You may have opened a checking account, which is nothing but a bank account that allows easy access to your funds. In most cases you will use this account to pay your utility and other bills and for most of your financial transactions. You will be able to access money in your checking account by using a check, by using an automatic transfer facility, or by using your debit card. Of course, most banks insist on a running balance in your checking account.
When you first open a checking account, you will need to keep a running balance in order to track the amount that you have in your account. Not only does it help keep you from accidentally overdrawing your account, it will help you track the transactions on your account and identify any errors made by you or the bank.
Usually free checking accounts do not earn interest on a running balance because such accounts would not be very profitable for the bank or financial institution offering the account. However, it is possible to have free checking accounts that give you interest too! You can follow the steps below to get a free checking account that will allow you to earn interest along with enabling you to carry out your regular financial transactions.
- Open a free checking account, which will not charge you for ACH transfers. You may need to shop around before you find one that offers such a deal. Open an account (online) - (a) that will not charge you any annual or other fees; (b) but will pay you interest on your balance for the period that the balance is maintained in the account; and (c) will also not require any minimum balance in it.
- Link the free checking account to another interest-earning account.
- Keep moving the balance in your free checking account to the interest-earning account and vice versa as and when required. This way you will be able to have a free checking account and yet earn interest when the amount in your free checking account is not required.
In case you are not keen on moving the balances back and forth between a free checking account and an interest-bearing account, or find this to be too cumbersome, you could look for a bank that will offer you a free online checking account. This will be useful if you are planning to use the account only for online payments. Here, the money you have in your account will earn you interest while it is in the account. This type of account will not offer you a checkbook, but all payments can be made electronically or the bank could post the payment printed to your customer. There will no charges for you in such an account provided you don't overdraw any amount as on an overdraft account.
There are a couple of other non-bank money market organizations that offer good interest earnings on similar free checking accounts with the catch of a ‘minimum balance' requirement, or a ‘no walk in to the branch' or ‘online transactions' only.
In any case, the good part is that you can earn interest on your free checking account also!