Tuesday, January 13, 2009

Method Madness Marathon!! High Interest Checking!!

Let me ask you a very simple question, ok?

Does your family have a checking account?

I am going to assume the majority of you answered yes.

So, here is one other question for you. How much money did you earn on your checking last year?

If the answer was nothing, then today's homework is to set up your new High Interest Checking Account. Last year, I made $760. Today, I got my statement and they deposited $70.01 in my account for one month. There is absolutely no reason you should not be making money on something you currently own and use daily, your checking.

So, let me first give you a bit of background information on High Interest Checking.

They are almost always electronic checking accounts. This means simply that you do not have a brick and mortar bank to visit whenever you want. But, there are ways to work around this, as I do, which I will discuss below.

You can use them just like a normal checking. I have checks, of course, that I use to write out whenever I need. I also have my husbands direct deposit set up here. Our bills are set to pay from this account automatically. Everything runs just like our old checking did.

The percentage you get paid can vary depending on your balance. This simply means the more you have in your account, the higher percentage you will earn.

Debit or ATM Cards can be used at any ATM. This is one of the more common questions I get. How do you get your money out? Well, with the account I have, it is even better than when I used to bank with Fifth Third. With them, I had to only use their ATMS or I got charged fees. But, with my High Interest Checking account, they charge no fees, AND they reimburse me the fees I get charged from the other bank when I use their ATM. So, basically, it is free anywhere.

Finally, you earn FREE money! And, for something you use anyway!

I do have a few suggestions of how to manage your account. My main problem was that I was not going to have a Brick and Mortar bank to drive up, deposit my checks, etc. The thought of manually mailing my checks into my High Interest Account was not appealing to me.

So, I kept my account open with a $0 balance ( check your local bank to make sure what the minimum amount you need to leave in to keep the account open ). Then, when I need to deposit checks, I simply do it like I always do at the bank.

How do I get the money to my High Interest account? I log into my old bank and simply do an electronic transfer for free. They send the money electronically to my High Interest Account. Now, I have a paper trail from my deposit and an electronic confirmation on the transfer. I feel much better about that then mailing it.

The only other issue for many is the actual process of transferring everything. Ugh! Doesn't sound fun, does it? But, believe me, it is well worth it.

The time invested was just a little over an hour for me. It didn't take long to set my account up. Once I got my account numbers, I pulled my last 2 checking account statements from my old account. That way, I could see ALL direct deposits, electronic payments, etc, that goes in and out of my account. I spent about 1 hour going to all the accounts and changing the old account number to the new number. Then, done! Well worth the money I made last year!

What accounts have great rates right now?

Bank of Internet - 3% - Click here to register

  • ATM reimbursement (up to $8 per mo.)
  • Free online bill pay
  • Online images of statements & paid checks - accessible the day they are paid (5yr archive)
  • Unlimited check writing
  • Free initial checks
  • Visa Check Card
  • Overdraft protection available
  • No minimum balance required
  • $500 min. initial deposit required
  • $5000 average daily balance in account to avoid fee of $7.50
  • FDIC insured up to $250,000 per depositor

E*Trade Max Rate Checking - 1.5% - Click here to register

  • Free ATM Anywhere ( unlimited fee reimbursements )
  • Free One Click transfers to any institution
  • Unlimited Check writing
  • Online check and deposit images
  • Free Online Bill pay and Advanced Reporting
  • Balances under $5,000 get .05%
  • Must have a balance above $5,000 to avoid monthly fee ( this fee is waived IF the account has direct deposit of $200 or more per month )
  • FDIC insured

ING Direct - .5% to 2.8% - Click here to register

  • Free Debit Card
  • Free Online Bill Pay
  • Free ATM at Allpoint ATMs
  • $0-$49,999 is .05%
  • $50,000 - $99,999 is 2.6%
  • $100,000 and above is 2.8%

Salem Five - 2.25% - Click here to register

  • No min. balance
  • Free ATM fees up to $15 per mo.
  • Free Online Bill Pay
  • Free Check writing

There are many more out there, too, but I thought these were good starting points for everyone!

So, make sure to spend time today doing your Methods Homework. Open a High Interest Checking! It is so easy to put it off, but today is your day to make this happen!

Welcome to the world of High Interest Checking!


Anonymous said...

Redneckbank.com - I know it sounds weird and well redneck but they have a rewards checking that pays 5.25% interest on balances up to $25,000. All you have to do is make 10 debit card transactions a month and receive electronic statements. Doesn't sounds too difficult, does it?

Jennifer said...

I'm going to check this out later today (supposed to be working now lol) but I was wondering if you knew right off hand if either Salem Five or E*Trade Max had free debit/checkcard. I assume from the Atm reimbursements that they do offer an ATM but the others actually had it listed as a feature so I wasn't sure. Also, on the Salem Five account, is the 2.25% on all balances? Thanks!

Anna McMullen said...

Salem Five Bank has a one time bonus of $25 if you sign up also. :)

frugal_mom_jenn said...

This sounds like a great idea! We have an account through the Navy Federal Credit Union, so we have to do everything through the mail anyway!

Carrie @ Moneysavingmethods.com said...


I know Salem Five has a debit card for free and I am almost positive E*Trade does, too.

I always write ATM cards, because I don't have a debit card and refuse to carry one. Too easy for anyone have access to your checking account if you drop it or they write your number down.

This happened to my parents and their checking account was drained of $1,000 of dollars over the internet.

And, I sometimes forget they exist.

So, I apologize for not even thinking to check on Debit cards for the other two.

Carrie @ Moneysavingmethods.com said...

Redneckback.com....that is hilarious.

Sounds like a good deal, though, if you use debit cards. That is a great interest rate.

There FDIC info is outdated, so you may just call them to ensure they are still FDIC insured up to $250K instead of $100K...meaning they are still covered, bascially. No bank should still be at $100K.

Carrie @ Moneysavingmethods.com said...


Yes, the interest rate is good up to $50,000, I believe. If your balance goes above that, your interest rate goes even higher.

You may want to call them. I just relooked at their sign up page, and it say 2% up to $50,000....but on another page, it says 2.25%.

Definitely email or call to check.

Jackie said...

Carrie- which one do you use?

Carrie @ Moneysavingmethods.com said...

Currently, I use Salem Five.

But, I am getting ready to switch to Bank of Internet ( or another...if I can find one with a High Interest rate ).

Salem Five was paying me over 3% all last year, and just lowered it to 2.25%.

This is still good...and higher than alot, BUT, I like to get as much money as I can on our money.

And, if Bank of Internet is paying 3%, I will probably go with that.

I just need to sit down with my husband tonight.

BUT, with that said, I have absolutely loved my relationship with Salem Five. I have had no issues whatsoever! And, I am quite gracious for that $760 they gave us last year! :-)

Kimberly S. said...

First off, I love your site. It has taught me to be more financially responsible at 22. I’ve done the E*trade and Sharebuilder bonuses. I use the E*Trade savings just for survey’s, bonuses, rebates, etc.

I’m thinking about opening a checking with SalemFive. I saw they have a $25 bonus with direct deposit. Would you know if it has to be a payroll only? I work for a small mailing business in Dayton (Contract Production…stuffing envelopes/VocalPoint) I’m not sure if they do direct deposits but I can always ask. Another thing is I don’t work all the time…only when they need extra help. I’m also a ChaCha expeditor; do you think that would count? If not I was thinking of using the ChaCha money towards opening the $100 TD Ameritrade Savings.

Evelyn said...

Just got my statement from Salem Five and I had $41 in interest. HMmm....I was thinking about the days when interest was real high ( in the 80's). Oh can one imagine how the interest earings soared then.

Jennifer said...

I called Salem Five just to make sure I had everything right and they said that there is no minimum balance or direct deposit (I had it mixed up with the other account where you had to have at least $200 direct deposited or you had a fee). They also give you your first order of 50 checks for free! I filled out my app online today and just have to mail it in with my opening deposit and I'll be on my way to getting paid for having a checking account!!!

Also, I signed up for my first 2 mystery shops today through a company called Market Force. Have you used them? You might have covered them before but with me being "new" I'm not sure.


Misty said...

I use a credit union (brick and mortor) and I get 3.01% APR each month on my checking. Is that good? redneckbank.com is the only one I see that has as high a rate as that, with no minimum deposit. Have you checked into it? I only got $8 last month (on a very small balance:)), but it's $8 I didn't have the month before!

Carrie @ Moneysavingmethods.com said...


That is a great rate. All the banks I had listed were higher than that last year, but rates have been dropping in just the last month.

So, if your CU is still paying that, not bad! I'd keep it, unless you see something alot better.

Christopher M. Smith said...

I am wondering if Salem Five lets you transfer money from and to a different bank account for free? Can you do this online?

Carrie @ Moneysavingmethods.com said...

I do it all the time for free. I deposit my money in Fifth Third, then transfer it in.

If I need money back in another bank, I just log on and electronically transfer it back out.

Everything is electronic and online.

Christy said...

I'm just learning about all of this, so my question is... the Redneck bank (oh my goodness, laughing over that) offers 5.25% APY. If we open an account with $1000 and keep AT LEAST that much in there, is the 5.25% earned over a year or per month? (5.25% on $1000 is $52.50... would we earn that over the course of a year or per month? I'm guessing over the year, correct?)

Carrie @ Moneysavingmethods.com said...


Good questions.

Banks offer a %APY. So, it is a 5.25% APY.

That stands for Annual Percentage Yield.

Hence, since it is annual, it is over the year.

Now, depending on when they compound ( daily, monthly, quarterly, etc ) will determine how much you make.

For example, if it was daily and your paycheck just hit, you may be up to $2,000 for a few days ( before bills come out ), so it would be calculated on that

But, if it is done monthly, then it just takes the average ( I believe for the whole month ), so it is based on probably a lower amount.

Here is a site that goes into great detail on how rates are calculated.


But, in answer to your question...you would make that approx over a year You would probably make more, because as the interest goes in each year, you are earning the APY on a higher balance, etc. It is a slight snowball effect, I guess you could call it.

That is a nice extra bit for simply having a checking.

Kelly said...

Coulee Bank out of WI offers 5.01% APY and it's a brick and mortar bank, you just have to get e-statements. It's also free nationwide, which most rewards checking accounts are not. You can apply on their website: http://www.CouleeBank.net

Anna said...

Many small local banks are competing with higher interest rates. Like "redneckbank" (love the name!) my local bank is offering 5.01% if you use your debit card. Except at mine, you have to make one direct deposit OR bill pay each month AND 12 (not 10) debit card transactions.

Note about those transactions - they have to be purchases. NOT getting money out of ATM machine.

For those interested, see www.bankononb.com