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.