Choose a checking account that works for you

If you're like most people, your checking account is like your sock drawer: a simple fact of life that you use every day but pay little attention to. The money comes in, the money goes out. You might pay a lot of attention to what that money is doing, but you barely notice the account itself.

Chances are, your checking account could be doing more for you.

Rewards checking accounts

The first thing you want to look into is what your account offers. Interest, as always, is king. While most checking accounts pay no interest at all, a rewards checking account frequently pays higher rates than most savings accounts. The trick is finding a good rewards checking account and meeting its eligibility requirements.

Eligibility requirements vary from account to account, but most require that you:

• use direct deposit
• have a certain number of transactions per month
• maintain a minimum balance

If you can do all these things, you can earn a great return on your checking account. That means your money is always working for you, instead of idling in a no-interest checking account while waiting to be spent on bills or moved to savings.

To choose a rewards checking account, shop around. SavingsAccounts.com lists checking interest rates at banks all over the country. Don't settle for what's offered at your local bank. Shop for the best interest rate online to get the best return on your money.

Don't worry if the best account you can find is based far away, or at an online bank. Online banking is safe and efficient. While you may still need a local account for some things, the bulk of your checking can be done online.

Using an online bank

Online banks have some distinct advantages over brick-and-mortar banks. Most important, they often pay better interest rates. Interest really should be your number one consideration when choosing a bank.

Online banks also have great account management features on their websites. Most banks will have all the features you need to pay bills online, track your balances, make transfers and essentially do all your banking tasks. In my experience, online banks like ING have really great user interfaces for these features. They have to, since all their customers are interacting with them online.

Some people have concerns about the safety of online banks, and of using online banking features with any bank. The truth is they really are safe, secure and efficient. Using online banking can save you time, money and effort.

Make your account do the work

Once you've found a high-yield checking account that works for you, it's time to put that account to work. By using your bank's online bill paying feature, you can automate your regular bills. That serves you in two ways: it saves you time and postage over doing it the old-fashioned way, and it guarantees you'll never have a late payment. Plus, you now have an automatic record of all the bills you've paid.

Setting up automatic bill paying through your checking account is like turning your bank account into your personal assistant. It manages the bills so you don't have to. Of course, you still need to make sure the money is in your account when the bills are due. But as long as you make the necessary regular deposits, you can take worrying about your bill paying right off your to-do list.

Consider using two checking accounts

To maximize the benefit of this approach, I use two checking accounts. I have an account at a local brick-and-mortar bank that I keep a small amount of spending money in and use for my day-to-day purchases. I also use this account to deposit checks and cash that come in from my freelance writing business.

I also have a high-interest checking account at an online bank where I keep most of my household money and from which I pay my bills. This ensures that I never overspend from that account. It gets a fixed amount of money each month to cover the bills as they come in. It also means that I only need to look at it about once a month to make sure everything is being handled correctly. For the most part, my household's monthly bills run on autopilot. Meanwhile, the money I use to pay them with earns interest instead of sitting idle in my brick-and-mortar bank account.

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