What Is Relationship Banking?

Quick Answer

Relationship banking is when banks offer many different products and services to meet the needs of loyal customers. As a relationship banking customer, you might qualify for exclusive services and deals, such as better interest rates on deposit accounts or loan products.

Happy couple communicating with their bank manager during a meeting in the office.

Choosing one bank to handle all of your money matters can come with unique benefits if your bank practices relationship banking. Relationship banking is a way banks attempt to gain and maintain customers by providing products to meet as many of their financial needs as possible. Here, we explain what relationship banking is, how it can benefit you and its pros and cons.

What Is Relationship Banking?

Relationship banking is when a bank offers a large portfolio of products and personalized services to loyal customers who maintain several accounts. As a relationship banking customer, you team up with relationship managers to choose products that meet your goals, and you could get rewarded for maintaining high account balances with the bank.

For example, having a total of $50,000 in your checking and savings accounts could unlock one-on-one financial planning, discounted bank fees, higher annual percentage yields (APYs) on savings accounts and lower annual percentage rates (APRs) when you borrow money.

Banks may provide the following products to promote relationship banking:

How Relationship Banking Can Benefit You

Becoming a loyal customer of a bank can be convenient. Within one desktop or app account dashboard, you might be able to check your savings, credit card and loan balances; autopay schedules and amounts; and more. In addition to relationship discounts, having a large balance at a bank could make you eligible for a personalized banking experience with financial advising.

PNC, for example, has a relationship banking service called PNC Choice Banking, which provides customers with relationship managers, lower interest rates on credit cards and the option to work with the PNC investment team on strategies to reach long-term goals. PNC Choice Banking is free to customers with $50,000 in deposit balances at the bank.

Similarly, Citi offers relationship mortgage rate discounts to current and new customers who open up and maintain a certain deposit account balance. If you have an account with $1 to $50,000, you could get $500 off mortgage closing fees. And if you have $50,000 or more in an account, you could qualify for a percentage off your mortgage interest rate.

Business owners may also benefit from relationship banking because it could allow you to handle all personal and business banking tasks with one bank visit. The bank might even connect you with client services representatives to help you reach your business goals.

Pros and Cons of Relationship Banking

Not sure if relationship banking is right for you? Here are the pros and cons.

Pros of Relationship Banking

  • Provides exclusive services: Banks may offer high-net-worth customers benefits like financial advising, concierge services or access to a wealth manager.
  • Makes account management easy: Having your cash and loans at one bank can make paying bills and managing your bank balance convenient.
  • Offers financial incentives: Banks may offer discounts on bank fees, higher returns on savings and lower interest rates on loans for loyal bank customers.

Cons of Relationship Banking

  • Limits your options: The bank you're loyal to might not always offer the best APYs on bank accounts or APRs on loans, so it's still always a good idea to keep your options open and periodically compare what else is out there.
  • Perks may require high balances: You might need to have a large sum in your accounts to qualify for valuable relationship banking incentives.
  • Not offered by all banks: Relationship banking isn't a service offered by all financial institutions, so you'll have to shop around and find one that offers products and benefits that meet your needs.

The Bottom Line

In a world where self-service has become the new norm, relationship banking may offer a more personalized banking experience where you can get one-on-one support along with better terms on products. However, even if you're loyal to a bank, shopping around and comparing services every so often is still worthwhile. After all, your bank should work for you—and checking out competitors could help you make sure your money is in the right place.