2c:["$","$L2d",null,{"category":"$2e","relatedArticles":[{"id":"cG9zdDoxOTQyNzg=","databaseId":194278,"postId":194278,"author":{"node":{"id":"dXNlcjoxMzI=","databaseId":132,"userId":132,"avatar":{"url":"https://secure.gravatar.com/avatar/84dcefeec2c4c48841f085fc9d50d96e?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":null,"additionalMeta":{"expertise":null,"__typename":"User_Additionalmeta"},"email":null,"firstName":"Bob","fullName":"Bob Haegele","lastName":"Haegele","name":"Bob Haegele","postCount":{"pageInfo":{"offsetPagination":{"total":110,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"bhaegele","__typename":"User"},"__typename":"NodeWithAuthorToUserConnectionEdge"},"categories":{"nodes":[{"id":"dGVybToxOTUxOQ==","children":{"nodes":[],"__typename":"CategoryToCategoryConnection"},"databaseId":19519,"categoryId":19519,"link":"https://smartasset.com/checking-accounts/articles","name":"Checking Accounts","postCount":{"pageInfo":{"offsetPagination":{"total":16,"__typename":"OffsetPaginationPageInfo"},"__typename":"CategoryToPostConnectionPageInfo"},"__typename":"CategoryToPostConnection"},"slug":"checking-accounts","ancestors":{"nodes":[{"name":"Checking Account","slug":"checking-account","__typename":"Category"}],"__typename":"CategoryToAncestorsCategoryConnection"},"parent":{"node":{"name":"Checking Account","id":"dGVybTo0NzIx","slug":"checking-account","__typename":"Category"},"__typename":"CategoryToParentCategoryConnectionEdge"},"__typename":"Category"}],"__typename":"PostToCategoryConnection"},"content":"$2f","date":"2023-04-11T08:53:30","excerpt":"

\n","featuredImage":{"id":"cG9zdDoxOTQyNzk=","databaseId":194279,"altText":"do checking accounts earn interest","date":"2023-04-12T02:01:37","fileSize":45360,"mimeType":"image/jpeg","modified":"2023-04-12T02:01:37","sourceUrl":"https://smartasset.com/wp-content/uploads/sites/2/2023/04/financial-advisor-discussing-financial-figures.jpg_s1024x1024wisk20c7cf5YGzG6S-f0IufYzGv9n1AolnBr8c-kLwW3VTq0-w.jpg","__typename":"MediaItem"},"modified":{"datetime":"2023-4-12","readable":"April 12, 2023"},"multipleBylinesByRole":{"editedBy":null,"reviewedBy":null,"writtenBy":null,"factCheckedBy":null,"secondEditor":null,"hideAuthor":null,"__typename":"Post_Multiplebylinesbyrole"},"adTargetingOverrides":{"fieldGroupName":"adTargetingOverrides","pageGroupNewKey":null,"__typename":"Post_Adtargetingoverrides"},"seo":{"canonical":"https://smartasset.com/checking-account/do-checking-accounts-earn-interest","metaDesc":"Checking accounts are generally intended for for short-term deposits and expenses. But some offer interest rates on account balances.","metaKeywords":"","metaRobotsNofollow":"follow","metaRobotsNoindex":"index","readingTime":5,"title":"Do Checking Accounts Earn Interest? - SmartAsset","__typename":"PostTypeSEO"},"slug":"do-checking-accounts-earn-interest","status":"publish","title":"Do Checking Accounts Earn Interest?","uri":"/checking-account/do-checking-accounts-earn-interest","tags":{"nodes":[],"__typename":"PostToTagConnection"},"__typename":"Post","adPageGroupOverride":null,"bylines":{"writtenBy":{"id":"dXNlcjoxMzI=","databaseId":132,"userId":132,"avatar":"$30","description":null,"additionalMeta":"$31","email":null,"firstName":"Bob","fullName":"Bob Haegele","lastName":"Haegele","name":"Bob Haegele","postCount":"$32","slug":"bob-haegele","__typename":"User"},"editedBy":null,"reviewedBy":null,"factCheckedBy":null,"secondEditor":null},"category":{"id":"dGVybToxOTUxOQ==","children":"$35","databaseId":19519,"categoryId":19519,"link":"https://smartasset.com/checking-accounts/articles","name":"Checking Accounts","postCount":16,"slug":"checking-accounts","ancestors":"$37","parent":"$3a","__typename":"Category"},"isModifiedBeforePublished":false,"contentBlocks":["

Checking accounts are generally intended for short-term deposits and expenses. But some offer interest rates on account balances. When checking accounts offer interest, the rates are generally on the low end. But if you prefer to eke out as much interest as you can from your accounts, you may want to look for a checking account that earns interest. Here’s what to know. To understand how the right banking accounts play into your full financial picture you may want to work with a financial advisor.

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Understanding Checking Accounts

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Checking accounts are one of the most common types of bank accounts. Individuals and businesses typically use checking accounts to pay for everyday transactions, such as paying bills, making purchases and depositing and withdrawing money. Checking accounts provide a safe and easy way to hold their money and access it when needed. They are generally FDIC-insured, so most people don’t have to worry about losing their balances.

","

There are several types of checking accounts available, each with its own set of features and benefits. A few common types of checking accounts include:

","$3c","

Checking accounts have several advantages, but they do have their downsides. For instance, some checking accounts have fees for certain transactions or if their balance falls below a certain threshold. And while some checking accounts earn interest, those rates are usually lower than the rates seen in savings products like high-yield savings accounts and certificates of deposit (CDs).

","

Checking Accounts and Interest Rates

","

","

While there are several things to think about before opening a checking account, there are many things to keep in mind, including fees and features. However, interest rates are likely an important factor as well. Interest-bearing checking accounts, also known as high-yield checking accounts, pay a small amount of interest on the money deposited into the account. Despite their relatively low rates, earning interest on the funds in your checking account can help your money last longer or even grow.

","

In addition to this benefit, interest-bearing checking accounts also have no loss of liquidity. This contrasts with CDs, for example, which require you to keep your money in the account for a predetermined time to earn a higher rate. With an interest-bearing checking account, you can access your money whenever needed.

","

Also, while interest rates on checking accounts tend to be low, some banks do offer competitive interest rates on them. Lastly, some interest-bearing checking accounts can have lower fees than non-interest-bearing checking accounts, allowing customers to save money.

","

Choosing a Checking Account

","

As mentioned earlier, there are several factors you must consider when choosing a checking account. In addition to fees, features and minimum balance requirements, there are some other things you should keep in mind:

","$3d","

In addition to considering the above features, also compare local banks versus credit unions. The latter sometimes offer better rates and customer service, but that isn’t necessarily always true. By comparing different accounts and banks, you can find the checking account that best fits your needs and helps you manage your money effectively.

","

The Bottom Line

","

","

Some checking accounts offer an interest rate that lets you earn money on your checking account balances. However, there are different types of checking accounts, such as basic checking, online checking and student checking. Each of these accounts may have its own fees, minimum deposits and extra features. Also, keep in mind that while your bank may offer an interest-bearing checking account, the rates might be lower than on savings products like high-yield savings accounts and CDs.

","

Tips for Opening a Checking Account

","$3e","

Photo credit: ©iStock.com/RichVintage, ©iStock.com/valentinrussanov, ©iStock.com/PixelsEffect

"],"experts":null,"link":"/checking-accounts/do-checking-accounts-earn-interest","published":{"datetime":"2023-4-11","readable":"April 11, 2023"},"shareInfo":{"title":"Do Checking Accounts Earn Interest?","origin":"/checking-account/do-checking-accounts-earn-interest"},"isNewsArticle":false},{"id":"cG9zdDoxODk5MzI=","databaseId":189932,"postId":189932,"author":{"node":{"id":"dXNlcjo5Mw==","databaseId":93,"userId":93,"avatar":{"url":"https://secure.gravatar.com/avatar/04483497dbd73f712b504e401c9c7d22?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"Mark Henricks has reported on personal finance, investing, retirement, \r\nentrepreneurship and other topics for more than 30 years. His freelance \r\nbyline has appeared on CNBC.com and in The Wall Street Journal, The New York Times, The Washington Post, Kiplinger’s Personal Finance and other leading publications. Mark has written books including, “Not Just A Living: The Complete Guide to Creating a Business That Gives You A Life.” His favorite reporting is the kind that helps ordinary people increase their personal wealth and life satisfaction. A graduate of the University of Texas journalism program, he lives in Austin, Texas. In his spare time he enjoys reading, volunteering, performing in an acoustic music duo, whitewater kayaking, wilderness backpacking and competing in triathlons.","additionalMeta":{"expertise":null,"__typename":"User_Additionalmeta"},"email":null,"firstName":"William","fullName":"Mark Henricks","lastName":"Henricks","name":"Mark Henricks","postCount":{"pageInfo":{"offsetPagination":{"total":773,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"mhenricks","__typename":"User"},"__typename":"NodeWithAuthorToUserConnectionEdge"},"categories":{"nodes":[{"id":"dGVybTo0NzIx","children":{"nodes":[{"name":"Bank Reviews & Comparisons","slug":"bank-reviews-and-comparisons","__typename":"Category"},{"name":"Banking Basics","slug":"banking-basics","__typename":"Category"},{"name":"Certificate of Deposits","slug":"certificate-of-deposits","__typename":"Category"},{"name":"Checking Accounts","slug":"checking-accounts","__typename":"Category"},{"name":"Other","slug":"other-checking-account","__typename":"Category"},{"name":"Savings Accounts","slug":"savings-accounts","__typename":"Category"}],"__typename":"CategoryToCategoryConnection"},"databaseId":4721,"categoryId":4721,"link":"https://smartasset.com/checking-account/articles","name":"Checking Account","postCount":{"pageInfo":{"offsetPagination":{"total":226,"__typename":"OffsetPaginationPageInfo"},"__typename":"CategoryToPostConnectionPageInfo"},"__typename":"CategoryToPostConnection"},"slug":"checking-account","ancestors":null,"parent":null,"__typename":"Category"}],"__typename":"PostToCategoryConnection"},"content":"$3f","date":"2023-03-08T11:52:52","excerpt":"

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A savings account is the most basic sort of bank account. And it is appropriate for almost anyone interested in being smart about managing their money. If you are trying to accumulate funds to reach a short- or long-range goal and want to keep your money safe, earning interest and readily available, you are a good candidate for a savings account. Savings accounts do have limitations, however. The interest they pay won’t keep up with inflation, as a rule. And fees may further erode the purchasing power of your dollars.

","

Talk to a financial advisor who can help expand your savings.

","

Savings Account Basics

","

A savings account is often the first financial account someone opens. Savings accounts are available from many financial institutions of different varieties. And they’re easy to open, with a minimum of paperwork and hassle. Most have low or no minimums and they pay varying interest rates that will change with the prevailing interest rate trends.

","

Interest rates paid by savings accounts will generally be less than the rate of inflation, however. This means your money will, over time, lose purchasing power as prices for goods and services rise faster than the interest it accumulates. In order to beat inflation, you will need to put money into investments such as stocks.

","

A savings account is a place for money that you don’t plan to spend out of soon. And you want to keep your savings account readily available. Keep in mind, savings accounts may have limits on the number of monthly withdrawals. So they aren’t good replacements for checking accounts or money market accounts. However, they do have deposit insurance through the Federal Deposit Insurance Corporation (FDIC), so you can rest assured there is no chance you’ll lose money.

","

Access to Your Savings Account

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","

You can get access to your money any time by transfer or withdrawal. And, unlike certificates of deposit (CD), there’s no penalty for withdrawing early. But by putting money in a savings account you separate it from funds in a checking account. That creates a psychological barrier that can help prevent you from spending it.

","

Many financial institutions allow you to set up automatic transfers into your savings account on a regular basis. This can help you build up the size of your account without having to take action to initiate the transfer. You could also link your savings account to your checking account as a way to provide overdraft protection.

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Best Uses for Savings Accounts

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You can benefit from having a savings account if you have almost any type of short- or medium-term financial goal. For instance, nearly everyone is advised to build up an emergency fund amounting to at least three months of living expenses. An emergency fund gives you a backstop in case you lose your job, become ill and unable to work for a time or experience an unexpected expense like a major car repair.

","

A savings account provides just the sort of safety, liquidity and convenience a rainy-day fund calls for, with the added benefit of earning interest. Other short-term savings goals a savings account can help with include saving for a vacation, making a down payment on a new car, or paying for a significant consumer goods purchase like a new refrigerator or television.

","

Long-Term Goals With Your Savings Account

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Savings accounts can also help with long-term goals. For instance, it may take several years to save up enough for a down payment on a home purchase. Putting money into a savings account lets it build up safely while earning interest.

","

Once you have enough for the down payment, you can access the money easily just as soon as you find the perfect house and are ready to apply for a loan. Other long-term savings goals that a savings account is good for include paying for college or funding a home renovation or upgrade.

","

While savings accounts are very useful, they aren’t the best choices for every savings goal. Financial objectives that are more than 10 years off are generally better addressed with investments that offer the opportunity for more return than a savings account. Saving for retirement, for example, is usually a job for a diversified portfolio of investments such as mutual funds, exchange-traded funds, stocks and bonds.

","

Bottom Line

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A savings account is a financial tool that fits the needs of anyone who wants to manage their money. The combination of safety, liquidity and interest makes a savings account appropriate for both short- and long-term goals. That includes emergency funds and major purchases.

","

However, the interest a savings account earns will keep up with inflation. So they aren’t ideal for goals such as saving for retirement. Also, banks may limit transactions on savings accounts, so most people will want a checking account as well to pay bills.

","

Savings Account Tips

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Photo credit: ©iStock.com/andresr, ©iStock.com/Kunakorn Rassadornyindee , ©iStock.com/Khanchit Khirisutchalual

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A health savings account (HSA) can be a useful way to cover medical expenses with pre-tax dollars. And knowing which treatments count as qualified medical expenses will help you maximize your savings. One common question that account holders have is whether an HSA can be used for a massage. While HSAs cover many healthcare services, […]

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As a certified educator in personal finance, he edits and writes content that focuses on retirement, investments, home buying and other financial topics.\r\n\r\nArturo is a bilingual native in English and Spanish, and also writes as a freelance journalist for NBC News, among other publications. 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","

A financial advisor can help you create a financial plan that includes HSAs and other tax-advantaged accounts.

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Health Savings Account Basics

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An HSA is a tax-advantaged savings account designed to help individuals with high-deductible health plans (HDHPs) pay for medical expenses. You can contribute money to your HSA pre-tax, which reduces your taxable income. The funds can be used to cover qualified medical expenses such as doctor’s visits, prescription medications and certain treatments.

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HSAs are also known for their triple tax advantage: contributions are tax-deductible, the funds grow tax-free and withdrawals are tax-free if used for eligible healthcare costs.

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Eligibility for an HSA is tied to having an HDHP, which typically has higher deductibles but lower premiums. The 2024 contribution limit for an HSA is $4,150 for individuals and $8,300 for families. If you are over 55, you can also make an additional catch-up contribution of $1,000.

","

When weighing the pros and cons of an HSA, one of the key benefits is that the funds never expire, so you can continue saving for medical expenses even into retirement.

","

HSAs offer flexibility, as the funds roll over year to year, allowing you to build up savings for future healthcare needs. However, you must understand what counts as a qualified medical expense to avoid penalties or taxes when using your HSA.

","

Can You Use Your HSA for a Massage?

","

","

Whether you can use your HSA for a massage depends on why the massage is being performed.

","

Generally, HSAs cover treatments that are considered medically necessary, and massages are no exception. If a doctor prescribes massage therapy to treat a specific medical condition–such as chronic pain, injury recovery or other ailments–then the cost of the massage may be a qualified medical expense. In these cases, you will need documentation from your healthcare provider to show that the massage is part of a prescribed treatment plan.

","

But, if the massage is for relaxation or general well-being, it is not considered a qualified medical expense, and you cannot use HSA funds to cover it. Massages for stress relief or spa treatments, even if they improve your overall health, do not meet the criteria for HSA reimbursement. This is why you should keep detailed records for any massage therapy you claim as an HSA expense to demonstrate that it is supported by a medical diagnosis and prescription.

","

If you are uncertain whether your specific situation qualifies, it is a good idea to consult with your HSA provider or review IRS guidelines on qualified medical expenses.

","

HSA Qualified Expenses

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HSAs can offer broad coverage for a variety of medical expenses, provided that they are deemed necessary for the diagnosis, treatment or prevention of disease. Understanding what counts as a qualified medical expense can help you maximize your HSA benefits and avoid penalties for ineligible expenses. Here are five examples of qualified HSA expenses:

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While HSAs cover a wide range of healthcare needs, expenses such as cosmetic procedures, gym memberships or non-prescribed vitamins and supplements are generally not eligible.

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Bottom Line

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HSAs provide a tax-advantaged way to pay for medical expenses, but understanding which services qualify is key to using your account effectively. Massages may be covered if they are prescribed by a doctor to treat a medical condition, but massages for relaxation or general wellness do not qualify. If you are unsure whether a service is eligible, you may want to consult your HSA provider and keep thorough records of any treatments prescribed by a healthcare professional.

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Health Savings Tips

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Unlike a traditional savings account that lets you access funds at any time, certificates of deposit (CDs) require you to lock in your money for a predetermined period from a few months to several years. This commitment often results in higher interest rates than what conventional savings accounts pay. But, if you withdraw before the CD’s maturity, you will owe a penalty. If you want more liquidity than a traditional CD and can accept a somewhat lower interest rate, a liquid CD provides an alternative blending aspects of savings accounts and CDs.

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A financial advisor can help you determine how liquid CDs and other types of investments could fit into your financial plan.

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What Is a Liquid Certificate of Deposit?

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A liquid certificate of deposit (CD), also known as a no-penalty CD, combines the benefits of a traditional CD with the flexibility of a savings account. Unlike standard CDs, which typically lock your money away for a set term with penalties for early withdrawal, liquid CDs allow you to access your funds without incurring fees.

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Liquid CDs generally offer lower interest rates when compared with traditional CDs due to their added flexibility. However, they still tend to provide better returns than standard savings accounts. The terms for liquid CDs can vary, often ranging from a few months to several years. Interest rates and terms offered by different financial institutions may also vary significantly.

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How Fast Can You Withdraw Funds From a Liquid CD?

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Typically, liquid CDs allow for penalty-free withdrawals after a short initial holding period, which can range from a few days to a few months. Once this period has passed, you can usually access your funds quickly, often within one to two business days. Check with your financial institution to confirm their specific withdrawal procedures and any potential limitations.

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Several factors can influence how fast you can withdraw funds from a liquid CD. The bank’s processing times, the method of withdrawal you choose and any specific terms outlined in your CD agreement all play a role. For example, electronic transfers might be faster than requesting a physical check. Additionally, some banks may have daily or monthly withdrawal limits. Be aware of these restrictions.

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Pros and Cons of a Liquid CD

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One of the primary benefits of a liquid CD is its accessibility. Investors can withdraw funds before the maturity date without facing the hefty penalties typically associated with early withdrawals from traditional CDs. This makes liquid CDs an option for individuals who anticipate needing access to their funds but still want to earn a competitive interest rate.

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Additionally, liquid CDs are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. This level of security is reassuring for risk-averse investors.

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The most notable disadvantage is the lower interest rate when compared with traditional CDs. This means that while you gain flexibility, you might sacrifice some potential earnings.

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Furthermore, some financial institutions may impose restrictions on the number of withdrawals you can make or require a minimum balance to maintain the account. These conditions can limit the overall flexibility that makes liquid CDs appealing in the first place.

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Liquid CDs are suited for individuals who value both security and flexibility in their investments. They can be appropriate for people who may need to access their funds unexpectedly, such as retirees or individuals saving for a short-term goal. However, if maximizing returns is your primary objective, you might want to explore other investment options that offer higher yields.

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Liquid Alternatives to a Certificate of Deposit

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A number of alternatives to a certificate of deposit can offer more flexibility and potentially higher returns. Below are some five popular options:

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Bottom Line

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Traditional CDs require you to lock in your money for a fixed term, ranging from a few months to several years. Withdrawing funds before the maturity date typically incurs penalties, which can reduce the interest earned and even lower the principal amount. This lack of flexibility makes traditional CDs less suitable for those who might need quick access to their funds. Liquid CDs, on the other hand, can offer a more flexible alternative. These allow you to withdraw money without penalties, while paying a somewhat lower interest rate than conventional CDs.

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Investment Tips

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