My mailbox and online advertising banners always contain New Bank Account Promotions. With promises of hundreds of dollars for each new account, it is easy to see why many people use this as a hack to earn extra cash. I have been reluctant to participate over the years. But recently, two offers came across my plate that I couldn’t pass up. Here is how I earned $1,000 with new bank account promotions over the last month.
What Are New Bank Account Promotions?
I’ll start with the basics. What is a new bank account promotion? Often times, banks are looking to increase the deposits held at their institution or increase their customer base in an effort to cross-sell products. This could be to fund faster than anticipated loan growth or increase the bank’s capital reserves. There are many methods to do this. One method is to offer new account promotions. New account promotions lure customers to the bank by offering large sign-up cash bonuses for depositing funds or large interest rates. For example, you can earn $100 for X dollar deposit, $200 for Y deposit, etc. Offers like this can be found everywhere! If you are ever looking for a place to find them, here is an example website that lists new bank account promotions for the month.
What are some PRos and Cons?
Earning free cash is a major pro! After all, the returns can be large on the deposited cash in the right bank account promotion. Also, as soon as the promotional period outlined in the terms and conditions is over, you can withdraw the funds and close your account. The cash is back in your primary account just like that.
If you are getting handed free money, then why haven’t I been doing this for years? After all, free money is free money! There are several reasons I have been reluctant to participate in new bank account promotions hacking:
- The promotion typically requires you to tie up capital for a long period of time
- Some promotions require a lot of cash to earn the big bucks
- Promotions typically have a lot of strings attached that require customers to change their daily habits. For example, for many promotions, in order to earn the bonus, the bank outlines specific transaction requirements. Some of them include: you are required to direct deposit a certain amount monthly, use X number of debit card transactions each month, or withdraw from the ATM a certain number of times per month.
Honestly, the last bullet point has always been the sticking point for me. I don’t want to change my daily habits (significantly) to earn a few hundred dollars. I currently use my credit card for all transactions to earn points and cash back via stock on Bumped (See our review of Bumped here). Changing from credit card transactions to debit card transactions would cut my other rewards, ultimately losing out on other incentives. Some individuals I have talked to will buy 8 packs of gum in 8 transactions each month to satisfy the requirements. That’s great, but it has always been annoying to me.
EArning $1,000 in New Bank account promotions
If I have been reluctant to participate in new account promotions in the past, then what put me over the edge? Two promotions came across my plate that I could not ignore with really easy terms and conditions.
Bank Account Promotion #1: For this promotion, you could earn a $600 cash bonus for new accounts where you have one $2,000 direct deposit within the first 60 days of opening. After the initial deposit, you are required to have a direct deposit of $1 to waive the monthly service fee. There are no additional transaction requirements. There are no minimum debit card transactions. That’s it!
The bonus will be deposited on August 31, 2019. At this point, you can close the account and withdraw your funds. In total, I ‘m depositing $2,007 to earn this bonus and avoid monthly bank account fees. The return on this deposited cash is 29.9%. Not too shabby for only four months!
Bank Account Promotion #2: For this promotion, you can earn a $400 cash bonus for new accounts that have a one-time $500 deposit. This doesn’t have to be a direct deposit. Just a simple transfer from your current checking account. You can open a no-fee checking account with the promotion. Thus, you aren’t required to do anything to waive account fees. Like the last promotion, there are no minimum transaction requirements. What’s crazy is that this promotions is EVEN EASIER to earn than the last one.
The bonus will be deposited into my account within 60 days of my initial $500 deposit. However, I am required to keep an account open at this institution for 180 days. So the waiting period to close is longer. However, I think that is work if to an 80% return on my deposited cash!
In total, I will earn $1,000 in new bank account promotions by depositing $2,507 into two new financial institutions. Overall, that is a 39.9% return on my invested dollars. But it isn’t just about the cash. What jumped out at me for these two promotions was how easy it was to earn the cash. I didn’t have to jump through very many hoops or change my spending habits. These account promotions were simple. Deposit cash for a certain period of time; earn a large cash bonus. I compared these two promotions to the current CD returns when making my decision. If I would sign-up for a CD bonus yielding 5% that locks my cash up for months or years at a time, then why wouldn’t I consider these accounts? The decision was pretty simple, and the returns are great! That’s one way to make EVERY DOLLAR COUNT!
What do you think of my moves? Do you sign-up for new bank account promotions? What causes you to do it? Or why do you avoid the activity? Did I miss any pros or cons in my analysis?
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