What Is a Packaged Bank Account and How Does It Work?
Understand packaged bank accounts: fee-based accounts offering bundled services. Evaluate if the benefits outweigh the cost for your financial goals.
A packaged bank account offers a comprehensive suite of financial services and benefits, bundled together for a recurring fee. Unlike standard bank accounts that primarily provide basic transaction capabilities, these accounts integrate various additional perks designed to offer enhanced value to the account holder. They are structured to consolidate multiple financial needs into a single product, aiming for convenience and potential savings on services that might otherwise be purchased separately.
Defining a Packaged Bank Account
A packaged bank account, often termed a “premium checking account” or “bundled account” in the United States, combines core banking functions with an array of supplementary services for a monthly charge. This contrasts with many standard checking accounts, which often come with no monthly fees, especially if certain conditions like direct deposit are met. These accounts integrate multiple financial and non-financial services into one integrated offering. Some banks may also refer to these as “relationship accounts,” as they often reward customers who consolidate multiple financial products with the same institution.
Common Features and Services
Packaged bank accounts typically include a variety of features and services. Many of these accounts offer higher interest rates on deposited balances compared to standard checking accounts. Account holders may also benefit from waived or reduced fees, such as those for out-of-network ATM usage, wire transfers, money orders, or cashier’s checks. Some accounts provide discounted rates on other financial products like personal loans, mortgages, or credit cards.
Beyond financial perks, these accounts incorporate various insurance coverages. Examples include travel insurance, mobile phone insurance, and roadside assistance. Identity theft protection and home emergency cover can also be part of the package. Some premium accounts offer higher daily limits for ATM withdrawals and debit card purchases, or provide access to dedicated customer service lines. The specific combination of these benefits varies among different banks and account tiers.
Understanding Fees and Eligibility
Packaged bank accounts come with a recurring monthly maintenance fee, which can range from $10 to $30 or more, depending on the bank and the specific benefits included. However, banks often provide ways to waive these monthly fees by meeting specific eligibility criteria.
The most common requirement for fee waivers or account qualification is maintaining a minimum average daily balance across all linked accounts. This minimum balance often ranges from $10,000 to $20,000 or more, though some banks may allow balances across checking, savings, and investment accounts to count towards this total. Other eligibility criteria include a certain level of monthly direct deposits, for instance, $5,000 or more per month, or having an existing relationship with the bank through other products like a mortgage or investment accounts. Some accounts also have age requirements, typically requiring the primary account holder to be at least 18 years old.
Opening a Packaged Bank Account
Opening a packaged bank account involves a process similar to that of a standard checking account. Prospective account holders typically begin by researching different banks to find a packaged account that aligns with their financial needs and lifestyle. Applications can often be submitted online or by visiting a bank branch.
During the application, individuals provide personal identification, such as a valid government-issued photo ID like a driver’s license, state ID card, or passport. Proof of address, commonly a recent utility bill or lease agreement, is also needed. A Social Security number or Individual Taxpayer Identification Number (ITIN) is necessary for identity verification and tax reporting. An initial deposit may be required to fund the account, with amounts varying by bank. The bank will then review the application and verify the provided information before approving and activating the account.