Common Mistakes to Avoid When Chasing Bank Account Bonuses

When you’re on the hunt for a new bank or credit union to open an account, the allure of account bonuses can be quite tempting. For example, a bank might offer a $250 cash bonus for opening a checking or savings account. However, these offers often come with strings attached, such as the requirement to make at least one direct deposit within a specified period.

At O1ne Mortgage, we understand the importance of making informed financial decisions. That’s why we’re here to help you navigate the complexities of bank account bonuses. In this blog, we’ll explore common mistakes to avoid when trying to earn a bank account bonus. And remember, if you have any mortgage service needs, don’t hesitate to call us at 213-732-3074.

Not Making Direct Deposits

Many financial institutions require a certain number of direct deposits, such as paychecks or government benefit checks, within a specific period to qualify for a bonus. The amount of the cash bonus might also vary based on the amount of each direct deposit.

If you fail to make the required direct deposit(s) within the stipulated time frame, you could miss out on the cash bonus or a higher annual percentage yield (APY). To ensure you receive the bonus, make sure to make a qualifying direct deposit within the time frame outlined by the financial institution.

Keep in mind that some deposits may not qualify for a bonus, depending on the bank or credit union. Ineligible deposits might include mobile deposits, account-to-account transfers, Zelle transfers, or deposits made at an ATM or branch.

Failing to Maintain a Minimum Balance

To earn a bank account bonus, some financial institutions may require you to maintain a minimum balance. For instance, a bank might offer a $200 bonus with a minimum balance of $10,000, a $500 bonus with a minimum balance of $30,000, or a $1,000 bonus with a minimum balance of $75,000. Additionally, the bank may require you to maintain this minimum balance for a set period, such as 60 days. If your balance falls into a lower bonus tier during that period, your cash bonus might decrease accordingly.

To avoid this scenario, ensure you can maintain the necessary minimum balance. Alternatively, look for a financial institution that doesn’t require a minimum balance to collect a bonus.

Failing to Make a Minimum Number of Transactions

Some credit unions offer generous APYs for checking accounts, but only if you make a minimum number of transactions each month. For example, you might be able to earn a high APY of 6% on balances up to $10,000, but only if you complete 15 or more monthly debit card transactions of at least $10 each.

In this case, you’d need to be mindful of meeting the transaction requirement. If you don’t, the APY may decrease or even drop to 0%. If you don’t regularly make a lot of debit card transactions, consider finding a financial institution that doesn’t require a minimum number of transactions but still offers a bonus.

Opening an Account Only for the Bonus

While a bonus for opening a bank account can be enticing, you shouldn’t open an account solely for the bonus. In addition to considering whether a financial institution offers a bonus, ask yourself the following questions:

• What fees will you be charged, such as monthly maintenance fees and ATM fees? Will the bonus be enough to offset these fees? Can the fees be waived?
• How widespread is the financial institution’s ATM network? If you’d need to search extensively for a fee-free ATM, the bonus might not be worth it.
• How much interest will your money earn? An account’s APY may tip the balance toward one bank or credit union over another, despite their bonuses.
• Is the financial institution up to date with technology? For instance, does it offer an easy-to-use online portal and mobile app?
• How good is the financial institution’s customer service? Seek recommendations from relatives, friends, and colleagues, and check online reviews for the financial institution’s pros and cons.

The Bottom Line

Many banks and credit unions attract customers with bonuses. However, it’s crucial to do your homework before opening a bonus-equipped account. The financial institution may require you to maintain a minimum balance or make direct deposits to qualify for a bonus. If you’re unsure whether you can meet these requirements, you may want to explore other options—even if it means giving up the chance to earn a bonus.

At O1ne Mortgage, we’re committed to helping you make the best financial decisions. If you have any mortgage service needs, please call us at 213-732-3074. Our team of experts is here to assist you every step of the way.