"Once you've set up this account, and you think 'OK, I've done a good job and now my money is earning a lot more,' don't go to sleep on this," Blayney says. "It's really important to understand the various requirements to keep this going, and monitor what you're doing."
Some hoops to jump through
In order to hit that high yield, you'll probably also have to meet a number of conditions designed to keep you engaged with the account and earn money for the bank. Any month you don't meet them, you'll earn a much lower interest rate that averages 0.06 percent.
Different accounts have different requirements, but they typically include some combination of the following:
- A certain number of debit card transactions: The most common number of transactions required in our survey was 10, and 14 percent of banks surveyed wanted signature-based debit transactions, specifically.
- Getting your checking statements electronically: Our survey found that 98 percent of accounts require electronic statements.
- One direct deposit going into the account: Eighty percent of accounts offered this as an option for meeting account requirements.
- -- or --
- One bill pay or other transfer going out: Eighty-four percent of accounts offered this as an option for meeting account requirements.
"I think that depositors really have to think hard about what is being required," says Blayney. "Some of these are fairly benign -- maintaining a valid email address, for example -- and are not a big deal, and it may be no cost really to you because you will be doing that anyway. Some of them involve a certain amount of activity every month."
Expect to go local
Finding a high-yield checking account in your area might not be easy.
"I've definitely seen a decline in the number of banks offering those products over the last, at least, three years," says Eric Weikart, managing director at Cornerstone Advisors, a management consulting firm for financial institutions. "It's a niche deposit play."
And you should definitely not expect to find high-yield checking at a megabank like Chase or Bank of America, Weikart says.
Instead, high-yield checking accounts are typically offered by small community banks or credit unions. Many are offered only in a limited geographic area, but not all: Forty-one percent of the accounts are available nationwide, without requiring any ties to a particular community or organization, according to our survey.
"A lot of community banks use this as a tool to compete against the bigger banks and attract deposits because it's not the type of account that the bigger banks offer," Bankrate's McBride says. "It also requires a more engaged customer, which is really the Holy Grail that banks are after."
The small size of the institutions offering high-yield checking means account holders are unlikely to have the kind of branch access you would with a large national bank, says McBride, but they probably will have access to a large national network of ATMs.
Not for everyone
If you think you'll have any trouble meeting the requirements to get the top rate from a high-yield checking account, you're probably better off sticking with a top-paying online savings account, says McBride.
Missing a few months of high yield may push you below what you could earn from a good savings account for the year.
In the end, high-yield account holders will need to do a little homework to make sure they know what they're getting into, says the CFP Board's Blayney.
"This is not, 'tuck it away and watch it grow,'" she says.