American Express announced Tuesday the launch of a new high yield, all-digital consumer checking account for cardholders. It features an annual percentage yield (APY) of 0.5% with no maintenance fees or minimum balance fees.

Consumers won't be charged overdraft fees, returned check fees, or declined item fees either. And on top of the high APY, the account comes with a debit card that earns 1 Membership Rewards point per$2 spent. Membership Rewards points can be deposited directly into the checking account, and points are worth 0.6 cents each.

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According to American Express, if consumers already have an AmEx card that earns Membership Rewards points, the points will be pooled with those earned by the debit card. The debit card offers Purchase Protection for eligible purchases, meaning the items cardholders buy are covered against damage and theft. 

The checking account is available to all consumer cardholders, so business cardholders won't be able to qualify. Customers can access and control their account through the American Express app.

According to AmEx, 81% of Millennials and Gen Zers use debit cards as a cash substitute. Additionally, J.D. Power recently found in a study that 41% of retail bankers have gone digital.

Liz Berman, Vice President of digital checking and debit product management at American Express toldZDNetin an email that 85% of American Express cardholders already engage digitally with the company.

By releasing the new checking account, American Express is looking to draw in more digital customers, with an emphasis on Millennials and Gen Zers. The company hopes to entice them by offering rewards for making purchases with their debit cards.

Berman said the numbers of digital consumer engagement and the rapid growth of digital banking during the pandemic also contributed to the decision to release the checking account.

"Our Members want more banking products and services from us," said Eva Reda, Executive Vice President and General Manager of Consumer Banking with American Express, in the press release. "And they want more from their checking account, without giving up the benefits that are important to them."

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