What Americans are Doing Wrong With Their $2 Trillion in Checking Accounts
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Where do you keep your money?
You’ve got options — from a shoebox under your bed to some fancy stocks.
But chances are, it’s probably in a checking account.
At least that’s what a recent USA Today analysis found. The headline reads, “Americans are hoarding money in checking accounts.”
It’s great that Americans have money to hoard.
In fact, Mike Moebs, CEO of Moebs Services, told USA Today that the average U.S. checking account deposit is $3,600 — up significantly from the 2007 average of $1,000.
In total, checking accounts hold about $2 trillion, the report says.
But is hoarding your money in a checking account really a smart money move?
It depends. Is your checking account earning your interest?
Because if Americans stash their money in a high-yield checking account, they could collectively be earning a whopping $20 BILLION in interest a year.
A Few Reasons Americans Love Checking Accounts
Up until this past year, I kept all my money in a generic checking account.
Apparently I wasn’t alone.
According to USA Today, many of us opt for checking accounts because we love liquidity — the ability to easily grab cash. We’re also less apt to invest these days.
Plus, interest rates for savings accounts kind of suck.
These were all my reasons for opting for a checking account, plus it proved to be easy on so many levels:
- I kept tabs on all my assets by simply checking one app.
- It’s safe; my money isn’t going to disappear at anytime.
- I didn’t have to remember to pay anything off.
- The account was free.
- It required no minimum balance.
The only thing I was missing was some interest. I had money sitting around doing nothing for me and after I wrote “make your money work for you” one too many times, I wanted to change that.
…So I Found a Checking Account With Interest
Until I started working at The Penny Hoarder, I had no idea checking accounts could rake in interest.
I assumed that was only possible with a savings account, which proved to be a hassle and a half for me in the past.
I liked the name.
As I dug into it a little more, I realized I could earn 1% interest, which might not seem like a lot, but at that time I was earning a fat goose egg of zero interest.
So this would be 100% more.
(Additionally, other checking accounts weren’t offering much, either; the national average hovers around 0.04%, according to the most recent FDIC report. Savings accounts only offer 0.06% in interest, according to the same report.)
It was all free, too, unless I wanted to add a monthly tip, but I didn’t feel pressured to do so. Plus, there was no need to keep a minimum balance.
Additionally, it was all online, which made everything convenient. If I needed cash, I could stop by nearly any ATM and be reimbursed if there were any fees.
Signing up for the card proved to be low-hassle, too. I added my name to a waitlist and heard back within about three days. Then I got my card in the mail.
Perhaps the best part of all of this is when I check my bank account now, I don’t have to dread only seeing my list of monthly expenses.
Now, I get a little excited when I see how much interest I’ve earned!
Another Idea: Get Paid to Open a Checking Account
Visit this Chase Total Checking® page to apply online, or enter your email address to get a unique coupon to take with you to open your account at any Chase branch.
- This coupon expires on Oct. 15, 2018, so you’ll need to complete the application at a brick-and-mortar location before then.
- Get a $200 bonus when you open a new Chase Total Checking® account and set up direct deposit.
- Get a $150 bonus when you open a new Chase Savings(SM) account, deposit a total of $10,000 or more in new money within 20 days, and maintain a $10,000 balance for 90 days. You’re not required to open the savings account to earn the $200 Chase checking bonus.
- This offer is available in Arizona, California, Colorado, Connecticut, Florida, Georgia, Idaho, Illinois, Indiana, Kentucky, Louisiana, Michigan, New Jersey, Nevada, New York, Ohio, Oklahoma, Oregon, Texas, Utah, Washington, Wisconsin and West Virginia.
Here's another option…
Earn $300 when you open a new Premier Checking Account at TD Bank.
- Visit this TD Checking® page and enter your city and state. (Note: This account is not available in every state.)
- Click the orange “open account” button and follow the instructions to open a TD Premier CheckingSM.
- There’s no minimum to open an account, but you must maintain a minimum $2,500 daily balance to qualify for the bonus.
- Receive a total of $2,500 or more via direct deposit into your new account within 60 days of opening.
- The bonus $300 will be deposited to your account within 95 days of opening.
- You must open the account online from this web page only.
Carson Kohler (@CarsonKohler) is a junior writer at The Penny Hoarder. Do you bank with Aspiration? She’d love to hear about your experience!
*Chase Fine print:
Checking offer is not available to existing Chase checking customers, those with fiduciary accounts, or those whose accounts have been closed within 90 days or closed with a negative balance. To receive the $150 checking bonus: 1) Open a new Chase Total Checking account, which is subject to approval; 2) Deposit $25 or more at account opening; AND 3) Have your direct deposit made to this account within 60 days of account opening. Your direct deposit needs to be an electronic deposit of your paycheck, pension or government benefits (such as Social Security) from your employer or the government. After you have completed all the above requirements, we’ll deposit the bonus in your new account within 10 business days. You can only receive one new checking account-related bonus per calendar year. Bonus is considered interest and will be reported on IRS Form 1099-INT.
**Account Closing: If your checking account is closed within six months after opening, we will deduct the bonus amount at closing.
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