Here's Why I'm Choosing a Checking Account Over a CD for Long-Term Savings Right Now

Most experts would tell you not to keep a large portion of your savings in your checking account. After all, checking accounts are designed for daily transactions and your money in one typically won't earn interest. Even when they do earn interest, very few can compete with the best high-yield savings accounts on the market.

Despite this advice, I recently opened a new checking account with a $25,000 deposit that I plan to keep in it for at least the next three months. This was after I contemplated depositing the same money in a high-yield CD with a 5.35% APY. Though that might give you a head tilt, here's why I did it. 

My checking account offers a special perk 

The checking account I opened is a U.S. Bank Silver Business Checking. The account doesn't earn interest, but it also has no monthly service fees. Finally, it comes with a special perk: a large welcome bonus of $800. 

To get the bonus, I had to deposit $25,000 within 30 days of opening my account. Then, I have to maintain a $25,000 balance for at least 60 days. If I can meet those two requirements, U.S. Bank will deposit my $800 bonus within 30 days. 

Our Picks for the Best High-Yield Savings Accounts of 2024

Product	APY	Min. to Earn
American Express® High Yield Savings Member FDIC. APY 3.80% Rate info 3.80% annual percentage yield as of January 6, 2025. Terms apply. Min. to earn $0 Open Account for American Express® High Yield Savings On American Express's Secure Website. Member FDIC.	3.80% Rate info 3.80% annual percentage yield as of January 6, 2025. Terms apply.	$0	Open Account for American Express® High Yield Savings On American Express's Secure Website.
Capital One 360 Performance Savings Member FDIC. APY 3.80% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Dec. 6, 2024. Rates are subject to change at any time before or after account opening. Min. to earn $0 Open Account for Capital One 360 Performance Savings On Capital One's Secure Website. Member FDIC.	3.80% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Dec. 6, 2024. Rates are subject to change at any time before or after account opening.	$0	Open Account for Capital One 360 Performance Savings On Capital One's Secure Website.
Western Alliance Bank High-Yield Savings Premier Member FDIC. APY 4.40% Rate info The annual percentage yield (APY) is accurate as of Jan. 2, 2025, and subject to change at the Bank’s discretion. Refer to product’s website for latest APY rate. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY. Min. to earn $500 to open, $0.01 for max APY Open Account for Western Alliance Bank High-Yield Savings Premier On Western Alliance Bank's Secure Website. Member FDIC.	4.40% Rate info The annual percentage yield (APY) is accurate as of Jan. 2, 2025, and subject to change at the Bank’s discretion. Refer to product’s website for latest APY rate. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY.	$500 to open, $0.01 for max APY	Open Account for Western Alliance Bank High-Yield Savings Premier On Western Alliance Bank's Secure Website.

This offer expires on April 2, 2024. If it's too late for you to open this account, you can also check out other bank bonuses for similar offerings.  

High-yield CDs can't match it 

In comparison to high-yield CDs, the bank bonus on my business checking account gives me the highest yield for my money. 

For example, if I had deposited $25,000 in a 3-month CD with a 5.35% APY, I would have earned about $328 when the CD matured. In contrast, U.S. Bank is giving me $800 for a deposit of $25,000 for a similar period (even less, since I deposited my money immediately). 

Of course, CDs offer something my business checking account can't: a fixed interest rate for the length of its term. Because CDs have fixed interest rates, they can help you freeze today's best rates before they start dropping to less lucrative yields. By locking in rates, you can ensure your money is earning interest at a decent rate for a longer period, giving you potentially more than my bank bonus for the same deposit. 

In fact, when I receive my bonus, I plan to move my money into a long-term CD. But since the bonus gives me the highest yield right now, I'm OK temporarily leaving it in a bank account with no APY. 

As far as whether this would be the right path for your money, I'd say it's rare to find bank bonuses this high. More often than not, you'll see heftier bonuses on business rather than personal accounts. It just so happened that I was in the market for a new business checking account, so getting the bonus was a nice surprise. But if you're not looking for a new checking or savings account -- or you're content with your current bank -- it might be too much hassle to switch your finances over for the sake of a bonus. 

But if you're looking for a new account, check out those with the best bank bonuses. While you shouldn't just open an account for the bonus, it can help you decide if you're comparing two or more accounts with similar features.