Guest Post from Doctor of Credit: Bank Account Sign Up Bonuses
(Disclosure: Will from Doctor of Credit emailed me about doing a guest post for each other’s blog and I said that would be a cool idea. If you are interested in doing a guest post, please send me an email.)
If you’re a regular Travel with Grant reader like myself then chances are you’ve made a heap of points, miles and cash from various credit card sign up bonuses. Unfortunately you’re limited by the number of cards you can apply for and be approved for because you receive a hard credit pull every time you apply. Manufactured spending can be a great way to fill in the time between app-o-ramas, but my favorite thing to do to take the edge off is to make some extra spending money from bank account sign up bonuses.
Why I Love Bank Account Sign Up Bonuses:
- The majority of them don’t require a hard credit pull, only a chex systems inquiry.
- They pay cash, which is much more flexible than points and can be used for spending cash for your travel holidays.
- They compliment credit card sign up bonuses. E.g, the Chase Freedom gives you a 10% bonus on all points earned if you have a Chase checking account open. A lot of checking accounts also allow you to fund the initial deposit with a credit card which is perfect for helping to meet some minimum spend requirements or some light manufactured spending.
What I Don’t Love About Them
- You have to pay taxes on them. Unlike credit card sign up bonuses, bank account bonuses are treated as interest and banks will send a 1099-INT form to the IRS and you’ll be required to pay taxes.
- The bonuses can be slow to post. Sometimes you might have to wait up to two months for the bonus to finally appear in your account.
Tips For Making The Most Out Of Bank Account Sign Up Bonuses
- Set the cash advance limit on your funding credit card to $0. That way if it’s coded as a cash advance, it’ll be rejected and you won’t be charged cash advance fees. Citi will almost always post as a cash advance and if you’re funding a bank account, use a card from a different bank (e.g, don’t use a Chase card to fund a Chase bank account).
- Track all of the bonuses you’re currently completing in a spreadsheet and make sure they post.
- Be wary of monthly fees and what requirements you need to complete to waive them. Most bank accounts come with a monthly fee, these are usually waived if you have a minimum balance but just be aware of these monthly fees and what you need to do to avoid them.
- Be wary of early account termination fees. Some bank accounts have to be kept open for a minimum of six months, otherwise you’ll have to pay an early account termination fee.
- Make sure a hard pull won’t be completed. Most bank accounts won’t require a hard pull because no line of credit is being extended, some accounts will result in a hard pull. This is because they offer overdraft protection (which is a line of credit), just be sure to check forums to ensure a hard pull isn’t done.
- Find out what counts as a direct deposit.
- Use Amazon Gift cards to complete any debit card transaction requirements. Some bank bonuses require you to do a minimum amount of debit card transactions per month to trigger the bonus. You can purchase Amazon Gift cards from amazon starting at only $0.15 per card. This is an easy and cheap way of fulfilling these requirements.
- Find out what counts as a direct deposit. Changing the bank account your regular employment payment goes to monthly goes tiresome for both you and the accounting department pretty quickly. Thankfully usually you can get an ACH transfer from your regular account to count as a qualifying direct deposit – just make sure you do some Google searching first!
Some Samples Of Current Bank Account Sign Up Bonuses
Below I’ve included a few bank account bonuses with all of the relevant information for you to get started. All of these promos are available nationwide and if you complete them you’ll earn $xxx in free cash
Chase $150 Bonus
- No hard pull.
- Can do initial funding of up to $500 with a credit card.
- Requires a qualifying direct deposit, aside from a regular employer payment or government benefit the following have all triggered the bonus recently:
- ACH push from Bluebird, Serve or
- Have a minimum daily balance of $1,500 or direct deposits totaling $500 or more a month to keep it fee free (otherwise $10-$12 depending on your location).
- Must keep the account open for six months to avoid having the bonus taken back by Chase (if you close within this time period and have a balance of $0, your balance will become negative and will be reported to chex systems as such. Making it hard to be approved for future bank accounts).
- Valid until July 7th, 2014.
Santander $20 Per Month Bonus
- No hard pull.
- Receive $20 every month you fulfill the following requirements:
- Receive direct deposits totaling $1,500 or more (almost every ACH is currently counting as a qualifying direct deposit).
- Do a minimum of two Bill Pays.
- Monthly fees may apply.
- Fundable with a credit card up to $500.
- No current expiration date.
Will is a consumer credit advocate that regularly posts about bank account bonuses (such as Chase coupon codes that can earn you up to $600 in bonuses) on his blog Doctor of Credit. He also covers credit scores and credit cards in depth. He’ll be sticking around to answer any questions or comments you have below.
Are there any banks that offer miles for opening a bank account? Also, for Santander, do you need to do direct deposits and 2 bill pays? Or is the requirement that you have to do direct deposits or 2 bill pays?
Thanks for the comment. I don’t know of any banks currently offering miles, but Citi and Chase both have in the past. The problem arises because you have to pay taxes on the miles, all of the banks overvalue them for their own tax purposes, but this means you have to pay more tax if you receive them as a bank account bonus. E.g Citi gave out some a year or so ago and they were reported as being valued at 2 cents a piece, which left people with a rather large tax bill.
If I understand correctly, you’re saying that if I send $500 chase/ $1500 santander monthly from my Bluebird account to the chase/santandor account, then that will count as direct deposit to exempt the monthly fee etc.
1) Do I need to send it on the same day every month, and in the same donominations?
2) Is it per calendar month?
That’s correct as of now.
1). No, doesn’t need to be the same day every month and in the same denominations. It can be differing amounts – remember not everybody is paid the same amount monthly.
So we would add chase and santander to our bluebird bill pay and send 500 to chase and 1500 to santander monthly to simulate a direct deposit correct? Is there a chance they would not count it as a direct deposit?
Yes, there is always a chance that they would update their rules and it could stop working. A qualifying direct deposit is usually considered an employer payment or government benefit, but sometimes you can get around this by doing a transfer.
Some banks (like Chase) try to counter act this and close methods down, whilst other banks don’t really care. My suggest is to leave the minimum required in Chase to keep it fee free, that way you only have to worry about getting a qualifying direct deposit once to trigger the bonus.
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