Best returns still found in high-yield accounts

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Although rates on high-yield checking accounts have fallen over the last year, these accounts remain by far the best risk-free place to park liquid cash.

Nationwide, the accounts are yielding an average of 2.05 percent, down from 2.56 percent a year ago and 3.3 percent in 2010, according to an annual survey by the interest rate tracker

Still, the return easily trumps the nearly imperceptible average return of 0.06 percent on regular interest-bearing checking accounts and 0.1 percent on savings accounts, said.

On a $10,000 deposit, it's the difference between earning about $200 in annual interest vs. $6 on regular checking.

"For account holders who can routinely meet the monthly requirements, high-yield checking accounts are a no-brainer cash investment," said Greg McBride, senior financial analyst for, based in North Palm Beach, Fla.

High-yield accounts require customers to perform certain banking activities to earn the high return. Typically that means making a certain number of debit card transactions each month (most commonly 10) and using direct deposit and/or automated bill payments.

If customers don't meet the requirements, the yield drops to a low default rate, which averaged 0.08 percent in the survey.

The accounts also typically limit the amount of money that can earn the above-market rates. The most common balance cap in the survey was $25,000. Some of the highest-yielding accounts had caps of $15,000 or less.

"Investors should calibrate the balance they plan to hold in the account with an [annual yield] offering that maximizes their return," Mr. McBride said. reviewed 57 high-yield checking accounts offered by banks and credit unions nationwide. Twenty-three of the accounts, or 40 percent, could be opened online or by telephone from anywhere in the country.

For's list of banks and credit unions with the top-yielding accounts, visit


Patricia Sabatini: or 412-263-3066. First Published June 3, 2012 12:00 AM


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