on meeting certain actions), putting more cash in your pocket.
High-Yield Checking Account Disadvantages
- You may have to jump through hoops to earn interest. To earn the highest rate these accounts offer, you’ll typically need to have direct deposits every month, make a certain number of debit card transactions, maintain a certain balance, or meet other requirements. Some high-yield checking accounts will offer a lower APY to those who don’t meet the monthly requirements, while others may not pay interest at all.
- Balance caps can limit your gains. Some high-yield checking accounts cap the amount of money you can earn interest on. Balances exceeding the cap typically earn a lower APY or no interest at all.
- You may not get some of the benefits of brick-and-mortar banks. You’ll typically find high-yield checking accounts at online-only banks or smaller, local banks and credit unions. If you want the benefits of a large, traditional bank — such as access to physical branches across the country — you may not be able to get that with a high-yield checking account.
Why Should You Open a High-Interest Checking Account?
The biggest reason to open a high interest checking account is to earn interest on the money you keep in your account. After all, the alternative is earning almost nothing (or nothing at all) on money kept in a regular checking account, which can be suboptimal if you tend to keep a lot of cash on hand.
Most checking accounts do not pay interest at all, and the average APY for interest-paying checking accounts is paltry. Data from the Federal Deposit Insurance Corporation (FDIC) shows that the average APY for interest-bearing checking accounts was just 0.05% as of December 2022.
The chart below shows how much in interest you could earn over one year with an interest checking account that offers the average yield compared to that of a high-yield checking account at various APYs:
|Earnings over 12 months with 0.05% APY (compounded monthly)||Earnings over 12 months with 2.0% APY (compounded monthly)||Earnings over 12 months with 3% APY (compounded monthly)|
|Average checking account balance of $1,500||$.75||$30.28||$45.62|
|Average checking account balance of $3,000||$1.5||$60.55||$91.25|
|Average checking account balance of $10,000||$5.00||$201.84||$304.16|
Ultimately, a high-yield checking account can help you secure a return on cash you don’t want to keep in a savings account, thus helping you keep up with inflation.
It’s common for high-yield checking accounts to require some threshold of monthly activity in order to earn an elevated APY — typically a certain number of direct deposits, debit card transactions, or both.
These requirements aren’t necessarily hard to fulfill, especially if you plan to use that checking account as your primary bank account. But you should also consider the opportunity costs associated with fulfilling the requirements — such as losing out on credit card points and protections if you pay for all your purchases with a debit card.
Compared to debit cards, credit cards let you build your credit while earning cash back or travel rewards, and have better purchase protections and fraud protections. Note that this only applies if you pay your credit card balance on time and in full every month; otherwise, any benefits will be wiped out by interest charges and late fees.
If you don’t plan on keeping a lot of cash in your checking account (for example, if you regularly transfer funds to your savings account) and you have a credit card with a high rewards rate, it may be worth considering whether you’ll earn enough interest on your high-yield checking account to offset the rewards you’re losing by using a debit card instead of a credit card.
If the math doesn’t work out, you could always get a high-yield checking account with no minimum transaction requirements (there are a few on our list) or get a non-high-yield checking account and regularly transfer money into a high-yield savings account.
High-Yield Checking Account vs. High-Yield Savings Account
With some high-yield checking account APYs rivaling those of high-yield savings accounts, it may be tempting to see the former as an alternative to the latter. But the truth is, you should have both a high-yield checking account and a high-yield savings account.
Apart from the fact that high-yield savings accounts typically come with fewer restrictions and hoops to jump through to earn interest, the two accounts serve fundamentally different purposes. High-yield savings accounts are best for storing your long-term and mid-term savings, including your emergency fund. Having a separate savings account can keep you from dipping into your savings for nonessential expenses. Making automatic transfers into your savings account every month is a great way to set aside money before you have the chance to spend it.
On the other hand, checking accounts are meant for everyday transactions, including paying bills, withdrawing cash, and paying for purchases in scenarios where you can’t or don’t want to pay with a credit card. Most savings accounts don’t come with ATM, debit card, or check-writing access and impose limits on how many withdrawals you can make each month (typically 6) before you incur an excessive withdrawal penalty.
The best solution for most people is to keep two accounts: a high-yield checking account for daily spending, and a high-yield savings account that you make regular contributions to and only use for emergencies.
Things to Consider When Choosing a High-Interest Checking Account
Before you choose a high-interest checking account, you should look at the following details for each account you’re considering:
- Fees: Watch out for monthly maintenance fees or hidden fees. None of the accounts we feature in this guide charge them, but plenty of online checking accounts do. When considering fees, be wary of accounts that charge monthly fees but waive them if you fulfill certain requirements — typically having direct deposits or maintaining a minimum balance each month. Even if you can meet the requirements now, there’s no guarantee that your financial circumstances or habits won’t change in the future. With so many checking accounts offering competitive APYs without fees, there’s no reason to pick one with fees unless you want to use a particular bank for specific reasons (local availability, other banking or loan relationships, etc.) that outweigh the potential fees.
- FDIC or NCUA insurance: Any bank you’re considering should be insured by the Federal Deposit Insurance Corporation (FDIC). Credit unions should be insured by the National Credit Union Administration (NCUA). These government-backed agencies will insure your money up to $250,000 in the event your bank or credit union goes out of business.
- APY: Look for high-yield checking accounts that offer the highest possible return you can find — but make sure it’s not at the expense of maintenance fees, excessive hoops to jump through, or a lack of the checking account features that are important to you.
- Actions required to get the APY: Check the requirements to earn a high APY, such as direct deposit requirements, minimum balance requirements, or needing to make a certain number of debit card transactions each month. These requirements are common in the high-yield checking account landscape and shouldn’t be an automatic dealbreaker, but do carefully consider whether you can realistically meet them every month or if they would present a significant inconvenience to your day-to-day financial routine.
- Minimum deposit requirements: Different banks have different minimum deposit requirements to open an account. Before opening an account, make sure you have enough money on hand to fund it.
- Maximum balance that earns APY: When banks offer a high-yield checking account, they’ll typically cap the balance that you can earn the high APY on. Any balance above the limit typically earns a much lower APY, or no interest at all. Consider how much money you plan to keep in your checking account and find a high-yield checking account that will let you earn interest on most or all of that balance. Remember that you can also keep a smaller balance in your checking account — enough for one month’s expenses — and regularly transfer any extra cash to a high-yield savings account.
- Features and convenience: Consider what features and conveniences are important to you — whether that’s ATM fee reimbursement, paper checks, an easy-to-use mobile banking app, or something else — and look for an account that offers those features. If in-person banking is important to you, make sure the bank you’re considering has branches in your area.
- Other accounts or products the institution offers: If you like to keep your finances all in one place, it’s worth checking out what other accounts or products the institution offers. Sometimes, institutions will offer better savings APYs or loan interest rate discounts if you have multiple accounts with them.
Frequently Asked Questions (FAQ)
Is a high-interest checking account safe?
Any reputable high-interest checking account will offer deposit insurance from the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA). These government agencies insure consumer balances up to $250,000 per depositor, per insured bank or credit union, and per account type.
Is a high-interest checking account worth it?
High-interest checking accounts can be worth it if you don’t mind doing a little work to secure a generous return. For example, you may have to set up direct deposits to your account or use your debit card for a specific number of transactions to earn the institution’s highest yield.
Are there fees with high-interest checking accounts?
None of the high-yield checking accounts on our list charge monthly maintenance fees. However, that may not be the case for every high-yield checking account out there. When choosing a high-yield checking account, make sure you compare all the possible fees charged by each of your options. These can include monthly maintenance fees, low balance fees, ATM fees, overdraft fees, and more.