One of the things you have to watch out for when you are opening new bank accounts is the fine print associated with bank deals and cash bonuses. These ploys are used to get you to open an account, and they can provide you with competitive yields and cash bonuses, but you do have to be aware of some of the catches that might come these opportunities.
Temporarily High Interest Yields
Like some credit cards offer lower interest rates as an introduction, there are some bank accounts that offer special promotional yields for savings accounts, CDs and rewards checking accounts. These accounts start out with attractive yields, but may go to something lower after a few months.
Another thing to watch for is the minimum balance. The advertised rate on a rewards checking account or on a high yield savings account may only apply if you maintain a minimum balance. Many financial institutions have two different rates for such an account: One for higher balances, and one that is offered if you fall below minimum. If you don’t maintain the minimum, you may not get the advertised rate.
Requirements for Your Account Bonus
Another popular way to attract new depositors is the account bonus. You can receive a cash bonus in your account if you open a new checking or savings account with a bank. This can be tempting, since the cash bonus might be anywhere from $25 to as much as $200 — or even more at some institutions.
However, the money isn’t yours just for the receiving. Instead, you usually have to perform a number of financial tasks in order to get the cash bonus. You might have to make a certain amount of debit card purchases by signing, rather than using your PIN. Some accounts require that you engage in a certain number of electronic transactions, such as direct deposits, or bill pay. Usually, you have to complete these financial tasks within a specified amount of time, usually within the first 30, 45 or 60 days of opening an account.
If you can complete these tasks, and if you can maintain a required minimum balance, these types of bank deals and account bonuses can be beneficial. After all, you are getting free cash, or a higher yield. Or both. The opportunities are there, and you can see why they are attractive. Just make sure that you have a plan as you approach these bank deals and attempt to qualify for account bonuses. That way you will be more likely to make the most of the opportunity.