Understanding Premium Checking Accounts: Are They Worth It?

Checking accounts are essential for managing your daily finances, offering a convenient place to store your money for easy access. However, if you’re looking for more than just basic deposits and withdrawals, a premium checking account might be the right choice for you. These accounts come with a range of perks, such as waived fees and potentially lower loan interest rates, but they often require a high minimum balance. In this blog, we’ll explore the ins and outs of premium checking accounts to help you decide if one is right for you.

What Is a Premium Checking Account?

A premium checking account is a higher-tier checking account that offers more features and perks than a regular checking account. These accounts are usually interest-bearing and come with benefits like waived fees, discounts on loans, and access to priority customer service and wealth advisors. However, to avoid paying monthly fees, you’ll typically need to maintain a high balance—often at least $15,000. The good news is that you can often combine balances from linked accounts, including investment and retirement accounts, to meet this requirement.

Pros of Premium Checking Accounts

Opening a premium checking account offers numerous benefits. While specific features may vary by bank, the most common advantages include:

Lower Fees

Premium bank accounts often waive out-of-network ATM and overdraft fees and offer discounts on services such as wire transfers, cashier’s checks, and foreign transactions. If you use these services regularly, upgrading your checking account can save you a significant amount on banking costs.

Higher Transaction Limits

Premium checking accounts may provide greater flexibility for accessing your money with higher daily or weekly purchase and ATM withdrawal limits. This can be particularly useful if you need to access a large amount of money for an emergency or an expensive purchase.

Access to Premium Benefits

Customers with premium checking accounts enjoy a variety of services, such as priority customer service, access to wealth advisors, and global support. These perks can make managing your finances more convenient and efficient.

Ability to Earn Interest

Premium checking account balances typically earn interest, helping your balance grow faster compared to a basic checking account. Some banks also offer higher rates on linked savings and investment accounts, maximizing your interest earnings.

Cons of Premium Checking Accounts

While premium checking accounts offer many benefits, there are a few disadvantages to consider before upgrading:

High Minimum Balance Requirements

You’ll need to maintain a higher balance to avoid being charged a monthly fee. With some banks, you can combine balances across multiple accounts—such as savings and investment accounts—to satisfy the balance requirement.

Benefits May Be Tied to Balance

Premium checking accounts with tiered benefits may restrict the top perks to customers with higher balances. Even after meeting the minimum balance requirement, you may still need a balance of six figures or more to access the most appealing benefits.

Interest Rates May Not Be Competitive

Premium checking account rates are often meager, especially when compared with other deposit account options such as high-yield savings accounts or money market accounts. If you have a lower balance, you may not earn enough to offset the monthly fee.

Is a Premium Checking Account Worth It?

For those who qualify, a premium checking account offers more on everyday banking. If you’re loyal to your bank, opening a premium checking account can provide a variety of benefits. A premium checking account may be worth it if:

• You have multiple accounts at the same bank. Monthly account maintenance fees are waived if you can maintain a high balance across all your linked accounts.
• You make multiple out-of-network ATM withdrawals each month. Many banks waive their out-of-network ATM fees and refund fees charged by other banks. There may be a limit on the number of withdrawals that qualify for a fee waiver, however.
• You’re considering a new loan. If you have certain loans, like mortgages or auto loans, at the same bank where you have a premium checking account, you may qualify for an interest rate discount that can save you on overall loan costs.
• You want personalized financial or investment advice. Premium checking accounts may offer access to free or reduced-cost financial planning and wealth management services, which can be valuable if you have a lot of assets to manage.

How to Open a Premium Checking Account

Opening a premium checking account is similar to opening a traditional bank account. Here are the steps you’ll need to follow:

Complete an Application

If you’re upgrading an existing account, you can apply online and start with a pre-filled application since the bank has most of your information on file. Applying over the phone and in-person may also be options. When you open a premium checking account with a new bank, you’ll complete an application providing some personal and financial information, such as:

• Your name
• Date of birth
• Social Security number
• Physical address
• Phone number
• Email address
• Proof of identity; for example, a state-issued driver’s license or passport
• Employment status
• Income source

If you’re opening a joint account, your co-applicant must provide the same information. Students applying for a premium checking account will need to provide proof of enrollment.

Make Your Initial Deposit

After you’re approved to open an account, you can make your initial deposit using a bank account or debit card number to transfer money from another account. Because premium checking accounts often require a high minimum deposit, you’ll need to have enough cash on hand—or enough held in linked accounts—to satisfy the minimums.

The Bottom Line

Opening a premium checking account is worth it for those who can meet the high minimum balance requirement and take advantage of the benefits. Otherwise, the benefits may not be worth paying a monthly fee. A healthy checking account is just one part of keeping your financial life in order. Check your credit report and credit score to ensure you’re making the right money moves.

If you’re considering a premium checking account or any other mortgage services, O1ne Mortgage is here to help. Call us at 213-732-3074 for personalized assistance and expert advice. We’re committed to helping you achieve your financial goals with the best services available.