Friday, May 2, 2014

High Interest Checking

Yes, you can make interest on your checking account! 

I went through the different aspects I think about before placing my money somewhere. (I’ll be posting about some other places to put your money using this same format.)

1-       Risk: You can’t get a whole lot less risk than having your money in the bank.
2-       Liquidity as to income stream: For most accounts your income will come in at the end of the month. It will be based on your account balance.
3-       Liquidity as to principal investment: This is a checking account, so it couldn’t be a whole lot more liquid.
4-       Fees: If you are sure to follow any requirements, you should be able to avoid fees. 
5-       Return: At Communication Federal Credit Union I am getting 1.5% APY. 
6-       Risk of a lower than expected return: Several years ago when I first opened the account it was 4% APY; they have steadily decreased the yield ever since.
7-       Technical investment minimum and maximums: There may be account minimums such as $2,500, it depends on which bank or credit union you are looking at. Many institutions will only pay interest on $30,000.
8-       Effective investment minimum and maximums: If you don’t have much money in the account, it may not be worth the effort to you, I call this a practical minimum.
9-      Effort:  In all the high interest checking accounts I’ve seen, you have to meet a handful of criteria every month (direct deposit, auto bill pay, 12 transactions, those transactions have to be for more than $100…).

How to get one?! - Check out to compare rates.

This is just my assessment of these options to get you started, but you should definitely look into it further for yourself.

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