2010 High-Yield Checking Study
2010 High-Yield Checking Study
High-yield checking perks have strings

High-yield checking accounts continue to offer top rates to customers who perform specific banking activities each month, according to a Bankrate.com exclusive survey of 211 banks and credit unions across the nation.

Bankrate found that 58 of the banks and credit unions it surveyed offer high-yield checking accounts, with rates ranging from a high of 6.17 percent to a low of 0.75 percent, according to the study.

However, customers must jump through a series of monthly hoops to earn those returns. Important details about how these programs work vary from institution to institution -- as do the requirements for earning hefty yields.

Some of the high-yield programs are restricted to local customers only. But 40 of the 58 institutions surveyed also offer the accounts nationally.
(Editor's note: On April 5, 2010, Bank of the Sierra stopped offering Sierra Reward Checking nationally.)

Average terms and conditions of high-yield checking accounts
High-yield APYDefault APYMonthly debit card transactions
3.3 percent0.16 percent11

Common requirements

While each institution has its own rules, the survey found that savers typically must perform some or all of the following account activities a certain number of times each month in order to earn high returns:
  • Debit card purchases.
  • Direct deposit.
  • Bill pay or accessing online banking.

Account holders also may be required to view their statements online each month.

Failure to meet any of these monthly transaction quotas results in earning a much lower return on your money for that month.

According to Bankrate's survey, customers who fail to perform the required transactions during a statement cycle will see their monthly yield drop down to a default rate of anywhere between 0.5 percent and 0.04 percent.

Once the customer gets back on track and meets account rules, the rate will increase again for the next statement cycle.

High-yield checking accounts impose a few nearly universal requirements, regardless of which institution is offering them. For example, account holders almost always must participate in a certain number of debit card transactions each month to qualify for the high yield.

Bill pay and direct deposit requirements
Bill pay requiredDirect deposit requiredEither bill pay or direct deposit required
35 percent43 percent48 percent

The most common number of transactions required is 10 per statement cycle, while the average is 11, according to Bankrate's survey. Ninety-five percent of banks and credit unions surveyed require a certain number of debit card transactions per month, with a range stretching from 10 transactions to 15.

In addition, 91 percent of institutions require account holders to use bill pay and/or direct deposit each month in order to qualify for the top rate. About half, 48 percent, allow customers to choose between direct deposit and bill pay rather than having to use both.

High-yield hoops
According to Bankrate's exclusive study, to earn the highest rate on a high-yield checking account:
  • 95 percent of institutions require a certain number of monthly debit card transactions.
  • 91 percent require monthly direct deposit and/or bill pay.

Balance caps

Because high-yield checking accounts offer greater yields, many customers keep larger balances than they would in their day-to-day checking account.



However, most institutions that offer high-yield checking accounts also have a balance cap that limits the amount of money on which customers can earn the inflated yields, according to the Bankrate survey.

"Banks will often put in place some type of reverse tier where it would say your checking account can only pay you that interest up to a certain threshold," says Richard Solomon, a director with Novantas, a financial services consulting firm in New York.

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