CUs Checking Accounts with crazy interest rates

[Brusilov]

I noticed a local CU (and many many more online) that offers a 4.17% interest rate on their premium checking account.  It offers up to $20 returned in ATM fees per month, free bill pay, yadda yadda yadda perks.  The only requirements are the following:

- 1 ACH/direct deposit (at least $500/mo)

- 12 debit card transactions

Since there are many CUs that offer very similar programs with no account minimums or maintenance/excess fees I guess I'm just curious how this is sustainable or what is the reasoning behind these (what I would consider) abnormally high interest rates?  Do banks really make that much money on debit transactions?  Are they counting on the fact that if you have your primary checking account with them you're far more likely to use their loan products as well?  I guess until I understand this fully I'm wary of switching accounts over to what may only be a temporary or "teaser" rate designed to grow their membership pool.

The link(s) for the specific CU I'm looking at can be found here:

https://www.ccfcu.org/checking.asp

https://www.myadvantagechecking.com/index.html

[Anonymous]

Definitely make sure you go with a reputable CU.  However, CU's can pay higher interest because they are not investor owned....meaning they don't have to pay dividends and other profits to outside interests, thus the "returns" can go to deposit accounts.

Also, if the CU is conservative and has low default rates, then the profits of loans can be passed on to members also through deposit accounts.  Remember, CU's are "member owned" and their purpose is to provide and encourage "thrift" and savings, as well as other financial services including checking, loans, cc's etc.

If you are concerned with them, do a little research.  Look on forums and post some questions and ask for somebody (or multiples) who have used them to describe their experiences.  Finally, look into their regulatory filings if you want.

Lastly, as long as they belong to NCUA, your deposits are protected (similar to bank FDIC), so what risk do you feel you may have?