High-Yield Checking Isn't Dead, You Just Have To Look Harder

You would almost think that high-yield checking was dead from the massive pullback over the past few years from previous leaders like HSBC, ING Direct and Smartypig, but it’s possible to find banks offering checking accounts still offering rates as high as 4% and even 6%, as long as you follow the new, stricter, rules.

Bankrate surveyed the nation to find the best high-yield checking accounts out there and found plenty of contenders, but the game has definitely changed. For one, you’re most likely to find the high rates being offered by a local bank or a credit union, rather than a national entity. You’ll also have to abide by new rules designed to make you more “sticky” as a customer, just like the big banks have done with free checking. Expect things like higher minimum balances, a minimum number of debit transactions required per month, and having to set up direct deposit or bill pay on the account. There also new balance caps where if you exceed a certain level, the interest rate gets cut.

Some gems from their findings:

* Atlantic Coast Bank has an APY of 3.05% and requires direct deposit and bill repayment. The balance cap is $15,000.00.
* Connexus Credit Union, Xtraordinary: 2.3% APY, requires 15 debits per month, direct deposit and bill repayment. Balance cap is $25,000.
* Integrity Bank offers an account with 4.01% APY, requires 10 debits per month, as well as direct deposit and bill pay, and has a balance cap of $25,000. While you can hold the account no matter what state you live in, you will have to open it at a branch in person.

We’re looking for a place to move our our house downpayment fund now that Smartypig has cut its rates so much. Maybe we’ll see about spreading it around in a couple of these high yield accounts. I say a couple because you have to watch out about hitting that balance cap if you want to still enjoy that high-yield.

2011 High-Yield Checking Survey [Bankrate]