As of February 8th, 2009, Bank Of The Sierra offers a free checking account which earns a 4.09% APY. It looks like the catch is that you pretty much have to use them as your main bank. You need to have direct deposit on the account, use their online bill pay for at least one bill and use the debt card at least twelve times a month. If you don't meet these useage requirements you get a much lower 0.12 APY. They only have physical branches in California.
To me they look like a normal bank. But I have trouble finding CD rates that high. Is there anything I should be aware of / look out for if I try to open an account with them? This is the first bank I have ever seen with such a high interest rate, are there others? Are they any better or worse?