We're starting to see several launches of online checking accounts. Recent launches include ING Direct's Electric Orange and ETrade's Max-Rate Checking. According to this CNBC article we should be seeing a new high yield checking account launched at HSBC Direct in the second quarter. I've also heard E-LOAN has plans for launching one this year.
These new checking accounts have competition. Several banks have had online checking accounts for some time now. These include Everbank, ebank, Presidential Bank and Bank of Internet. In the last year some major banks like WaMu and Citibank have started free checking accounts with many perks. These checking accounts have been required to open their high yield online savings accounts. Many small banks and credit unions around the country have started high yield reward checking accounts in which you can earn very high interest rates in return for maintaining a relationship. The relationship typically requires 10 or more debit card transactions per month, direct deposit and online account usage. Finally, brokerages like Fidelity and Vanguard have high yield money market funds that have many features of checking accounts.
In this post I'll list the best accounts from all of the above options. If you have other recommendations for high yield checking accounts or other alternatives, please leave a comment.
Nationally Available Checking Accounts
High Yield Reward Checking Accounts
- For Latest Rates: Nationally Available Reward Checking Accounts
- 4.50% APY at Presidential Bank. Over $25K earns 2.75%. $1.5K minimum to open. $1K balance to avoid fees. Requires Direct Deposit. Hard credit inquiry is done.
- 4.03% APY at City National Bank. Requires debit card usage and Direct Deposit. $100 minimum to open, but no minimum after and no monthly fees. Automatic ATM refunds. Free checks.
High Yield Checking Accounts Without Relationship Requirements
- 5.10% APY at Salem Five Direct. Tiered rates from 5% to 5.30%. No minimum balance requirements or monthly fees. ATM refunds. (post)
- 5.00% APY at ebank. May be a teaser rate. $2.5K to avoid fees. Free checks. ATM refunds. Hard credit inquiry is done (post)
- 4.25% APY at Charles Schwab. No minimum balance requirements or monthly fees. Free checks. ATM refunds (post)
- 4.00% APY (5.25% for over $50K) at ING Direct. No minimum balance requirements or monthly fees. No paper check books (post).
- 4.00% APY at UnivestDirect. Like ING's checking but with paper checks (post)
- 3.41% APY for under $10K at Everbank. Tier rates. 6% APY 3-month promo. ATM rebates. $1.5K minimum to avoid fees only required for online BillPay. Hard credit inquiry is done (post)
- 3.40% APY for under $25K at Bank of Internet. $1K minimum to avoid monthly fees. ATM fee reimbursements. 3.75% APY for Senior Checking with no minimum balance requirements.
- 2.50% APY at HSBC Direct. No minimum or monthly fees. No paper checks. ATM refunds (post)
Free But No Interest Checking Accounts Linked with High Yield Savings Accounts
- WaMu Free Checking. Free checks. Free outgoing wire transfers. Required for 5% savings account No hard credit inquiry is done (post)
- HSBC Free Checking. Often has sign-up bonuses. 3-months inactivity converts account into Basic Banking with monthly fee. Not required for HSBC Online Savings. No hard credit checks.
- Citi EZ Checking. Often has sign-up bonuses. Monthly fee unless you maintain combined monthly balance of $1,500 or use Direct Deposit or make 2 monthly bill payments online or by phone. Promos available to avoid this requirement. Hard credit check is done.
Local High Yield Reward Checking Accounts
For Latest Rates: Reward Checking Accounts by State
Most of these rewards checking account are similar to what City National Bank offers, but they're intended for people in the local areas. Most require a branch visit to open the account. Like City National Bank, they typically require 10 or more debit card transactions per month, Direct Deposit and online account access. Note, I've added a note "open to all?" on some of these which I've received some confirmation that no branch visit is required and they allow out-of-state customers. Since these are small banks, this might not last. You can also see my latest reward checking account posts on this page.
- 5.61% in Alabama, Tennessee and Mississippi at Citizens Bank (post)
- 6.01% in Arkansas at Parkway Bank (post)
- 6.01% in Arkansas at Bank of Little Rock (post)
- 6.15% in Arkansas at First National Bank (post)
- 6.01% in Colorado at 1st SouthWest Bank (post)
- 6.01% in Florida at Premier Bank (post)
- 5.64% in Florida at First Commercial Bank (post)
- 6.01% in Illinois at Valley Community (post)
- 5.50% in Illinois at Bank of Illinois (post)
- 6.01% in Iowa at State Bank of Toledo (post) open to all?
- 5.51% in Kansas at Bank of Blue Valley (post)
- 6.01% in Kansas at Emprise Bank (post)
- 6.01% in Kansas at Vision Bank (post)
- 5.60% in Kansas at First National Bank (post) open to all?
- 6.01% in Kansas/Missouri at Equity Bank (post)
- 6.01% in Massachusetts at Florence Savings Bank (post)
- 6.01% in Massachusetts at Danvers Bank (post)
- 6.01% in Massachusetts at Slades Bank (post)
- 6.17% in Missouri at RCSBank (post)
- 6.01% in Missouri at Champion Bank (post)
- 6.10% in Nevada at Clearstar Financial Credit Union (post)
- 6.01% in New York at Northern Financial CU (post)
- 5.01% in North Carolina at Capital Bank (post)
- 5.00% in Oklahoma at Legacy Bank (post)
- 6.01% in Oregon at Oregon Community Credit Union (post)
- 6.10% in Oregon at Rivermark Community CU (post)
- 6.25% in Tennessee at Wilson Bank and Trust (post)
- 6.17% in Tennessee at FirstBank (post)
- 6.01% in Texas at United Heritage Credit Union (post)
- 4.75% in Texas at First National Bank (post)
- 5.00% in Texas at Capital One - no hoops but 1yr promo (post)
- 7.50% in Washington State at BECU (post)
- 6.00% in Washington State a TwinStar CU (post)
- 6.01% in Wisconsin at Connexus Credit Union (post)
- 6.01% in Wisconsin at West Bend Savings Bank (post)
- 5.01% in Wisconsin and Illinois at Blackhawk Bank (post)
Other Checking Accounts and Other Alternatives
USAA Checking has free checks, ATM reimbursements, no monthly fees, and a fast ACH transfer system. USAA Asset Management Account can also be used as a checking account and has similar perks, but it has the advantage of a high yield. You must be affiliated with the military or live in Bexar County Texas to be eligible to join.
Bank money market accounts often have check writing and ATM/debit cards. However, the check writing is limited to 3 checks per month by law. MMAs often have minimum balance requirements higher than savings accounts and checking accounts. Three of the best high yield money market accounts with check writing includes Zion Bank's Deseret Money Market Account (see post), Capital One's Money Market (see post) and GMAC Money Market Savings Account (see post). You can also get a high yield money market account through a Bank of America affinity account (see post).
Money market funds held in brokerage accounts can be used as a high yield checking account. Unlike bank money market accounts, they typically don't have a 3-check-per-month limitation. However, there's often a requirement that checks be over a certain amount (i.e. $250 for Vanguard and $500 for Fidelity). They're not FDIC insured, but are generally considered very safe. Fidelity money market funds and Vanguard money market funds both have yields above 5%. USAA's Asset Management Account would fall into this category.
[Update 7/04/07: Added several new local reward checking accounts.]
[Update 6/02/07: Added HSBC Direct's OPA and reward chk for UHCU and Bank of Illinois]
[Update 5/22/07: Added Salem Five Direct.]
[Update 5/19/07: Added several rewards checking accounts.]
[Update 5/06/07: Updated ING's mid-tier rate. Added UnivestDirect.]
[Update 4/28/07: Added Charles Schwab's new checking account. Updated BofI's Senior rate.]
[Update 4/18/07: Added several rewards checking accounts.]
[Update 4/2/07: Added Equity Bank's reward checking account.]
