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Bank Bonus 101: Everything to Know about Bank Account Sign-up Bonuses

By: Phil Kirkeiner
2020-07-10

An Introduction to Bank Account Bonuses

Of all the easy ways to make money out there, taking advantage of bank signup bonuses is probably the most risk-free and least time-intensive one I have found.

While most people have seen these kinds of sign-up promotions before in the mail or online, many simply dismiss them on the suspicion that the fees are super high, that you need a ton of money to take advantage, or that somehow the bank will find an excuse to not deliver on the promised reward.

The truth is that getting a bank bonus is generally straightforward and quick. Fees are avoidable, you don't need a lot of money, and the banks always pay when you meet the requirements. That is why we built EveryBankBonus.com while in college - to help as many people as possible filter through the fine print of sign-up promotions so they can take advantage.

With a little know-how (and I really do mean "a little") you can feel confident as you open your next one, two, or several new bank accounts for some of the easiest money you ever made.

Enough talk; let's get started.

First things first: What is a bank bonus?

Due to intense competition and the perceived hassle of switching banks, hundreds of banks and credit unions offer cash sign-up bonuses to new customers as an incentive to try someone new. We call these sign-up promotions "bank bonuses," and they are wonderful.

Banks run these offers with the hope that you will give them a shot and make them your primary bank for everything. While this does not always end up being the case, it does often enough for them to keep doing it. And that means bank bonuses stick around for everyone.

Bank account bonuses have an advantage over credit card sign-up bonuses in that they are awarded in cash instead of points. Also, they almost never affect your credit score, so you can have more of them than you would credit accounts.

Common Bank Bonus Requirements

Now to be clear, on most occasions a bank will not pay you hundreds of dollars JUST for opening a new account. They want to ensure to the best of their ability that you will make them your new primary bank.

In addition to meeting basic eligibility criteria (like living within the bank's footprint), each promotion has different requirements set forth by the bank that you'll need to fulfill to get the bonus. Below are the most common requirements and a few little tips & tricks on how to easily satisfy them.

Direct deposits

Probably the most common requirement, this just means the bank wants to see your paycheck or other income drop straight into your new account. Setting this up is pretty easy - nowadays with the rise of popular HR software platforms like WorkDay and BambooHR you can usually update your payroll direct deposit info online by yourself. If that doesn't work, it normally just takes a quick email to your work's payroll department.

While most banks state that a direct deposit needs to be from an employer or government benefit, some are more generous on what they will count. Several blogs and communities of bank enthusiasts report on what has worked for them and their users before, and we have done our best to compile as many of those data points in one place on this page.

But if you can easily just change your payroll, that's the best option.

Maintain a Minimum Balance

Many bank bonuses, especially those related to savings accounts, will require you to deposit a certain amount of "new money" (meaning money not already kept at that bank) into the account, and then leave it for a certain amount of time. Usually this time frame is about 90 days.

Maintaining a minimum balance is also a common requirement for avoiding monthly fees. If you want to stay fee-free, pay attention to potential minimum balance requirements.

Debit card transactions

Another popular requirement, some banks will demand that you request a new debit card and use it a certain amount of times. The idea is that by doing this, you will give the bank a new home in your wallet.

Most people just put regular expenses on their new debit card. However, if you don't feel like making space in your wallet, there are a few ways you can quickly generate a lot of small debit card transactions without buying stuff you don't need.

  • Reload gift cards that you know you will use (ie Walmart, Amazon)
  • link your debit card to Venmo and use it to pay friends
  • turn a single trip to the grocery into several different transactions at the self checkout

Sure, it might sound annoying if you don't plan to carry around your debit card all the time. But the few minutes it takes might be all you need to ensure you get that $100+ bonus.

Bill payments

This is the least common bonus requirement, though sometimes it is an option offered in place of setting up direct deposit. Bill Pay means to set up automatic payments to vendors like landlords, utility companies, etc. directly through your bank. You enter the bills in your account, and set it up for the bank to automatically mail them a check.

This requirement is easy to meet. If you need to set up multiple payments, you can either (1) pay a single bill in multiple installments (like sending AT&T five $10 checks for your $50 bill) or (2) input your family or friends as companies you owe and pay them. Hopefully they pay you back!

How EveryBankBonus can help

Since every bonus has different requirements, EveryBankBonus.com makes finding the best bank bonuses easy. Filter through all of these requirements instantly and more on our Bonuses page so you can find exactly the bonuses you can get.

Before, it was up to you to read through the details of every offer. Now you can do that in seconds!

Fees and How To Avoid Them

Most concerns people have about bank bonuses center around fees. There are two main fees you need to think about when it comes to bank bonuses: (1) monthly fees and (2) early account closure fees.

Monthly fees.

While these can range anywhere from $0 to $50, it is almost always possible to waive them by meeting certain requirements each month, usually similar to what was required to get the bonus.

You might need to have a certain number of transactions each month, maintain a minimum balance, or have a direct deposit post to the account. Whatever the fee schedule is, that information is included in the details section of every bonus on this site.

Keep in mind that sometimes avoiding the monthly fees is not worth the hassle. Virtually every bank bonus is big enough that you can still win a nice profit even after paying 6 or so months of fees (see below), at which time you can likely close the account without penalty.

For example, let's say an account has a $200 bonus with a $15 monthly fee if you don't meet certain requirements. You need to keep it open for 6 months to retain the bonus, so if you pay the fee every month for 6 months you still net $110 ($200 - $15 * 6 months).

Chances are you may even be able to get fees refunded if you call the bank and ask nicely. Remember, the reason bank bonuses exist in the first place is competition. They know you have options!

Early account termination fees.

Most accounts are like the example above - if you close an account before a certain time then you will usually be charged a fee and/or lose your bonus.

Financial institutions do this because it costs them money to set up new accounts. They want a chance to recoup that money, while also encouraging you to give the account a real chance instead of getting the bonus and quickly dropping them.

Every bank is different, but typically you can avoid the early account closure fee by waiting at least 180 days or 6 months from the day you opened the account.

Other fees.

As a rule, ALWAYS opt in to receive electronic monthly statements instead of paper, and always decline overdraft protection. These are little things can banks can expect big profits from over time. And by declining overdraft protection, you also ensure that the bank will not do a "hard" inquiry on your credit score, since you are letting them know they do NOT have permission to "lend" you money when you overdraft.

Other Bank Bonus Tips

Here are a few things to keep in mind when opening new bank accounts.

Stay organized.

If you’re not organized, then things can quickly get hard to manage. What I've done is this:

  1. Have a solid main or "hub" account that has lots of good non-bonus features like no monthly fees, easy transfers, fee-free ATMs, an easy to use mobile app, etc. You should actually use this account for paying bills and whatnot. (And yes, these types of accounts give bonuses too!)
  2. You will want to connect every new account right away to Mint or another platform so you can see everything from one view. This is extremely useful for me and helps me remember when I opened my accounts.
  3. Keep some sort of Google Doc where you keep your bonus information by copy-pasting new bank account numbers and the bonus requirements there. You don't want to forget about a requirement and not get your bonus! In the future we'll add some features to help you do that here on the site. You can also save the bonus to your EveryBankBonus.com account to reference it for later even after the bonus expires.
Fund the New Account with a Rewards Credit Card

This is outside the scope of our site, but a lot of these financial institutions let you initially fund your new bank account with a credit card. This lets you earn points or miles or meet minimum spend requirements for a sign up bonus.

Final Thoughts

This is the type of thing where it's a fantastic, low risk opportunity, but most people dismiss it as too good to be true. They say it's not legit, or there's a hidden catch somewhere. To that I say great, because it ensures there will never be too many people taking advantage to the point that banks change their ways! More longevity in this for the rest of us.

To be clear, there is nothing unethical about taking advantage of a promotion. In fact, the banks know about this and account for it in their projections. These guys are managing millions, billions, TRILLIONS of dollars; it's just not worth their time to change their outdated, expensive systems to take down the small community of people harvesting a few grand in marketing dollars. Plus, there is always a chance they will impress you with their services and convert you into a long term customer.

EveryBankBonus.com makes finding the best bank bonuses easy. Go give it a try and sign up for a sweet new bank account with a bonuses, features, and more.

You got this!

A few other things

No, it will not affect your credit score 99% of the time your credit won’t be touched. Checking accounts (sometimes called "deposit accounts") have their own credit reporting agency called ChexSystems, which is like the credit reporting agencies of Experian, Equifax & TransUnion, but for deposit accounts.

When you open a new checking account most banks will request a copy of your ChexSystems report and then either not request your credit report at all, or do a soft pull on your credit report. This means your credit score is not affected.

In rare cases, a hard pull is done on your credit report. This does affect your credit score temporarily. When an offer is a known hard pull, we let you know in the details section of the bonus.

Because it does not affect your credit score, you can open a lot of bank accounts in a relatively short period of time There is no hard rule on this but the general consensus is about 10 bank accounts per year.

Yes, you will have to pay taxes on your bonus Yep. Bank account bonuses are treated as interest so you need to pay taxes on them. Usually you’ll receive a 1099-INT form from the bank at the end of the year. If not you should still pay taxes on it. Contact your tax advisor if you have questions.

Keep your bonus by closing the accounts after at least six months This varies from bank to bank, and we try our best to tell you when in the details section of every bonus. As a rule of thumb keep every account open for at least 6 months, and then a quick call to customer service should do the trick to close the account.

Done reading?
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