Premium bank accounts
If you hold a significant sum with your bank, you might qualify for the additional perks of a premium bank account.
Premium bank accounts, also known as “premier” bank accounts, offer extra perks to people who hold a large sum with the bank offering the account.
Whether or not you can or should get one depends on your circumstances and whether you like keeping big sums with the same bank, or would rather spread it out.
What is a premium bank account?
A premium bank account is really just a current account with a fancy name and some additional perks.
You’ll get all the things you usually get with a current account: a debit card, an overdraft facility, the ability to make bank transfers, set up direct debits and sending orders, and so on. However, you’ll also get some additional features, such as insurance or dedicated customer service.
The catch is that only a handful of people will qualify for their bank’s premium account, as eligibility criteria are quite financially demanding (more on this below).
What benefits does a premium bank account offer?
Premium bank accounts are usually offered by traditional banks (think Barclays, HSBC and the like). Each account has its own sets of perks, but here are some of the features you can expect:
- Some kind of insurance. For example you might get free travel insurance for you and your family.
- Interest-free arranged overdraft. Up to a certain limit, which can be for example £500.
- Special offers on other banking products. For example you might be offered a higher interest rate on your savings, or better conditions on a mortgage or a loan.
- Higher account limits. Such as a higher limit on daily ATM withdrawals.
- Dedicated banking service. Big banks often have a dedicated customer service team to support their premium customers.
- International banking. If you travel a lot, you might also be able to get a premium international bank account, which will allow you to hold different currencies at the same time. Alternatively, the premium account might come with free international bank transfers.
How much do premium bank accounts cost?
Premium bank accounts usually come for no monthly fee. They are a way for banks to reward you for your loyalty and for being a “big” customer.
This doesn’t mean that there are no fees at all. Do check the terms and conditions carefully before applying. For example, there might be fees for making payments abroad.
How can you qualify for a premium bank account?
Again, every bank has slightly different eligibility criteria, but generally speaking, you will need to hold a significant sum with the bank offering the account.
This will usually mean having at least £50,000, £75,000 or £100,000 in either a current account, savings or investment with the same bank. With some banks you might also qualify if you have a high annual income paid into the bank (again, think £75,000 or higher) or a big mortgage with it (criteria for this can be £500,000 borrowed or more).
So yeah, premium bank accounts are not for everyone. If you can’t qualify but would still like a comprehensive account with a lot of extra perks, you can consider a packaged bank account. They come for a monthly fee but offer all kinds of extra features and insurance. More info about them is on this guide.
Should I go for a premium bank account?
It depends. The perks included in premium bank accounts are nice, but definitely not worth changing your overall financial strategy over. If you are uncertain, just leave them out of the equation for a second and consider everything else.
For example, would you want to have most of your savings or investment with the same bank any way? Or would you rather shop around and make sure you get the best deal, even though it will be more time-consuming to manage?
If you do decide to go for a premium bank account, do compare options carefully. Check the fees, the perks, ask about customer support and other banking products. For example, say you are thinking of buying a house in the near future: will the premium account also come with a better deal on your mortgage?
Finally, keep in mind that anything above the first £85,000 you hold with the same bank in a current account or a savings account will not be covered by the Financial Services Compensation Scheme, which is a big safety net in case anything were to go wrong with the bank. It may not be worth losing that protection over the small perks of a premium bank account.
Pros and cons of a premium bank account
- Extra free perks and benefits, such as free travel insurance.
- You’ll often get more dedicated customer service compared to a standard customer.
- Better deals on other banking products, such as mortgages.
- Keeping all your money with the same bank can make it easier to manage everything.
- Being loyal to the same bank may mean missing out on better deals elsewhere.
- If you go over the FSCS limit, your savings may not be entirely protected.
Frequently asked questions
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