Bank Account Bonuses

Bank Account Bonuses

Bank Account Bonuses
Bank Account Bonuses

Bank Account Bonuses

Banks frequently offer cash signup bonuses as incentives when opening new checking and savings accounts. These promotions provide an easy way to earn quick money just for making specified transactions within a defined period.

With bonuses ranging from $100 to over $700 per account, consumers can rack up substantial earnings by shopping around various bank deals and capitalizing on multiple offers. This guide explores available bank bonuses, how the offers work, steps to qualify, key tips for maximizing payouts, and pitfalls to avoid with bank promotions.

While bank bonuses should not dictate financial decisions alone, they offer a simple way to earn extra cash from routine banking activity.

How Bank Account Bonuses Work

Banks use cash bonuses to incentivize new customers. Typical terms include:

  • Bonus amount advertised such as $300
  • Required initial deposit amount to open account
  • Minimum balance required to maintain account
  • Qualifying transactions needed such as direct deposits or debit purchases
  • Time period to meet requirements, typically 2-3 months

The bonuses basically reward doing routine banking activities with a new account. You earn the payout after meeting the terms during the specified timeframe.

Why Do Banks Offer Account Bonuses?

Financial institutions use bonuses to:

  • Attract new customers in a competitive landscape
  • Acquire deposit balances which provide capital to fund lending
  • Increase assets under management for investment products
  • Motivate use of accounts driving fee income
  • Promote products like high-yield savings, CDs, or checking
  • Build brand awareness and word-of-mouth via promotions

Account bonuses provide a customer acquisition tool allowing banks to aggressively compete on promotions.

Best Checking Account Bonus Offers

Checking accounts commonly have bonuses up to about $300-400. Top recent offers include:

  • Chase – $300 for opening a new Premier Plus Checking account and setting up direct deposit
  • Bank of America – $100 for depositing $1,000 into a new Advantage Checking account
  • Wells Fargo – $200 for opening a new Everyday Checking account and making 10 debit card purchases within 60 days
  • Citi – $200 for opening a new Access Account and making $500 in direct deposits within 60 days
  • HSBC – $450 for opening an HSBC Premier Checking account and depositing $10,000 within 60 days

Review all the terms details carefully when considering checking account bonus offers.

Best Savings Account Bonus Offers

Savings accounts bonuses tend to be a bit lower than checking accounts:

  • Discover – $150 for depositing $15,000 into a Discover Cashback Debit savings account
  • Chase – $225 for opening a Chase Savings SM account with $10,000 deposit within 20 days and maintain for 90 days
  • TD Bank – $300 for opening a TD Premier Checking account with $2,500 initial funding and a linked TD Relationship Savings account
  • HSBC – $250 for establishing a Premier Savings account with a $10,000 balance within 30 days of account opening
  • Wells Fargo – $250 for opening a Premium Savings account with $25,000 and maintaining the balance for 90 days

Maximize savings bonuses by laddering maturity dates on CDs so funds rotate back into savings accounts frequently.

Highest Value Bank Bonuses and Offers

Some of the most lucrative bank bonuses can yield over $700:

  • Chase Sapphire Banking – $750 bonus for opening a new Chase Sapphire checking account, and completing qualifying activities.
  • Citi Priority – $700 bonus for opening a new Citi Priority Checking Account with $50,000 in deposits within 2 months. No qualifying transactions required.
  • TD Bank Premier Checking – $300 checking bonus plus up to $300 more savings bonus
  • HSBC Premier Checking – $450 with an additional $250 savings bonus opportunity
  • Wells Fargo Premium Checking – Up to $700 bonus based on deposit account balances

To earn the biggest payouts, look for promotions bundling checking and savings bonuses together.

Earning Bonuses From Multiple Banks

You can maximize earnings by taking advantage of bonuses at several banks. Consider:

  • Checking accounts let you frequently switch banks and earn new account funding bonuses
  • Interest earning savings accounts are worth keeping open longer to continue growing
  • Set calendar reminders to close accounts with monthly fees after bonus clears to avoid charges
  • Rotate closing old accounts after bonuses post and open new ones elsewhere

Earning $200+ each from just 2-3 banks per year can quickly add up without needing to switch primary bank.

How to Qualify for Bank Bonus Offers

To earn advertised bonuses, follow all terms:

  • Open account online or in branch by stated deadline
  • Fund account with initial deposit amount within timeframe
  • Keep minimum account balance without dropping below during period
  • Complete required debit card transactions and direct deposits, if stipulated
  • Avoid withdrawals that bring balance below requirement
  • Keep account open for specified duration such as 6 months
  • Watch for bonus to post to account on schedule

Read all details closely and mark your calendar with reminders to complete transactions and track bonus payments. Activating offers takes diligence.

Are Bank Account Bonuses Taxable?

Cash received from bank promotions counts as taxable miscellaneous income. If total bonuses from all sources exceed $600 in a year, banks will issue a 1099-MISC reporting the amount for tax filing.

Options to handle taxes:

  • Report any amount as other income on your tax return, even if under $600
  • Increase tax withholding or make estimated quarterly payments to account for extra tax
  • Set aside a percentage of bonus received to cover the tax
  • Deduct any fees associated with the account as an expense

While bonuses must be reported as income, the tax impact is typically minimal compared to the payout amounts.

Mistakes to Avoid with Bank Bonuses

Be sure to sidestep these common missteps:

  • Not reading all terms carefully or noting dates and deadlines
  • Assuming you completed requirements without tracking closely
  • Moving bonus funds out of account too quickly
  • Dropping account balance below minimum prematurely
  • Forgetting to cancel accounts incurring monthly fees after the bonus posts
  • Failing to compare bonus value against fees accounts may incur
  • Overlooking any customer exclusions for those with previous accounts
  • Not accounting for taxes owed on received bonuses

Closely following all terms, avoiding assumptions, and taking taxes into account ensures you actually pocket the bonuses offered.

Can You Negotiate Bank Bonuses?

Banks rarely negotiate signup bonus amounts above advertised offers. However, some opportunities may exist to request exceptions:

  • Inquire about boosting bonuses around slower seasons like holiday periods
  • Ask nicely about matching or beating a better competitor bonus you’ve been offered
  • See if they offer periodic “win back” bonuses if you previously closed an account
  • See if bonus amounts increase if you open multiple bundled products like checking and savings
  • Ask about repeat customer bonuses when signing up again after some time off

You have very little power to negotiate higher published bonuses. But it never hurts to courteously inquire about special cases or seasonal incentives.

Do Bank Bonuses Hurt Your Credit Score?

Opening accounts only for bonuses will not hurt your credit scores directly. However, it could indirectly in certain cases:

  • Having too many account inquiries in a short timeframe may temporarily lower scores.
  • Closing accounts after short periods can reduce your average account history age.
  • Missing fee payments if forgetting to close fee accounts could hurt.
  • Aggressive bank account funding through loan balances could increase credit utilization.

Go slowly, limit inquiries, close unused accounts promptly, and avoid carrying loan balances and you can safely earn bonuses without credit damage.

Using Bonus Funds to Pay Off Debt

While bank bonuses provide nice supplemental income, the best approach is applying funds to financial priorities like debt:

  • Pay down higher interest credit card, payday loan or personal loan balances first
  • Make extra student loan principal payments to pay loans off faster
  • Save toward closing costs for mortgage refinancing at a lower rate
  • Build up emergency fund balance if lacking adequate savings
  • Contribute toward retirement accounts if under funding based on long-term goals
  • Put toward needed home repairs, auto maintenance, or medical expenses

View bonus funds not as free money to spend but as an opportunity to strengthen your overall financial foundation and pay off burdensome debts faster.

Reporting Bank Bonus Earnings

To report and track your bank bonus earnings:

  • Carefully note which bonuses you qualify for and expected payout months
  • Record when you apply, account numbers, and requirements for each
  • Create a spreadsheet to track opening dates, key deadlines, and bonus receipt
  • Scan and save bonuses terms and conditions for future reference
  • File tax documents like 1099-INT and 1099-MISC sent for interest and bonuses
  • Input bonus amounts into tax software as Other Income for proper reporting
  • Deduct any account fees incurred as line item expenses

Keeping meticulous records ensures you meet all requirements, receive full owed amounts, and have data to report earnings.

Closing Thoughts on Bank Account Bonuses

When approached thoughtfully, opening new bank accounts specifically for bonuses provides an easy avenue to earn a few hundred extra dollars per year. Just be sure to read all terms thoroughly, avoid unnecessary fees, meet eligibility activities, promptly close unwanted accounts, and keep detailed records. Bank bonuses can quickly add up by combining a few of the best checking and savings offers.

While not worthwhile alone if you otherwise have no need or interest in new accounts, bonus promotions remain a useful periodic tactic for making routine banking activity more lucrative. Taking advantage occasionally gives your finances a quick boost while diversifying accounts across institutions. Just integrate bank bonuses judiciously as part of broader personal finance strategy.

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