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Bank of the Sierra: Are they legit? How can the checking interest APY be so high?
The FDIC is pretty confident about them being legit. http://www2.fdic.gov/idasp/main_bankfind.asp  (type in Bank Of The Sierra in the name field and search on that) You got to realize how much money they will make if you use them per the agreement.  Every credit card / debit transaction gets them some cash.  Businesses get between 1 and 5% of each transaction even on debit cards.  Then there is a flat fee the merchant pays for accepting the credit card between .25 and .50 per transaction.  Even at 12 transactions a month, the bank is looking at making around $6/month.  Probably more because who uses a debit card just 12 times a month.  It would be convenient for most people to juse use it all the time. Does 4.09% APY beat $6/month?  You would have to keep a balance of $2000 plus to cost more than you earn.  And if you keep more than $2k in the account, they have other ways to make money off of you. I would also assume they make money on the bill pay and direct deposit side of things, but I can't speak for certain about that. Bottom line is this seems like a good deal to attract customers, they would rather make a bit less profit then BofA to grow their business.  They are betting their offer restrictions will change your habits and make you more profitable to them.