On March 15th the Federal Open Market Committee (FOMC) voted to raise the federal funds rate by 25 basis points (0.25%) to a range of 0.75% to 1.00%, marking its 3rd rate increase since the great recession and its 2nd rate increase in the last 3 months. Most economists expect the FOMC to raise the federal funds rate 2 more times in 2017 and 3 times in 2018.
Many banks were quick to respond to the FOMC’s decision by raising rates on credit products tied to the prime rate like credit cards and home equity lines of credit. Though the response rate on checking and savings accounts will be a lot slower as banks look to benefit from expanding net interest margin, it’s a good time to determine if your checking account is providing you a high quality yield and if its yield is positioned to increase appropriately as interest rates rise.
I’ve done an analysis of the highest yielding checking accounts available in the US and listed the details below. The accounts listed are pretty comparable but you’ll want to make sure that you fully understand the account requirements before signing up.
|Bank Name||Yield||Req Monthly Debit Trans||Req Monthly Debit Spend||National?|
|Main Street Bank||2.25% ($0-$25k), 0.25% ($25k+)||12||$0||Yes|
|Mid-Illini Credit Union||2.50% ($0-$25k), 0.00% ($25k+)||0||$300||Yes|
|Northern Credit Union||2.26% ($0-$25k), 0.25% ($25k-$50k)||10||$0||No|
|Bellco Credit Union||2.25% ($0-$25k), 0.25% ($25k+)||15||$0||Yes|
|Consumers Credit Union||3.59% ($0-$15k), 0.00% ($15k+)||12||$500||Yes|
|Provident Credit Union||2.01% ($0-$25k), 0.08% ($25k+)||0||$300||No|
|Lake Michigan Credit Union||3.00% ($0-$15k), 0.00% ($15k+)||10||$0||Yes|
If your current primary checking account isn’t providing you with the yield you expect, it might be time to make a switch.