• The Boston Globe, Monday, August 27, 2007 11:30 AM

As banks and brokerage houses try to top each other's services in a bid to bring more of their client's funds in-house, Boston mutual fund giant Fidelity Investments is rolling out a checking account that pays customers an interest rate of 3.5%--well above what most local banks are offering.

Fidelity's account--called mySmart Cash--also features no minimum balance requirement, no annual fees, no bounced check fees, free checks and free online bill-paying services. Though Fidelity doesn't own any automated teller machines, the account offers refunds of nearly all fees a customer is charged at any of more than 1 million ATMs worldwide, including the networks of Bank of America, Citizens Bank, and TD Banknorth.

The new Fidelity account is currently being offered to a portion of Fidelity's brokerage customers, although company officials say non-Fidelity customers are welcome to apply for it. Customers depositing checks would have to either drop them off at the company's 118 investment centers nationwide or mail them in.

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