Anytime you look to sign up for a new bank account chances are you will find a variety of bank bonuses!
Bank bonuses promise extra cash to new customers who bring assets or commit to working with the bank. But not every bank bonus is a good offer, so read below to find out how to tell!
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Why Banks Offer Bonuses
According to recent studies, data suggests that banks promoting more and more bank bonuses everyday and these bonus amounts are steadily rising. Researchers state that banks do so in order to set themselves apart from the competition.
These bonuses allow financial institutions to bring in new deposits without wasting too much money upfront. The account bonuses are really geared toward the objective of the bank: Open new accounts and bring new money in the door.
Types of Bonuses
The most common to find bonus is a new account bonus which are generally earned when you open a qualifying account and complete certain requirements.
Checking Accounts
Checking account bonuses are some of the easiest to find because they are the most advantageous for banks and credit unions. Generally in order to earn rewards for this type of account, you must set up direct deposit, use your debit card multiple times per month, and maintain a minimum balance for several months.
These types of of accounts work well for banks because it offers a long term relationship with the customer in order for them to earn the bonus. However, checking accounts tend to have maintenance fees and if you are not careful you may end up with maintenance fees adding up.
Savings Accounts
Although harder to find, savings account bonuses are out there. These bonuses will usually require customers to deposit a larger opening deposit, usually $10,000 or more, to earn the bonus. however this means that the bonus will be much higher as well.
Other Types of Bonuses
Besides opening with checking and savings, some banks may try to persuade you to join them by offering a variety of bonuses related to rates. For example, they could offer high interest on a high-yield checking account, but it is only available for the first $1,000 in your account.
Is the Bonus Worth It
Depending on what you are doing bank bonuses can be both beneficial and potentially risky. If you are simply hoping to just open an account and start maintaining a checking account, these bonuses are a nice added bonus.
However if you trying to potentially earn profit by chasing bank bonuses this can be a risky venture if you are not careful.
Can you qualify?
Depending on the account, there could be some potentially 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 advertised offer sounds great, when you open a new bank account, especially a savings account, you want to make sure you are actually earning back on your investment. 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.
Be mindful of whether or not you need to use your credit anytime soon. If your credit is already less-than-perfect or you’re planning to buy a house, it would make sense to minimize inquiries.
Fees
While it is great to earn a several hundred dollar bonus, but you should pay attention to how much you may have to pay the bank in 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.
Most banks do offer ways to avoid having to pay monthly service fees, for instance maintaining a balance requirement, but be sure to to double check the fine print as some are more complicated then they seem!
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. Therefore the actual amount you get to keep will be reduced by a percentage.
How to Find Bonus Offers
Finding bank bonuses is incredibly simple, all it takes is a quick 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.
You may also come across forums or sites that discuss bank bonuses, these sites can be helpful as they go over bonuses to help you have a better understanding.
Additionally, local offers are great too because allows you to have a physical branch near by. This allows you to go to the branch if you ever need banking services or deal with any issues in person.
Conclusion
At the end of the day account bonuses are the banks way of persuading potential customers to open an account with them. That being said these bonuses can be beneficial so make sure to choose one that best suits your banking needs!
If you don’t have a bank account yet, definitely take a look at our list of Bank Bonuses or CD Rates for all your banking needs.
