Are Bank Bonuses Worth It?

When researching new bank accounts, you may find some that offer sign-up bonuses — free cash for opening an account and depositing some money — and wonder if it’s worthwhile. The answer is: It depends. This can make a bank account seem more attractive because of the quick payout, but it’s important to think about the long-term value of a bank account before opening it.

Are bank bonuses worth it for you? They can be if the bank also offers other features that align with your needs, like a high interest rate, no monthly fees, a large ATM network, and cash back rewards.

But in other cases, they may wind up just being an incentive that leads you into an arrangement that involves, say, high fees and low interest rates.

Here, you’ll learn more, including:

•   What is a bank account bonus?

•   Are bank account bonuses worth it?

•   What are the pros and cons of bank bonuses?

What Is a Bank Account Bonus?

A bank account bonus is a reward that customers earn for opening a new checking or savings account and meeting specific criteria during a set period. That might include setting up direct deposit, funding the account with a set amount of cash, using your new debit card a certain number of times, or meeting a specific spend threshold.

Bank account bonuses can vary in size, with some banks offering $50 and others offering up to $2,000 (expect some very strict criteria on very large deposit amounts to nab that kind of a gift).

Banks may offer other types of bonuses, but sign-up bonuses are the most common and are meant to entice you to open a new bank account.

Note: Banks generally offer bonuses during promotional periods that last a set number of months. At the end of that period, they may choose to extend the bonus, end it, or offer a new bonus that could be more (or less) valuable than the preceding one.

How Do Bank Account Bonuses Work?

A traditional sign-up checking account bonus generally requires that you are a new client of the bank — or haven’t had an account with the bank for a set number of years. Each bank will have varying criteria to earn the bonus. Depending on the bank, you might:

•   Simply need to set up and receive qualifying direct deposits

•   Deposit a certain amount of money into the account (say, through an external bank transfer) and keep the account funded for a set number of days

•   Use your debit card a set number of times or for a minimum spend amount in a given timeframe

•   Pay a minimum amount of bills using the account

Evaluation periods for such bonuses may range from a few weeks to several months to an entire year. That means it could take a while to receive the sign-up bonus.

Some banks may also take back the bonus if you close the account too soon after receiving the bonus. That’s why it’s a good idea to read all the fine print for a bank bonus before opening a new account.

What Are Some Common Bank Account Bonuses?

You may often see the phrase “bank account bonus” used interchangeably with “sign-up bonus.” However, banks may offer other types of bonuses that have nothing to do with opening a new account. Here are some common bank account bonuses to watch for:

•   New account bonus: A sign-up bonus, or new account bonus, is what we generally think of when we hear “bank bonus.” Consumers can earn these bonuses for opening a new account and meeting specific criteria.

•   Referral bonus: Some banks may offer referral bonuses. Get friends and family to sign up for a new account, and you — and maybe your referral — can earn a cash bonus.

•   Cash back bonuses: Though we often think of cash back with rewards credit cards, some banks may pay out cash back with debit card. You might get a percentage back when you make qualifying purchases.

•   Waived fees: Some bank accounts charge monthly service fees for keeping the account open. Often, these banks offer a way for you to have the fees waived — usually by maintaining a minimum balance, earning direct deposits, or meeting certain spending criteria. While you won’t earn cash, you’ll avoid paying fees; in that way, it’s like a bonus.

And don’t forget: Many banks offer sign-up bonuses on their credit cards as well. These also have their own criteria for earning the bonus that you may want to review before applying.

Pros of Bank Account Bonuses

Bank bonuses can be advantageous for consumers who are looking for a new account. Here are some of the pros:

Many Are Offered for Opening a New Account

Sign-up bonuses are a common form of bank bonus. Because the criteria are built around things you’d commonly do with a new account — setting up direct deposit, funding it with cash, using the debit card on everyday purchases — it can be easy to earn the bonus for activities you would’ve done anyway.

Recommended: Checking vs. Savings Account

Bonuses Can Be Enough to Pay Off Potential Fees

While it’s wise to prioritize a bank account without any monthly fees, big bonuses can offset such fees for several months. And even if you find a bank account with no monthly fees, you may still end up paying:

•   ATM fees

•   Minimum balance fees

•   Overdraft and NSF fees

•   Foreign transaction fees

Such occasional fees might be easier to swallow if you’ve already earned a bonus worth several hundreds of dollars.

Recommended: What Are ATM Fees?

Bonuses Can Help You Build Your Savings

If you earn a bonus for opening a new savings account, you can keep that money in your account where it will continue to earn interest. This makes bank account bonuses an easy way to jump-start your savings, whether you’re building an emergency fund or saving for a wedding, house down payment, or vacation.

Recommended: Different Types of Savings Accounts

Cons of Bank Account Bonuses

While it’s hard to imagine how free money could be a bad thing, bank account bonuses may have drawbacks for certain consumers. Here are some considerations as you decide if bank bonuses are worth it.

Bonuses Are Considered Taxable Income

First and foremost, a bank account bonus is never as big as it sounds. Here’s why: because Uncle Sam takes his cut. The IRS considers bank account bonuses earned income, just like any interest you earn on the account.

You Might Pay More in Fees

Sign-up bonuses are meant to entice you to open a new account, but it’s a good idea to consider the account as a whole before moving forward. While a shiny sign-up bonus may offer you money up front, consider how much you’ll spend on fees (or how much you’ll miss out on in interest if it’s a low-interest account).

Once you factor in fees and missed earning opportunities, a bank account offering even a large bonus may not be the best long-term option for you.

There Are Often Many Requirements to Receive the Bonus

Some sign-up bonuses are easier than others to earn. If you’ll struggle to meet all the criteria — for example, the account may have too high of a deposit threshold for you to meet — it probably doesn’t make sense to open the account for the bonus alone.

Is It Worth It to Switch Banks for a Bonus?

So are bank account bonuses worth it? That depends on your needs. If you’re happy with your current bank and like all the features it offers, it may not be worth the hassle to switch.

But if you have other reasons to switch banks right now — like you want a higher interest rate, better mobile app, or fee-free overdraft — it could be worth your time to compare bank bonuses and make the switch.

That said, sign-up bonuses are a one-time benefit. It’s a good idea to weigh other features, like annual percentage yield (APY), monthly fees, mobile banking features, and ATM access, along with new account bonuses when making your decision.

Recommended: How to Switch Banks

Banking With SoFi

Bank bonuses can be easy to earn and may offer a great jump-start to your savings. For most consumers, however, it makes sense to consider sign-up bonuses alongside other important banking features, like interest rates and fees, to make a sound financial decision.

Are you looking for an online bank that offers a competitive APY, no monthly fees, which may help your money grow faster, month after month? Open a new SoFi bank account and you’ll enjoy those benefits, plus the ease of spending and saving in one convenient place.

FAQ

How can I qualify for a bank account bonus?

Banks offering sign-up bonuses for new accounts have specific terms and conditions to achieve the bonus. Read the fine print of any bank account bonus program to ensure you understand all the steps you need to take to qualify for the bonus.

What are the different types of bank bonuses?

The most common type of bank bonus is a sign-up bonus, which some banks offer when you open a new account and meet certain criteria during an evaluation period. Some banks may also offer:

•   Referral bonuses for getting friends and family members to open an account.

•   Cash back bonuses when you swipe your debit card.

•   Waived accounts fees for meeting criteria every month.

Banks might also have unique credit card rewards, like sign-up bonuses and cash back, travel points, or miles with every swipe.

Does SoFi offer a bank account bonus?

SoFi may offer a bank account bonus to new members when they sign up for the SoFi Checking and Savings Account; it may require setting up direct deposit. Check here to see what may be available right now.

Photo credit: iStock/Prostock-Studio

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SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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