A Closer Look at Premium Checking

NerdWallet’s study of big banks confirmed last week that while every big bank has a basic checking account offering (one to be exact), banks have been actively targeting the “mass affluent” with numerous higher-tier, premium account offerings. In this post, we take a closer look at these premium checking accounts at the top 5 banks to examine just what it takes to have one of these Cadillac checking accounts and what the actual benefits are.

What it takes: Typical Deposit of $25,000+ to Qualify for free Cadillac Checking

Bank	Checking Account Name	Monthly fee	Requirements to waive fee
Bank of America	Prima with Tiered/Advantage with Tiered Interest Checking	$25	$10,000 in combined deposits OR $15,000 balance on a linked Installment Loan, Line of Credit, or any balance on a linked first mortgage OR $15,000 in combined assets in linked brokerage accounts
Bank of America	Premium (in AZ, MA, GA)	$25	$20,000+ in linked deposit accounts with BoA and/or eligible linked investment accounts with Merrill Lynch
US Bank	Platinum Checking Package	$17.95	$25,000 in combined personal deposit, invesment and credit balances
Wells Fargo	PMA Package (with $250k+ in relationship balances)	$30	$25,000 in combined qualifying deposit accounts (checking, savings, CD or FDIC-insured retirement) OR $50,000+ in qualifying PMA relationship accounts (deposits, certain credit, 10% of outstanding mortgage, certain brokerage accounts)
Citibank	Citigold	$30	$50,000+ for all linked deposit/retirement accounts OR $100,000+ across all eligible linked Citi accounts, including investments and loan balances, but excluding mortgage
Chase	Premier Plus Checking	$25	Average daily balance of $15,000+ in linked deposits/investments
Chase	Premier Platinum Checking	$25	Average daily balance of $75,000+ in linked deposits/investments

Highlights: 

• Least restrictive: Bank of America, which requires $10,000 in combined deposits; note: this may change given piloting in Arizona, Massachusetts and Georgia, where Premium accounts require combined balance of $20,000+
• Most common requirement: $25,000 in combined deposits (US Bank, Wells Fargo)
• Most demanding: Citibank and Chase, which require $50,000 to $100,000+ in linked account

Benefits of Cadillac Checking: discounts (and freebies) on more bank products, some waived fees
If a consumer is required to hold such large balances, what exactly is he or she receiving in return? Turns out it’s mostly discounts and specials on additional bank products (Savings accounts, CDs, mortgages, loans, etc), waived out-of-network ATM fees (sometimes), and waived fees on things that an average consumer would likely encounter only minimally (e.g., wire transfer, stop payment)

Bank	Checking Account Name	Out of network ATM charges	Specials and discounts on other bank products	Waived fees
Bank of America	Prima with Tiered/Advantage with Tiered Interest Checking	$2	Special rates on line of credit/loans and deposits	Specialty checks
Bank of America	Premium (in AZ, MA, GA)	$2	Up to 4 interest-bearing checking and regular savings/money market accounts	Specialty checks
US Bank	Platinum Checking Package	Waived	Preferred rates, rewards, and rebates on other financial products	Overdraft protection, specialty checks
Wells Fargo	PMA Package	Two non-Wells Fargo ATM withdrawals waived per cycle	Interest rate specials on deposits and loans	Incoming wires, stop payment, specialty checks
Wells Fargo	PMA Package (with $250k+ in relationship balances)	Waived	Interest rate specials on deposits and loans	Incoming wires, stop payment, specialty checks
Citibank	Citigold	Waived out of network ATM and Int’l foreign exchange fees	Preferred pricing on other Citi products	Overdraft protection, stop payments, incoming wire transfers, specialty checks
Chase	Chase Premier Plus Checking	First four waived	Chase Plus Savings with higher interest rates and additional checking accounts	Specialty checks
Chase	Chase Premier Platinum Checking	Waived	Chase Plus Savings with higher interest rates and additional checking accounts	Incoming wires, stop payment, specialty checks, overdraft protection transfer

What it all means: Unless you’re in the market for other financial products (mortgage, loans, etc) and could benefit from preferred rates and discounts or additional deposit accounts (checking, savings, money market, etc), the benefits of having a Cadillac checking account is probably not worth tying up large amounts of cash for occasionally waived fees on relatively uncommon charges (cashiers check, stop payment, wire transfer – how often do these really happen?).  Even though you can earn interest on many of these premium checking accounts, you’re likely to find a higher rate on a conventional savings or high-yield checking account.  If you’re considering upgrading or signing up for a premium account, take a close look at what other non-checking financial products you may need and try to calculate the true net benefit of having a premium account.