A recent report issued by the financial planning website WalletHub, argues that interest-bearing personal checking accounts now earn more than savings accounts. The report found the average checking account pays 0.20% interest compared to the average savings account, which pays 0.14% on balances up to $10,000. It was also reported that the highest earning savings account paid 1.00% interest while the highest earning checking account paid nearly 3.00%.
The interest rates for online consumer checking accounts were reported even higher, earning 0.53% interest compared to only 0.08% for commercial checking accounts. Additionally, the report found that money market accounts charge $5.00 more per month on average in fees than online checking accounts and require almost 50% higher account balances in order to avoid fees. With low risk and minimal fees, a trend may be developing for small businesses to invest their money in checking accounts rather than the more traditional savings options.
Read More: Banking Landscape Report – January 2014