

It’s a common financial instrument. You can find many providers online.
You get a much better interest rate than a typical savings account (I think current rates are around 4% or so), but you are typically limited in the number of withdrawals you can make per month. Banks offer better interest rates because the cash is less volatile and sits in the account longer. They are good for cash you want to park somewhere for a while but that you still need quick, infrequent access to, like emergency funds. Credit card payments are also a fine use for it, though I’d say the benefit is pretty minimal unless you consistently maintain a balance greater than the credit card payment.
High-Yield Savings Accounts are something distinct from normal savings accounts. I don’t believe there are any HYSAs being offered that have rates as low as 1%.
You can find many institutions online offering HYSAs. It is definitely pretty common. In personal finance circles it’s very often recommended to put your emergency fund in a HYSA.
And yes, as you noted, HYSAs have different rules than normal savings accounts. Just like how CDs do.