Here's Why I'm Keeping $25,000 in a Checking Account With No Interest

A checking account is an excellent place to store some cash. Most checking accounts come with checks and a debit card, making it easy and fluid to withdraw cash when you need it. Plus, you can find plenty of great free checking accounts, which releases you from the pressure of maintaining a minimum balance or depositing a certain amount each month.

But most checking accounts have one glaring weakness: interest. While some are interest bearing, most don't earn interest on your cash. For this reason it's a good idea not to keep a hefty amount of savings in your checking account, as you'll miss out on interest elsewhere. But, like most personal finance rules, there are exceptions, which explains why I'm keeping $25,000 in a checking account that earns no interest. If that seems odd, let me explain.

My checking account excels at this one thing

First off, the checking account I'm referring to is a U.S. Bank Silver Business Checking account. It's a business checking account, which I use to separate my income from my joint checking account. This account has no monthly fees and no APY, but it comes with one very special perk -- a hefty welcome offer.

This particular U.S. Bank bonus works like this: First, I had to deposit $25,000 in my account within 30 days of opening it. Then, I have to maintain a $25,000 balance in my account for 60 days. After this, U.S. Bank will deposit my bonus within 30 days.

The bonus isn't small ($800!), and I was already looking for a business checking account before spotting this offer. So it worked out well for me. But even if I didn't have $25,000 in savings, I might have gotten a $350 bonus for satisfying the same criteria but with a $5,000 deposit. Both of these bonuses expire after April 2, 2024, and you'll need to open a new account with the promo code Q1BUS24 to activate it.

Alternatively, if you don't want a business checking account, you might be eligible for a bonus on a U.S. Bank Smartly® Checking account. You can earn up to $400 by meeting some criteria, like enrolling in online banking, receiving at least two eligible deposits, and getting $5,000 or more in total direct deposits within the first 90 days. You could also earn a $200 bonus by getting direct deposits totaling $3,000 to $4,999.99.

A high-APY equivalent

Now, as far as APY goes, the bonus on my business checking account gives my savings the best return on investment that I can find. Yes, even in spite of the fact that my checking account doesn't earn interest. Earning $800 in 60 days on $25,000 is like getting a 19.2% APY on my savings -- that is, for two months. At that rate, my earnings are in the territory of the S&P 500. Not bad for a bonus, especially since I had the money in a high-yield savings account with a 5.25% APY.

Of course, once I get the bonus, I'm going to move my money to an account with a more favorable APY, like a good CD. But for the massive bonus I'm getting, I'm OK temporarily leaving my savings in an account with no interest rate. There are plenty of great bank bonuses like this, so if you need a new bank account right now, be sure to check out available bonuses before you choose a bank.