Earning Interest on Your Checking - Video

What are the concepts and rules surrounding an interest bearing checking account? What do you need to remember when it comes to opening up this type of account? Finding out the answers can help you make the most of your money.

Having the money in your checking account earn interest is a great idea. It is like getting free money where you don't have to do anything except keep your money in an account. While earning interest on checking accounts is a great banking innovation and serves as a big draw to customers, there are a few caveats that you should keep in mind about these accounts.

Interest checking is most definitely an excellent banking perk; who wouldn't want to earn extra money on their funds. Another plus to interest checking is the fact that the interest rates for these kinds of accounts are significantly higher than the very low rates that accompany traditional savings accounts.

Also, the interest checking accounts I've come across are tiered so that the higher your balance, the higher your interest rate. So if everyone would like interest checking then why doesn't everyone have it? The way banks weed out those who have interest checking is through fees and balance requirements.

For instance; the bank may have a balance requirement for an interest checking or a pretty high monthly fee. Earning extra money on your spending money is a most wonderful idea but be careful about the conditions of the account and the other obligations involved. Make sure you understand and fulfill the banks requirements because if you don't you could easily end up paying more in fees then you earn in interest you may want to select a different type of account that's better suited for your situation.

For a longer tip related to this subject, see Earning Interest on Your Checking