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|
- 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.
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