What Is a Preferred Checking Account?
Learn about preferred checking accounts: a distinct banking option offering elevated benefits for customers who meet specific criteria.
A preferred checking account is a specialized banking product designed for customers who meet specific financial criteria. These accounts offer enhanced benefits beyond those of a standard checking account, providing a more comprehensive banking experience for individuals with complex financial needs or those seeking greater value from their banking relationship.
Key Features and Benefits
Preferred checking accounts often include higher interest rates on deposited balances, allowing account holders to earn more on their funds. Some accounts may offer tiered interest rates, where higher balances qualify for better returns. Financial institutions frequently waive or reduce various fees for preferred account holders, such as monthly service charges, out-of-network ATM fees, wire transfer fees, and overdraft fees.
Account holders often receive access to dedicated customer service or personal financial advisors. These accounts also extend exclusive perks, including discounts on loans, credit cards, or investment products. Preferred accounts may provide enhanced digital banking tools, increased transaction limits, or higher ATM withdrawal limits. Complimentary services like free checks, money orders, or safe deposit boxes are also common. Some accounts even offer unique protections like cell phone coverage, roadside assistance, or identity theft protection.
Eligibility Requirements
Qualifying for a preferred checking account typically involves meeting certain financial thresholds or maintaining a broader relationship with the financial institution. A common requirement is maintaining a minimum average daily balance across linked accounts, which can range from $10,000 upwards. Another criterion is meeting specific direct deposit thresholds, such as a minimum monthly amount.
Account holders might also qualify by having a certain amount of assets under management with the same financial institution. Additionally, holding multiple financial products with the bank, such as a mortgage, credit card, or investment account, can help satisfy eligibility criteria. Some preferred accounts may have specific age requirements or professional affiliations for eligibility. These requirements vary significantly among financial institutions.
Comparing with Standard Checking
Preferred checking accounts offer distinct advantages compared to standard checking accounts. Standard checking accounts typically come with monthly service fees unless specific conditions are met. Preferred accounts, conversely, often waive these fees entirely, provided the account holder maintains the higher eligibility requirements.
Most standard checking accounts are non-interest bearing or offer very low interest rates. Preferred checking accounts generally provide higher interest rates, allowing account holders to earn a modest return on their balances. The level of customer service also differs, with preferred accounts often granting access to dedicated banking specialists or financial advisors.
Preferred accounts also bundle additional perks and benefits, such as fee waivers for various banking services and exclusive discounts on other financial products. Standard accounts usually lack these extensive benefits. Preferred accounts target individuals with higher balances or more complex banking needs, while standard checking accounts are generally aimed at everyday transactions and individuals with basic banking requirements.