Many people are starting to abandon CDs and take interest in rewards checking accounts. This is because a reward checking accounts can offer a great deal of benefits that you wont find with CDs, making them a better investment option. High yield checking accounts can be used at any time without any harsh penalties, people are rewarded for normal activity, and their owners can enjoy the added flexibility.
The fact that people can access their funds at any given time without harsh penalties makes rewards checking accounts all the more attractive. When one uses a CD, that individual is required to keep the money in this particular account for a period of years. Drawing out the money will cause this person to incur harsh penalties, such as a large chunk of money being taken out of the balance. Reward checking accounts, on the other hand, does not have any restrictions on spending. As a matter of fact, these types of accounts encourage it. One of the rules to having a high interest checking accounts is that the account holder is required to use his or her bank card anywhere up to ten to fifteen times a statement cycle, meaning within a month period. So, while the user is accruing high interest on the funds that are in the account, he or she can still spend freely.
People who possess these accounts are also rewarded for everyday activities, such as spending, paying bills, and getting paid. Another rule to having one of these accounts is often to have at least one direct deposit made to the account every single month. This direct deposit has to occur on schedule. It cannot be a transaction that the user makes, it has to be automatic, like a paycheck or social security check. Other potential rules include making a certain number of transactions with a bank card, which is where the spending comes in, and having one or more automatic payments each month, an option people will typically use for paying bills. The rules that the banks set for these accounts are not unreasonable because people’s living habits will often exceed the requirements. For instance, many will use their bank cards to make purchases far more than what is required to keep the account, and several people will pay more than one bill with automatic payments because they do not want too much to worry about. Because these are all normal everyday activities, keeping these accounts will not require much effort on the part of the account holders, and account holders are rewarded by being able to keep the account and receive high yields on their account balances.
Finally, account holders can enjoy flexibility that CDs do not offer. The rules that CD holders must follow are strict and do not offer a whole lot of flexibility. CD holders cannot take their money out under any circumstances. Furthermore, having a CD requires a certain balance to remain in the account at all times. Unlike CDs, reward checking accounts do not require that a certain balance be maintained, since spending with a check card is encouraged, and money can be taken out at the account holder’s leisure.
The benefits that rewards checking accounts offer makes them great options. As people find out about them, they are going online and looking for the best checking account deals for themselves. With rates as low as they are, more people are making it more of a priority to get their hands the available high interest checking accounts.