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Checking accounts offering higher interest

April 30, 2010 12:00:00 AM PDT
If you don't have the stomach for the ups and downs of Wall Street and you aren't too happy with the meager interest rates offered by financial institutions, you might want to consider a rewards checking account.Bankrate.com found dozens of banks across the nation that offer high-yield interest rates. Even though the vast majority are based outside of California, many offer federally-insured accounts open to anyone with access to the internet.

The "High Flying" checking account at Pacific Resource Credit Union, with branches in Downtown L-A and Carson, pays more than three percent and Bank of the Sierra, which has locations in Kern County, offers a rewards checking account that earns more than four percent.

Compare that with common interest-bearing checking accounts. Citibank offers one-tenth of a percent. Bank of America and Wells Fargo each gives .05 percent. Chase Bank offer just one one-hundredth of a percent.

Community West Bank, which has a branch in Westlake Village, offers a checking account that earns about a three-and-a-half percent yield on balances up to $25,000. But, like other reward checking accounts there's a catch.

To qualify, you have to meet four requirements; (1) You have to use a debit card at least ten times every month, (2) you have to make at least one direct deposit or an automatic debit, like a car payment, every month, (3) you'll have to use online banking one or more times a month and (4) you'll only receive your statements electronically.

"Even if you didn't do all the electronic transactions and didn't qualify for that bonus interest rate, you still get .55 percent and there's no monthly fee," said Lynda Nahra, the president and CEO of Community West Bank. "So why wouldn't you get it?"

With so many consumers banking online these days, it pays to shop around for the best rates. Many banks require you to come in to open an account, but as long as you follow the requirements, you may not have to visit the bank in person again.

"These accounts can be a slam-dunk and a great way to boost your interest earnings but, on the other hand if you're not going to meet those requirements, you're not going to be able to earn that high rate of return," said Greg McBride of Bankrate.com.


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