Are premium bank accounts worth the money?
Premium bank accounts are typically designed for a bank’s most loyal or wealthiest customers. However, premium doesn’t always mean best, Finder.com says, especially when many free bank accounts offer plenty of useful features.
What is a premium bank account?
A premium bank account is often a bank’s most valuable and expensive banking option and often includes extra benefits you wouldn’t usually get with run-of-the-mill accounts.
As a general rule, premium accounts offer benefits for that same bank, such as exclusive relationship APYs on its savings products, rate discounts on the bank’s lending products, or better rewards on the bank’s credit cards.
Other premium perks often include waived foreign transaction fees, out-of-network ATM reimbursements, unlimited withdrawals or transactions, metal cards, priority customer support, and investment advice
How much do premium bank accounts cost?
Most premium bank accounts start at $25 per month, or $300 annually. Additionally, plan on needing to meet an opening deposit requirement, which often starts at $100.
However, some premium accounts offer ways to waive their monthly maintenance fees, such as holding a specific balance or meeting spending requirements.
Premium accounts are best for loyal and high-balance folks
Premium accounts are best-suited for high-balance customers, often requiring balances in the thousands to waive monthly fees or take advantage of the account’s benefits. They also make more sense for longstanding and loyal customers of that bank, since many of the extra perks you get involve the bank’s other products and services.
For example, Bank of America’s premium account, Advantage Relationship Banking, offers $600 off a Bank of America mortgage origination fee, a 0.50% rate discount for Bank of America auto loans, and a 20% boost on savings interest. These perks make a lot of sense for someone who does all their banking and lending with Bank of America, potentially saving money long-term.
Are premium bank accounts worth the cost?
If you’re considering a premium bank account, you’ve got to weigh the cost against the benefits. Here are some situations where a premium bank account could really make sense:
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You’re a frequent traveler and the account waives all foreign transaction fees and has complimentary travel insurance.
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You need a loan soon, and the premium account offers discounted APRs.
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You have multiple accounts with the same bank, and the premium account waives fees on your other accounts.
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The premium account earns interest, and you regularly hold a large balance.
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Your bank doesn’t have a lot of in-network ATMs near you, but the premium account waives all out-of-network ATM fees.
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You use the bank’s investing services and the premium account offers discounts on trades and free investing advice.
When a premium account may not be worth it
On the flipside, a premium account might not be worth the cost for everyone:
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You earn a higher APY on another savings account than what the premium account offers.
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You don’t meet the requirements to waive the monthly maintenance fee.
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You wouldn’t use the perks, such as travel insurance or airport lounge access.
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You don’t intend on staying with the bank long-term.
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The account’s APY and your typical balance do not cover the cost to keep the account open.
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You won’t need discounts on lending or investment products with that bank in the near future.
Bottom line
Premium accounts are designed for people who frequently hold high balances in their bank accounts and offer perks that are often exclusive to the bank itself. If you’re a mega fan of your bank and don’t intend on switching anytime soon, then getting the institution’s premium account could unlock a lot of internal benefits that could earn or save you money in the long run.
However, if the monthly fee is too steep for your liking, and you’re not the type of person who sticks to one bank for everything, then paying for a premium account could mean lots of unused benefits.
This story was produced by Finder.com and reviewed and distributed by Stacker.
