The 2024 Beginner’s Guide to Bank Account Bonuses

One of the best ways to make a little extra money with almost zero risk (more on that) is to take advantage of a bank’s new account bonus.

There are nearly 5,000 FDIC insured banking institutions and many of them, especially the big national or regional banks, offer hundreds of dollars when you open an account.

For them, it’s a direct way to get new customers. Instead of advertising, and hoping people open an account, they can offer a cash incentive for you to give them a try.

So how do you take advantage of these offers?

It comes down to a simple four-step process:

1. Know where to look for the best bank offers
2. Understand the different requirements you need to meet
3. Avoid fees that can eat into your bonus
4. Hold a little back for the tax man

There are a few other things to look for but that’s the gist.

Let’s dig into each:

How to Find the Best Bank Offers

We maintain a list of the offers we know about – the only requirement is that they be at least $100 in cash to appear on this list of bank bonuses.

We don’t list every single bank because there are some smaller, regional banks that only service a small area. The list would be unwieldy to read, let alone maintain, so we try to stick with larger banks. We don’t have a set rule on what is included but generally, I like them to be available in at least a handful of states.

If you want to find the best offers in your area, Google is your best friend. Just do a search for “bank bonuses” or “best bank bonuses” and peek at the advertisements.

I know that when I do a search, Google knows my zip code and if a bank is targeting that zip code, I’ll see an ad like this one:

Just look for the ads, click on them, and get the offer!

Understand the Requirements

Most bank offers are structured in the same way – open an account, make a minimum deposit, and then satisfy the conditions of the offer to get the bonus cash. Sometimes the bonus condition is to transfer over a certain amount of “new money.” Other times, it may be a monthly or cumulative direct deposit requirement. We’ll break down a few popular offers and explain how they work.

Let’s break down one popular offer:

Chase Total Checking® Account – $300

Chase Bank will give you a $300 cash bonus when you open a Chase Total Checking account and set up and receive direct deposits totaling $500 or more within 90 days. The deposit must be an electronic one from a paycheck, pension, or government benefit. You can’t transfer money from another account, it has to be a direct deposit.

This offer is considered an easy one to achieve because:

• It doesn’t require you to transfer in a high amount of “new money” to the bank;
• There is no minimum direct deposit amount or a cumulative amount you have to reach – any will satisfy the conditions

The account itself is appealing because there is an easily waivable $12 monthly service fee. You just have to:

• Have a monthly direct deposit of $500+ each month, or,
• Keep a minimum daily balance of $1,500 in the account, or,
• Keep an average daily balance of $5,000 in Chase checking, savings, and other balances.

The bonus is paid out 10 days after you satisfy the conditions. There is one last requirement – you keep the account open for six months or they take back the bonus.

You can learn more about active Chase promotions here.

You have 60 days to get a direct deposit, which is a nice long time period. Some banks will have a shorter window. You want to double-check this because the direct deposit may need to come from a government benefit or your employer. It may take those entities a long time to process a change of payment. Try to find out how long it would take to change your payment information and when the next payment will be – so you can get it done within the requirement.

Common Bank Bonus Requirements

Most bank bonuses fall into one of two categories:

1. Transfer a lot of “new” money into the bank account, or,
2. Set up and receive a “large” amount in direct deposits.

The idea behind both is they want you to make them your primary bank. Moving a large sum of money into the bank and requiring you to keep the account open for six months may incentivize you to stay there but most people don’t have many thousands sitting around in a checking account.

Asking you to change a direct deposit can be a pain but once you do, you’re likely to stay. Plus, a direct deposit of $500 is often much easier than transferring $5,000. Plus, your employer’s human resources department may not like you much if you keep moving it around – which keeps people with the same bank.

You will rarely see a bank offer that requires both. Usually, it’s one or the other and the bonus requirement also helps get you a waiver on monthly maintenance fees.

Don’t Open Joint Accounts

If you are married, don’t open a joint bank account. This way you can access a bonus twice – once for you and once for your partner. Some banks will check the address on an account and deny you a bonus based on having the same address, but those are rarer.

By keeping your account just to a single person, you’re able to maximize those offers.

What To Watch For

Here are a few things to watch out for when it comes to bank bonuses:

Remember to Unfreeze Your Credit Reports

Before we get to any of the offers and how to evaluate them, remember that you will need to unfreeze (or thaw) your credit reports. You want to do this at least 14 days before you apply for an account or you risk being denied. Different banks use different bureaus so to be sure, I recommend unfreezing them all.

We’ve gotten multiple reports of folks who were initially denied accounts because of this. 14 days seems like such a long time but that’s how long it takes for the systems to work properly. (for what it’s worth, freezing your credit reports is a brilliant move to protect against identity theft)

Is the Offer Competitive?

When interest rates were lower, a lot of the offers were no brainers. As interest rates have gone up, some of the big deposit bonus offers aren’t worth it anymore. If you have to deposit $10,000 for six months to earn $100… well you could’ve left it in a high yield savings account and earned more (and have less paperwork).

Keep a Copy of the Offer Page!

When you apply for an offer, keep a copy of it in your records. I like to print it as a PDF and save it on my computer. Make sure you include the terms & conditions if they are included on a separate page. Otherwise, save the terms & conditions page too.

This way if there is any question about the terms of the offer, you have a copy of the PDF handy. When an offer expires, the bank will usually remove the page. You want a copy of your own so you know exactly what the requirements are and whether you satisfied them.

Check Qualifications VERY Carefully

Many banks will restrict the promotion to new customers and those who haven’t had a bank account at the bank within the last 12-24 months. They don’t want you to be opening and closing accounts just to get their bonuses. Sometimes they will set a specific date, sometimes it’ll be “customer must not have had an account in the last 12 months” or some other time period.

They also have geographic requirements – typically where they have a physical location.

Track Bonuses Using a Spreadsheet

A spreadsheet is going to be the best way to keep track of offers, especially if you take advantage of several of them. It can also keep track of the last time you did an offer, in case you want to return to it.

A lot of savvy readers will track:

• Amount of bonus
• Requirements of the bonus
• Important dates – when to get direct deposits by, how long to keep the account open, when the bonus is deposited
• Other relevant terms & conditions

If you do several of these, it’s hard to keep track so a spreadsheet can help.

💡 We have a bank bonus spreadsheet that you can build on. When you click on the link, go to File -> Download to get your own copy that you can edit.

Set Reminders

Whether it’s calendar reminders or old fashioned Post It Notes – make sure you keep reminders of important deadlines. This can be how long you need to keep the account open to avoid early closure penalties or when you can move your direct deposit (or not). These reminders are far easier than trying to remember in your head or having to re-read the requirements.

Don’t Open Multiple Accounts

The offers will usually be one per household or one per person. If you open multiple accounts, they will likely get flagged and you’ll have issues collecting the bonus. They may even close your account and your funds may be tied up in the process.

If you and members of your family (but not household) are taking advantage of an offer, don’t open those accounts from the same computer. A bank seeing three accounts opened from the same IP address won’t know whether they’re looking at fraud or just three people using the same computer to get a promotion.

I’ve heard of cases where accounts were frozen because three people, who were related but not living together, used the same computer (they were over for dinner) to open an account and all three were flagged and frozen until they sorted it out.

Bonuses May Expire Early

Banks will usually tell you when an offer will expire – however, they may often pull an offer early if they get too good of a response.

I’ve also seen banks change the terms of an offer before it expires. For example, in February 2021, Sunflower Bank was offering a $200 bonus for a new checking account and allowed you to open it online. I sent an email out to our bank bonus email list and within a day or so, Sunflower Bank made it so that you had to visit a branch to get the offer!

If you see an offer you like, jump on it.

Avoid Maintenance Fees

Most checking accounts have fees that can be waived if you meet certain requirements. Before you open an account, make sure you review those pesky monthly maintenance fees. Since most of these accounts are checking accounts, you will have a small monthly fee that will be waived if you receive a direct deposit or maintain an average daily balance of a few thousand dollars.

Make sure you can meet these requirements or that you’re willing to take the monthly charge.

How Are Bank Bonuses Taxed?

Bank bonuses are typically taxed as interest income. The bank will send you a Form 1099-INT and the bonus will be reported as bank interest. If you do a lot of these in a year, make sure to set some aside for income taxes so you don’t get surprised. Unlike your regular salary, the bank generally does not withhold interest to pay for your taxes.

Do not confuse them with job bonuses, which often have some of that amount withheld for taxes.

Why does the IRS collect taxes on bank bonuses but not credit card sign-up bonuses? It’s because sign up bonuses are considered “cash back” – you are simply getting a discount on your purchase. You’re getting your own money back, so the IRS doesn’t consider it taxable.

Also, bank fees are not considered expenses that can reduce your income. If you get $100 in a bonus but are charged $20 in fees, you still owe taxes on the full $100 – not the net of $80.

Avoid Early Closure Penalties

Many banks will require you to keep the account for a set period of time, sometimes as long as a year. If you close it early, they warn that they will charge you a fee or even claw back the bonus.

Watch for Credit Inquiries

In some very rare cases, a bank may use your credit report to determine eligibility, especially if they offer some kind of overdraft protection. This will result in a hard inquiry appearing on your credit report, which will reduce your score temporarily. If you are planning on getting a loan, such as a mortgage or car note, then you want to make sure the bank only does a soft inquiry (usually for identity verification).

You don’t want to earn a $100 bonus but then pay thousands more on a mortgage over 15 or 30 years!

Summary

Banks often offer bonuses for opening a new account with them and jumping through some hoops – such as depositing a certain dollar amount into the account or setting up direct deposit.

Before taking advantage of these offers ensure that you know the details of the offer and what you need to do get your bonus. It’d be a shame to sign up but then miss a requirement that keeps you from getting your payout.

Here’s a list of our best bank bonuses. If you do a lot of them, be sure to set aside some money for taxes as bank bonuses are taxable income. If you are really into bank bonuses, you can also check out our list of credit card bonuses as well.

That’s it! You now know practically everything you need to know when it comes to taking advantage of bank bonuses.

The only question is which one will you do first?