Charles Schwab's checking account does not pay interest on your deposit balance
The Charles Schwab Bank Investor Checking account earns zero interest on money you keep in it. Schwab stopped paying interest on checking balances years ago and has not resumed. If you hold cash in this account, you receive no return on that money—it simply sits there.
This matters because other banks and financial institutions do offer interest-bearing checking accounts. If earning something on your cash balance is important to you, Schwab's checking is not the account to use for that purpose. However, Schwab offers other ways to earn returns on your money, which may or may not work better for your situation.
Key Takeaways
- Schwab's Investor Checking account pays no interest on any balance you maintain.
- Some online banks and credit unions offer checking accounts with interest rates between 0.01% and 5%, depending on the account type and balance tier.
- Schwab's strength is low fees, ATM reimbursement, and no minimum balance—not interest earnings.
- If you want both checking features and interest, you may need to split your money between Schwab and a separate high-yield savings account.
Why Schwab stopped paying interest on checking
Schwab offered interest on checking accounts in the past, but discontinued the practice when interest rates fell to near zero in the early 2010s. At that time, the rate of return became so small that it was not worth the administrative cost to track and pay it. The account remained popular for other reasons: no monthly fees, no minimum balance requirement, and Schwab's network of ATMs plus reimbursement for out-of-network ATM charges.
Interest rates have risen since 2022, but Schwab has not brought back interest-bearing checking. The bank's business model focuses on investment accounts and brokerage services, not on competing for deposits through interest rates. If you already have money with Schwab for investing, the checking account is a convenient place to park cash temporarily—but not a place to earn returns on it.
How to earn interest on money at Schwab
Schwab offers a Schwab Bank Investor Savings Account that does pay interest. The rate changes with market conditions and is set by Schwab, not by you. You can check the current rate on Schwab's website. This account has no monthly fee and no minimum balance, just like the checking account.
You can also move money into Schwab's money market funds or short-term bond funds, which generate returns through dividends and interest payments. These are not bank deposits—they are investments—so they carry slightly more risk than a savings account, but they may offer higher returns depending on market conditions. Schwab's advisory team can discuss these options with you if you call or visit a branch.
Another option is to keep your checking account at Schwab for its convenience and ATM access, but maintain a separate high-yield savings account at an online bank. Many online banks currently offer savings rates between 4% and 5% on deposits. You can transfer money between Schwab and another bank within one to three business days, so this split approach works if you do not need instant access to all your cash.
What Schwab checking does offer instead of interest
Schwab's Investor Checking has features that appeal to people who move money frequently or travel. The account reimburses all ATM fees, anywhere in the world—you use any ATM and Schwab refunds the charge. There is no monthly maintenance fee, no minimum balance, and no overdraft fees if you link it to a Schwab savings or investment account.
The account also comes with a debit card and online bill pay. You can deposit checks by phone using Schwab's mobile app. If you are already a Schwab customer with a brokerage or investment account, the checking account integrates with your other holdings, so you can move money between accounts instantly.
These features have real value if you use them, but they do not generate interest income. They reduce your costs instead. If your priority is earning money on your cash balance, Schwab checking is not the right tool.
Comparing Schwab checking to interest-bearing accounts elsewhere
| Account Type | Interest Rate | Monthly Fee | Minimum Balance | ATM Access |
|---|---|---|---|---|
| Schwab Investor Checking | 0% | None | None | Worldwide reimbursement |
| Online bank checking (typical) | 0.01% to 0.5% | None | None | Limited or reimbursed |
| Online bank savings (typical) | 4% to 5% | None | None | No debit card |
| Credit union checking (varies) | 0.5% to 2% | None to $5 | $0 to $500 | Shared branch network |
The table shows that online banks and credit unions often pay interest on checking, though the rates are usually lower than what they offer on savings accounts. Schwab's advantage is ATM access and integration with investment accounts, not interest earnings. Your choice depends on whether you value those features more than you value earning a small return on your checking balance.
How to move money between Schwab and a higher-interest account
If you decide to keep Schwab checking for its features but earn interest elsewhere, you can link an external bank account to Schwab. From Schwab's website or mobile app, go to the transfer section and add the other bank's account number and routing number. Schwab will send two small test deposits to verify the account is yours, which takes one to two business days.
Once linked, you can transfer money from Schwab to the other bank, or from the other bank to Schwab. ACH transfers (the standard method) take one to three business days. You can schedule recurring transfers if you want to move a set amount each week or month. There is no fee for this on Schwab's side, though the receiving bank may charge a fee—check their terms first.
Some people use this setup to keep a small amount in Schwab checking for immediate access and bills, and keep the bulk of their cash in a high-yield savings account at another bank. Money moves between them as needed, and the larger balance earns interest while sitting in the savings account.
Frequently Asked Questions
Does Schwab pay interest if I keep a large balance in checking?
No. Schwab does not pay interest on checking balances at any amount. The rate is zero whether you have $100 or $100,000 in the account. If you want interest, you need to move money to Schwab's savings account or to another bank.
Will Schwab start paying interest on checking again?
Schwab has not announced plans to do so. The company's focus is on investment services and low fees, not on competing for deposits through interest rates. If this changes, Schwab would announce it on their website and notify existing customers.
Can I earn interest on money I keep in my Schwab brokerage account?
Yes, if you hold cash in a money market fund or sweep it into Schwab's money market fund automatically. You can also buy short-term bonds or Treasury bills. These generate returns, but they are investments, not bank deposits, so they carry more risk than a savings account.
What is the current interest rate on Schwab's savings account?
Schwab's savings rate changes based on market conditions and is posted on their website. You can log in to your account or call Schwab to see the current rate. It is typically lower than rates offered by online banks, but higher than zero.
If I move to a bank that pays interest on checking, will I lose access to Schwab's ATM network?
Yes, you would lose Schwab's worldwide ATM reimbursement. However, many online banks offer their own ATM networks or reimburse fees. Some credit unions participate in shared branching networks. Compare the ATM access at your new bank before you switch.