By BankingMyWay.com Staff
Typical checking accounts are often advertised as “Free Checking” accounts because customers do not have to pay maintenance or service fees. The customer deposits their money and in return, the bank allows you to write checks and make other debits.

For a bank, the accounts operate much like a free loan as the institution does not have to pay customers any interest.

With high-interest checking accounts, however, the bank does pay customers interest. For those who seek the convenience of a checking account but still want to earn a modest return, high-interest checking accounts may be the answer.

Here are 3 perks that high-interest checking accounts offer that most typical checking accounts do not:

1.    Interest Earned
The main selling point for a high-interest checking account is obviously the interest pay out. With most checking accounts, funds just sit at the bank like a high-tech wallet and earn nothing. In some cases, you may even have to pay a monthly service fee to keep the account open. With high-interest checking accounts, some interest is paid on the balance albeit a modest amount. The current national average for interest checking account interest rates is 0.16% according to BankingMyWay.com. At that rate, if you kept a balance of $5,000 in the account for 1 year, you would only earn $8 in interest.

However, some banks offer significantly higher interest rates. For example, in Illinois, Security Bank offers a rewards checking account with 3.51% APY for balances up to $25,000.  To top it off, the account requires no minimum balance and there are no service charges or ATM fees.

If you’re not in Illinois, head online to Presidential Online Bank, which offers a 2.0% interest rate on checking accounts with balances up to $25,000. A minimum balance of $1,000 is required, but there are no ATM fees. To compare rates on high-interest checking accounts in your area, use the search tool at BankingMyWay.com.

2.    Free Check Writing
Another benefit of high-interest checking accounts is free check writing. With most typical non-interest bearing checking accounts, customers have to pay for check printing, and some accounts only allow a limited number of free check transactions per month. With many high-interest checking accounts, however, banks will provide free checks and unlimited check transactions.

3.    Free ATM Services
Banks often waive the ATM fees for high-interest checking accounts so customers can use any ATM they choose. This is a common perk for Internet banks in particular because they do not have their own proprietary ATMs for customers to use. Unfortunately though, some banks may not reimburse for fees charged by the ATM servicers.

Though there are perks to high-interest checking accounts, it still is important to note its caveats. These accounts typically have more restrictions than free checking accounts, such as high balance minimums. If balance minimums are not met, you may have to pay fees or the account may not earn the advertised interest yield.  In addition, there may also be monthly requirements, like a minimum amount of debit transactions or a monthly direct deposit amount.

In the end, those who opt for high-interest checking accounts should be careful to read all of the rules and regulations first to ensure penalty fees won’t diminish the actual interest earned.

— For more ways to save, spend, invest and borrow, visit MainStreet.com.