You might have noticed recently that banks seem to be in an arms race to see who can offer the biggest bonus for opening a new account. Whether they’re offering iPads or cash bonuses of anywhere from $50, to $500, you might have considered opening a new account to take advantage of one juicy bank bonus.
But you should know that banks offer these bonuses for a reason. They expect to make back every penny of the amount that they pay out in bonuses through the fees or interest they charge you.
Some of the more attractive bank promotions that are currently being offered include $300 in cash for opening a TD Bank Premier Checking Account, $300 in cash for opening a Chase Premier Plus Checking Account, and a whopping $500 cash bonus for opening a Citibank Priority Account Package. If any of those offers tempt you, read on to find out what you should know before signing up for a new account.
What You Need to Do to Get a Bank Bonus
Rest assured that banks aren’t offering free money to just anyone who opens a new account. In order to qualify for a bonus, you have to fit certain criteria. For example, many bonuses require that you have a minimum account balance. While the Chase bonus mentioned above only requires a $25 deposit, the Citibank bonus requires a deposit of $50,000.
Sometimes these bank account bonuses also require that you set up certain kinds of direct payments or deposits to qualify. For example, you might have to set up a payroll deposit, or a certain number of direct deposits to qualify. For the TD Bank bonus mentioned above, you need to receive at least $2,500 in direct deposits within 60 days of setting up your account.
Some other strings that might be attached to these bonus offers include the requirement that you make a minimum amount of automatic bill payments or automatic withdrawals with your account or that you make a minimum number of debit transactions or spend a minimum amount of money via your account during a set time period.
These time periods are generally 30, 60, or 90 days and during that time you usually have to keep your account open even if you fulfil the requirements to get the bonus before the period is over.
It’s Not Easy to Qualify
Because there are often a number of different criteria that you must meet in order to qualify for the account opening bonus, many people find it difficult to fulfill all the requirements and get that cash or bonus prize. For example, if you’re already a customer at that bank that might exclude you completely even if you would be opening an additional account to get the bonus.
Another way but you might be excluded is if you don’t meet the requirements by certain date since many of these offers have quick expiration dates or short terms in which you have to fulfill the requirements.
You could find that you have made the required 15 to 20 debit transactions, but they’re not the right kind of debit transactions. Some banks require that you make signature transactions instead of PIN transactions so its important to read the fine print on these offers.
Because of all the work involved in moving your cash and setting up different types of direct deposits or direct withdrawals, it can be quite time-consuming to open a new account just to get a bonus. Banks know this and that is why they have all these hoops that they require you to jump through. Once you set everything up, you are far less likely to make changes to your account and move your money elsewhere. That way they’re able to make the money back that they invested in acquiring your business with the account opening bonus.
What Else Should You Consider When Opening an Account
It’s critical that you think about more than just the savings or checking account bonus you might get when you’re looking to open a new bank account.
Checking accounts often charge you a monthly fee, so it’s important that you choose an account that will provide you with the amount of service you need at the right price rather than just the one with the biggest bank promotions. The last thing you want to do is open a new account that is going to cost you significantly more than your current account.
When you’re opening a checking account check how many free transactions you get every month and see how much you’ll be charged if you go over. Look into things like their out of network ATM fees, how much they charge for checks, and whether they have conveniently located ATMs and branches. Consider their business hours and how easy their online banking or apps are to use. If you’re looking to open a savings account, it’s important to look into things like the amount of interest they pay, and what kinds of fees they charge for transferring money to other accounts.
Also, remember that even though that account bonus is great, you have to pay taxes on it so it might not be as wonderful as it appears!