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High-Yield Checking Accounts Offer Attractive Yields When Requirements Are Met
Thursday, May 30, 2013
High-Yield Checking Accounts Offer Attractive Yields When Requirements Are Met08:00 EDT Thursday, May 30, 2013
NEW YORK, May 30, 2013 /PRNewswire/ -- Consumers who consistently use debit cards and are comfortable with electronic transactions will find that high-yield checking accounts are the most attractive federally insured, liquid cash investments, according to Bankrate.com (NYSE: RATE). However, accountholders typically need to meet a few requirements each month.
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After surveying 56 high-yield checking accounts offered by banks, thrifts and credit unions in the United States, Bankrate.com found that the average APY for these accounts is 1.64%. That is almost 33 times the current national average for an interest-bearing checking account (0.05%), but is lower than the average of 2.05% that Bankrate.com observed last year and the 3.30% that it reported in 2010.
All of the high-yield checking accounts that Bankrate.com surveyed mandate electronic statements and almost all require 10 or more debit card transactions each month. Most also require direct deposit and/or automated bill payments. Failing to meet the monthly requirements drops the average APY to a miniscule 0.07%.
Another caveat is that the above-market yield only applies up to a certain limit, known as the balance cap. The average balance cap is $17,102 (down from $19,118 last year and $25,482 in 2010), but the highest-yielding accounts tend to have lower balance caps. None of the 14 highest-yielding accounts are available nationwide with a balance cap above $15,000.
"Savers looking to maximize interest earnings on these accounts must do more than pursue the highest-yielding offer," said Greg McBride, CFA, senior financial analyst for Bankrate.com. "They also need to factor in the balance cap on which that higher yield is paid."
Sixty-one percent of the high-yield checking accounts that Bankrate.com surveyed are available nationally (although this includes 12% that require notarization or an in-branch signature). Thirty-nine percent are available with some geographic limitation.
Click here to view the full survey:
About Bankrate, Inc.
Bankrate is a leading publisher, aggregator and distributor of personal finance content on the Internet. Bankrate provides consumers with proprietary, fully researched, comprehensive, independent and objective personal finance editorial content across multiple vertical categories including mortgages, deposits, insurance, credit cards, and other categories, such as retirement, automobile loans, and taxes. The Bankrate network includes Bankrate.com, our flagship website, and other owned and operated personal finance websites, including CreditCards.com, Interest.com, Bankaholic.com, Mortgage-calc.com, CreditCardGuide.com, Nationwide Card Services, InsuranceQuotes.com, CarInsuranceQuotes.com, InsureMe, Bankrate.com.cn, CreditCards.ca, NetQuote.com, and CD.com. Bankrate aggregates rate information from over 4,800 institutions on more than 300 financial products. With coverage of nearly 600 local markets in all 50 U.S. states, Bankrate generates over 172,000 distinct rate tables capturing on average over three million pieces of information daily. Bankrate develops and provides web services to over 80 co-branded websites with online partners, including some of the most trusted and frequently visited personal finance sites on the Internet such as Yahoo!, AOL, CNBC and Bloomberg. In addition, Bankrate licenses editorial content to over 500 newspapers on a daily basis including The Wall Street Journal, USA Today, The New York Times, The Los Angeles Times and The Boston Globe.
Ted Rossman Public Relations Manager Bankrate, Inc. firstname.lastname@example.org (917) 368-8635
SOURCE Bankrate, Inc.