My Checking Account Doesn't Earn Interest. Here's Why I Don't Care

Some bank accounts give you the opportunity to not just store your money and keep it safe, but to help it grow by earning interest. Savings accounts are one example, as are certificates of deposit (CDs) and money market accounts.

Traditionally, checking accounts haven't been among the bank accounts that earn interest, but these days, there are a few out there that do. The checking account I use to pay most of my bills doesn't, however. Am I losing sleep over this fact? Nope -- and here's why.

I don't keep a lot of money in my checking account

That's really the main reason why I'm not fussed about my checking account not earning interest. Money is in it only temporarily, and most of the time, it doesn't get to hang out and get cozy. When I get a direct deposit in the account, I send the money elsewhere. If it's money I've earned from a client, I have to take a percentage off the top to cover my quarterly freelance taxes. My next deduction is money I'm saving for my goals, like buying a home and paying for a big vacation next year. And finally, there are always, always bills to pay. Ah, adulthood.

I do leave a cushion in my checking account, but it's usually right around $1,000, if not a little less. I do that so I have some breathing room in case of a surprise bill (it's nice to be able to leave my savings alone if I can) and so there's no chance of me accidentally overdrafting the account. If I was the kind of person who kept more in my checking account, sure, it might be nice to earn some interest on it, but it's not my reality.

Is it worth opening an interest-earning checking account?

Opinions vary, and while having a high-yield checking account isn't important to my own personal finances, you might really like earning an APY of 1% or 2% (or more) on the money you keep in a checking account. This is quite generous, given that the average APY on checking accounts is 0.07% as of this writing.

Note that in order to open one and earn that high APY, you might need to make a certain number of transactions every month, set up a direct deposit above a certain amount, or maintain a certain balance in the account. In short, the perks might be nice, but the hoops to jump through to access them make these accounts less accessible to everyday people and more geared toward those who keep a lot more in their checking account than you or I do. A high-yield savings account, on the other hand, is absolutely worth opening for just about anybody. Savings research from The Ascent noted that just 31% of Americans have a high-yield savings account, and if you don't have one yet, you're missing out. The best high-yield savings accounts are easy to open and come with no fees or minimum balance requirements. And right now, some of them are even beating inflation.

Which checking account features matter?

Earning interest on my checking account doesn't matter to me, but these checking account features absolutely do. I recommend you consider them, too, if it's time to open a new checking account.

• A great mobile app: Being able to bank from anywhere is amazing, and the checking account you're considering should come with a full-featured and easy-to-use banking app.
• Low fees or no fees: Why pay a maintenance fee for the privilege of keeping your money in the bank? Some banks have even done away with overdraft fees, too.
• Easy access to your money: By this, I mean a robust ATM network so you can take money out as needed. And if you'll be relying on out-of-network ATMs, look for an account that will reimburse you for fees.

An interest-earning checking account might be worth it for you, but since the purpose of my checking account is to funnel money outward, my current account is working just fine for me.