What is a High-Interest Checking Account?

If you aren’t getting paid from your checking account, it might be time to upgrade! Checking accounts with high interest rates can help your money grow more, while still providing the convenience you need. Want to learn how to get more mileage from your money? Keep reading for the high-interest checking account definition, how interest is calculated, and how to find the best checking account option for you.

What is a High-Interest Checking Account?

A high-interest checking account is a checking account that pays you interest on your balance, which is the money you keep in it.

Also called an “interest-bearing checking account” or “high-yield checking account,” a high-interest checking account is less common than a regular checking account. That’s because it is built for people who consistently keep more money in their account. In addition, high-interest checking accounts come with certain requirements, like maintaining a specific minimum balance per statement cycle.

Even with the higher rate, you still enjoy standard checking features: debit card, mobile* and online banking capabilities, bill payments, ATM access, and the option to open a checking account online or in person.

High-Interest Checking vs. Regular Checking Account: How It Compares

As mentioned above, both types of checking accounts have the same core functionality for day-to-day spending. The real difference is the growth that happens while your money sits in your account:

 

BOTTOM LINE: If you keep a decent balance, having a checking account with a high interest rate can help your money work a little bit harder.

How Often is Interest Paid on a Checking Account?

Most interest-bearing checking accounts accrue earnings DAILY and deposit the total MONTHLY.

Specifically, each day, the bank looks at your account balance and calculates the interest earnings based on your checking account interest rate. These daily amounts accumulate throughout the month, and at the end of the statement cycle (or sometimes at the beginning of the next month), the total interest earned is deposited directly into your checking account.

Every bank handles interest payments a little differently, so it’s worth reviewing the account disclosures for the specific calculation methods, compounding schedules, and crediting frequencies.

Find the Best High-Interest Checking Account at Academy Bank

If you’re researching what banks offer interest on checking accounts, it’s a good idea to look beyond just the rate. The right account will pair leading rates with top digital banking solutions PLUS friendly, local service.

That’s where Academy Bank comes in! We understand that each client has different banking needs, and we offer interest-bearing checking account options for both personal and business banking:

• PERSONAL: Elite Investment Checking — A tiered-interest account designed for people who keep more money in checking. It combines everyday convenience with the ability to earn more interest as your balance grows.
• BUSINESS: Business Interest Checking — Business owners, we haven’t forgotten about you! This business checking account with interest lets your company’s operating funds work harder while staying accessible for payroll, vendors, and day-to-day business expenses.

Ready to start earning MORE from your checking account? Learn why Academy Bank is known as one of the best banks for interest checking accounts. Find a checking account online or in person at one of our local bank locations!

Open Elite Investment Checking Account

Open Business Interest Checking Account

Want to maximize your earnings EVEN FURTHER? To explore other interest-bearing bank accounts, compare our personal savings accounts and business savings accounts.

FAQ on High-Interest Rate Checking Accounts

What is the difference between high-interest checking and regular checking?

The primary difference is that high-interest checking accounts pay you a competitive APY (annual percentage yield) on your balance. On the other hand, regular or “traditional” checking accounts pay little-to-no interest. Both account types offer convenient access through debit cards, online banking, and bill payments, but interest checking accounts have more requirements to meet.

Can I use a high-interest checking account instead of a savings account?

They serve different roles. A high-interest checking account is best for the money you use frequently but still want to grow. This is where you keep your accessible funds, so it should NOT completely replace your dedicated savings account. Ultimately, savings accounts are built for long-term and short-term goals, and they offer different rates or withdrawal limits than checking accounts.

THE BEST APPROACH: Use both! Keep your everyday spending money in an interest-earning checking account, and use a savings account (like a money market account) for the funds you won’t need for a while.

Will my interest rate change over time?

Yes, checking account interest rates are variable and can change with market conditions and economic factors. In addition, the best interest checking accounts have tiered rates, meaning your account balance determines the rate you earn. In other words, a higher balance will earn a higher interest rate.

How is interest calculated on a checking account?

The bank multiplies your balance each day by the checking account interest rate, which is the annual rate divided by 365. Then, the bank adds together the daily amounts at the end of the month.

IMPORTANT: During the calculation, your daily interest rate is NOT expressed as a percentage—it’s actually shown as a decimal. For example, if you have a 2% APY (annual percentage yield), then your math would look like 0.02 ÷ 365, not 2% ÷ 365.

How can I earn more money on my checking account?

There are several methods to maximize your earnings on an interest checking account:

• Choose the best high-interest checking account option that fits your balance and spending habits.
• Meet required balance thresholds.
• Even better, maintain a higher balance (since many accounts offer tiered rates with better returns on larger balances).
• Set up direct deposit.
• If you don’t intend to use the funds for a while, consider moving a portion to a money market account, certificate of deposit, or standard savings account for potentially higher yields.

 

Still weighing your checking account options? View the full range of Academy Bank checking accounts to find the best fit.

Compare Personal Checking Accounts

Compare Business Checking Accounts