Do Checking Accounts Earn Interest?

Do Checking Accounts Earn Interest?

Checking accounts do not typically earn interest because they're transaction-oriented banking products. Banks pay interest to encourage you to place—and hold—more money in their accounts, which gives the banks funds to make loans and run their operations. Unlike a savings account, the goal with a checking account isn't to build a high balance, but rather to have a pool of money you can use to pay bills or make debit transactions.

That means banks generally don't stand to gain much by paying interest on checking accounts, because the average customer likely won't keep as large a balance in their checking account as they would in their savings account. That said, there are exceptions.

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What Types of Checking Accounts Earn Interest?

Interest-bearing checking accounts do exist, typically for customers who either plan to keep a significant balance in the account at all times or who can commit to receiving a certain amount of money directly deposited into their account each month.

Checking accounts that earn more interest may come with higher fees, such as monthly maintenance fees. Review the account's fee schedule and requirements to understand how to avoid these fees, if possible.

Here are interest-bearing checking account types to consider:

• High-yield checking accounts: The average interest rate on a checking account as of June 2025 is 0.07%, according to the Federal Reserve Bank of St. Louis. But high-yield checking accounts can pay significantly more in interest; in some cases, up to 5.50% annual percentage yield (APY). You may qualify for this type of account if you meet specific requirements set by each individual bank or credit union. For example, you may need to keep a minimum average daily balance, such as $2,500; set up direct deposit for at least $250 per month; or use your debit card at least 12 times per month. There may also be a maximum balance, such as $10,000 or $15,000, that you can earn the highest interest rate on; any balance beyond that could earn a lower rate.
• Rewards checking accounts: Some banks refer to high-yield checking accounts as rewards checking accounts—the reward being a higher interest rate, or other benefits such as fee waivers on foreign ATM transactions or monthly maintenance fees. Other banks offer rewards checking accounts that let you earn points, similar to a rewards credit card, that you can use to pay for items or get cash back into your checking account. Check the institution's offered interest rate on the account and what you'll have to do to access it in order to understand how they're defining a rewards checking account.

How to Open a Checking Account

To open a checking account, follow these steps:

• Choose your account. You can decide between a credit union and a bank, and between an online bank and one with a physical presence in your area. If you're prioritizing the interest you could earn, review high-yield checking accounts' requirements for getting the highest APY available and make sure you can meet them. Double-check the fees you may be subject to, as well.
• Get your documents ready. To apply for a checking account, you'll need an official photo ID, proof of address such as a bill or loan statement in your name, your Social Security number and birth date, and your contact information. The same requirements apply for any account co-owners if you're applying for a joint account.
• Submit the application. You can apply either online or in person if you choose a brick-and-mortar institution.
• Fund the account. If there's a minimum opening deposit, you can transfer funds right away from one of your existing accounts. Or, if there's no minimum initial deposit, you can fund the new account later. You may need to set up direct deposit or keep a certain amount in the account consistently to access a higher interest rate, so take the steps to meet those requirements once the account is open.

Learn more: What Is Required When Opening a Checking Account?

Alternatives to Checking Accounts

If earning interest is your main goal, consider opening one of the following types of accounts instead of, or in addition to, an interest-bearing checking account.

• High-yield savings account: You could opt for a high-yield savings account as a place to keep money beyond what you need for the everyday essentials like bills and debit transactions. Traditional savings accounts paid interest rates of 0.38% on average in June 2025, according to the Federal Reserve Bank of St. Louis, while high-yield savings accounts can pay up to 4% or more.The account may come with a limit to the number of withdrawals or transactions you can do in a month.
• Money market account: If you want to be able to use a debit card with your account and earn higher interest than you would with a standard checking account, a money market account is a strong option. You can earn interest rates of 4% or more, and you'll get access to checks and a debit card, but you'll likely be limited to six debit transactions per month.
• Certificate of deposit (CD): On the other end of the spectrum are CDs, which pay high yields in return for your commitment to keep your money in the account until a certain date in the future. That means, in most cases, no withdrawals without paying a penalty. CD interest rates can depend on the institution type—with online banks and credit unions typically offering the highest rates—and the amount you deposit, with larger opening deposits often leading to higher returns.

The Bottom Line

If you meet the requirements, interest-bearing checking accounts can help you get an extra boost in your bank account each month. But if you don't find an account that fits your lifestyle and goals, you have options. You can keep a few months' worth of living expenses in a standard checking account and park the rest of your cash in a savings account that could pay high interest rates with potentially fewer restrictions. High-yield savings accounts, money market accounts and CDs are all good alternatives. Choose based on how accessible you want your money to be and the interest rates you can qualify for.

If you're thinking about opening a new checking account, the Experian Smart Money^™ Digital Checking Account & Debit Card can help you build credit without debt by automatically linking to Experian Boost^®ø, which gives you credit for eligible bill payments after three months of payments. You'll also pay no monthly fees^¶ for Experian Smart Money, have access to more than 55,000 fee-free ATMs worldwide^** and could receive your paychecks up to two days early when you enroll in direct deposit^†. You can get an Experian Smart Money Account through a free or paid Experian membership, which also gives you access to your FICO^® Score^Θ, Experian credit report and more. See terms at experian.com/legal.