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Free High Yield Checking Accounts

October 20, 2009 by Silicon Valley Blogger

Your high interest savings funds and certificates of deposit are earning you returns, but what about your free checking account?

If you’ve hardly made much from your checking account all this time, you are not alone. Lots of savers haven’t had a chance to shop around for a better yielding checking account, figuring that since their liquid accounts are usually in flux (with lots of ongoing transactions), that trying to eke out interest from these accounts isn’t a priority.

But just because you’ve already placed your intermediate and longer term savings elsewhere where they are earning savings account rates at par with the markets, it doesn’t mean that you can’t earn more with your short term money. These days, every little bit counts, so checking out higher yielding checking accounts for those extra returns is worth doing, in my opinion. Here’s a list of accounts to consider:

Free High Yield Checking Accounts

1. EverBank has the FreeNet Checking Account which currently yields 1.20% to 1.72% APY (but it starts off with a pretty high 2.51% rate for the first 3 months). This is a no fee account that requires a $1,500 minimum opening balance. For new accounts, the first 3 months will return 2.51% APY. After this period, the new rate will be variable based on your account balance: in particular, if your balance is under $10,000, you’ll earn 1.20% APY, and if it’s at least $50,000, your rate will be an attractive 1.72%.

2. ING Direct has the widely known Electric Orange Checking Account. This account has no fees (other than those incurred for extra services) and no minimum balance required. However, just like EverBank’s free checking account, you’ll earn a rate that is commensurate to the balance amount that you’re able to maintain. ING Direct Electric Orange Account currently yields .25% to 1.55%. Other great benefits include free online bill pay, free debit card, free ATM access, direct deposit, and the ability to make p2p payments. One more thing: this is a paperless checking account but you can send out checks through online methods.

3. HSBC Direct also has a paperless checking account called the Online Payment Account. It has an interest rate of 0.85% APY and works just like a checking account, except without the paper checks. This means that you can send out checks electronically through free online bill pay and have the ability to schedule recurring or one time payments. In addition, you’ll receive a free debit/ATM card and be able to easily link to HSBC Direct’s Online Savings Account. This account has no monthly fees and requires a minimum balance of only $1.

4. E*Trade is known for being a top broker but they’ve also got a reputable banking division. However, their Max-Rate Checking Account presently sports a rather low .30% yield, and that is if your balance is at least $5,000! Below this amount, you’ll barely earn anything. The good news though, is that they also offer free online bill pay, a free ATM debit card, and actual free checkbooks. There is a minimum initial deposit of $100 for this account and a requirement for you to maintain a $5,000 average monthly balance if you want to avoid getting charged a monthly fee. Out of all the high yield checking accounts in this list, this is the only one that is not truly free.

Best High Yield Checking Account?

In my opinion, EverBank looks like a really solid option. I like this online bank particularly because they also have a rich stable of other financial products that appeal to me, including a high yield CD, a money market account and a roster of foreign currency certificates of deposit that can be a good fit for a well diversified portfolio. These are some products I’m personally considering as potential investments (especially since we’re possibly headed for an inflationary environment). For more information on EverBank’s interesting products, check out my EverBank review.

So far, these are the accounts and banks I’ve had a chance to study. Once I get a chance to review a few more, I’ll add them here.

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