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Financial Landscape in Dallas

Dallas is not just a hub for business and innovation; it’s also home to various banking accounts that cater to different financial needs, from young to old and consumer to business accounts. 

According to the Dallas Federal Reserve, the latest report indicates that Dallas's economic growth is robust and sustainable. This positive economic outlook has significant implications for consumers regarding their expectations and behavior in the banking markets.

Interest-bearing checking accounts at competitive Dallas banks can earn annual percentage yields (APYs) between 3% and 6%. This promising potential, especially when the national average on interest checking accounts is around 0.07%, is a compelling reason to consider an interest checking account to maximize earnings. 

The top yields don’t always come without some conditions.  The best high interest checking accounts typically require a certain balance, a direct deposit, a number or amount of debit card transactions per month, or other specific consumer actions. 

Whether looking at the most feature-rich checking account or a high yield with competitive rates, understanding the nuances of each product is crucial to maximizing your money-earning potential and matching the account's features to your lifestyle. 

What is a High Interest Checking Bank Account

A high-interest checking account, also known as a high-yield checking account or rewards checking account, is an interest-bearing checking account offering a higher annual percentage yield (APY) than a standard checking account.

For banks and other financial institutions to offer high interest rates, they may ask the consumer for something in exchange.  For instance, they may want you to maintain a higher deposit balance, use your debit card several times per statement cycle, take an eStatement vs a paper statement, have a direct deposit, etc. But remember, it's your actions and how you use the account that put you in control of your financial future. 

What are the Benefits

High-yield interest checking accounts are deposit accounts that allow your money to work harder for you, earning you more money in return. One of the benefits is that the higher interest is risk-free, and unlike a CD, you don’t have to tie up your cash in a checking account. It is a smart move for savvy investors.

Higher Returns on Your Money = More Money in Your Pocket

The APY refers to the yearly interest your money earns, which is a percentage.  The APY considers how often interest is compounded and applied to your checking account.  Compound interest helps you achieve your financial goals faster by adding the earned interest back into your principal balance, earning you even more interest and compounding your return.  It acts as a multiplier over time.

For example:

• No Interest Earned over 12 months: $10,000 in cash will remain $10,000
• With daily compounding over 12 months, $10,000 in a high-yield checking account at a 5% interest rate will earn you $512 for a total of $10,512 over one year.

With a higher rate and yield, you will earn more money faster, putting you in a better financial position. 

Accessibility

Debit Card – A debit card is the gateway to your checking account.  It takes the place of check writing and allows you to access your account to pay for goods and services easily.  Some people may refer to this as a card account.  Ultimately, the card gives you access to your money daily.  To earn the best rates, you may have a card transaction requirement. 

Digital Banking - With digital banking (online and mobile banking), your checking accounts are easily accessible for various options, such as bill payment, direct deposits, balance transfers, person-to-person money transfers, and more. Sometimes, you may need cash, and for that, your debit card should have access to a network of convenient ATMs.

ATM - ATM networks are complicated, as are the associated charges. Look for accounts that refund ATM fees as part of their checking account program. This way, you don’t have to worry about whether you can withdraw money from your account and pay a fee. 

What are some Drawbacks?

Interest Rates Fluctuate

When the Federal Reserve increases deposit rates, checking account rates can follow suit.  When rates come down, checking account rates come down too.  Typically, you will see fewer high-interest-rate checking account offers in a very low-rate environment, so we have recently seen a resurgence of high-interest checking accounts due to the Federal Reserve rate increase in the past years. 

Account Fees and Charges

While the high interest rate might be alluring, watch out for any fees!  Fees and other charges can eat up the interest you earn on the account quickly, leaving you with just another low-interest or no-interest checking account. Here is a list of the following fees:

• Maintenance or service fee: This fee can range between $10 to $12 per month and can be tied to a balance or other user requirements.
• Minimum balance fee: Some banks require you to maintain a certain amount of money (ranging from $100 to $2,500) in your account to avoid a service fee.
• Overdraft fee: Financial institutions charge this fee if you don't have enough money in your account when a transaction is made. The cost can range from $28 to $35 per transaction and occurrence.
• Transaction fee: An example of a transaction fee may be charged for sending or receiving a wire transfer.
• Statement fee: Some banks and credit unions charge to print and mail you a paper copy of your statement. You can avoid this fee by enrolling in e-Statements, which allow you to download, print, and keep copies of your statements at your convenience and refer back to them for up to 24 months.

Financial institutions must disclose any fees they charge on an account and how to avoid them.

Account Requirements  

In exchange for earning a high yield on your account, there is typically a list of requirements needed to earn this rate.   In some cases, there may be a fee charged for not completing the requirements, in other cases, it’s forgoing the advertised rate.  Check for the following common requirements:

• Minimum balance requirements
• Direct deposit requirements
• Minimum number of debit card transactions per month
• eStatements vs paper statements

The higher yield may come with balance or other account activity requirements. Check the fine print and weigh your options based on what makes the most sense for your spending habits.  From there, you will be able to evaluate your account habits to the requirements to see if you can easily full-fill them in a statement cycle. 

Strategies on Maximizing Your Returns

To maximize your benefits, carefully compare all the requirements and fees of different high-interest checking accounts. The best account for you will align with your regular banking habits and allow you to earn the most from your money.

What About High Yield Savings Accounts?

Just as the high-yield checking accounts have risen to the top, so have high-yield savings accounts.  High savings rates can help you compound your earnings further. 

The best banks in Dallas allow you to link a high-yield savings account to your high-interest checking account to maximize your rewards. Combining the two accounts can increase rates for additional bonus savings if offered.  Look for the best savings interest rates that allow you to combine your high-interest checking accounts and propel your earnings. 

This increased return on your interest savings account can help you achieve your financial goals more quickly. Moreover, savings and checking accounts are eligible for FDIC insurance coverage of up to $250,000 per depositor, securing your hard-earned funds.

America’s Credit Union Can Help

At America’s Credit Union, our Rewards Checking and Kasasa Saver are considered the best checking account and best savings account in Dallas. 

With our personalized service and customized solutions, our members trust us every day because we have proven friendly, reliable, and hardworking as a team and financially stable as an institution. Our deposit banking options are more competitive than the best bank in town.  We offer the best savings interest rates for the best value. 

Banking with America’s Credit Union in Dallas, Texas, opens opportunities to improve your financial journey today and in the future. 

Open a Kasasa Cash Checking Account