The High Interest Checking Account You've Never Heard Of5.051

Yeah Right… 4% APY in 2010?

Did you know there are safe, FDIC insured, high interest checking accounts with 3% and 4% APYs? I didn’t and I didn’t believe the hype either when I first heard about them.

How could I get 4% interest in 2010 when major banks like American Express, Discover, and Ally are only doling out 1.3%?

Well, its pretty simple. Don’t go to a major bank!

Many smaller local banks and credit unions have devised a way to make a profit and unlike the big fellas, share it with you.

I started looking around and found out that I was eligible to join United Federal Credit Union just because I lived near one of their locations. I have thrown out Ally, Discover, and Bank of America all together. I now get a 3% APY on up to $25,000 in my new account.

So, What’s the Catch?

There are a few requirements to get this rate but they are easy to follow.

1. Have a Direct Deposit or make 1 online bill pay per month.
2. Use your visa debit card for 10 swipe and sign (non-debit) transactions per month.
3. Enroll in e-statements.

This is deal I got with United and other banks have similar requirements. The bank makes money off of requirement #2 because they get a cut of the merchant fees that are paid to Visa. Then they share it with you in the form of a high interest rate.

There were no other fees associated with the few accounts I reviewed and you can open most of them with under $100.

Wait! Wait!

“What if I don’t meet a requirement?”

You just won’t get the high rate for that month. Instead you will get something like half a percent interest, but you shouldn’t be charged anything. Just read the fine print before you take the plunge since every bank or credit union is slightly different.

Other Benefits

1. Lower rates on auto loans (you can negotiate better if you secure your own loan)
2. Lower rates on mortgages
3. FDIC or NCUA (federal insurance for credit unions) insurance up to $250,000 for deposits
4. ATM fee rebates (usually $20-$30 per month)

So what do you have to lose?

In my opinion, the answer to that question is nothing! It would be dumb to pass up a rate that is 3x higher than what your are getting in your online “high yield” savings account.

Where to Find One

You may be asking, “Where can I find a high interest checking account like this?”

Well, the 2 easiest places to look are checkingfinder.com and ratebrain.com. I did not believe it at first, but the high interest rates are legit, so check it out!