6 ways to get the best checking account rate

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Your checking account might not seem like the most likely place to make a little extra cash, but that doesn’t mean it’s an impossible task.

By their very nature, checking accounts aren’t intended to earn a lot of money. They are places to temporarily hold cash, with money flowing in from your paycheck and flowing out as you pay your bills, buy food and cover other monthly expenses.

But with a little research, your monthly slush fund can moonlight as a place to make money. Just follow these steps.

1. Setting priorities

First, you want to determine why you might want a checking account that pays interest instead of a savings account or other high-interest deposit account that offers a higher return in exchange for you agreeing to having limited access to your money.

Maybe you’ve already opened a new CD, you’re planning for an upcoming expense or just have commitment issues.

Once you’ve decided you want an interest-bearing checking account, the best place to start is at the bank where you currently have an account. If it has a well paying option, great. You don’t have to move.

But chances are, especially if you’re at a large bank, you may be offered a ridiculously low yield. The typical interest checking account pays 0.08 percent APY, according to Bankrate’s national survey of banks and thrifts.

2. Go shopping

Shop for a checking account online to see what other banks have to offer. Don’t be afraid to go with a bank outside of your area.

Given the widespread adoption of mobile banking apps, where your bank is headquartered is perhaps less important than it was even 10 years ago.

You’ll also want to check with local banks and credit unions to see what they offer because sometimes banks reserve their best rates for people who live within a certain area.

3. Cast a wider net

Much like with CD rates, online banks often pay higher rates than traditional banks because they have lower overhead costs. They have no or limited branch network, which means they can afford to pay more.

There are also players in the fintech world that might be a good fit. For instance, startup Aspiration pays a 1 percent APY on daily balances higher than $2,500. Such platforms partner with banks, so your deposits are still insured by the FDIC for up to $250,000 per person per account.

4. Look for sign-up bonuses

Although it is true the largest banks are among the lowest interest-rate payers, they often run promotions — sometimes offering as much as $500 — for new accounts.

Essentially, these banks have determined that if they are going to spend money on acquiring new customers, offering them cash or other bonuses is an effective ways of getting them in the door.

Bonuses are not exclusive to large banks, but if you’re already a big bank customer and are accustomed to their massive branch networks and cutting-edge mobile apps, taking another big bank up on its incentive might be a good idea for you.

5. Be ready to work

Banks pay customers higher rates to leave their deposits untouched for a set period of time in CDs. Typical checking accounts offer no or very little yield. If you want the best of both worlds, you have to be ready to jump through some hoops.

So called high-yield checking accounts often require higher minimum deposits, for instance or cap the amount that is eligible for the higher rate. That can make the math trickier than just picking the one that pays the most. One with a lower rate but a higher cap might pay more.

Others might require you to opt in for electronic statements or make a minimum number of debit card purchases in a month.

You’ll often find these types of accounts at smaller banks or credit unions.

6. Watch the fees

Higher-yielding accounts often come with more strings, and there are sometimes penalties for not fulfilling account requirements.

You don’t want a monthly fee to eat away at your meager earnings because your minimum balance dropped below the threshold.

Make sure you understand what the account requires of you before agreeing to place your money there.