To come out of this recession relatively unscathed, one of my priorities has been to stem the outflows from my checking account.  But what if you can increase the inflows into your checking account?  You could ask for a raise or switch to a higher-paying job.  However, the Wall Street Journal’s February 9-10, 2008 edition advocates an easier, more immediate way to boost your account balance.   Reporter Jane Kim’s “New Checking Has High Yields — and Strings”  talks about opening a “reward checking account” at a community bank or credit union, which has interest rate yields of as high as 6 %.  This compares very favorably with average bank rates on checking accounts.  Last time I checked at my bank, Bank of America, the checking interest rate didn’t even clear 1% - and that’s with a $1,500 minimum balance.  These reward checking accounts also beat the rates offered by internet banks like www.Ingdirect.com, which has followed the Federal Reserve’s interest rate cuts in lockstep and is now paying 3.40% on my savings account.

Of course, there’s a catch to earning such a high interest rate:

• You must get your bank statement delivered electronically to you
• You must have at least one direct deposit (like your paycheck) or automatic debit each month
• You must use your debit card at least 10 times a month

 The advantages are:

• There are usually no monthly fees or minimum-balance requirements
• Many banks will offer to refund ATM fees charged by other banks (Wow!)

 Why, might you ask, are these banks being so generous with their interest rate yields?  Well, if you meet their requirements, they save money on mailing statements and make money on debit card transactions.  However, beware - if you don’t follow all of the requirements for a particular month (e.g., 9 instead of 10 debit transactions), the interest rate will drop precipitously, probably to less than 1% for that month.  But, considering that the large banks are paying 1% or less on checking accounts, there’s really no downside, if you can meet the requirements without too much effort.

You might have to do some online research to see which local banks and credit unions are offering these accounts.  Some banks that the Wall Street Journal says are offering accounts nationwide include Iowa’s State Bank of Toledo and Bank of Fayetteville, of Fayetteville, Ark.