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How to get the most out of a checking account bonus

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Banking incentive programs | Bankrate

In major U.S. cities, it's not difficult to find banks that will offer you $50, $100 or even $400 for opening a new checking account, a new Bankrate survey has found. The reason for these lump-sum lures is simple: Checking bonuses work.

But we also discovered that the offers tend to come and go rapidly, and that they often have conditions that can make a cash reward less worthwhile than you might think at first glance. So, you have to move quickly and smartly in deciding whether to make a play for a checking bonus-money deal.  

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2 offers, 2 results

Max Soni, owner of the marketing agency Qumana in New York City, took advantage of just such a bonus last year, and so far it has worked out well. He received the cash he was promised -- $200 -- and because he already was a customer at the bank offering the promotion (Bank of America), signing up was easy.

"I've been solicited with these types of offers in the past," he says, "but unfortunately, you'd have to then fill out an application, so I've never really touched any of them, ever, period."

What ended up making the difference was convenience. He was in a branch doing other business with the bank when the teller made the bonus offer in person. Earning $200 was enough to get him on board.

"I just sat there for about 2 minutes on my phone playing Angry Birds and I was signed up," he said. All that was left to do was deposit $4,000 in the account within the next few weeks and the money eventually showed up.

There can be snags, however. Andrew Reeves, CEO of Luxe Translation Services in Beverly Hills, California, says he never got the money he was promised from a major bank.

"At the time that I was opening the account, the teller assured me that the $200 would be credited to my account within a week," Reeves says.

Two months later, the money still hasn't shown up.

"I tried to speak with them about this on multiple occasions, but they keep giving me the runaround," he says. "Their excuses range from 'we will call you back' to 'the manager is not here right now' to 'your account does not qualify.'"

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Substantial variation in terms

Bankrate initially searched the 10 largest U.S. markets for checking-reward-money offers in late April and early May and found 37 of them, with the bonuses ranging from $10 all the way up to $400. We found that a bank might offer different amounts for different sizes of new accounts.

The strings attached to those payoffs varied, too. Here were some of the most common ones:

  • Signing up for direct deposit. This was the most common stipulation. Twenty-one of the 37 offers we surveyed required direct deposit. Some had specific minimums ranging from $200 to $5,000.
  • Minimum debit card usage. A few of the accounts required a minimum number of debit card transactions, ranging from 6 to 20, to pay out a reward.
  • Minimum deposit. Many offers required account holders to deposit a certain amount of money and keep it in the account for a specific period.

Also, be prepared to wait. You'll typically have to have the account for 60 to 90 days to get the payout.

Don't let fees eat up your bonus

While we didn't find any accounts with flagrant "gotchas" in the fine print, be aware of the minimum balance requirements attached to many of these accounts. Failing to meet them could mean your monthly service fees could quickly overtake your cash bonus, says Greg McBride, CFA, chief financial analyst for Bankrate.

Fortunately, if you don't like the terms, there's a good chance you can close it as soon as the bonus is paid with no ill effects. Almost two-thirds of the accounts had no fee or "clawback" for canceling the account within the first 12 months. That may be for the best, McBride says.

"I think you're best served by looking for a free checking account," McBride says. "Sure, maybe you can make a move that snags a bonus in the interim, but I think long term, you ultimately want to be in an account that has no monthly service charges and no monthly balance requirements."

Otherwise, you may end up locking up cash in a checking account that pays no interest just to avoid paying fees, rather than putting it in a high-interest savings account, he says.

You may need to act fast

Several offers that we found in late April and early May were gone weeks later, including a $250 promotion that expired at the end of June and a $150 offer that ended May 31. We've found that new-checking bonuses typically come with expiration dates, meaning that if you see a deal and it seems like a good one, you'd better grab it while you can.

But if you lose out on one bonus, you probably won't have any trouble finding another. We searched again for offers in early July and found many that we hadn't spotted in the earlier round, including bonuses available from some of the nation's largest banks.

And, here's more evidence that customers need to move quickly: The clock will run out on several of the fresher deals by the end of July.

What's in it for banks

In understanding why banks would be willing to pay you to open a checking account, it's important to realize that banks are already paying for customers, says Joseph Dugan, president of Edge Consultancy, a bank consulting firm in Miami.

"Typically, the cost to acquire a new checking account if you use standard marketing channels is anywhere from $150 to $300 per checking account, so one of the ways to be more direct in the effort is to offer cash for the actual opening of the account," Dugan says.

In return, banks hope they are getting a customer who will open multiple accounts, not just a core checking account. But that's not always the case, he says.

"It doesn't always work. Frequently consumers are very savvy," Dugan says. "They understand how to take advantage of the opportunity and may or may not move their entire relationship as a result."

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Checking bonuses available in major markets

Apple Bank: $100

  • Offer valid in New York. No expiration date given.
  • To receive the bonus, you must establish and set up direct deposit of a recurring payment into the new checking account. That direct deposit must be verified within 60 days of opening the account. To qualify for this offer, the recurring payment must be a payroll payment, or a federal or state government benefit or pension benefit.
  • Fee if account is closed early: $0.
  • Monthly fee: $0; balance required to avoid fee: $0.

BBVA Compass: $100 NBAStore.com Gift Card

  • Offer valid in Dallas, Houston. No expiration date given.
  • To receive the bonus, open an NBA Checking account and make 3 qualifying bill payments of $50 or more within 90 days of activating bill pay.
  • Fee if account is closed early: $25 if account is closed within 180 days of opening.
  • Monthly fee: $0; balance required to avoid fee: $0.

BBVA Compass: $15 Amazon Gift Card

  • Offer valid in Dallas, Houston. No expiration date given.
  • To receive the bonus, open an NBA Checking account and have 2 direct deposits of $300 or more within 90 days of activating the "Direct Deposit Dash" game.
  • Fee if account is closed early: $25 if account is closed within 180 days of opening.
  • Monthly fee: $0; balance required to avoid fee: $0.

BBVA Compass: $10 iTunes Gift Card

  • Offer valid in Dallas, Houston. No expiration date given.
  • To receive the bonus, open an NBA Checking account and make 40 qualifying purchases using Visa debit card within 30 days.
  • Fee if account is closed early: $25 if account is closed within 180 days of opening.
  • Monthly fee: $0; balance required to avoid fee: $0.

BMO Harris: $200

  • Offer valid in Chicago. Expires July 31, 2016.
  • To receive the bonus, sign up for an account (Everyday, Select or Portfolio) and make a direct deposit of at least $300 within the first 60 days. Bonus is deposited into the checking account approximately 120 days after opening the account.
  • Fee if account is closed early: $50 if closed within 90 days.
  • Monthly fee: $12/$15/$25; balance required to avoid fee: $1,000/$5,000/$25,000.

Cambridge Savings Bank: $100

  • Offer valid in Boston. No expiration date given.
  • Promotion targets students and employees at companies that Cambridge Savings Bank does business with. $100 bonus is deposited into account after 30-60 days.
  • Fee if account is closed early: $0.
  • Monthly fee: $10/$20; balance required to avoid fee: $1,000/$10,000.
  • Monthly service fee waived with $2,500/$10,000 combined balances in consumer banking products.

Capital One Bank(360): $200

  • Offer valid in New York and Washington, D.C. Expires July 31, 2016.
  • Promotion is only available if you receive an email or mail directly to sign up for 360 Checking. Bonus requires 2 direct deposit of $200 or more within 60 days of opening account. $200 bonus is deposited into checking account about 90 days after opening.
  • Fee if account is closed early: none.
  • Monthly fee: none; balance required to avoid fee: none.

Chase Bank: $150

  • Offer valid in Chicago, Dallas (national), Detroit, Houston, Los Angeles, New York and San Francisco. Expires Oct. 15, 2016.
  • To receive the bonus, open account, deposit $25 or more at opening and have direct deposit made to the account within 60 days of opening the account. Bonus is deposited into account within 10 business days after completing requirements.
  • Fee if account is closed early: none.
  • Monthly fee: $12; balance required to avoid fee: $1,500.
  • Monthly service fee also waived with monthly direct deposits of $500+ OR keep an average daily balance of $5,000+ in combination of qualified checking and savings balances; additional $100 bonus if a Chase Savings account is opened and linked to the checking account.

Citibank: $400

  • Offer valid in New York, San Francisco, Washington, D.C. Expires Aug. 31, 2016.
  • To receive the bonus, open a new checking account in either The Citigold Account Package or The Citibank Account Package and deposit $15,000 within 30 days. Bonus is paid after account within 90 days.
  • Fee if account is closed early: N/A.
  • Monthly fee: $25-$30; balance required to avoid fee: $15,000.

Fifth Third Bank: $200

  • Offer valid in Chicago, Detroit. Expires July 23, 2016.
  • To receive the bonus, open account, set up direct deposit and make 3 online bill payments using Fifth Third's online bill payment service within 90 days of opening the account. Bonus is deposited into the new account within 6 weeks of completing requirements.
  • Fee if account is closed early: none.
  • Monthly fee: $11; balance required to avoid fee: $1,500.
  • Monthly service reduced to $8 with monthly direct deposit of $500 or more; monthly service fee also waived with combined monthly average balance of $1,500 across your deposit and investment accounts OR if you spend at least $500 per month on a Fifth Third credit card OR any existing Fifth Third personal mortgage, auto loan or line of credit with an outstanding balance.

First Republic Bank: $350

  • Offer valid in San Francisco. Offer is a case-by-case basis. Bank wants customer to bring all banking relationships and banker will determine if eligible to get the bonus.
  • To receive the bonus, the customer must have direct deposit. Bonus gets direct deposited after 90 days.
  • Fee if account is closed early: $0.
  • Monthly fee: $25; balance required to avoid fee: $3,500.

First Savings Bank of Hegewisch: Up to $100

  • Offer valid in Chicago.
  • Customer must open with $300. To keep the bonus, you must continually make 5 transactions using the account each month, or the $50 offer will be taken away. After the first 3 months of opening account you will get the $50 bonus; if you get direct deposit right away, you get another $25 bonus; if you do e-statements after 3 months of activity, you get another $25 bonus. The $250 promo is for customers who get a home equity loan.
  • Fee if account is closed early: $35.
  • Monthly fee: $0; balance required to avoid fee: $0.

Flagstar Bank: $100

  • Offer valid in Detroit; varies by location.
  • To receive the bonus, set up recurring direct deposit of $250+. Direct deposit must be from a local company. Bonus is deposited into checking account within 60 days of completing requirements.
  • Fee if account is closed early: $100.
  • Monthly fee: $0/$10/$25; balance required to avoid fee: $0/$1,000/$5,000.
  • Hockeytown Banking products match up with Simply Checking line (Red Wings/Powe Play/Hat Trick).

Liberty Bank for Savings: $100

  • Offer valid in Chicago.
  • To receive the bonus, you need 2 recurring direct deposits of at least $100 within 60 days of opening and 2 bill payments through Liberty Bank Bill Payment. After direct deposit is set up for 60 days, you get the $50. After you sign up for online banking and have it for 60 days, you get another $50.
  • Fee if account is closed early: $50 if closed within 90 days.
  • Monthly fee: $0; balance required to avoid fee: $0.
  • No checks, only debit card.

M&T Bank: $150

  • Offer valid in Philadelphia, Washington, D.C. Expires Sept. 30, 2016.
  • Bonus is available on any personal checking account. Requires 1 direct deposit of at least $100 within 90 days of account opening. The $150 bonus is deposited into account within 90 days of qualifying direct deposit.
  • Fee if account is closed within 12 months: $50 if account is closed within 180 days of opening.
  • Monthly fee: $6.95; balance required to avoid fee only avoided with a transaction such as deposit, withdrawal or debit purchase.

PNC: $50/$200/$300

  • Offer valid in Detroit, Philadelphia, Washington, D.C. Expires Aug. 31, 2016.
  • Bonuses available are $50/$200/$300. Requires 10 debit card transactions within first 60 days for all levels. Virtual Wallet (Base) must have $500 direct deposit within first 60 days; Virtual Wallet Performance Spend requires $2,000 direct deposit within 60 days; Virtual Wallet Performance Select requires $5,000 direct deposit within 60 days. Bonus deposited into checking account within 60 days of completing requirements.
  • Fee if account is closed early: $25 fee if closed within first 6 months.
  • Monthly fee: Base: $7; Spend: $15; Select: $25. Fee can be waived with direct deposit: Base: $500; Spend: $2,000; Select: $5,000; balance required to avoid fee: Base: $500; Spend: $2,000; Select: $5,000.

Salem Five: $100 Visa Reward Card

  • Offer valid in Boston.
  • To receive the bonus, registration is required; 2 direct deposits over $250 each, 6 online bill pays over $25 each or 20 debit transactions over $5 each within 60 days. All gift cards will be mailed within 60 days of successfully meeting one of the criteria listed.
  • Fee if account is closed early: $0.
  • Monthly fee: $15, can be waived with direct deposit; balance required to avoid fee: $1,500.

Santander Bank: $150

  • Offer valid in Boston, Philadelphia. Expires Sept. 30, 2016.
  • The bonus is available on Simply Right (fees shown), Basic and Premier Plus Checking accounts. Customer must have direct deposits totaling $500 or more within the first 90 days and keep account open for 90 days. Bonus is deposited into account within 30 days of meeting requirements.
  • Fee if account is closed early: $25 if account is closed within 90 days of opening.
  • Monthly fee: $10; balance required to avoid fee: Only avoided with a transaction such as deposit, withdrawal or debit purchase.

SunTrust: $200

  • Offer valid in Washington, D.C. Expires July 31, 2016.
  • To receive the bonus, open Select Checking Account online, deposit at least $100 within 14 days of opening, make $2,000 or more in qualifying direct deposit within the first 60 days. Bonus is deposited into account up to 8 weeks after you make the qualifying direct deposit and the minimum account opening deposit.
  • Fee if account is closed early: $25 if account is closed within the first 6 months and if the Checking account is closed by the client or SunTrust within 180 days after opening. SunTrust reserves the right to deduct the reward amount from those accounts at the time of closing.
  • Monthly fee: $15. Monthly fee also waived with $2,000 or more in total direct deposits each statement cycle or $10,000 in combined relationship balances (deposits, investments, mortgages and loans); balance required to avoid fee: $2,000.

SunTrust: $100

  • Offer valid in Washington, D.C. Expires July 31, 2016.
  • To receive the bonus, open Essential Checking account online, deposit at least $100 within 14 days of opening, make $500 or more in qualifying direct deposit within the first 60 days. Bonus is deposited into account up to 8 weeks after you make the qualifying direct deposit and the minimum account opening deposit.
  • Fee if account is closed early: $25 if account is closed within the first 6 months and if the checking account is closed by the client or SunTrust within 180 days after opening. SunTrust reserves the right to deduct the reward amount from those accounts at the time of closing.
  • Monthly fee: $7. Can be also waived with $500 or more in total direct deposits each statement cycle OR make 10 banking transactions per statement cycle; balance required to avoid fee: $500.

Bankrate.com surveyed checking account sign-up bonus promotions currently offered by banks in the 10 largest U.S. markets. Promotional offers are subject to change without notice. The research was conducted in late June and early July 2016.

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