How often do you turn down free money? We’re going to go out on a limb and assume that it’s not often. Did you know that when you use a checking account that doesn’t pay you, you’re turning down free money?
Now, you might be wondering, how can you find a checking account that pays you? It’s relatively simple. It just requires that you take the time to find the right account for you. Many checking accounts will pay you in interest or cashback, and you can use that free money to your financial advantage.
How Can A Checking Account Pay You?
You will find that checking accounts today have more to offer than a place to safely store your money. Many operate like a hybrid savings account and credit card by allowing you to earn interest and cashback based on your spending.
The two primary ways in which a checking account will pay you are:
- Earn interest: This is when you get paid a percentage of the balance in your checking account over a set period. For example, at the end of the month, you can earn 2% on the average balance in your account during the last 30 days.
- Earn cashback: This is when you earn money based on your spending. For example, you might earn 2% cashback on your transaction amounts each month.
What you do with the money you earn is up to you. We recommend that you use it to your financial advantage.
4 Ways To Take Advantage Of A Checking Account That Pays You
When earning interest or cashback on your checking account, the best way to use that money is to improve your financial status. Here are four ways to do so.
1. Save Your Money
As you can expect, one way you can use this extra money is by adding it to your savings account. Whether it’s $5 or $50 per month, there’s power in compound interest, so every dollar you save will benefit you.
You can save for a small or large purchase, depending on your financial goals. Simply make a habit of transferring each deposit into a savings account and watch your balance grow.
2. Invest Your Money
Similar to saving your money, you can use what you’re paid in interest and cashback to invest. The amount you earn might not be much, so you can save until you have enough to make a more significant investment. Or, you may choose to make partial stock investments using popular apps that allow you to make smaller contributions.
Over a year, you could save a few hundred dollars and buy a real estate stock investment or other option that will earn you money for years to come while boosting your net worth with additional assets to your name.
3. Pay Off Debt
Taking on debt, especially consumer debt, can quickly eat up your income without much of a benefit to your overall financial health.
When you use the money you earn from your checking account to pay off a debt, you’re putting yourself in a much better financial state. While you might not think that an additional $5, $20, or $50 payment to your principal balance will make a big difference, remember that every dollar counts and can make a significant impact over time.
4. Focus On Your Retirement
Your retirement days are coming, whether you’re currently in your 20s or 60s. The earlier you make your retirement a priority, the better because, again, compound interest is where the magic happens, so you want to give yourself time to make your money work for you.
Similar to saving and investing, you can use the money you earn from your checking account to add to your retirement account and max out your contributions each year. Another idea is to set up a personal match policy where you match the amount you earn from your checking account each month to really add a boost to your retirement fund.
For example, if you earn $5 from your checking account, you’d add an additional $5.
Start Using A Checking Account That Pays
There are many advantages to using a checking account that pays you, and one is the boost that it can have to your overall net worth. While small amounts obviously won’t make you rich overnight, they can make a lasting impact over time. By decreasing how much you owe or increasing how much you have saved or invested, you will see an improvement in your overall financial picture over time.
When you’re ready to get started with a checking account that pays you, we have you covered. At Atlantic Financial Federal Credit Union, you can earn up to 2.50% APY along with cashback and rebates, depending on the checking account you choose.
We invite you to learn more about our checking account options when you’re ready to optimize your checking experience.