If a bank offers you $100, $200 or even $400 or more to open a new account, should you do it?
The easy answer is yes. The right answer is maybe.
“These promos are a great opportunity, but only if you consider the time and energy you’re giving up to take advantage of the promo,” says Wakefield Hare, a certified financial planner and founder of Greater Than Financial, a financial planning service in Kansas City, Missouri.
One factor to consider is whether you’ll get more cash than you would have earned in interest if you’d left your funds where they are.
“Weigh how much additional interest you get from the promotion versus the minor hassles,” says Andy Panko, a certified financial planner and owner of Tenon Financial, a retirement planning and investment firm in Iselin, New Jersey.
Those “minor hassles” could include opening the account, transferring funds and remembering your new online banking login and password.
What Are Some Rules That Apply to Bank Account Bonuses?
To earn a cash bonus when you open an account, you may have to:
- Make a minimum initial deposit.
- Keep the account open for a minimum period of time.
- Make a minimum amount in direct deposits each month.
- Maintain a minimum balance.
- Wait weeks or months to receive the bonus.
- Open the account online or at a branch.
- Use a promo code.
- Pay monthly account maintenance fees that may be waived if you complete specified account activities.
By the way, cash incentives are considered a form of interest, so you may owe income tax on the bonus.
9 Banks That Offer Bonuses
These promotions typically are for new customers only and may be available only for a limited time. Promotions may not be available in all states.
- Citibank: Cash bonuses of $200, $400, $700 or $1,500 for new regular or interest-bearing checking and savings accounts with minimum initial deposits and required balances for the first 60 days of $5,000, $15,000, $50,000 and $200,000, respectively. (Offers available through Jan. 5, 2021.)
- HSBC: New checking account bonuses of $200 or $450 with recurring monthly direct deposits totaling at least $500 or $5,000, respectively, for at least three consecutive months after the account is opened. (Jan. 7)
- U.S. Bank: A bonus of $100, $200 or $400 for new checking accounts with at least two recurring direct deposits that total minimums of, respectively, $1,000, $2,000 or $4,000 within 60 days, and enrollment in e-statements by Dec. 18. A bonus of $50 or $100 for new savings accounts with a required minimum deposit of, respectively, $2,500 or $5,000 by Dec. 21 and maintaining those minimum balances until June 21, 2021. Promo code is required. (Dec. 14)
- PNC: Bonuses of $50, $200 or $400 for new PNC Virtual Wallet accounts. The “wallet” package must be opened online, and bonuses require direct deposits within 60 days that total $500, $2,000 or $5,000, respectively. (Dec. 31)
- Chase: A $200 bonus for new Total Checking accounts with a direct deposit of a payroll, pension or government benefit check within 90 days. The bonus will be forfeited if the account is closed within six months. Chase also offers a $50 refer-a-friend bonus, up to 10 bonuses, or $500, per year. (Jan. 20)
- SunTrust: A $200 bonus for a new basic checking account with a minimum opening deposit of $100 within 14 days and at least $500 in qualifying direct deposits per month for at least two consecutive months within the first three full months of a new account. May be opened online with the required promo code Q420ESSENTIAL or in a branch or by phone with simultaneous enrollment in the bank’s promotions center. Minimum balance is 1 cent. The reward may be forfeited if the account is closed within 180 days after opening. (Jan. 4)
- Bank of America: Bonus of $100 for a new checking account requires a minimum of two direct deposits of at least $250 each within 90 days. Accounts must be opened online with the promo code PSR100CIS. (Dec. 31)
- Huntington Bank: A bonus of $150 or $200 for a new regular or interest-bearing checking account, respectively, with cumulative new-money deposits of at least $1,000 within 60 days of opening the account. (Jan. 7)
- Bank of the West: A $25 refer-a-friend bonus tops out at 40 per year for a total of $1,000. (Dec. 31, 2021)
Despite their appeal, new account bonuses may not be worth the effort, says Daniel M. Yerger, a certified financial planner and president of MY Wealth Planners, a financial planning firm in Longmont, Colorado.
“Consumers looking for a good deal are better off finding a low-cost/no-fee institution that pays high yields over the long term and won’t (require them to) lock their money up or risk losing an incentive,” Yerger says.
Be sure to read the terms and conditions of any new bank account and cash bonus offer before you say yes and sign up.