“Relationship banking,” is a term used to describe a bank that offers multiple benefits or product offerings alongside opening an account with them. While the benefits of relationship banking differ with each bank, there are new options to check out with every institution that may apply to your own financial needs. For example, benefits could include specialized financial products created for specific demographics, such as students, seniors, and high-net-worth individuals. Along with high touchpoint customer service, credit cards, investments, safe deposit boxes, insurance plans, different types of loans, and business services (e.g., credit card or payroll processing) are some examples of the types of benefits that might come with opening an account at a specific bank.
1. Get the benefits of Direct Deposit
For some of these banks, the more money you keep (or deposit) in your checking account, the more benefits you’ll earn. Banks like Citi and PNC, for example, offer tiered cash bonuses for opening an account with a specified minimum balance and then maintaining that balance within a range for a certain number of days.
Setting up direct deposit is an easy and common way to maintain your account balance, and many different types of banks offer incentives for setting this up. The digital bank Chime, for example, is one of several banks that give you the ability to access your money up to two days prior to the date it’s scheduled to be auto deposited in your account.
2. Earn student loan benefits
Through relationship banking, you may also be able to earn better rates to refinance student loans. While this depends on the platform you’re using, lender Laurel Road will offer lower refinance rates on student loans if you open a linked checking account with them and meet certain direct deposit targets.
Another unique offering from Laurel Road revolves around their credit cards. If you have student loan debt and use a Laurel Road credit card, you’ll be able to put the cashback rewards towards paying down that debt. So not only will you benefit from using a credit card, but you can also pay down some of your student loans faster in the process.
3. Rewards and cashback
Another common offering of relationship banking is to offer more rewards or cashback on their select credit cards. These rewards can mean anything from more points to a higher percentage back on cash rewards. With so many types of credit cards with different perks to choose from, just make sure to do your due diligence and select the card that makes the most sense for your lifestyle. That way, you can get more out of credit card usage.
Bank of America’s Preferred Rewards let you earn a higher percentage of benefits and cash rewards on select credit cards as you continue to put more money into your checking account. To meet the requirements, you will need at least $20,000 in your daily checking account for three months, so make sure you qualify before you go looking for your rewards! But, make sure you understand how to redeem rewards and that they make sense for you financially.
4. Higher APY
Many banks will also offer higher interest rates on money market, CD, and standard savings accounts if you can retain a high minimum balance in your checking account. While the percentage change might not be enough to convince you to switch banks, it is a great perk if you’ve been loyal to a bank over a long period of time.
Chase Bank is one of the companies that offers these kinds of benefits. Their CD accounts offer “relationship rates” that can earn an APY as much as .01%.
To meet your goals, consider relationship banking
Banks love to find strategies that keep their business flowing and their customers’ account balances high. Incentives and perks create a win-win situation for bankers and customers that you can take advantage of to reach your financial goals. As a customer, you get a host of benefits in addition to the traditional savings and interest offered by a bank, and the bank benefits from your continuing business.
