Bankrate's survey found that the most common balance cap is about $25,000. Any additional dollars in the account that exceed the balance cap earn the default rate rather than the high-yield rate.
Customers should keep balance caps in mind rather than simply looking for the highest yield.
For example, BECU, a credit union, offered the sweetest yield of the bunch in Bankrate's survey -- 6.17 percent. However, BECU imposes a $500 balance cap. That means you'll earn 6.17 percent on only the first $500 you keep in the account.
Three of the accounts surveyed have no balance cap. Of those, two offer their rates nationwide.
Who benefits?Greg McBride, senior financial analyst at Bankrate.com, believes the smartest banking customers treat high-yield checking accounts as a place to stash savings.
"The people that will use this most effectively will not be using this debit card to purchase a big screen TV," he says. "They'll make the required purchases with incidental transactions, a tank of gas here and there. It is a checking account but the savvier people will use it as a savings account."
While customers benefit when they play by the rules, so do community banks and credit unions, says Gabe Krajicek, CEO of BancVue, an Austin, Texas-based product development and marketing company for small financial institutions and the company responsible for REWARDChecking-branded programs.
"Reward checking is typically twice as profitable as free checking and the attrition rate is half of what you would see with free checking accounts," he says.
In other words, the banks make more money and their customers stick around longer.
Other features push customers toward less expensive delivery channels such as online banking and e-statements. Further requirements, such as direct deposit, ensure some customer inertia once they're set up, according to Bert Ely, principal at Alexandria, Va.-based Ely & Co., a consulting firm to financial institutions.
"They have these requirements for the stickiness, it's a bit of a hassle to set up direct deposit or bill pay," Ely says. "The more people do that the stickier they are, because it's more of a bother to switch away."
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