Checking accounts aren’t meant to be investment tools because they carry such low rates. Over time, if you leave all your cash in a low-yield checking account, inflation will actually eat away at your money’s value. The average checking account earns a measly 0.158% APY, while inflation chugs along at around a hefty 2% per year.
So every year, the money held in your checking account is worth less than the year before. That’s why most experts recommend keeping as little cash in checking as possible, while parking your long-term money in other, higher-earning accounts.
One way to lessen this slow decay of your money is to choose a checking account that offers comparatively high interest rates.
High rates are not the only thing to consider, though: Hidden fees will actually make it more expensive to keep your cash there. So, look closely at the fees banks require you to pay by reading through their disclosures carefully.