| Product | AVG | Top 1% |
|---|---|---|
| Business Checking | 0.17% | 1.00% |
| Business High Yield Savings | 2.01% | 4.01% |
| Children's Checking Account | 0.00% | 1.01% |
Checking accounts are transactional accounts that can be opened at a bank or credit union. They are different from other accounts, such as savings accounts, in that they are intended for day-to-day use, like paying bills or other daily transactions. They are not intended to hold money for the long term, as is the case with CDs, and withdrawals are not limited, such as with savings and money market accounts. In some instances, checking accounts may pay interest, but because the funds are readily available, the rates offered tend to be on the lower end of the spectrum. Based on our research, the national average rate is currently at 0.11% for checking accounts. There are some checking accounts available that offer high yields, with the best checking account currently yielding 6.05%.
Checking accounts are transactional accounts that can be opened at a bank or credit union and allow you to access your money at all times without limitations. They usually include a debit card, check-writing as well as online banking. Checking accounts are different from other accounts, such as savings accounts, in that they are intended for day-to-day use, such as paying bills, making purchases and more recently, peer-to-peer transactions. They are not intended to hold money for the long term, as is the case with CDs, and withdrawals are not limited, such as with savings and money market accounts. When compared to a savings or money market account, checking accounts tend to offer lower yields, if any. Based on our research, the average yield for a checking account is 0.11% with the best checking account currently yielding 6.05%
As checking accounts are so easily accessible, convenient, and safe, almost everyone can use them. These accounts can be used for making purchases via check or a debit card, paying bills, and receiving deposits. They can be set up to receive automatic deposits from your employer and make automatic withdrawals to pay your bills. Most banks also offer mobile apps that let you manage your checking account from the convenience of your phone, wherever you may be. In short, they make everyone's financial life much easier to manage.
Generally speaking, yes. As long as your bank is FDIC insured or your credit union is NCUA insured and your account falls within the limits of up to $250,000 per depositor, per account ownership type, and per financial institution, there isn’t much to worry about as your money is safe in case of a bank failure.
Analyzing things further, in an inflationary environment such as the one we find ourselves in now, if your money is not growing at the same or greater rate as inflation, the purchasing power of your money is decreasing. This means that your dollar buys less and less over time. This makes it even more important to use the information we've gathered on our website to find the best checking account available. The best checking account is yielding 6.05%, which helps your money keep up with inflation while at the same time providing you with the benefits of having a checking account.
Choosing the best checking account isn’t always a straightforward decision. There are many different types of checking accounts with varying perks and features. When shopping around for the best checking account, here are the most important factor to consider:
Fees - As with any financial product, account fees can chip away at your account. The main fees assessed in checking accounts are overdraft fees and non-sufficient funds fees, which can be pricey. If your checking account comes with a debit card, out-of-network fees may be assessed if you use an ATM machine that is not associated with your bank. It is important to understand what fees may be assessed and why.
Account Minimums - Some banks may require you to maintain a minimum average daily balance to avoid monthly service charges or to qualify for specific rates.
Bonuses - Some banks offer bonuses for opening and funding a checking account. Unless you want to use a specific bank, it might be beneficial to find a bank that offers account opening bonuses.
Cash Bank Rewards - Some banks offer cash back rewards that may be either a specific dollar amount or a percentage of a transaction for example.
Annual Percentage Yield (APY): The total interest you receive on money in your checking account over the course of a year is expressed as an APY. The higher the APY on your account, the harder your money that is in your checking account, will work.
| They are a convenient and easy way to pay bill and make transactions. | Banks and credit unions pay little to no interest. |
| You can write checks or use your debit card to pay bills and withdraw money from an ATM. | There are overdraft fees, account minimum fees, etc. |
| Most checking accounts allow peer-to-peer transactions. | Not all accounts offer free checks. |
| Direct Deposit is available so that employers can deposit your paycheck right into you checking account. | |
| Your funds are FDIC or NCUA insured up to the limits allowed by each program. |
Money Market Accounts: A money market account is a type of interest-bearing account available at banks and credit unions. They are similar to savings accounts; however, one significant difference is that certain money market accounts also provide some checking-writing features.
Savings Accounts: A savings account is a deposit account that guarantees your principal and pays interest. While savings account rates at large traditional banks typically stay close to zero, some online banks offer rates higher than the average rate of 0.45% our research has identified.
Certificates of Deposit (CDs): Banks and credit unions both offer a type of savings account known as a certificate of deposit, or CD. Generally speaking, you commit to leaving your money in the CD for a predetermined period without taking any withdrawals. Early withdrawals may incur penalties, depending on the type of CD.
Our editorial staff continually updates the information contained on our website. Our editorial staff has analyzed virtually all of the banks and credit unions that it follows, and it does weekly rate analysis for more than 250 prominent banks and credit unions. These institutions were chosen because they provide competitive APYs, low fees, and other factors we find important. These banks and credit unions often provide accounts that are available nationally. All of these banks are FDIC-insured, and all of these credit unions are NCUA-insured. Choosing an FDIC-insured bank or an NCUA-backed credit union assures that your money is protected as long as it stays within insurance limits and requirements.