Chase checking accounts do not earn interest

Chase's standard checking accounts—including Chase Total Checking and Chase Sapphire Checking—pay zero interest on your balance. The money you keep in these accounts sits idle and earns nothing, no matter how much you deposit or how long you leave it there.

This is typical across the banking industry. Most banks, including Chase, use checking accounts as transaction tools rather than savings vehicles. They make their money by lending out customer deposits at higher rates than they pay back to depositors. On a checking account, that rate back to you is straightforward zero.

If you want your money to earn interest, you need to move it into a different product—either a savings account, a money market account, or a certificate of deposit (CD). Chase offers all three, and each pays a different rate depending on how much you deposit and how long you commit the money.

Key Takeaways

  • Chase checking accounts earn 0% interest regardless of your account type or balance size.
  • Chase savings accounts and money market accounts do pay interest, but rates change monthly and are currently very low across the industry.
  • If you want meaningful interest earnings, a CD locks your money away for a set term but typically pays a higher rate than savings accounts.
  • The interest you do earn on any Chase deposit account is taxable income and will be reported to you on a 1099-INT form.

How Chase checking differs from savings accounts

A checking account is built for spending: unlimited deposits and withdrawals, a debit card, check writing, bill pay. A savings account is built for storing money: limited withdrawals per month (though this rule has loosened in recent years), no debit card, no checks. Banks use this distinction to justify paying interest on savings but not on checking.

Chase's savings account currently pays a very small interest rate—the exact percentage changes monthly and is set by Chase based on market conditions. As of early 2024, most banks' savings rates hover between 4% and 5% annual percentage yield (APY), but this varies week to week. You can check Chase's current rate on their website before you open an account.

The practical difference: if you keep $10,000 in a Chase checking account for a year, you earn nothing. If you keep that same $10,000 in a Chase savings account earning 4.5% APY, you earn roughly $450 over the year (before taxes). That $450 comes from the bank's own pocket, which is why they limit how often you can withdraw.

Money market accounts and CDs as alternatives

Chase offers a money market account that functions like a hybrid: it earns interest like a savings account but also comes with a debit card and check-writing ability. The interest rate is typically similar to or slightly higher than the savings account rate. The tradeoff is that you still have withdrawal limits, and the account usually requires a higher minimum balance to open.

A certificate of deposit (CD) is a different animal entirely. You give Chase a sum of money for a fixed period—three months, six months, one year, five years, or longer—and in return they pay you a may provide interest rate. That rate is locked in when you open the CD and does not change, even if market rates drop. The catch is that you cannot touch the money without paying an early withdrawal penalty, usually equal to several months of interest.

CDs currently pay higher rates than savings accounts at most banks because you are giving up access to your money. If you have money you know you will not need for six months or a year, a CD is often the better choice. If you might need the money sooner, a savings account is safer.

Why banks stopped paying interest on checking

Decades ago, some banks did pay interest on checking accounts. But in 2010, the Dodd-Frank Act banned banks from paying interest on business checking accounts. Many banks then stopped paying interest on personal checking accounts too, partly because it was simpler to have one policy and partly because interest rates had fallen so low that the cost was barely worth the complexity.

Today, almost no major bank pays interest on checking. A few online banks and credit unions still do, but the rates are tiny—often 0.01% or less. Chase has chosen not to compete on this front and instead focuses on other perks: cash back on debit card purchases (through the Chase Sapphire Checking card), no monthly fees if you meet a minimum balance, and integration with their broader banking ecosystem.

Tax implications of interest earnings

Any interest you earn on a Chase savings account, money market account, or CD is taxable income. At the end of each year, Chase will send you a Form 1099-INT showing how much interest you earned. You must report this on your tax return, and you will owe federal income tax on it (and state income tax in most states).

This matters more than it sounds. If you earn $450 in interest and you are in the 24% federal tax bracket, you owe roughly $108 in federal taxes on that interest. The actual after-tax return is lower than the advertised APY. This is one reason why interest rates matter less on small balances—the tax burden can eat most of the gain.

How to move money from checking to a higher-earning account

If you decide to move some of your checking balance into a savings account or CD, the process is straightforward. Log into your Chase online banking portal, navigate to the account opening section, and follow the prompts. You can fund the new account by transferring money from your checking account—this usually takes one to two business days.

There is no penalty for opening a savings account or CD. Chase will not charge you to move money between your own accounts. The only cost is the opportunity cost: money in a CD is locked away and cannot be withdrawn without a penalty, so make sure you do not need it before the term ends.

If you are opening a CD, read the early withdrawal penalty terms carefully. A six-month CD with a three-month penalty means you lose three months of interest if you need the money early. On a small balance, that penalty might exceed the interest you would have earned anyway, so the math matters.

Frequently Asked Questions

Can I earn interest on a Chase checking account if I keep a large balance?

No. Chase checking accounts earn 0% interest on any balance, regardless of size. The account type, not the amount of money, determines whether interest is paid. If you want to earn interest, you must open a savings account, money market account, or CD.

What is Chase's current savings account interest rate?

Chase's savings rate changes monthly and varies based on market conditions. You can find the current rate on Chase's website before you open an account. As of early 2024, most banks' savings rates range from 4% to 5% APY, but this fluctuates frequently.

Is it worth moving money from checking to savings if the interest rate is very low?

It depends on the amount and how long you leave it there. On $1,000 earning 4.5% APY, you make roughly $45 per year before taxes—maybe $30 after taxes. That is not much. On $50,000, you earn roughly $2,250 before taxes. The larger your balance, the more sense it makes to move it.

What happens to my interest if I withdraw money from a savings account early?

You keep the interest you have already earned. Withdrawals do not erase past interest. However, some banks charge a penalty if you exceed a certain number of withdrawals per month, though this rule is less common now than it was before 2020.

Can I have both a checking account and a savings account at Chase?

Yes. Most people do. You can keep your checking account for daily spending and your savings account for money you want to earn interest on. Transfers between your own accounts are free and usually when ready or next-day.