As the name suggests, these types of checking accounts provide basic checking account features plus added benefits to incentivize customers to open and use them. They generally pay interest—often at an even higher APY than the bank’s interest checking accounts. Some banks also offer reward account holders the perks of preferred interest rates on new loans or discounts on fees such as overdraft protection.
You often have to “qualify” for the higher rate paid on reward accounts, and it may be difficult to do so. You may have to open a credit card or mortgage with the bank, hold investments with the firm, or jump through other hoops to qualify.