Interest-bearing checking accounts, referred to as interest checking or high-yield checking accounts, are similar to basic accounts but pay interest on your deposits. This allows you to earn a small amount every month just for keeping your money at the bank.7
The specific amount you’ll earn depends on the annual percentage yield (APY), which reflects how much interest you will be paid based on the interest rate and the frequency of compounding. You may not earn much, but it’s something, especially considering that most basic checking accounts earn nothing at all.
Interest checking accounts are most often found at online banks, which have minimal overhead, but some brick-and-mortar institutions offer them as well. As you shop for these accounts, take note of the APY along with any restrictions for account usage (such as how often you’re allowed to write checks and the dollar amount restrictions for any checks you write). Likewise, review the account fee schedule. Some interest-bearing accounts impose monthly maintenance fees, while others (usually online interest checking accounts) don’t.