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Where do you keep your money?
You’ve got options — from a shoebox under your bed to some fancy stocks.
But chances are, it’s probably in a checking account.
At least that’s what a recent USA Today analysis found. The headline reads, “Americans are hoarding money in checking accounts.”
It’s great that Americans have money to hoard.
In fact, Mike Moebs, CEO of Moebs Services, told USA Today that the average U.S. checking account deposit is $3,600 — up significantly from the 2007 average of $1,000.
In total, checking accounts hold about $2 trillion, the report says.
But is hoarding your money in a checking account really a smart money move?
It depends. Are is your checking account earning your interest?
Because if Americans stash their money in a high-yield checking account, they could collectively be earning a whopping $20 BILLION in interest a year.
A Few Reasons Americans Love Checking Accounts
Up until this past year, I kept all my money in a generic checking account.
Apparently I wasn’t alone.
According to USA Today, many of us opt for checking accounts because we love liquidity — the ability to easily grab cash. We’re also less apt to invest these days.
Plus, interest rates for savings accounts kind of suck.
These were all my reasons for opting for a checking account, plus it proved to be easy on so many levels:
- I kept tabs on all my assets by simply checking one app.
- It’s safe; my money isn’t going to disappear at anytime.
- I didn’t have to remember to pay anything off.
- The account was free.
- It required no minimum balance.
The only thing I was missing was some interest. I had money sitting around doing nothing for me and after I wrote “make your money work for you” one too many times, I wanted to change that.
…So I Found a Checking Account With Interest
Until I started working at The Penny Hoarder, I had no idea checking accounts could rake in interest.
I assumed that was only possible with a savings account, which proved to be a hassle and a half for me in the past.
My co-worker Dana Sitar genuinely gushed about her checking account, which I’d never even heard of: Aspiration’s Summit Checking Account.
I liked the name.
As I dug into it a little more, I realized I could earn 1% interest, which might not seem like a lot, but at that time I was earning a fat goose egg of zero interest.
Full story at The Penny Hoarder
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