Capture Nearly 5% Yields... from Your Checking Account?

Stocks and bonds too dicey? Commodities out of reach? Options too complex? Then forget about all those investments. Right now, you can earn up to 4.5% with FDIC protection. Now, 4.5% isn't too tough to beat with other investment classes, but each of them carries its own set of risks. With the FDIC, you have something very few investments offer. A guarantee you won't lose your money.

Amazingly, some community banks are offering these rates on checking accounts. (The only similar return is on the 30-Year Treasury.) Traditional checking accounts pay you zilch, and most people use a savings account to pull in a little interest on their cash until they decide what to do with it. Yet, these checking accounts are turning that common practice on its head by offering rates that beat what savings accounts, certified deposit and money market accounts can offer.

There are some limitations. Many of these community banks can't offer their best rates on deposits of more than $25,000. Others have no limit but pay slightly lower rates of 3.5%, which is closer to the 10-Year Treasury rate or 5-year CD rate. If you're in the happy position of hitting these deposit limits, you can spread your dollars around to multiple banks.

While these rates don't compete with the highest dividend-paying stocks and bonds out there, virtually risk-free returns do have some upside. There's no prospect of capital loss up to the FDIC limit of $250,000. And there is the less tangible benefit that stems from the peace of mind you have knowing that your assets aren't at risk.

To find more checking accounts with fat returns, visit checkingfinder.com.

Issuer	Type	Restrictions	Rate (%)
30-Year U.S. Treasury	Treasury	N/A	4.6%
Community National Bank of Lakeway	Checking	Max $25,000	4.5%
Royal Bank of Missouri	Checking	Max $25,000	4.3%
Liberty Bank	Checking	Max $25,000	4.3%
10-Year Treasury	Treasury	N/A	3.8%
City Bank	Checking	None	3.6%
E-Loan	5-Year CD	Min $10,000	3.5%
Lone Star Bank	5-Year CD	Min $1,000	3.5%
First Trade Union Bank	5-Year CD	Min $500	3.5%
City National Bank	Checking	None	3.3%
Bank of Internet USA	Savings	Min $100	2.5%
Tennessee Commerce Bank	Savings	Min $250	2.3%
Aurora Bank	1-Year CD	Min $1,000	2.1%
Seacoast Commerce Bank	Money Market	Min $25,000	2.1%
2-Year Treasury	Treasury	N/A	1.1%

Anthony Haddad
Staff Writer
StreetAuthority

Disclosure: Anthony Haddad does not own shares of any security mentioned in this article.

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Wednesday, July 29, 2009 - 1:55 PM

Anthony
Haddad

Anthony Haddad is a writer and editor at StreetAuthority.com. Prior to joining the company he was an editor at a large financial magazine in Los... Read More

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