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The Perks of Relationship Banking

CHICAGO — Your bank would like you to keep as big a chunk of your cash with it as possible. In order to convince you that they are the best place to keep your money, most big banks and some of the smaller regional banks have come up with special programs to court customers willing to show their loyalty.

Some banks may have a different name for the effort, but the most popular name these days is “relationship banking.” Whatever your bank calls it, it will be to your advantage to be aware of what it involves.

When it comes to banks, it’s all about money, and convincing you to commit as much of your money as possible to their safekeeping is what a bank considers a good relationship; thus, “relationship banking.”

What it all means is that if you’re willing to commit a sizable amount of money to one bank, you can expect to receive the royal treatment, which isn’t available to just anyone who opens a modest savings or checking account. Most of the country’s largest banks are offering attractive perks to customers who maintain thousands of dollars in some combination of checking, savings and investment accounts. Among the potential benefits are lower banking fees, higher interest rates on deposits, lower interest rates on loans and credit card balances, and special attention when you contact customer service.

Why all this romancing of privileged customers? Because a customer who keeps lots of money in various types of accounts in the same bank is a profitable customer, while the customer who opens only a modest checking or savings account is likely to be a money loser instead of a money maker.

Here are what a couple of major banks offer to their “relationship” customers:

In what it calls the PMA Package, Wells Fargo offers higher interest rates on some deposit and CD accounts; lower interest rates on loans and credit lines; up to 100 commission-free trades annually through a self-directed investment account; and extra benefits for Wells Fargo VISA credit card holders, including purchase protection coverage. To qualify for the PMA package, a customer must have $25,000 in qualifying deposit accounts or $50,000 in qualifying deposit and brokerage accounts.

Bank of America, another major player, calls its program Platinum Privileges. To qualify, a customer must have an active personal checking account plus $50,000 in combined deposit accounts and Merrill Edge brokerage accounts. Among the Platinum Privileges are higher interest rates on money market accounts, CDs and IRAs; home loan discounts; lower rates on home equity loans; plus 30 commission-free online stock trades per month with a self-directed Merrill Edge account.

Other major banks and many smaller ones offer similar programs to those they consider their “relationship” customers. In most cases, you need to keep at least $25,000 in relationship accounts to qualify.

Depending on the bank involved, you may get a dedicated phone number for customer service, and lower or no fees on such services as money orders, cashier’s checks and wire transfers. Some banks offer breaks for relationship customers who take out a mortgage loan, including discounts off closing accounts or lower interest rates on a first-time mortgage loan.

Of course, not every banking customer is in love with the idea of being tied to one bank for all or most of his or her banking needs. With easy access to the Internet to shop around for the best deals, some customers feel it makes more sense to shop for top yields on their savings rather than depending on one bank to treat them right. In truth, even the deals on relationship packages offered by the biggest banks often don’t measure up to the best yields offered by many online banks, or even credit unions or smaller local banks.

For many people, the personal interaction of working with a local bank or credit union is more important than obtaining the highest possible return on their deposit accounts. Credit unions in particular are rapidly gaining new members as they relax their membership requirements while offering highly competitive rates on deposits and loans. (To find a local credit union, log on to

Of course, the best deals often are available to those willing to deal with an online bank versus a more familiar brick and mortar institution. For example, online Ally Bank offers a free checking account with no minimum balance, interest rates as high as 0.75% depending on the size of the account, and no-fee ATM transactions with reimbursements for another bank’s ATM fees.

Obviously, you have a wide range of choices when it comes to where you park your money. Some perks will be more important to you than others, so it’s best to shop around for the deal that is best suited to your needs.

As long as the bank you choose is a member of the Federal Deposit Insurance Corporation (FDIC) or, in the case of credit unions, the National Credit Union Administration (NCUA), your money will be safe up to the maximum insured coverage.

Information in this article is provided for educational and reference purposes only. It is not intended to provide specific advice or individual recommendations.

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Have a question or comment? E-mail our editor Dave Davis at [email protected] .