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How Do Rewards Checking Accounts Work?

Rewards checking accounts can offer its account holders very high interest returns compared to other checking account types. By complying with some of the bank's requirements, potential depositors can earn a great deal by depositing their hard-earned savings through such accounts. It basically requires the account holder to use a debit card for their regular purchases for a set number to times monthly. The bank mainly earns for every purchase the account owner does and uses a portion of it to pay for the high interest depositors enjoy. In general, it could be a great deal and a feasible investment once a potential investor passes all the requirements and is deemed qualified to have and maintain reward checking accounts.

One difference of reward checking accounts have over other account types is that these accounts pay its investors the high interest in cash. It also provides easier access to the money saved when the depositor needs it and does earn a lot even when just sitting there deposited - something that other accounts cannot offer.

The main catch on these benefits when opening reward checking accounts is complying with the requirements to qualify. For one, the interested client should set up a direct deposit into the account. Bank statements will only be accessed online, and there will be no hard copies that will be sent in the mail. The responsibility of accessing such statements online shall be burdened to the depositor. The client should also proceed to the bank to open the account in person, and the debit card that comes with the account should be used at least ten times in a month. This could be the hard part for most people, because such payments will entail additional charges that will be paid to the bank. Account holders should also be able to login and access their accounts at least once in a month.

Another catch on reward checking accounts could be certain conditions set by the banks themselves. Some only provide interest earnings for a certain portion of the deposit amount. New depositors should be wary of such conditions and see if they are at a disadvantage before considering putting their hard-earned savings on such an account type. Also, it should be remembered that non-compliance of the requirements may nullify the benefits of the high earnings of these reward checking accounts. It is most important to maintain compliance to these, especially on the use of debit accounts which some may found cumbersome.

Reward checking accounts can be a great investment for those who can maintain a good spending via the debit card that is packaged with the account. As long as one can continually meet the account's requirements, the high yield will be continuously enjoyed without much risk. If one cannot meet the account's requirements and if there would be worse financial problems by doing so, there are other alternatives in making the most out of one's nest egg and make it useful for gaining more without risking too much. However, it is best to consult with the preferred banks first and know the clear implications of opening reward checking accounts, along with an initial research on the reward checking accounts' advantages and possible problems.