So for the folks who are asking where they can find higher-yielding deposit accounts for their rainy-day funds, Bankrate.com has done the legwork for you. The site has canvassed banks, thrifts and credit unions, pulling together data on 56 high-yield checking accounts. From that it identified 20 checking accounts offered by U.S. banks and credit unions that yield 2 percent or more. And don’t worry, all the accounts are federally insured.
To find the list, go to Bankrate.com and on the home page look for the link “2015 High-Yield Checking Survey.”
Of course there are some conditions with these accounts. To receive the better rates, eligible customers have to jump some hurdles, although you probably are doing many of the things anyway. Typically, you have to have direct deposit, get your statements electronically and pay bills online. Most of the institutions require at least 10 debit-card transactions each month and some as many as 15. If you don’t hit the mark on the conditions during a monthly period there are default rates on what you can earn on your money.
Coupled with those requirements, many of the financial institutions have caps that limit the amount of money deposited in the account that can earn the higher interest rate. The caps range from a low of $500 to as much as $25,000. Any amount in the account that exceeds the cap earns a much lower rate.
In the Bankrate.com survey, BECU, a credit union near Seattle, offers a checking account that has the highest annual percentage yield at 4.07 percent. But balances above $500 yield just 0.05 percent. There are membership requirements to open the account.
Among traditional institutions, Jeff Davis Bank in Jennings, La., had the highest rate at 3.25 percent for its “Kasasa Cash” account. You can earn that rate for a balance of up to $10,000. But it’s available only if you live in Louisiana or the southeast Texas counties of Jefferson, Orange, Jasper and Newton.
Even though some accounts are open only to certain customers, almost half of the high-interest rate accounts surveyed by Bankrate.com are available nationwide. Even if you don’t want to switch your everyday banking relationship to these banks and credit unions, it could be a good place to park your emergency money, which you don’t want to touch anyway because it’s there for when the worst happens.
Measured against the returns many are seeing in the stock market, earning even 2 percent may not sound great, but it gives you the chance to keep pace with inflation or even beat it, said Greg McBride, Bankrate.com’s chief financial analyst. “People work hard to squirrel away every dollar, so you want to make sure it is still worth a dollar when you need it,” he said.
But here’s the thing. You’ll have to stop thinking of your emergency money as a pot that has to have huge growth. This is money you shouldn’t invest because you don’t want to risk it. You need it to be liquid, or readily accessible, if you have a financial emergency.
