January 31, 2017

The Complete Guide To Banks Checking And Savings Bonuses

Banks want to lure consumers to go deposit their money. That's why from time to time, banks are offering incentive cash bonuses that range from $50, $100 to $300-$400 just to open a checking or savings account with them. You can look at this bonus as a way to earn bank interests for parking your money at the bank for a certain period of time. If you have free time on hands, this is a great way to pick up some extra cash.

Taxable Income
Banks treat these signup checking and savings bonuses as interests, and therefore they are taxable income. At the end of each year, they will send you 1099-INT form to report on your tax. This is one of the reasons why you want to sign up for the deal only when the bonus is good and the amount is worthwhile after you pay tax on it. Personally, I like to go for the deal that offers at least $150 to make my time worthwhile to open a new bank account and complete the requirements in order to get the bonus. I sometime go for $100 bonus if the requirement is easy enough.

Direct Deposit & Requirements
The requirements to complete certain tasks in order to get the bonus varies from one bank to the other. The obvious one typically requires that you establish a Direct Deposit that cannot be a money transfer (ACH push) from another bank that you are associated with. Although that's the case, several reports out there have proven otherwise for some banks. That's being said, some bank code ACH push transaction as "Direct Deposit" so you don't have to go change direct deposit with your employer every time you want to sign up for a bank bonus that has direct deposit's requirement. If you can change direct deposit online with your employer on your own, that'd be super convenient. In that case, I recommend that you always want to establish a real direct deposit as much as you can to guarantee that you don't fail to satisfy that requirement during the qualification time. There are also other requirements that you will just need to read through the fine print to try to understand and complete each task. Some banks even require a huge amount of money to be deposited. That means you have to park a large amount of money there and lose earning high interest somewhere else. Again, each requirement varies from one bank to the other.

Opening and Closing Account
I have to admit, this "game" isn't for everyone. The sole reason to go through all these is to get the cash bonus offer when you sign up for either a checking or savings account with a local bank that you have never had desire for in the first place, and not to mention some banks that you have never heard of across the country. It's definitely not a hassle-free process. This is why you want to make sure the bonus is worth your time that you spend on opening a new account and completing the requirements. Some banks are generous enough that they allow consumers to open the account, complete the tasks, receive the bonus, then close the account within allowed closure time by the banks. After certain period of the time, consumers can repeat the process once they are qualified for the offer again.

Bank Fees
As I mentioned above, it is very important that you are aware of each bank's rules on closing the account. Some banks are generous about this, but most banks require that you keep your money in their bank after getting the bonus for a certain period of time before closing, or you'll get a penalized fee for early closure. In addition, there's another fee that you want to look out for is the monthly service charge. Fortunately, there are ways to waive that fee and those ways are defined by the bank itself. Once again, know these fees before sign up so you are not losing your bonus money to these bank fees. There might be some other fees as well that are imposed by the bank, so just take your time to learn about those fees then determine if it's worth it to sign up with that particular bank or not.

Credit Pull
When you open a checking or savings account with the banks, you do have to provide your social security number. But let me tell you this, banks or credit unions 99.9% use the ChexSystems to determine your eligibility to open a checking/savings account with them. That system basically tells the bank about you and your use of deposit accounts in the past. This doe not affect your credit at all. Moreover, the pull on your credit is typically done "softly." In other words, that kind of pull will NOT affect your credit as well. However, there are a few certain banks and mostly credit unions out there that would do a "hard" pull on your credit in addition to the ChexSystems. I try to stay away from those financial institutions because I don't want to waste my credit pull on opening a bank account if the bonus is not worth the pull. If you get bank bonus deals from my blog, each time I try to add a new one, there's a section that I indicate whether that bank/credit union does soft/hard pull on credit when applying.

Final Thoughts
I strongly recommend that you really take time to read the fine print of each offer carefully before signing up for the offer. Look through to see if the requirements are something that you can commit to completing for the bonus, and then see if you are qualified for the offer. Some offers have offer code that you MUST enter during application process. Leaving that out may result in your account opening without the offer, and that certainly defeats the purpose of opening a new account to get the bonus in the first place. Do pay attention also to what type of account you will be opening and see if there's any monthly fee along with the methods to get that fee waived. Understand the bank or credit union, make sure it's legit and your funds are well insured. Finally, what are their terms on closing the account early, etc.

It seems a lot if this is your first time consider doing this type of deal, but believe me, it'll get easier each time. If you have some free time, this is a great way to pick up some extra cash.

After reading this, if you think you are ready to give this a try, check out the list of Bank Cash Bonuses page.

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