What is a high-yield checking account, and is it worth opening?

High-yield checking account benefits

Recently, the Fed has been raising rates, and savers are benefitting from higher interest rates on savings vehicles like checking and savings accounts.

This is what makes high-yield checking accounts so appealing. The accounts can pay an APY, or annual percentage yield, of 1% or more.

For example, Axos Bank is currently offering up to 3.30% APY on its Rewards Checking Account, which has no monthly maintenance fees or minimum balance. That's certainly not too shabby.

High-interest checking accounts can also come with other benefits, such as a one-time sign-up bonus, reimbursements of ATM fees, cash back or airline miles.

Applying for a high-yield checking account may seem like a no-brainer, but to reap the rewards you may need to meet some requirements.

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High-yield checking account requirements

If you want to earn high interest, collect a signing bonus or get other goodies, you may have to do a few things for the bank. Some common high-yield checking account requirements include:

• Maintaining a certain balance
• Making a minimum number of debit card purchases each month
• Signing up for direct deposit or automatci bill pay
• Opting in for e-statements

Be sure to check the fine print to see what the banking institution's requirements are – it’s worth the effort!

With high-yield checking, you need to maintain all of the requirements as long as your account is open. If you slip and make too few debit card transactions, for example, you might lose your super-high interest rate.

More: Explore the best high-yield savings accounts

Are high-yield checking accounts worth it?

The rewards from a high-yield checking account can be sweet, but you'll have to crunch some numbers to determine whether it's the right type of bank account for you.

Some accounts come with high monthly fees, as much as $20, if you're unable to maintain a minimum balance. You wouldn't want fees to essentially wipe out your interest.

Could you make enough debit transactions each month to qualify, or would you feel pressured to overspend to meet your quota? And what does the fine print say about how long your high interest rate is likely to last?

Alternatives to a high-yield checking account

While the rewards of this type of checking account are certainly worth checking out, there are alternative types of bank accounts to consider.

Savings accounts. These bank accounts are a good place for your emergency fund because withdrawals are usually capped. You can find that some of the best savings accounts are offering very attractive APYs.

Money market accounts. MMAs tend to offer you a stable place to stash some cash and earn somewhat higher interest rate compared to a regular savings account. These accounts often require a minimum deposit and balance to maintain.

More: Compare the best banks