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Premium checking accounts — also known as premier bank accounts or premium bank accounts — are a great option for consumers looking to make money off of the funds they store in their checking account. While it’s more common to earn interest on money held in savings accounts, premium checking accounts offer perks like higher interest rates, free checks, and waived ATM fees. The catch? Account holders have to meet high balance requirements to qualify for this type of account and these rewards. Let’s examine what premium bank accounts are, how they work, and what else consumers need to know before opening one.
Premium Checking Account
Premier bank accounts are normal checking accounts that come with enticing perks for account holders who can meet minimum balance requirements. These requirements can be hard to meet, as they require keeping a large amount of money in a checking account instead of in a savings account. However, they can be a great way to earn interest on money the account holder wants to keep accessible for use. Other perks typically associated with premium checking accounts include fee-free ATM access and free checks. Often, the more money someone keeps in a premium checking account, the more rewards they can qualify for.
Features & Benefits
The goal of premium checking accounts is to encourage customer loyalty and retain customers. Popular benefits that come with premium checking accounts can include:
Better interest rates on deposits
Free checks
Lower fees for financial products at the bank
Dedicated customer service support
Free or less expensive wire transfers
ATM fee reimbursements
Premium Savings Account
Another option banking customers may have for earning rewards and perks is keeping their money in a premium savings account.
Features & Benefits
Like a premium checking account, a premium savings account can offer more interest on deposits and other unique benefits like free ATM use, low fees, or free checks. It’s fairly common for a bank to reward customers for using both a premium checking and savings account. Before opening a savings account that offers premium benefits, it’s important to check what their minimum balance requirements are. Like premium checking accounts, premium savings accounts typically come with strict minimum balance requirements to qualify for any perks.
Pros of Premium Bank Accounts
One of the main reasons people may be willing to keep money stashed in a premium checking account is so they can take advantage of the perks this type of account has to offer. These are some of the advantages associated with premium bank accounts.
Higher Interest Earnings
One of the main perks associated with premium checking accounts is they tend to come with much higher APYs, or annual percentage yields, on deposits than normal checking accounts do. Being able to earn higher amounts of interest helps account holders earn money with no effort on their part. The more interest they earn, the more their checking account balance can grow.
Fewer Fees
Sick of paying fees? Premium bank account users often get to pay less for the following fees or have them waived completely:
Out-of-network ATMs
Cashier’s checks
Money orders
Wire transfers
When shopping around for a premium bank account, or any type of bank account, it’s a good idea to inquire as to what types of fees that bank charges and what the cost for each fee is. From there, it’s helpful to compare the different fees charged by each bank being considered to see who will cost the least to bank with.
Discounts
Alongside making it possible to earn money with interest and save money on fees, premium checking account users may also be able to enjoy discounted rates on other financial products the bank offers, such as mortgages or auto loans.
Higher Transaction Limits
Another perk that customers can expect with premium bank accounts is having access to higher transaction limits. This can make it possible to make larger daily ATM withdrawals, transfers, or debit card purchases.
Cons of Premium Bank Accounts
Of course, there are also some disadvantages worth considering before opening a bank account with premium perks.
Lower Earning Potential
While the interest rates on premium checking accounts tend to be higher than normal checking accounts, they don’t typically offer as high of earnings as a savings account or a money market account. Someone looking to grow their savings would likely want to choose an account designed with that purpose in mind.
Strict Requirements
To qualify and remain eligible for premium checking accounts, there are usually strict requirements in place surrounding minimum balances. It may be necessary to keep large amounts of money (think $10,000 to $50,000) in the premium checking account to remain eligible.
Benefits are Often Tiered
All banks manage their premium checking account policies differently, but some tier the benefits and the customer has to “level up” their balance if they want to enjoy the better interest rates and perks.
The Takeaway
Premium checking accounts can come with enticing perks that can benefit consumers who tend to keep a lot of cash in their checking accounts. These premium bank accounts tend to come with higher interest rates than normal checking accounts, but still don’t offer earnings as high as high-yield savings accounts or money market accounts. Because of this, premium checking accounts aren’t the best fit for someone who is looking to grow their savings. If someone is on the hunt for a new savings account and has interest earnings at the top of their mind, Lantern to make their search more strategic. With Lantern, it’s possible to compare current high-yield savings rates being offered by a variety of different banks all in one place.Compare high interest online savings accounts and find today’s best rate with Lantern.
Frequently Asked Questions
How do I open a premium bank account?
What is the limit on a premium bank account?
How much can a premium savings account hold?
Photo credit: iStock/Delmaine Donson
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About the Author
Jacqueline DeMarco
Jacqueline DeMarco is a personal finance writer and editor based in Southern California. While she spends the bulk of her time writing about complex financial issues, she also tackles a variety of subjects ranging from food to fashion to travel. Her work can be found across dozens of publications such as Credit Karma, LendingTree, Northwestern Mutual, The Everygirl, and Apartment Therapy.
