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Like any industry working to pick itself up after the economic downturn, large and small banks have struggled to keep business coming through the door. Among the impacts of the Great Recession was the Federal Reserve's move to keep the interest rates artificially low, a maneuver that made it increasingly difficult for savers to earn yields on their deposit products and harder for banks to entice new account holders.
According to the 2018 World Retail Banking Report, only half of the surveyed bank customers reported satisfaction with their retail banking services. That's because banks have been slow to move from traditional brick-and-mortar locations to digital channels. This doesn't mean financial institutions don't want new business. In fact, it's the opposite. This is why it's so important for banks to remain competitive, and find ways to attract more customers. But just how are they doing it? Easy: Signup rewards, or cash for opening a new account. Read on to find out more about how this incentive works, and which banks are offering some of the biggest rewards for opening new accounts.
- Banks remain competitive by offering new customers signup bonuses.
- Make sure the account you choose is right for you by reading the offer details as well as all the fine print.
- In order to qualify for bonuses, some banks may require you to open accounts online.
- You may need to make an initial deposit or arrange for direct deposits into your new account to qualify.
Rewards for Opening New Accounts
Competition between banks is still high, and cash back rewards are proving both scalable for banks and a much-needed windfall for customers. So, looking for an inventive way to grow business, banks and credit unions began offering cash rewards to new clientele for opening a checking account with them.
As an example of the type of rewards being offered, if a depositor put $100 into a new checking account and receives a $200 bonus in return, that creates a 300% return on investment (ROI). This return sounds like a wonderful idea, but as with anything that sounds too-good-to-be-true, this practice requires more examination.
The Costs Behind the Rewards
Banks and other financial institutions earn money from many sources. One such source is the revenue they receive from—on-average—over 30 potential fees on checking accounts, according to The Wall Street Journal. These fees include monthly maintenance, non-sufficient funds (NSF) charges, overdraft fees, paper statement charges, and dormant account fees among others. However, a cash back promotion can be a win-win for banks and consumers alike, as long as the latter remain aware of the pitfalls that could threaten their deposits.
But before you go and open up that account, remember to do your research. Make sure the account you open is the right one for you. You need to ensure you meet all the minimum requirements, so be sure to read all the details as well as the fine print before you accept the offer.
Calling All Heads of Households
Banks want to attract heads of households with these promotions. This type of customer is more likely to require a mortgage, credit cards, or other loans in the future, and will likely open new accounts where they hold their main checking accounts. They may also be more willing to move existing accounts and loans to the new institution. To encourage this, banks offer multiple product discounts to further sweeten the pot.
But consumers should be aware of the costs associated with closing and moving accounts. They must weigh the difference between the advertised cash incentive to open a new account and any fees to close or move their financial holdings.
Available New Account Bonuses
Bankrate conducted a study of cash back promotions available on the market by surveying some of the biggest banks by deposits in the United States, based on Federal Deposit Insurance Corporation (FDIC) data. The following banks currently offer new customers cash incentives for opening a deposit account. Even though some of the these banks may be physically based in certain parts of the country, offers may be nationwide, as most require online applications. These offers are current as of February 2020, and are listed in no particular order.
Most banks require new customers to maintain a balance, direct deposits and/or keep their accounts open for a specific period of time to qualify for a signup bonus.
Fifth Third Bank
Customers who open a Fifth Third Bank Essential checking account until April 30, 2020 receive a $250 bonus. But it doesn't come without a cost. In order to qualify, customers must reach a balance of $500 within 45 days of opening account and maintain that balance for 60 days thereafter. This offer is only available to brand new customers, and cannot be redeemed by existing Fifth Third clients. The bank deposits the bonus into the account within 10 business days of meeting the qualifications.
Fifth Third Bank has more than 1,110 branches across the United States in 10 states including Florida, Illinois, North Carolina, Michigan, and Ohio.
Customers who open a Wells Fargo Everyday Checking account on or before July 31, 2020 may qualify for a $400 bonus. In order to receive the signup bonus, the account must be open online. Customers must not have had a Wells Fargo checking account within the last 12 months.
Customers must have direct deposits going into the account totaling $4,000 or more during the first 90 days the account is open. These can include payroll deposits, or Social Security or other government benefit payments. The best part of this account is the low minimum deposit requirement—Wells Fargo only asks customers to deposit $25 to open the account.
TD Bank offers two different bonuses for new checking account customers. The first is a $300 bonus for a brand new TD Beyond Checking account. New clients qualify for the bonus after making $2,500 in direct deposits within the first 60 days of opening the account. There is no minimum deposit to open the account, but it comes with a hefty $25 monthly fee. This fee is waived if the customer maintains a $2,500 minimum daily balance. The account pays interest, and there are no charges for non-TD automated teller machine (ATM) transactions. The other ATM company may charge a fee, though.
If this isn't the account for you, you can earn $150 by opening a Convenience Checking account. Like the Beyond Checking account, there is no minimum deposit requirement. There is a monthly $15 fee, which is waived if the customer maintains at least $100 throughout the month. In order to get the signup bonus, customers must have a minimum of $500 in direct deposits within 60 days.
New customers who open a Chase Total Checking account and set up direct deposit to receive a bonus of $300 from the bank. This deal is not available to current Chase checking customers, those who have closed their accounts within 90 days, closed with a negative balance, or have fiduciary accounts.
This checking account comes with a $12 monthly service fee that can be avoided if an account holder either makes a direct deposit of $500 or more to the account, keeps a minimum daily balance of $1,500 or more in the account, or maintains an average daily balance of $5,000 or more within any combination of Chase checking, savings, and other qualified balances.
The bank also offers a $200 bonus for customers who open a new savings account with a deposit of $15,000 or more within 20 business days. Customers must maintain that balance for at least 90 days. A $5 per month fee applies unless customers maintain at least $300 per day in the account.
The bonus increases to $600 total for anyone who opens both the checking and savings accounts.
Those who open a new account with PNC Bank could earn up to $300 for opening a new PNC Virtual Wallet.
Opening a new, standard Virtual Wallet earns depositors $50. By opening a Virtual Wallet with Performance Spend, depositors get $200. Those who open a Virtual Wallet with Performance Select get $300 deposited into their accounts.
Direct deposits must be $500, $2,000 and $5,000 for the Virtual Wallet, Performance Spend, and Performance Select, respectively, to qualify for the reward. Customers must establish a qualifying direct deposit to the account and make at least five debit card purchases.
Santander Bank is offering a $225 bonus to customers who open a Simply Right Checking account. With a minimum opening deposit of $25, and direct deposits totaling $1,000 or more within the first 90 days, customers can earn $225 paid within 30 days. There is no minimum balance requirement to earn the bonus.
Huntington National Bank
Until April 7, 2020, new Huntington Bank customers can qualify for one of two different bonuses after opening up a new checking account. Those who open the Asterisk-Free Checking account may receive a $150 cash bonus. There is no minimum balance requirement and this account comes with no monthly maintenance fees. For the $200 cash bonus, customers must open the Huntington 5 Interest Checking account. This account has a $5 fee which is waived with a minimum $5,000 monthly balance.
In order to qualify for either bonus, customers must make cumulative deposits of $1,000 within the first 60 days and accounts must remain open for at least 90 days. Once all the requirements are met, the bank deposits the bonus into the account.
Brand new HSBC customers can choose from two different checking account offers. The first promises $475 with the opening of an HSBC Premier Checking account. In order to quality, customers must make direct deposits of at least $5,000 into the account each month for three full months from the second month that the account is open. The second offer is for up to $350 with the Advance Checking account. This bonus is earned over 12 months and requires setting up direct deposit. You'll earn 2% cash back on the amount of your direct deposit each month, up to $30 per month. This offer is good for the first 12 months of account opening and is capped at $350 for the year.
Both offers end on March 29, 2020, and applications for the accounts must be completed online.