How to Maximize the Best High-Interest Rewards Checking Accounts

writing check moneySafe, low-risk investments have historically returned low interest rates.

However, these days, rates have become abominably low. The interest rates offered on savings and checking accounts, for example, often do not provide enough incentive for people to keep their money there.

In response, some banks now offer a higher-return, low-risk account: the rewards checking account.

Earning Higher Interest with Rewards Checking

A different type of account has been around for a few years called rewards checking. These accounts are typically offered by small to medium-sized community banks and credit unions as part of a marketing campaign to attract additional deposits. They are virtually the same as your typical checking account, except they currently earn anywhere from 2% to 4% interest on deposits.


Banks institute a few requirements that must be met to get the higher interest rate. However, most or all of them may be part of your banking behavior already.

  • You are limited to earning the higher interest rate on the first $25,000 of your account balance (some banks will have a lower maximum than $25,000).
  • You must swipe your debit card a certain number of times each statement period (usually 10-12 times).
  • You must have direct deposit or an ACH automatic transfer (this happens when you pay your credit card online).
  • You must access online banking each statement period and/or receive your statements electronically.

Achieving the above is not difficult at all. You could easily swipe your debit card 12 times per month, while direct deposit and online banking are standard practice for most people.

Just how big of an impact can this higher interest rate have? If you earn 3% on $25,000 instead of 1%, you will earn $750 in 12 months rather than $250. An increased return of 2%, or $500 in this case, is well worth meeting the above requirements.


While the added interest can be a great benefit, there are some risks to using a rewards checking account. You need to check the health of the institution before committing your funds. If the bank is in desperate need for deposits, it may be at risk of bank failure. Be careful to only bank with institutions that are backed by deposit insurance by either the FDIC (for banks) or NCUA (for credit unions).

Another risk is a changing interest rate. Look at the history of the bank to make sure it has offered a stable rewards checking interest rate and is not simply quoting a higher rate that will decrease as soon as you sign up.

How to Maximize the Benefit of a Rewards Checking Account

If you think a rewards checking account is a good move, here are ways to maximize the benefits:

1. Use the Additional Interest Wisely

What could you do with an extra $50 per month? Could you hit your emergency fund goal faster? Could you pad your retirement savings? Deposit $20,000 into an account earning 3% and you will generate exactly that much each and every month.

Don’t view the extra interest income as “free money.” Use it wisely to accomplish long-term financial goals like paying off debt, or saving for college and retirement. Occasionally, you can treat yourself to small splurges, but don’t forget to prioritize.

2. Use Debit and Credit

Rewards checking accounts require you to use your debit card a set number of times per month without any minimum dollar amount. So only use your debit card on small, everyday purchases. For bigger purchases, use your credit card wisely to gain rewards that you would otherwise not receive from your debit card. Just remember to pay off large credit card purchases with an ACH automatic transfer when you pay your credit card online.

3. Utilize Multiple Accounts

Remember, rewards checking accounts will limit your ability to earn the higher interest only up to a certain amount. So if you want to earn this rate on the rest of your money, open multiple checking accounts. You can either open multiple checking accounts at the same bank, or spread your money between different financial institutions. Keep in mind that you will not earn the high interest rate unless you meet all the requirements for each account. Stay organized to make sure you are meeting requirements and receiving the higher interest rate on all accounts.

4. Pay One Bill with Multiple Transactions

Not sure if you can swipe your debit card that many times every single month? Many service providers will let you decide how much of your bill to pay when you login through their website. For example, your cell phone company might let you pay the monthly bill in weekly installments, which is 4 swipes per month. This is a great way to meet the monthly debit card quota if you might otherwise fall short.

swipe card

Best Rewards Checking Accounts

Many financial institutions only allow you to open this type of account if you live in the bank’s local area. However, there are some banks and credit unions that will allow you to open an account regardless of location.

Here are 3 of the highest paying rewards checking accounts available nationally:

Highest Interest Rate

Consumers Credit Union:

  • Interest rate: 4.09%
  • Maximum account balance to earn high interest: $10,000
  • Annual interest potential: $409.00
  • Monthly requirements: 12 debit card swipes, 1 direct deposit or ACH debit or bill pay, enroll in online banking, receive electronic statements

High Interest Rate, Larger Deposit Threshold

Lake Michigan Credit Union:

  • Interest rate: 4.00%
  • Maximum account balance to earn high interest: $15,000
  • Annual interest potential: $600.00
  • Monthly requirements: 10 debit card swipes, 1 direct deposit or ACH debit, login to online banking 4 times, receive electronic statements

Lower but Consistent Interest Rate, Maximum Deposit Cap:

Avidia Bank:

  • Interest rate: 2.27%
  • Maximum account balance to earn high interest: $25,000
  • Annual interest potential: $567.50
  • Monthly requirements: 10 debit card swipes, 1 direct deposit or ACH debit, login to online banking 1 time, receive electronic statements

These are nationally available accounts. Be sure to check out accounts available in your state as well as local banks in your area. Consider all of the factors listed above to decide which bank offers you the best rewards.

Final Word

Rewards checking accounts can be a great replacement to your ordinary checking account. Ideally, you can earn a significantly higher interest rate without having to change your financial habits. Select an account that has a consistent interest rate, deposit insurance, and is with a financial institution that is not at risk of going under.

Do you have a rewards checking account? What has your experience been like?

  • Rosalie

    One thing you failed to mention is that while these reward checking accounts have a maximum balance on which they will pay the advertised high interest, money above that amount will still earn interest, although the rate is usually a lot lower. For example, I have a reward checking account that pays $3.5 on all money up to $25,000 and .50% on the remaining balance above $25,000. While .50% is significantly less, it still far exceeds what other types of interest-bearing checking accounts earn (which is maybe .05% – .20% and often only if you maintain a very high minimum balance).

    Definitely consider opening more than one reward ckg acct, though, if your checking balance is high and you use your debit card a lot.

  • Shawn Neil

    For the debit card swipe requirement, you physically have to swipe your card for the Consumers Rewards Checking. Recurring payments and online bills do not count towards the minimum swipes.