Posted by William Charles on February 8, 2016
Bank Account Bonuses

Published on February 8th, 2016 | by William Charles

40

A Beginners Guide To Bank Account Bonuses

Lots of banks (and credit unions) offer sign up bonuses when you set up a new account with them, they are hoping that by offering these bonuses you’ll sign up for an account and make it your primary account. We can use the banks greed to our advantage and turn an easy profit. In this guide we’ll show you how to easily take advantage of these bonuses to add some extra income to your bottom line, without wasting a heap of time and getting hit with fees. I’ve personally made on average well over $2,000 in cash per year for the past two years from these bonuses, so let’s get started.

Note: Unlike other sites, we don’t do deals with financial institutions when it comes to bank accounts or credit cards. This let’s us remain unbiased and keep the readers best interest in mind rather than pushing you towards products that pay us the most. If you like our content, we just ask you to share it with others so more can benefit from it.

Popular Requirements & How To Easily Meet Them

Pretty much all banks require you to complete certain actions to receive the sign up bonus. Below are the most common requirements and a few little tips & tricks on how to easily meet those requirements.

  • Direct deposits. Probably the most common requirement and one people think is the most difficult to meet. Usually the fine print on these bonuses says that it must be a deposit from your employer or a government benefit. Thankfully for us, most banks can’t differentiate between a simple ACH transfer and a payroll payment. We keep a handy list of what’s worked to trigger the direct deposit requirement for each financial institution here [Also read: how to use our direct deposit page]. If you can easily change your payroll, even better!
  • Debit card transactions. Another popular requirement, you could just put regular expenses on your debit card but then you’d be missing out on credit card rewards points (and more spend towards minimum spend requirements for credit card sign up bonuses). There are a few ways you can generate lots of small debit card transactions easily (and online), we list those here.
  • Bill payments. This one is easy to meet, rather than paying a bill in full you can instead split it up in smaller payments (just make sure it’s paid in full before the due date) to generate multiple bill payments. Sometimes the fine print will say that only one payment per biller counts, but chances are you have multiple bills to pay anyway.

Avoiding Fees

There are two main fees you need to think about when it comes to these bonuses: monthly fees & early account termination fees.

  • Monthly fees. It’s almost always possible to waive these fees by meeting some sort of requirement (often the same ones required to trigger bonuses, see above). In most cases the monthly fee is waived for the first month or two, giving you some time to get this set up but this varies by financial institution. Once you know what the fee is and how to avoid it, it’s pretty easy.
  • Early account termination fees. This one is a little less obvious, but if you close an account before a certain time then you’ll usually be charged a fee. Financial institutions do this because it costs them money to set up new accounts (especially when they are offering a bonus) and they want a chance to recoup that money. Most banks will charge this early account termination fee if the account is closed within 90 or 180 days, obviously this is easy to avoid if you know about it in advance.
  • Other misc fees. In most cases you won’t actually be using these new accounts as your primary checking account, so you shouldn’t need to worry about ordering checks and the like.

Where To Find Bank Bonuses

There are a few different ways to find bank account bonuses:

  • Our site. Obviously this is the best place to find bank account bonuses, we list all the current bank account bonuses on this page (we will update it soon, I promise. Just waiting on my old laptops data), it’s all in a sortable table so you can easily find bonuses in your state with the requirements you’re looking for (e.g no direct deposit, soft pull, over $200 in value). We also update this page with the best bank bonuses. The bonus of our site, is we let you know about all of the fees, requirements, if it’s a soft or hard pull and whether you can fund with a credit card.
  • Find them yourself. These bonuses are actually quite easy to find yourself, just find the web address of banks in your area and in google type in site:<url of bank you found> bonus. You can replace the word bonus with anything, for example promotion. If you find anything, let me do the hard work for you by finding out more about the bonus. Just let me know by using the contact us form.
  • Forums. A lot of forums will post these bonuses, although they will usually only post the nationwide ones (or the ones that are available to a large portion of the population). I find FatWallet Finance usually has the best ones, but sometimes Slickdeals also has some as well. Just remember that we’ll likely post our in depth review of these bonuses on this site anyway.

Additional Tips

  • Credit card funding can be a nice little side bonus. A lot of these financial institutions let you initially fund the bank account with a credit card, letting you earn credit card rewards points or meet minimum spend requirements for a credit card sign up bonus. Most of the time these transactions will code as a purchase, but sometimes they code as a cash advance. That’s why we recommend you set your cash advance limit to zero (or as low as possible and try to fund over that limit). We also provide a database that shows what did/didn’t code as a cash advance for each financial institution in the past, you can find that here.
  • Keeping organized is key. If you’re not organized, then things can quickly get hard to manage. I’d recommend at minimum keeping a spread sheet that contains some basic information about each bonus for example: date opened with a screenshot of the bonus, date the requirements were met, date the bonus posted, date the account was closed. You can also include some additional information such as: what the early account termination fee is and how long the account needs to be kept open to avoid that and monthly fees and how they are avoided. You can view a sample spreadsheet here.
  • Don’t call the bank. If you’re not following the rules of the bonus to the letter, then there is no point in calling the bank as you’re just drawing more attention to your account. For example, if you’re using an ACH transfer to trigger the direct deposit requirement you don’t want to call them and ask if it counted as a direct deposit as then they’ll know it wasn’t a real direct deposit. More reasons for not calling the bank can be found here.

Final Thoughts

We’ll be doing a similar guide to credit card bonuses in the near future, so I hope people found this one interesting. We spend a lot of time finding new bonuses and writing them up, so if you enjoyed this post or any of our bank account content please consider sharing it. I find these bonuses quite lucrative and for the most part I can do these from where ever I am, whenever I have the spare time.

If you have any questions, no matter how basic they are please ask in the comments. I just ask you to read this post (and the F.A.Q’s below) first in full. If you’re going to answer somebodies questions in the comments, remember this post is for newbies so please be polite and patient (and remember nobody is forcing you to answer!).

F.A.Q’s

Does opening bank accounts hurt my credit? Will it affect getting approved for a mortgage/home loan?

Most of the time your credit won’t be touched, deposit accounts have their own credit reporting agency called ChexSystems. This agency collects & compiles information regarding deposit accounts, much like the nationwide credit reporting agencies (Experian, Equifax & TransUnion) collect & compile information regarding credit accounts (e.g credit cards, home loans & auto loans).

When you open a new deposit account (e.g a checking account) most banks will request a copy of your ChexSystems credit report and then either not request your credit report at all, or do a soft pull on your credit report (meaning it’s not affected). In some cases, a hard pull is done on you credit report as well.

When we post bank account bonuses, one of the things we look at is whether a hard or soft pull is done on your credit report. In fact we have a dedicated page that lists what financial institutions have done in the past. If you just stick to banks that only do a soft pull, then your credit report & credit score won’t be affected.

How many bank accounts can I open in a year?

We’ve answered this question before, read our full answer here.

Do I have to pay taxes on these bonuses?

Bank account bonuses are treated as interest and as such you need to pay taxes on these bonuses. Usually you’ll receive a 1099-INT form at the end of the year. Even if you don’t receive this form, it’s my understanding you still need to pay tax on the bonus. As always you should consult a tax professional.

How can I close these accounts?

This varies from bank to bank, we list the easiest ways to close accounts here and also datapoints on what works/doesn’t work for each financial institution here.

 



40 Responses to A Beginners Guide To Bank Account Bonuses

  1. tbradnc says:

    To keep things simple I never have more than 2 of these going at one time.

    Also, you might want to consider mentioning Chexsystems and the possibility of opening too many accounts within a short period of time and being denied a new checking account at that point.

  2. Jackalope says:

    William,

    I would add one more item as an additional tip. MINIMIZE PERSONAL CONTACT WITH THE BANK AS MUCH AS POSSIBLE!!

    Most of these bonuses can de done online without any human contact. The more Human contact you have concerning the account and bonus, the more likely you will not get it if you are not specifically meeting the exact promotion requirements. In particular, if an ACH transfer will trigger a bonus, if eventually will. Calling up the bank and asking where you bonus is just alerts them and might put on additional roadblocks. I had a bank ask for copies of pay stubs to prove that my ACH transfer met the requirements.

    At worst, you don’t get the bonus and you get your money back.

  3. Kevin says:

    Good post. This should be the Bible of Churning community.

  4. Amanda says:

    Great article! Thanks for the info! I have dabbled in this, my husband has opened a few accounts online and gotten the bonuses, however for some reason I always get declined saying they couldn’t verify my data, even though I’m confident I answered the questions correctly. Any thoughts why this might be? I have a fraud alert on my credit from an incident many years ago, I had wondered if that was why, and considered removing it to see if that worked. Have you run into this before?

  5. John says:

    Great article….I’m learning so much and now able to do so much more. Thanks

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  17. Patti says:

    First I want to say, I love this website! It’s so full of great info and step by step instructions!
    My question is, for the bonuses that are state-specific, does the person opening the account have to live in that state?
    I live in NJ but very close to PA and work in Philadelphia. It would be easy for me to stop by one of these banks that have PA offers but obviously they would see my DL and know my address.
    Has anyone tried this?

    • Chuck says:

      I think it will work most of the time by going into a brach even if you’re from out of state.

      But there might be some banks that require residing in the state so it’s not a one-size type of question you’re asking.

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  19. max says:

    The most important thing missing here is explaining to “beginners” what you mean by “ach.” Do you mean adding the new bank account as an external transfer account to an existing bank and transferring money to the new from old? If so, why does the master list show specific bank names in addition to “ach?” Hopefully the author will explain this, thanks in advance!

    • ACH stands for automated clearing house, it’s basically just an external transfer. They should bank names in addition to ACH, as it’s sometimes possible to do a transfer that isn’t ACH (e.g payroll).

  20. Abey says:

    Love this post. Thanks!

  21. Bryan says:

    I had a question, I read that by getting these bonuses youwill be get another tax form to file. I’m curious if these would have any if all impact on your return?

    Thanks,

    • Patti says:

      Yes, it is income that is taxable but because they don’t with hold our tax obligation, like our employers do, we still owe the IRS tax on that income.
      So it will reduce a refund or increase the amount if you owe.

      It all varies depending on your tax bracket and how much you received in bonuses in 2016.

  22. Abey says:

    Thanks for this post. Very useful info ☺

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  28. Etrader83 says:

    Hey there,

    Going back to William’s point about staying organized by keeping track of everything in a spreadsheet.

    Rather than create something from scratch, can someone please point me to a spreadsheet with all the necessary columns that I can use to start tracking my bank bonus applications?

    Thanks.

  29. Lisa says:

    Hi there,

    First of all, love your website! I’m planning to open a checking account with BofA after reading your post, is it possible you can help me get a promo code? i see that it’s targeted offer….

    Thanks so much.

  30. Matt says:

    Just want to say I love this site, such a wealth of information. Thank you very much William!

    I apologize before hand if this is answered somewhere else but I’ve been unable to find out if I’m able to withdraw money after the bank bonus posts?

    For example, lets say, the bonus was $150 and you just needed to deposit $100. After the ACH push of $100 into the new account, the $150 bonus posted. The account now has a total of $250.

    How much can I withdraw from the account if the account has a early termination fee if closed with 180 days?

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