Here's What Happens When You Leave $10,000 in a Checking Account

Keeping $10,000 in a checking account is like microwaving a steak. It'll get the job done, but you're wasting something good.

That something good is earning delicious interest! Checking accounts at the biggest traditional banks pay a microscopic 0.01% APY, while some of the best online banks are paying up to 4.20% APY on high-yield savings accounts.

On a $10,000 balance, that's the difference between earning $1 a year and earning $420.

Here's how to actually grill that steak instead of nuking it.

Your checking account pays you almost nothing

Checking accounts aren't built to grow money. They're built to move it in and out and make day-to-day banking easier.

The average checking account pays just 0.07% APY, according to the FDIC. But big banks like Bank of America, Chase, and Wells Fargo all pay less than that for basic checking and savings accounts.

What's worse, plenty of traditional banks pile on junk fees. Some charge you monthly just for having an account, plus random fees for normal money tasks. The other day, Chase charged me $15 for an incoming domestic wire transfer -- I think it's silly, being charged to receive my own money.

What that same $10,000 could actually earn at 4.20% APY

Right now, some of the top online high-yield savings accounts are paying up to 4.20% APY.

At that rate, a $10,000 balance would earn $420 in interest in a year. Personally, I keep about $25,000 in cash for emergencies, and so my interest is a little over $1,000 at this rate.

Online banks are just as safe as big banks, too. Most carry the same FDIC insurance, protecting your accounts up to $250,000 per person.