We spend a good couple hours each month keeping the Best Checking and Savings Rates Page up to date, so I was surprised when I didn’t have a quick answer to a basic question from reader Mathias:
What is the best interest rate on a checking account without any hoops involved to get the rate? I want an account where I can set my payroll and direct debits without having to think about how much balance it needs to have at any given time.
When looking through the list on our Best Rates page, all of them are saving or money market accounts – only the complicated high interest accounts are checking accounts.
All, that is, except one: the Memory Bank 1.6% APY checking account. (Direct Link)
- [Follow-up Post: What’s the Best High-Yield APY Checking Account Option?]
The accounts without hoops are almost all savings or money market accounts: with checking accounts the banks feel they are offering a service without having to offer a decent interest rate. Only the Memory Bank checking offers a reasonable interest rate on a simple, no-frills checking account.
To be clear, there are numerous high-interest checking options available, such as Consumer’s Credit Union 4.59% account on up to $20,000, Heritage Bank 3.33% account on up to $25,000, and many more. If you rarely have more than $25,000 in your checking account at any time, it’s probably worth just making Consumer’s or Heritage your regular checking account and going through the hoops for the significant extra interest earnings.
However, if you aren’t willing to deal with hoops or if your regular checking account fluctuates to numbers much higher than $25,000 (and you want to stick with just one checking account), the Memory Bank account is a solid option.
Another option is to open a no-interest checking account at the same bank as your high-yield savings account and simply transfer out any funds you aren’t currently using into the savings with the instant transfer option. A tried-and-true example would be the Discover Bank checking which is known as a solid online checking account (even offering 1% back on debit transactions), and they also typically offer a competitive savings rate (currently, 1.75%).
Ultimately, many people just want the convenience of a competitive interest rate on their checking account without having to deal with hoops or transfers, and the Memory Bank is the best option. This is especially true for those whose checking accounts fluctuate a lot due to MS or whatever, and want to earn interest for the time their float is sitting doing nothing.
I don’t know much about the actual Memory Bank checking product – do they have online bill pay? is their online login functional? etc. – maybe someone who’s used it can chime in on this.
Follow-up Post: What’s the Best High-Yield APY Checking Account Option?
