This is correct for their high-yield investor checking account (don't let the name fool you, the interest is a fraction of a percent). This account requires a credit check and a linked brokerage account; although, I don't think that brokerage requires a minimum balance. While I hold options, my cash balance is ~$3.

Anecdote: I have been with Schwab for years and love their offering. One weekend in Vegas I accumulated something like $150 in ATM fees and they refunded every penny of it. Like Alex said, this was only possible through previous trade commissions/fees they've generated from me.

It's only possible from trade commissions/fees they've generated in general, but not specifically from you. Some people definitely come out ahead.

And yeah, you have to open a brokerage account but you can leave it with $0 and no positions forever. That said, Schwab has some pretty killer deals on ETFs on the brokerage side..

Schwab rocks!

Fidelity also has a similar account although it is a joint checking/brokerage account and the interface is tailored towards the brokerage side.

Glad to see more competition in this space. Give me something even better than Schwab :)