If you apply for a bank account, chances are they probably have a bank bonus associated with it. You’re basically getting free money just by signing up for this bank account. So how does the promotions work, and what do you need to do to get the bonus cash?
Types of Bonuses
The most common types of bonuses are welcome bonuses which is cash gifted to you for opening a new account with that bank. To qualify for this offer, you genearlly need to bring new assets into the bank and meet certain requirements.
Checking account bonuses are some of the easiest to find because they are the most advantageous for banks and credit unions. To earn rewards for this type of account, you must set up direct deposit, use your debit card multiple times per month, and leave a certain amount of money in your account for several months.
These types of relationships work well for banks because it offers a long term relationship with the customer in order for them to earn the bonus. However, keeping checking accounts open for awhile may result in some maintenance fees adding up.
Although harder to find, savings account bonuses are out there. These promotions will often require customers to deposit a larger amount of money, usually $10,000 or more, to earn the bonus. This means that the bonus will be much higher as well.
Other Types of Bonuses
Some banks may try to persuade you to join them by offering a variety of promotions. For example, they could offer high interest on a high-yield checking account, but it is only available for the $1,000 or so in your account.
Is the Bonus Worth It?
If you are simply looking for a new bank, then these offers can be a great way to get your foot in the door. However, if you want to try and profit from these deals, it can get a tricky.
Can you qualify? Although the advertised promotion may seem appealing, there are some difficult requirements you must meet in order to get the deal. For savings accounts, you need to have a large sum of money. Also, you will need to set up direct deposit, and if you work for someone who doesn’t offer direct deposit, you won’t be able to get the bonus. Keep in mind that some banks even require you use your debit card multiple times per month.
Interest rates. Although the introductory offer sounds great, when you open a new bank account, especially a savings account, you want to make sure your future is secure. Select a bank that offers competitive, if not better interest rates. This will allow you to earn off of the money you put into their account.
Credit scores. Some banks will look into your credit report to see how trustworthy you are with a bank account. If they perform a “hard pull“, that inquiry will temporarily lower your credit score. So if you’re trying to apply for any credit cards or loans during this period, you might not get the best rate possible if you have a lower score.
Fees. It may sound good to have a couple hundred dollars in bonuses lying in your bank account, but the real question you should be asking is: will it cover the fees? Like we stated earlier, having a bank account open means you must pay the monthly maintenance fees required to keep the account open. To avoid losing your bonus to fees, do your research and find out ways to get the fees waived.
Taxable interest. When you receive your bank account bonus from opening your account, the bonus actually counts as interest. As a result, you will need to pay interest on this bonus. Realistically, you aren’t going to be walking away with the full amount you were promised.
How to Find Bonus Offers
All you have to do to find bank bonuses is to search online for offers from all the banks you’re interested in. Banks that want to get more customers will normally pay to advertise at top spots.
Additionally, local offers are great too because you’ve probably seen this physical branch while you go about your day. This allows you to go to the branch if you ever need banking services.
The idea of banks giving out free money to their customers might seem strange, but it is simply a way of persuading potential customers to doing business with them. If you’re looking for a new bank account, make sure to choose one with a bank bonus.
If this information interests you, check out our Best Business Bank Bonuses and Best Bank Savings Rates to make the most out of your bank account. Take a look at our list of Credit Card Bonuses here on HMB!