Even though all checking accounts are helpful in managing your funds, there are those which provide more in return. Enter the question, what is a rewards checking account and why are so many switching over to one? These accounts function like traditional checking accounts but come with additional benefits, usually benefiting you for banking the way you already do.
Understanding Rewards Checking
In a very simple definition of what is a rewards checking account, you can also think of it as how a traditional checking account that we use for daily purchase, is going to look like. Now picture that same account rewarding you simply for using your debit card, getting paid by direct deposit, or holding a minimum balance.
If money sitting around doing nothing (which is what savings accounts do) isn’t your thing, a rewards checking account pays you back with cash bonuses, interest, or special perks.
How Rewards Checking Accounts Work
There are some differences in the rules set by individual financial institutions, but the vast majority of rewards checking accounts work the same way. You get awarded for completing monthly targets like:
- Making a specified number of purchases using debit cards
- Receiving a minimum direct deposit
- Using online banking
- Maintaining a positive balance
Those little things will unlock great rewards. The idea is also to drive usage on accounts and to provide customers with a little something in return.
What Kind of Rewards You Might Get
What is a rewards checking account? Part of knowing what that is, lies in knowing the services these accounts actually provide. Benefits will differ from plan to plan, but the most common include:
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High Interest Rates
In fact, the interest rates found with some rewards checking accounts are much higher than you will find in a traditional checking account, and even higher than with some savings accounts.
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Cash Back
You could get cash back on certain purchases or on all of your card purchases.
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ATM Fee Refunds
A few accounts will even refund fees that out-of-network ATMs charge you.
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Loyalty Bonuses
Institution could provide higher returns for loyal customer, or customer which keep higher balance on their account.
These benefits transform an ordinary account into a functional component of the banking routine.
The Reason Behind Opening a Rewards Checking Account
Rewards checking accounts are enticing to anyone wanting to maximize the benefits of their everyday banking.
The advantages include:
- How to earn money from interest or cashback
- Better value from routine spending
- No hard work needed to earn rewards
- Less expensive than some traditional accounts
This makes earning these perks easy if you are already using your debit card frequently or receiving direct deposits.
Nominative Watching in Curiosity to Opening One
While these usually are enticing, read through the account inclusions carefully. Certain accounts impose restrictions on the rewards with specific balances, while others demand a minimum number of transactions. A months-worth of missed requirements could equate to fewer benefits gained.
When you know the fine print, you are able to use your rewards better and likely more often.
Final Thoughts
So, what is a rewards checking account, anyway? Its is basically an intelligent checking account that pays you for everything you do as a natural course of your life. These accounts are designed to get the most out of your money by offering perks like cash back, interest boosts, and ATM reimbursements. These are definitely something to check out if you have an interest in a better banking experience.
