Can you still find high-yield checking?

"If the loan-to-deposit ratio starts to go south, we counsel (our clients) to pull back, not go nationwide, for example, or to drop their rate slightly, or lower the cap in the tiered interest rate structure."

Some banks can offer higher yield

But some banks, which may be in areas with better loan demand, have been able to continue offering high-yield checking to a broader customer base, in part because of the structure of the account.

Most high-yield checking products offered by community banks and credit unions require customers to use their debit cards for 10 to 15 transactions per month, not counting ATM usage. That debit card usage generates fee income for the bank. Other fee-generating or money-saving requirements include having one direct-deposit or automatic bill payment per month, and agreeing to receive statements online.

"The effective cost of funds goes down substantially if you factor in the debit card usage and the electronic statements," says Bill Skow, executive vice president at State Bank of Toledo in Toledo, Iowa, which has reduced its high-yield checking rate to 2.51 percent, but continues to offer the account nationwide and pays that rate on balances up to $70,000.

"That $2.51 actually looks more like 1.5 percent or 1.75 percent to us," says Skow.

Skow says a lot of customers who opened accounts on the Internet closed their accounts as the rate, which was 6.01 percent at one time, dropped.

"We knew there was that potential," he says. "It really doesn't bother us. We have the account structured to where we think it's going to be a good account for us no matter what the rate. We're going to try to move it with the market, so that it's always what we would consider to be a very fair, aggressive rate."

While BancVue's product is probably the most prevalent high-yield checking account nationwide, a number of banks, which you can find on the Internet, have developed their own high-yield checking accounts.

If you're also interested in decent yields without the debit card requirements, peruse Bankrate's high-yield savings accounts index or, if a fixed rate is more appealing to you, search Bankrate's high-yield CDs.

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