How to Score a Savings Account Bonus — and Know When to Skip It | Smart Change: Personal Finance

Margarette Burnette

There are banks that want to give you more than $ 100 to open a new account. The catch? You may need to make a minimum deposit. Or get a direct deposit. Or keep your money deposited for a certain amount of time. Or all of the above.

For some customers, the requirements are worth it. “I have free money,” says Anika Jindal, a personal finance blogger in Houston who recently took advantage of a bank’s bond offer. She says she opened an online account at a large bank and made a deposit to be eligible for a cash bond.

“It was easy. They gave me back $ 200 in two months,” she says. With a few smart moves, you can do the same. Here’s how to get a bank bond, even if you’re sure the bank’s offer, hoops and all, is right for you.

Search online for major banking promotions

Some banks will send offers directly to certain customers. But you don’t have to wait for an invitation. You can search for “bank bonuses” online to get an idea of ​​what financial institutions offer. It’s not uncommon to find bonuses of $ 100, $ 200, and up to $ 300 for new customers who open savings or checking accounts.

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A major bank bond can be like earning a stellar fee. For example, a $ 200 bonus in exchange for depositing $ 2,500 into an account for the first three months is like earning an annual percentage return of 8% on that same amount for an entire year. For comparison, the best savings accounts currently have rates of just under 1%.

Check the requirements

You will want to read the fine print. With many bank promotions, the key to earning a bonus of more than $ 100 is to make an even larger deposit first, for example, $ 1,000 or more. You may be expected to make that deposit within the first two to three months of opening your account, and the bonus funds will be deposited a few weeks later.

If you can make a large deposit into your account for the required period of time, the advantage could be worth it. But if that amount is a stretch, it might not be worth tying up your money.

Know what fees you may end up paying

Some accounts that offer bonuses and benefits also have monthly service fees. If you can’t exempt from those fees, for example, by keeping your account balance above a few hundred dollars, you’re likely to end up returning the bond money to the bank, says Jeff Kronenberg, founder and founder. president of Imagine Wealth Group LLC, a financial planning company in Ridgefield, Connecticut.

“Banks are very good at making money,” he says. “If you get a $ 100 bonus, but the monthly fee is $ 30, which I saw, after four months you’ll lose all the profit.”

Maximize your entire balance

If you plan to continue using your savings account after earning the bonus, look for an account that doesn’t set limits on how much of your money will earn your highest rate. For example, a financial institution may offer a 1% fee, but only for the first $ 5,000 deposited. Anything above that amount can earn you a lower rate.

Since savings account rates are likely to start rising to fight inflation, if you have a large amount of cash to deposit, you don’t want to be left with a lower return on any part of your balance, says René Nourse, a certified financier . planner and founder and CEO of Urban Wealth Management in El Segundo, California.

It may be worthwhile to opt for a high interest savings account that pays a hefty fee on your entire balance and may not have a bonus, instead of an account with a bonus and a teaser fee for a smaller amount. “We’ve had a couple of years where your rainy day account earned very little,” Nourse says. “But now is a good time to look for a better option.”

Follow up if necessary

Once you meet the eligibility criteria, pay attention to the bank to deposit your bonus. Many offers indicate that the institution will pay the bond in a few weeks. You can view transactions online or view your monthly or quarterly bank statement. If you do not see the bonus, please contact the bank’s customer service for an explanation.

Getting a savings bond can be like earning extra interest, rather than even the best savings accounts. As long as you meet the requirements and do not return funds in the form of bank commissions, bank bonuses can be a great way to increase your bank balance.

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