Unlock Top Bank Accounts with Lucrative Signup Bonuses
Financial institutions are constantly competing amongst themselves to get their hands on new customers, so in the highly competitive banking market, getting company details right matters. They also use signing bonuses to attract potential clients to open up new bank accounts. For the right consumer, these bonuses can be a money maker when you know how to play the bank game. In this article, we look at the different bank accounts with signup bonuses, how much you can earn, and the pros and cons of these offers.
How Bank Signup Bonuses Work
Banks sometimes offer signup bonuses in order to entice new customers. These bonuses are usually offered when you open new checking or savings accounts and meet certain criteria, like keeping a minimum balance or establishing direct deposits. The bonuses may vary from cash, to gift cards, to travel points.
As an illustration, a common bonus might be to earn $200 when you do any of the following (actions must happen within the first 90 days1: Open a new checking account and setup a direct deposit of $500 or more. These offerings are not just consumer-friendly a vehicle that helps consumers make the best bang for their buck but tool for marketing Banks to expand their customer base.
Types of Accounts and Bonuses
Signup bonuses are often available when you open a checking or savings account, although the terms can vary greatly.
Checking Accounts: These generally carry higher bonuses than savings accounts. Some banks might ask you to establish a monthly recurring direct deposit or have a monthly transaction minimum to receive the bonus. The bonuses vary from $100 to $500 depending on bank and account.
Savings accounts: Savings accounts normally have lower bonuses compared to checking accounts. However, it can be a good incentive. These bonuses may also come with a minimum deposit needed, as well as a minimum balance to hold for certain time.
Making the Most of Signup Bonuses
Understanding the terms and conditions associated with these signup bonuses is critical to maximizing the potential of each offer. So why not consider the following strategies:
Bank bonuses are not created equal: That is to say, you can’t just find the highest-paying offer and run with it. It is extremely important to weigh up the offers from banks and consider the requirements against the rewards. Resource: Websites such as NerdWallet and Bankrate keep extensive lists of those bank bonuses now4.
Fulfil The Criteria: Ensure you read the terms properly and that you can fulfil the criteria like minimum deposits or minimum number of trades in that time frame. Important Note: Missing these could result in the loss of bonus.
Watch for FeesSome accounts come with monthly maintenance fees that can wipe out the bonus unless certain requirements are met. Be aware of what fees there are, and how to get those fees waived.
The Benefits and Costs
Bank signup bonuses are mostly about putting money into your pocket as quickly as possible. If you are a consumer who opens accounts with bonuses as a strategy, that can turn into a little side income. Such offers could also spur some people to save or expand their banking service providers.
But there are probably also costs involved. Several banks will charge for closing the account sooner, canceling the bonus when you move the bank very quickly. In addition, they treat bank bonuses as taxable income according to the IRS, which means you have to consider the tax before calculating the net benefit3.
Bank signup bonuses present an attractive way to potentially make money from consumers testing new financial products. Familiarity with the account types, knowing how to compare offers, and taking the time to meet the requirements can net you hundreds of dollars through these programs. That said, investors should always evaluate the advantages against the associated costs (i.e. fees, taxes), to help determine whether to accept this trade-off based on financial priorities. However, as banks thrive for innovation to snatch as many customers as possible, these bonuses are here to stay for the benefit of banks and the consumers.