Important takeaways

• A relationship interest rate, or relationship APY, provides a higher annual percentage return on deposit accounts when you open an additional account at the same bank.

• The terms and benefits associated with relationship APY vary by bank, including the level of boost and additional benefits.

• Some offers may have high fees relative to the APY increase, negating the overall benefits of getting a relationship APY.

Whether you’re moving to a new bank or looking to top up your current deposit account, a relationship rate, also known as a relationship annual percentage rate of return (APY), can help increase your savings potential.

A relationship APY is a boosted return you can get with a deposit account if you open another deposit account at the same bank. Usually, banks offer this deal when you open an account focused on savings – inclusive the money market and savings accounts — and a checking account.

Whether it’s worth opening different accounts to earn a ratio APY depends on your specific financial situation and other factors including monthly maintenance fees (which can offset your savings). It’s important to shop around to find the best deal for you, as you may be able to find very competitive returns on accounts without a relationship APY.

Here’s what you need to know about relationship pricing.

How a relationship degree can affect your money

A higher APY means your money grows faster over time.

For example, if you keep $5,000 in a savings account with a 4 percent APY over a year, you’d earn nearly $200 in interest. However, if you had the same amount in an account with a 1 percent APY, you would only earn $50. So increasing your current yield with a relationship APY can go a long way toward your savings goals.

Whether a relationship APY is offered, what conditions you have to meet to get it and how much it increases the base return varies from bank to bank. Some deposit accounts may even come with extra benefits with a relationship APY, including increased cashback on debiting or credit accounts and interest discounts on mortgages and other loans.

KeyBankfor example, offers higher interest rates on their savings accounts, enhanced cashback on their credit cards and interest discounts on mortgages and personal loans.

Major banks that typically offer relationship pricing include:

But while a relationship APY can come with several benefits, it can also come with several burdens. For example, opening a checking account may mean spending extra money monthly maintenance feeswhich can fully offset any earnings depending on how much you have saved. And the APY ratio might not even be enough to justify opening multiple accounts.

Take Chase Bank as an example. It offers a relationship rate for its Chase Premier savings account when you open a Chase Premier Plus Checking or Chase Sapphire Checking account, both of which charge a hefty $25 monthly fee that can’t be easily waived. But your savings APY will only be compounded by a nominal 0.01 percent APY, for a total of 0.02 percent APY, making this a bad deal for most consumers.

Bottom line

Relationship APY can improve your savings by offering higher interest rates when you open multiple accounts at the same bank. Some institutions may even offer additional benefits, including increased cashback and discounts on loans. However, it’s important to carefully evaluate the costs of earning a ratio APY — including monthly maintenance fees — because the costs can negate the benefits. Your best bet is to shop around to find the best deal for you, and make sure any potential increase justifies the effort and additional account requirements.