Is This What It Will Take? Over 2% Interest to Win Checking Deposits?
A study by Bankrate.com reveals high-yield checking accounts paying over 2% are still being offered by U.S. financial Institutions. Could this become the norm as interests rates rise, the economy improves and the war for deposits heats up?
The dismal rate environment for depositors has lingered for over five years now. But there are still financial institutions offering yields of 2% or more on federally-insured liquid deposits (not CDs), according to a new Bankrate.com report.
Bankrate recently surveyed 56 high-yield checking accounts offered by U.S. banks, thrifts and credit unions. The average annual percentage yield for these accounts was 1.57%, nearly twice the average APY offered by the typical five-year certificate of deposit (0.80%) and more than 26 times the average yield offered on standard interest checking accounts (0.06%).
All of the high-yield checking accounts that Bankrate surveyed are federally insured by the FDIC or NCUA. And, of course, unlike a five-year CD, a high-yield checking account is completely liquid.
| Rank | Top High-Yield Checking Accounts in the U.S | Nationally Offered? | APY | Monthly Debit Transactions Required | Balance Cap |
|---|---|---|---|---|---|
| 1 | BECU | N | 4.07% | 1 | $500 |
| 2 | Jeff Davis Bank | N | 3.25% | 10 | $10,000 |
| 3 | Consumers Credit Union | Y | 3.09% | 12 | $10,000 |
| 4 | Ouachita Independent Bank | N | 3.01% | 12 | $15,000 |
| T-5 | Great Lakes Credit Union | Y | 3.00% | 10 | $10,000 |
| T-5 | Lake Michigan Credit Union | Y | 3.00% | 10 | $15,000 |
| 6 | Coulee Bank | N | 2.55% | 10 | $15,000 |
| 7 | Belvoir FCU | N | 2.53% | 15 | $15,000 |
| T-8 | Bank of the Wichitas | Y | 2.50% | 10 | $10,000 |
| T-8 | Lee Bank | Y | 2.50% | 12 | $15,000 |
| T-8 | CapEd FCU | Y | 2.50% | 12 | $10,000 |
| 9 | BankTexas | N | 2.25% | 10 | $7,000 |
| 10 | Cross Keys Bank | Y | 2.05% | 12 | $10,000 |
All 56 high-yield checking accounts mandate electronic statements and many require direct deposit. Other typical requirements include a certain number of debit card transactions, online bill payments and/or automated withdrawals each month. The specific details vary by account. Meeting the requirements is very important because the average yield drops to 0.06% if the monthly mandates are not satisfied.
Even if the accountholder meets all of the requirements, the 1.57% average yield applies only to a certain limit, known as the balance cap. The most common balance cap is $25,000, but the highest-yielding accounts tend to have lower balance caps. None of the 15 highest-yielding accounts are available nationwide with a balance cap over $15,000.
Half of the high-yield checking accounts that Bankrate surveyed are available nationwide (including 12% that require a charity contribution, a family member’s credit union membership or an in-branch signature).
