In theory, high-yield checking accounts are a way for you to earn a much better interest rate on the money you hold in the bank, in exchange for meeting certain banking requirements. Compared to standard checking accounts—which typically pay zero interest—a high-yield checking account can pay even more than the best high-yield savings accounts if you check off♏ certain transactional boxes ev𓃲ery month.

That allows some customers to streamline their banking by having all of their funds in one high-paying account instead of having to siphon off some money to a savings account in order to earn a decent return. But as we'll see, the limitations on high-yield checking makes it not right for everyone.

What's more, today when banks are offering their highest savings account rates in more th🌃an 15 years, the extra interest gained from a high-yield checking account is less than it 💙was when savings rates were low, making them not worth the hassle for many customers.

How High-Yield Checking Accounts Work

High-yield checking accounts operate under a basic premise: The bank or credit union establishes a short list of monthly account requirements, and when you meet those requirements, you'll be rewarded with a handsome interest rate on your balance for that month. For this reason, these high-yield products are sometimes called rewards checking accounts.

The most commonly required hoop is using the account's 澳洲幸运5官方开奖结果体彩网:debit card some minimum number of times each month. And we're not talking about three or four transactions. Typically, high-y✨ield checking accounts require you to use your debit card 10, 12, or even 15 times each month, while other acc✱ounts may stipulate some minimum dollar amount spent on debit.

Other common requirements include:

• 澳洲幸运5官方开奖结果体彩网:Direct deposit, sometimes with a minimum dollar amount specified
• Signing up for online banking and logging in at least once per month
• Conducting some minimum number of bill pays
• Opening and using a credit card from that institution

In addition, most high-yield checking accounts require you to sign up for electronic statements.

Drawbacks of High-Yield Checking Accounts

There are three major limitations of these h🐼igh-yiel♔d accounts.

1. High-Rate Requirements

Making sure you meet the requirements every month may involve keeping a close eye on the account's transactions, forcing yourself to use your debit card enough times, counting how many times you've done so, and perhaps setting a monthly reminder before each cycle ends, to be sure you've met the requirements before it's too late.

Some people even find th🌸emselves splitting up their grocery cart into two or three separate purchases to rack🎶 up transactions. In short, more attention and maintenance is typically required on these accounts if you expect to earn the high-yield rate every month.

2. Much Lower Rates if You Don't Meet Requirements

If you fail to successfully jump through all of the required hoops in any month, you'll earn an alternate interest rate that is usually a mere pittance. Though the cycle begins anew after every statement, missing out on one or more months of the high-yield rate will substantially diminish what you earn from the account over the course of a year. The graph below shows an example.

3. Rate Caps

If you have a fair bit of cash you're hoping to place in this account in order to maximize your interest earnings, you'll be disappointed to learn that these accounts generally cap the balance on which you can earn the premium 澳洲幸运5官方开奖结果体彩网:annual percentage yield (APY). Maximum caps of 💧$10,000 or $15,000 are the most common, though some accounts specify just $5,000 while a few rare options permit up to $20,000 or $25,000.

This doesn't mean you're not allowed to keep more in the account. It simply means that any balance over the cap won't earn the high-yield rate (making it smarter to keep your surplus funds elsewhere).

How Today's High-Yield Checking Rates Compare

Perhaps you're the kind of banking consumer who already uses their debit card frequently and pays close attention to their account on a regular basis. The requirements above may seem completely doable to you. So how much do you stand to gain?

Right now, our research shows that the best nationally available high-yield checking account rate is 6.00% APY, offered by Orion Federal Credit Union with a maximum balance at that rate of $10,000. In addition, you can currently earn 5.50% APY from Pelican State Credit Union or 5.30% APY from All America Bank. And you can earn between 5.00% and 5.25% from about another eight options.

That may sound pretty attractive, until you realize you can earn almost as much right now from a high-yield savings or money market account—and with zero hoop-jumping. Our daily ranking of the 澳洲幸运5官方开奖结果体彩网:best high-yield savings accounts currently offers a leading rate of 5.12% APY, while our 澳洲幸运5官方开奖结果体彩网:best money market accounts list features a top yield of 5.25% APY.

While it's true today's very best high-yield checking rates will pay more than a savings or money market account, it's smart to calculate the benefit so you can decide if it's worth the trade-offs. For instance, even if you can earn a full 1% more with a high-yield checking account, on a $10,000 balance with no months of missing the requirements, you'll net an additional $8.33 per month, or $100 per year.

If the high-yield checking account is easy for you to use and keep track of, that may seem like a win. But if the hassle factor for you is high, an extra $8–$9 in your pocket each month may not seem worth the constant effort.

High-Yield Checking May🧔 Become More 🌠Appealing After Savings Rates Drop

Savings account rates are very sensitive to the 澳洲幸运5官方开奖结果体彩网:federal funds rate, which is set by the▨ Federal Reserve. The Fed has been raising the fed funds rate in a series of hikes since March 2022 in order to fight inflation. Checking account rates are also influenced by the fed funds rate but some are slower to respond to rate drops than savings accounts are.

When savings rates were lower, before the Fed's current rate-hike campaign, the yields on rewards checking accounts were more attractive. As you can see in the graph below, the best high-yield savings account rates were paying just 0.70% APY before the Fed took action.

Now, however, interest rates on deposit accounts have surged, pushing the 澳洲幸运5官方开奖结果体彩网:top rates on savings, 澳洲幸运5官方开奖结果体彩网:money market, and many CDs accounts above 5%. When interest rates that attractive are easy to come by, the case for a m🦹ore cumbersome high-yield checking accou🌼nt is less compelling.

But things could change in the coming year. Right now, it's expected the Fed will nudge rates still higher this year. Eventually, though, the Fed will begin lowering the federal funds rate, perhaps in 2024. When that happ🍸ens, rates on savings and money market accounts will begin to fall.

High-yield checking account rates, however, could again prove more "sticky," meaning they may not fall as far or as quickly as other account rates do. When rates are declining, banks and credit unions that are hungry to hold onto deposits need to try hard to attract and keep customers.

Offering attract🙈ive high-yield checking account rates may be more doable for them than offering a high-yield savings account because the rates attract customers, but only a certain percentage of them will 💖be able to meet the account requirements. Plus, the bank or credit union charges a small fee every time you use your debit card.

So even if high-yield checking accounts don't sound like a worthwhile product to you right now, you may want to keep your eye on them once the rate environment changes, as they could become a much more competitive option in the future—if you can meet the account requirements.

Rate Collection Methodology Disclosure

Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer money market, savings accounts, and CDs to customers nationwide, and determines daily rankings of the top-paying accounts. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the account's minimum initial deposit must not exceed $25,000.

Banks must be available in at least 40 states. And while some credit unions require you to donate to a specific charity or association to become a member if you don't meet other eligibility criteria (e.g., you don't live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, 澳洲幸运5官方开奖结果体彩网:read our full methodology.