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If you are like any other hard working individual than you most likely have a checking account where you put your hard earned money. And, you probably use your debit card (which is attached to your checking account) to make a lot of your purchases. In doing so you should notice that every time that you make a purchase with your debit card the money is immediately taken out of your checking account and deducted from your balance. But what if you were able to earn interest on the money in your checking account? And what if that interest was compounded daily? Wouldn’t you want to leave as much money in your checking account for as long as possible? Well, there is a way to do this, which will result in some extra cash in your account each month along with some great rewards. It involves using a reward credit card and combining it with an online interest earning checking account. By doing this you will find that you have a lot of extra money to spend that you didn’t have before.
Online Checking AccountsThere are a handful of online checking accounts out there that offer interest on the money that is in your account. And these accounts might even save you even more money by eliminating some of the fees that you have with your traditional bank. Online banks are a little different than traditional banks in the fact that you do not have a physical bank that you can drive down the road to make a deposit or talk to a representative in person. But with most people using direct deposit and doing most of their banking online this shouldn’t be an issue. Online banks do not have the overhead associated with managing and maintaining thousands of branches around the country and they are able to pass on these savings to their customers in the form of interest.
Here are some of the main online banks and the interest that they offer on their checking account products.
- Ally Online Checking
Note: as of today the national average for interest earning checking accounts is 0.05% APY. So by placing your money in an online interest earning checking account you could be earning at least 4x the interest that you are earning with a traditional bank.
By combining these two options of, an interest earning online checking account and a rewards credit card, you will see a lot more in benefits and rewards then by just using your traditional bank checking account and your debit card. With so many available options out there for both of these products you should look at everyday that goes by without utilizing these options as costing you money and the opportunity to earn some great rewards.
This guest post was written by Matthew Coan, founder of the personal finance website Casavvy.
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