Because the main purpose of checking accounts is for making frequent payments through the use of checks, most of the checking account products offered by banks and financial institutions today do not earn interest. However, there is a growing number of banks that are offering interest-bearing checking accounts for those individuals who would like to maintain a checking account while still having the opportunity of making their funds grow. Here are some essential information about interest-bearing checking accounts.

First, you need to know that although there are checking accounts that you can get which can interest, their rates are usually still lower than the interest rates of regular savings accounts. However, because of the competition in the banking industry, you can expect a lot of banks which now offer great rates for both savings and checking accounts.

When comparing your options in interest-bearing accounts, the first thing you need to check would be the APY or the annual percentage yield of the account. This is more important than the interest rate itself, as the APY takes interest compounding into consideration as well. This means that the more often your bank deposits the interest that you earn to your checking account, the higher your return would be.

You should also consider the features that come with the interest-bearing checking account. Aside from the APY and the interest rate, knowing what benefits and services come with the account would be important, especially if you have specific needs that you would want to be addressed.

Similar to regular checking accounts, there are also several requirements that may need to be met with interest-bearing checking accounts including the requirement that you need to submit upon opening the account. One of the main differences of interest-bearing checking accounts from other types of checking accounts would be that they usually require a higher minimum maintaining balance or average daily balance so that the account could earn an interest.

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