Here are five common ways that consumers can qualify for credit union checking accounts that earn relatively high annual percentage yields, or APY.
The reason for the requirement is that for credit unions to earn revenue from checking accounts (and pay out high yields), there needs to be a good amount of account activity, which can be accomplished through debit card use, he says.For people who normally pay with cash or a credit card, it can take some getting used to, says Paul Hendley, a member of First Community Credit Union in St. Louis. He says he joined a local credit union to take advantage of its high-interest checking offering but had to start using a debit card at least 12 times a month to qualify.
"At first, I worried that I'd have to run out and buy things just to satisfy the debit card requirement, which would defeat the point of getting a higher interest rate. But I found out that doing 12 transactions for the month with normal shopping was easy," Hendley says.
When you do the math, the amount of money a credit union saves by generating electronic statements instead of paper can be enough to justify a higher-interest checking rate for the member, says Kelly.
As an alternative to direct deposit, some credit unions use automatic withdrawals to let members meet eligibility requirements, Kelly says. This could be useful for entrepreneurs, retired people and others who don't work for companies that offer a direct deposit option but still want high-interest checking, Kelly says.
On the flip side, there are likely to be no or very low minimums with credit union interest checking accounts, says Kelly. "If you only have $5 in your account, you could earn a yield on that $5," he says.
"The best thing to do is shop around and make sure you're comparing apples to apples with checking account features," Schenk says.