Have you ever gotten a bank bonus? You know – the ones where you open an account, jump through hoops, and then the bank eventually deposits a cash bonus into your account.
Over the years I’ve taken advantage of a few bonuses when I received good offers. I’d get a snail mail from a bank, open an account and make $150 to $200. It was nice when it happened.
One day I had the genius idea of looking for bank bonuses on the interweb. I’ve no idea why I didn’t think of this sooner. Maybe I’m a little slow. Anyway I discovered a great site and community for bank bonuses – DoctorOfCredit. Little did I know that people are making thousands of dollars from bonuses. Someone claimed to have made $8,000 in a single year! Sign me up, right?
The DoctorOfCredit keeps a current list of the best bank bonuses. The site has other helpful information about bank bonuses which is definitely worth exploring. Check it out.
Important to know
In the meantime, here’s a summary of the most important things I’ve learned to help get you started:
- Banks use a system called ChexSystems to find out if you’ve ever had a bad bank account and how many accounts you’ve recently opened. You can generally open up to 12 new bank accounts per year before banks start denying your application. If you include your spouse, that’s a total of 24 accounts. I plan to keep it down to less than 8 accounts per year per person or less than 16 when I include Mrs. Freaky Frugal.
- Banks usually do what DoctorOfCredit calls a Soft Pull on your credit score. That means the bank just reads your credit score from a credit bureau when you submit an application. The bottom line is that opening a new bank account generally does NOT change your credit score unless you enroll in overdraft protection. So stay away from overdraft protection when you apply.
- Bonuses are usually between $100 and $400. I shoot for $200 or more.
- Some bonuses require Direct Deposits. Direct Deposits are things like employee paychecks, social security, or pensions. These are a pain in the ass to change. But here’s a trick – some banks count external transfers from other banks or even Paypal as a Direct Deposit. Doctor of Credit conveniently tracks these.
- Calculate how much you really make from a bonus when you take into account lost interest. Suppose a bank bonus requires a $15,000 deposit for 6 months to get a $200 bonus with little or no interest. You’ll lose $75 dollars in interest that you would have gotten in your regular 1% savings account. So you’re only really making $125. Good, but not great.
- Read the comments at the end of the DoctorOfCredit bank bonus posts. They help you understand what tips and tricks people are using to get the bonus.
- Keep a spreadsheet of all your bank bonuses including amount, account opening date, account closing date, and notes. Closing dates are important because some banks allow you to get a bonus more than once depending on when your last account was closed.
- Some banks let you make an initial deposit with a credit card as a purchase. So if I fund a $2,000 initial deposit with a purchase – not cash advance – from my 2% cash back credit card, I make an instant $40 on top of the bank bonus. Crazy, right?
- Bank bonuses count as interest for tax purposes. That’s another reason to keep a spreadsheet but most banks will also send you a 1099-Int.
There’s definitely a hassle factor with doing bank bonuses so calculate your hourly wage to see if it’s worth your time. If you spend 4 hours working on a $200 bank bonus, you’re making $50 per hour before taxes. Not bad. But if you spend 8 hours dealing with a $100 bank bonus you’re only making $12.50 per hour. Not worth it for me.
But what about the poor, poor banks? 😥
You might feel sorry for the banks. Don’t. They factor in people like us who open accounts just for the bonus. And they still make tons of money from peddling bonuses to people who keep their new accounts! Besides some banks have done some pretty bad stuff lately: opening dummy client accounts, outrageous executive bonuses, and insane fees.
Remember when Wells Fargo opened all those dummy client accounts? And then all the senior executives claimed ignorance after setting up an employee reward system for opening up new client accounts that put tremendous pressure on low-level employees? And then many of those same low-level employees got fired? It still pisses me off. So when Mrs. Freaky Frugal recently got a $250 bonus from Wells Fargo, it felt like cosmic justice. I did the Happy Dance!
Mrs. Freaky Frugal and I have already made $1,300 this year, but we aren’t done. I estimate we can make between $2,000 and $2,500 for the total year. And I think it’s possible to do the same next year. It’s the closest thing I’ve found to free money. Go get yours!
Thanks for reading! Have you ever scored a bank bonus?