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Premium checking accounts can offer reduced fees, cash-back rewards, rate discounts, and enhanced service—but may not be worth the lost interest you could’ve earned elsewhere.
What Are Premium Checking Accounts?
Premium checking accounts are a bank’s higher-tier, broadly available deposit accounts for consumers who can maintain a minimum balance requirement in return for avoiding a monthly service charge. Many premier accounts require you to keep a minimum balance of $10,000 to $15,000 or more. Many of these accounts will credit the money you keep in linked savings, checking, retirement, and investment accounts within that banking family.
However, some premium checking account offers are also extended to U.S. Armed Forces servicemembers and veterans, employees of specified businesses, and those who already have a relationship with the bank, such as through a home mortgage loan or membership rewards program.
Key Takeaways
- Premium checking accounts can offer perks such as waived ATM fees, cash-back rewards, higher interest on linked savings accounts, and reduced rates on loans. However, they require maintaining a significant minimum balance, typically between $10,000 and $15,000.
- These accounts often come with lower interest rates compared to other investment options like certificates of deposit (CDs), meaning you might earn more interest elsewhere.
- If you regularly use banking services, such as personal checks or money orders, a premium checking account can save on fees, but it might not be the best option if you rarely use these services or ATMs.
- Consider how fluctuations in your account balance might affect your ability to maintain the minimum balance required and avoid recurring fees.
- Review additional rewards or discounts offered, such as credit card rewards or account sign-up bonuses, to determine if they add value that aligns with your financial needs.
Premium checking accounts may offer various benefits that could include:
- Waived or refunded ATM fees, even at non-bank branded ATMs
- Interest earned on your checking account balance
- Increased interest rates on associated savings and CD accounts
- Higher limits on transfers, debit card usage, and ATM withdrawals
- Free bank checks, money orders, stop payments, and incoming wires
- Several waived or reimbursed insufficient funds fees annually
- Rate discounts on loans
- Better credit card rewards
- Dedicated customer support lines
- Safe deposit box rental
Each premier checking account works a little differently and offers different benefits. But generally, if you don’t maintain the minimum balance over time, you could either pay a monthly maintenance fee or get bumped down to a more standard banking tier without the above benefits.
Important
Premium checking differs from even higher-tier prestige banking services, which may offer worldwide ATM access and other perks. With private banking, a private or personal banker helps manage your financial needs. Both typically require ultra-wealthy clients to have far higher minimum balances, such as $75,000 or more.
Key Considerations for Premium Checking Accounts
If you’re just looking for an everyday checking account and comparing various banks’ offerings, you’ve probably run across a bank’s premium accounts. There’s no one-size-fits-all answer, but here are some considerations.
Exclusive Banking Services and Fee Reductions
If you’re someone who uses a lot of traditional banking services (such as personal checks, money orders, and incoming or outgoing wires), a premium checking account may waive or reduce many of these fees. Your monthly savings could add up fast if you’re repeatedly paying per-item fees. You can also often open multiple accounts for free, which also help meet your balance requirements.
Benefits and Limitations of ATM Access
One of the biggest perks of premium checking accounts are fee-free ATM transactions. In most cases, however, at non-bank-owned ATMs, you may have to pay the ATM owner’s fees unless your bank refunds any fees paid. But if you don’t use ATMs regularly, this perk may not be important to you.
Managing Balance Requirements in Premium Accounts
If you have difficulty keeping the minimum in your account, any advantages you earn from a premier account could be lost to monthly maintenance fees, typically around $25. On the other hand, if you have more than $250,000 in your account, you may not be able to take advantage of FDIC insurance if your bank fails.
Evaluating Interest Rates on Premium Accounts
Calling these accounts interest-bearing might sound good, but be sure to compare rates. Most average around an APY of 0.01% to 0.02%. On a $50,000 balance, that works out to $5 to $10 per year. Whether you stay with your bank or shop around for the best certificate of deposit (CD) rates, you could earn nearly five times a checking account’s rate with a CD. Money market accounts may yield slightly less but some have rates that are comparable to CDs.
Maximizing Rewards and Discounts in Premium Accounts
You might receive bonus credit card rewards or rate discounts. Not all banks offer rewards, but you can factor the potential savings available into your decision if you’re hoping to borrow money soon.
Some financial institutions offer sign-up bonuses for accounts, including premium accounts. To qualify for the bonus, you must meet certain requirements, typically direct deposit or minimum account transfers.
Assessing Customer Service Quality in Premium Banking
Your bank or credit union’s customer service aspects are important to weigh as well. Review of “premium checking accounts” data in the Consumer Financial Protection Bureau’s Consumer Complaint Database to see if there are concerns about your premium checking account.
What Are the Benefits of a Premium Account?
A bank’s premium account can offer interest on your checking account balance, fee-free ATM withdrawals at non-bank ATMs, better rates on the bank’s products, and fewer fees on other products such as cashier’s checks and money orders.
How Much Do You Need for a Premium Account?
Generally, you need around $10,000 to $20,000 in your checking account to qualify for a premium account. You might also qualify through your employer, meeting direct deposit requirements, or other methods. You could also find lower minimum requirements at some credit unions and community banks.
What Is a Premium Bank Account?
A premium bank account attracts customers who can maintain high minimum checking account balances with minimal or waived fees. But there is no standardized definition for a premium bank account, and this account tier may go by other names such as advantage, preferred, or metal or jewel titles.
The Bottom Line
Keeping a five-figure balance in one checking account to avoid a monthly fee probably isn’t a good financial strategy. Ultimately, it depends on how much you’re using your bank’s other services and how easy it is to hit the premium-tier account minimum. If you or your family members use bank services regularly, a premium checking account could save you money in fees. Premium accounts could help you get slightly lower loan rates or perks from the bank’s investment division. Compare rates against the top high-interest checking accounts to ensure you get a good deal.
