§ 1403 Bank Interest On Deposits

• •Most banks cannot pay interest on checking or savings accounts that let you withdraw money anytime.
• •Only banks that are Federal Reserve members or have FDIC insurance can pay interest on these accounts.
• •The rule does not apply to deposits that can only be withdrawn at a bank branch outside the U.S. or D.C.

You have a checking account at your local community bank and want to earn interest on the money you keep there.

The bank can't give you any interest because the law stops most banks from paying interest on demand deposits, unless the bank is a Federal Reserve member or has FDIC insurance, which most community banks are not.