JPMorgan Chase's (JPM) new prepaid card, Liquid, is being marketed as an alternative to a bank account, but its underlying terms make clear that it's more of a complement to one.

The prepaid card, which allows free funding from a linked JPMorgan Chase checking account and from the bank's branches, is cheapest and most beneficial to a customer that either has an existing relationship with the New York company or at least lives near its ATMs and branches.

"For us it hinges on building a long-term relationship with a customer by getting them in the right product that works with them and works for us … [and] growing that relationship over time," says Jon Wilk, JPMorgan Chase's head of product and marketing for consumer banking.

Though some have speculated that JPMorgan Chase is trying to shift its checking customers to its prepaid card, others say this is a two-way street.

"My sense of it is that they want the cards to be appealing to current account holders," says Ben Jackson, a senior analyst in the prepaid advisory service at Mercator Advisory Group.

There is a security benefit to having a separate card that can't be overdrawn, Jackson says. It can be used by "those who don't want to expose their [debit] accounts online, for example," he says.

The card, which JPMorgan Chase announced Tuesday, carries a monthly fee of $4.95. This fee can be waived only by linking one of the checking accounts listed in the card's terms and conditions. Although the card allows direct deposit, users of that feature still have to pay the monthly fee.

JPMorgan Chase is testing the card in about 200 branches. The bank plans a full-scale launch later this summer.

The bank has been expanding its card offerings recently, including one product developed with LivingSocial, a Groupon competitor.

The LivingSocial credit card provides the most reward points for money spent on the daily-deal provider's website. The points can be redeemed for discounts on LivingSocial deals.