Most of us have checking accounts and love their convenience, but you may be curious about premium checking accounts, which offer even more perks. Some offer higher interest rates and ATM-fee reimbursements. But what’s required to reap those benefits?
Let us answer that question. Here, we’ll fill you in on the differences between your typical checking account and the premium variety.
What Does Premium Checking Mean?
Premium checking accounts are a type of checking account in which account holders are rewarded for meeting high balance requirements or paying higher monthly fees. These rewards may include higher interest rates, fee-free ATMs, free checks, and more.
In some cases, a bank may offer you these perks if you open multiple types of account at the same institution — an example would be having both premium checking and savings accounts at a bank. Another common scenario with premium checking accounts is that the more you keep on deposit, the more incentives you may receive.
What Are the Benefits of a Premium Checking Account?
Those who qualify for a premium checking account may be rewarded with the following benefits:
• Lower fees for other financial products within the same financial institution
• Dedicated customer service
• Higher interest rates
• Free or low-cost wire transfers
• ATM fee reimbursements
• Free checks
These can be attractive ways to encourage customer loyalty, as many financial institutions work to find new ways to enhance their clients’ experience (SoFi’s membership benefits are an example, too).
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Pros and Cons of a Premium Bank Account
Opening a premium bank account might be valuable if you can take advantage of all the benefits offered. That being said, there are some downsides, too. Meeting certain requirements can make this type of account inaccessible to some. Let’s take a closer look at the benefits and the downsides.
Pros
• Higher APYs: Premium checking accounts typically come with higher annual percentage yield compared to basic checking accounts (which may not accrue any interest). That enhanced interest rate means your money earns more money.
• Waived or lowered fees: In most cases, premium checking accounts will waive fees such as those for out-of-network ATMs, money orders, cashier’s checks, and wire transfers. Depending on the bank and what other accounts you have with them, you may even get lowered or waived fees on exchange rates for ATM withdrawals outside the U.S.
• Discounted rates on other financial products: It’ll depend on your relationship with the bank (and what other accounts you have in addition to a premium checking account), you could receive lower rates for personal loans or mortgages compared to other customers.
• Higher transaction limits: You may be able to make larger daily ATM withdrawals, transfers, or debit card purchases.
Cons
• Rates may not be as high as you think: Although you could receive a higher interest rate compared to other types of checking accounts, it may not be as high as what you could get with savings or money market accounts.
• More stringent requirements: You’ll typically need to maintain a higher minimum balance in your account in order to avoid monthly maintenance fees or to earn interest. For instance, many banks require anywhere from $10,000 to $50,000 or more in your premium checking account. The good news is that the balance requirements may be the total across all your accounts with the same financial institution.
• Benefits may be tiered: While it varies from bank to bank, you may have to “level up” to an even higher minimum balance to access the best interest rates and other perks.
How Can I Qualify for a Premium Checking Account?
In most cases, all you need to do is to have a minimum amount on deposit in order to open a premium checking account. Some may even require you to open other financial products or allow you to meet the minimum deposit requirements across a number of qualifying accounts.
Some major banks, like Chase and Bank of America, will allow you to meet minimum deposit requirements across different accounts as long as they’re linked.
Additional Features of a Premium Checking Account
You may want to consider whether having that much money in a checking account is a worthwhile move for you. Consider the following points:
• Is earning interest a priority for you? If you’re after a checking account that earns a higher amount in interest, a premium checking account may be for you. Keep in mind though that if you may not earn as much as you think you will. For instance, if a bank currently offers a 0.05% APY, on a $50,000 balance, you’re only earning $25 per year.
• How often do you use ATMs? Many premium checking accounts offer more ATM transactions and even waive fees for third-party ATM fees. For those who use ATMs frequently, especially out-of-network ATMs, this perk may not be worth it.
• Do these perks sync up with your financial goals? Premium checking can be part of a deeper relationship with your bank (often called relationship banking) that offers holistic support for your finances. This includes benefits like discounted rates on other financial products — say, a home loan. If you’re willing to remain with one bank for all their finances, a premium checking account might be a good fit and open other doors for you.
Are Premium Checking Accounts Worth It?
To decide if a premium checking account is right for you, it can be a smart idea to compare them to standard checking accounts. You may be able to get many of the same benefits, such as free checks or equivalent interest rates, without stashing as much cash as premium accounts require.
If all you’re looking for is a checking account without fees, a regular checking account might be a better fit. Getting a high-yield savings account could be a good option if you want to earn a higher interest rate but can’t meet the large minimum balance criteria required of premium checking accounts.
That said, premium checking accounts can be a great fit for people who want to keep all their banking with the same financial institution — this includes investment and loans. If you’re able to maintain a high balance across your qualifying accounts, then it could be well worth it, especially if you’ll use all the perks like free checks and ATM reimbursements. By thinking about your financial goals and how you like to bank, you may decide that premium checking is the right move for you.
SoFi Is Making Banking Better!
While you’re thinking about checking accounts…hey, over here! Open a High Interest Bank Account with SoFi, where you can earn a competitive APY. Plus, you don’t have to worry about monthly maintenance fees (there aren’t any) and can take advantage of other benefits. Another cool feature: SoFi recently announced that deposits may be insured up to $2 million through participation in the SoFi Insured Deposit Program1.
3 Great Benefits of Direct Deposit
- It’s Faster
- It’s Like Clockwork
- It’s Secure
As opposed to a physical check that can take time to clear, you don’t have to wait days to access a direct deposit. Usually, you can use the money the day it is sent. What’s more, you don’t have to remember to go to the bank or use your app to deposit your check.
Whether your check comes the first Wednesday of the month or every other Friday, if you sign up for direct deposit, you know when the money will hit your account. This is especially helpful for scheduling the payment of regular bills. No more guessing when you’ll have sufficient funds.
While checks can get lost in the mail — or even stolen, there is no chance of that happening with a direct deposit. Also, if it’s your paycheck, you won’t have to worry about your or your employer’s info ending up in the wrong hands.
FAQ
Is a premium checking account worth it?
A premium checking account may be worth it depending on whether you can afford to meet the higher than usual minimum balance amount and whether you’ll be able to take advantage of all the perks. If you can, and if you frequently use ATMs and would like those fees waived, it may be a good fit.
What are the benefits of a premium bank account?
Some of the key benefits of a premium bank account is a higher interest rate, waived out-of-network ATM fees, discounted rates on loan products, and overdraft protection. Some may even offer free financial and investing advice.
What does a premium bank account mean?
A premium bank account is a type of account offering extra perks once you meet a minimum balance requirement.
Photo credit: iStock/Charday Penn
1SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by banks in the SoFi Insured Deposit Program. Deposits may be insured up to $2M through participation in the program. See full terms at SoFi.com/banking/fdic/terms. See list of participating banks at SoFi.com/banking/fdic/receivingbanks.
SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
SoFi members with direct deposit activity can earn 4.50% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.
SoFi members with Qualifying Deposits can earn 4.50% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.50% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 8/9/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet..
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