interest bearing checking accounts

Interest Bearing Checking Accounts Basics

A checking account is a service provided by financial institutions which allows individuals and businesses to deposit money and withdraw funds from a federally-protected account. Generally account holder can use personal checks in place of cash to pay debts. He or she can also use electronic debit cards or ATM cards to access individual accounts or make cash withdrawals.

In general, checking accounts are available in two primary categories - accounts that pay interest (interest-bearing) and accounts that don't pay interest (non interest-bearing).

Interest-Bearing: These checking accounts were developed to entice customers to keep more money in their accounts, which allows the bank access to more funds to loan to consumers. Interest-bearing checking accounts may be great for the consumer, but they also come with a price - fees may be charged to the consumer to help offset the interest paid to the consumer.

Interest Bearing: Banks usually call these accounts "Regular or Basic Checking" accounts. The consumer is usually required to keep a low monthly balance to avoid a nominal monthly service fee. These accounts are ideal for consumers who write just a few checks per month.

Interest Bearing Checking Account Strategy

Make sure the interest-bearing checking accounts you're interested in offer what you need, whether it's online banking, direct deposit, paper checks, debit cards or free ATM service. Check to see if they're FDIC insured, and also whether you pay for paper checks if you need them or whether they're provided free.

you have to have a consistently high balance in order to avoid the finance charges incurred for falling below a specific point. Most U.S. banks and credit unions require customers to keep at least $2,000 in their checking accounts or they are charged a monthly fee.