Are Checking Account Bonuses Really Worth it?

Banks Editorial Team · November 27, 2019

Checking accounts bonuses for opening a new account may not be worth your time, just like “cash back” when purchasing a new vehicle can be a seemingly wonderful trap,. In fact, sometimes these bonuses are something of a trap designed to lure you into terms and conditions that you don’t really want. Everything from free gifts to $100 or more in cash are frequently offered to bank customers that open a new checking account. The following information is definitely worth your consideration before you sign on the dotted line.

Checking Account Bonuses: Are They Worth It?

You Might Have to Wait

Sometimes there are conditions that require a direct deposit into the account within a certain amount of time. Still worse, some banks require a certain amount of time to pass before the checking accounts bonuses are paid. This may not be a problem for you, but if you are counting on walking away from the bank with cash in your hand, it could be a deal-breaker. Depending upon the terms and conditions on the account, you may be paying monthly or other hidden fees while you wait.

The Dreaded Bank Fees

Free checking accounts are an attractive option for many banking customers. Customers tend to dislike the idea of paying the bank a fee for the privilege of holding your money. Some consumers make the mistake of assuming that all checking accounts are offered free of charge. This couldn’t be more incorrect. Make sure you are aware of all the terms and conditions associated with any advertisement of checking account bonuses. You may be agreeing to open an account that charges a monthly fee (over time this will far outweigh any bonus you may receive, becoming something of a never-ending loan payment,) or requires a high minimum balance. Make sure you read the fine print carefully and ask as many questions as necessary to get to the bottom of how many fees are associated with the account.

Referral Checking Account Bonuses

You don’t necessarily have to change your bank to get a new customer checking account bonus. If you have some influence over people in your circle of friends and family, you may be able to get a referral bonus instead of a new customer bonus. Maybe you have a few relatives that are looking for a new bank or looking to open their first account. Check with a number of banks to see what their referral program is and begin referring! By doing some of the marketing for the bank, you should absolutely reap some rewards. The more people you refer, the money you’ll make and it doesn’t require a new account at all. You may be surprised to learn about the banks that have referral awards. Just some of them include the following:

  • Chase
  • Toronto Dominion Bank (TD Bank)
  • HSBC
  • Bank of America
  • Many more!

 

 

Activity Requirements To Get Checking Account Bonuses

Eric Rosenberg with Business Insider talks extensively about the importance of knowing what you are getting into when looking at an account with a sign-up bonus. He mentions that some of these accounts are a little sneaky in how they require certain levels of activity to avoid fees. Some accounts may require direct deposits, while others will require a certain amount of transactions each month. Flexibility with their accounts is important to most banking customers, and the idea of being stuck with transactional requirements leave a bad taste in their mouths. That signing bonus of $100 could very well end up costing you far more, in the long run, depending upon your deposit and spending habits.

Look for the Account Closing Fee

Some banks charge to close an account. If you are closing one account at a bank to open this new checking account that pays a bonus, you may want to make sure you know if this is the case. In addition, it’s important to know what the account closure fees are for the bank offering the checking account bonuses as well. Even if they don’t assess a closing fee, you will want to be very clear on the length of time the account must stay open before closing to avoid any penalties. Of course, banks will want to avoid people that open the account only long enough to get the bonus, so find out what those terms and conditions are before you sign.

Doing Your Homework

The checking account bonuses offered for opening a new account may well be worth your time and attention. But rushing in to open an account without asking a lot of questions could end up costing you over time. Ask questions and read the fine print to determine all the possible hidden fees and then decide if it is the right move for you. All new account bonuses are not created equal, and some are truly better than others. This information can help you to make a better, more knowledgeable decision.

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