Until two years ago I didn’t know there were such a thing as an Interest Checking Account. I had a standard Wells Fargo checking account for 12 years making me zero money. Literally zip, so imagine my surprise when I discovered there are checking accounts out there that pay you interest like a savings account.
What is an Interest Checking Account?
It’s essentially a regular checking account You can write checks, use debit cards or withdraw from ATMs but while your money is in the account, you’re earning interest like a savings account.
How much can you earn in an Interest Checking Account?
It isn’t much, but better than zero. I have an account with Ally Bank and my Interest Checking Account makes 0.10% interest. To give you an idea. I keep around $4,000 in my checking account at all times. $2,000 is
To give you an idea. I keep around $4,000 in my checking account at all times. $2,000 is for my emergency fund and $2,000 for my monthly expenses. So that’s $4,000 sitting in my account making about 0.38 cents per month. See my Income Reports to see how it changes per month.
It’s not much, but over the last year, my Interest Checking Account made $3.66. That’s what I entered on my taxes last week.
My Personal History
Now $3.66 is more than I made on my Wells Fargo Checking Account, EVER! Keep in mind, I don’t mean to hate on Wells Fargo, but they simply never told me an Interest Checking Account was a thing.
They were like the cool kids in every high school (likely named Chazz). You wanted to hang out with them, even though you knew you they were dicks and there were better friends out there.
At Wells Fargo, if my checking account ever made interest, they kept it. Even my Wells Fargo Saving Account at 0.01% was earning less than my current Interest Checking Account. If I kept my $4,000 in Wells Fargo Savings Account for a year, I’d be left with $0.40 at the end of the year. THAT’S THEIR SAVINGS ACCOUNT!
Do a lot of Checking Accounts earn you interest?
Actually, most checking accounts I’ve encountered do not earn you interest. This is why I was so surprised when I discovered there are a few that do.
Many of my friends have a balance similar to mine with $4,000 in their account and some of my friends have up to $60,000 sitting in their checking account because they don’t know what to do with it. If you have that much, you should move it over to a savings account at least and hire a financial manager. I get the fear of the stock market, but there is no reason to keep that much in a checking account, especially not making you interest.
I’ve been wanting to do this post for a while now. It’s cool to share with people, who like me, didn’t know about Interest Checking Accounts. They exist! It’s not a lot of money, but it all adds up!
PS. I’m in no way sponsored by Ally Bank here. This is just my personal experience so far and if they start to F*!k up, you’ll hear about it
I hope I taught at least one person something new!
Wallet Squirrel is a personal finance blog by best friends Andrew & Adam on how money works, building side-hustles, and the benefits of cleverly investing the profits. Featured on MSN Money, AOL Finance, and more!
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