We all use our checking accounts for the basic purposes — direct deposit of our paychecks, paying monthly bills and making debit card purchases. And while usually you’re seeing money leave your checking account, there are ways you can actually earn money with your checking account too.
Here are ways you can earn extra cash with your checking account and maybe even grow your savings:
1. Earn interest on your checking balance
Hopefully you have already discovered the benefit of opening a high-yield savings account, which can earn you upwards of 4 percent annual percentage yield (APY). But did you know you could earn interest on the money you keep in your checking as well?
There are checking accounts that will pay interest with few (or no) requirements, such as TAB Bank’s Spend Checking account, which pays 3.50 percent APY on all balances, with no hoops to jump through to earn the APY.
You can find higher APYs but they sometimes come with restrictions to earn the high advertised yield. Presidential Bank Advantage Checking earns up to 4.62 percent APY, but you’ll have to set up a monthly direct deposit of $500 or more and make a minimum of seven electronic withdrawals per month (such as ATM withdrawals) to get that rate.
Even though it’s great to earn interest on your checking balance, it’s not meant to replace a savings account. Keep excess cash in other places where you’d earn more, such as the aforementioned high-yield savings account or a high-yield certificate of deposit (CD).
2. Opt for a cash back checking account
You can find a checking account that allows you to earn cash back on purchases. Typically, the cash back you earn is automatically added to your account balance at the end of the month.
Here are some checking accounts that offer cash back:
- Discover’s Cashback Debit: 1% cash back on purchases up to $3,000
- LendingClub Rewards Checking: 1% cash back (as long as you maintain an average monthly balance of at least $2,500 or receive that much in direct deposits)
- TAB Spend Checking: 1% cash back (in addition to earning 3.50 percent APY on all balances)
There are also checking accounts that offer cash back on specific purchases. For example, Bank of America has BankAmeriDeals, where you can get cash back on purchases with select brands, such as Kohl’s and The Home Depot.
3. Open an account with a sign up bonus
If you’re in the market for a new checking account, see if you can score a bonus for signing up. You’ll likely have to meet some requirements, such as receiving a specific amount of money worth of direct deposits, but if you can meet the terms and like the account, you’ll end up with free money.
4. Score a referral bonus
If you’re happy with your current checking account, you may be able to earn extra cash just for recommending the account to your family and friends. As an added perk, the person you refer often scores a bonus as well.
There may be certain stipulations to get your bonus, such as the person must open a specific account, fund the account in a certain time period or with a specific amount of money. Check if your bank is running a referral bonus promotion.
5. Use your checking to increase your savings rate
See if your checking account can earn you a relationship rate on savings products at the same bank. A relationship rate is a better rate that banks give to customers who open more accounts with them. A relationship rate can come in the form of higher APYs on CDs, money market accounts or savings accounts. It can also be a reduction of an interest rate on a loan, such as a mortgage loan.
For example, KeyBank offers a higher rate on savings accounts and interest rate discounts on personal and mortgage loans.
6. Sign up for autosaving features
If your account offers it, consider signing up for a round-up savings feature where each debit card purchase is rounded up to the nearest dollar amount and the change gets transferred from your checking account to your savings. As long as your transfers go to a high-yield savings account, then your money will earn money thanks to the power of compound interest. SoFi and Ally Bank are two institutions that offer this feature in their checking account and have savings accounts with strong rates.
7. Take advantage of money-saving checking account perks
Your checking account just might come with some unique benefits that can save you money, such as cell phone protection, reduced admission to events or locations, discounts on subscriptions and more.
For example, Bank of America offers debit cardholders completely free general admission on the first full weekend of every month to more than 225 museums across the United States. Navy Federal Credit Union offers members discounts on car rentals, home and auto insurance and SiriusXM.
Check out your bank’s website, which will often highlight these features or give customer service a call to ask what perks are offered.
Consider general checking account features before opening an account
Keep in mind that while it’s fantastic to have a checking account that results in extra cash, it shouldn’t be the sole reason you choose your checking account. Compare other important features that you need from a checking account, like:
- No monthly maintenance fees (or one that is easily waived)
- Convenient customer service hours and types
- Free overdraft protection
- A large ATM network with no fees and/or ATM-fee reimbursements
- Early direct deposit
Whatever account you choose, be sure it’s from an institution that is insured by the Federal Deposit Insurance Corp. or the National Credit Union Administration. This way, your money is protected in case of a bank failure, up to $250,000 per depositor, per insured institution and per account ownership type.
Bottom Line
You can earn a little extra cash with your checking account if you can take advantage of some features, such as earning interest, cash back or getting a sign-up bonus. But always consider the whole picture when it comes to choosing a checking account to make those perks worth it.
