Introduction

When you’re shopping around for a bank or credit union to open a bank account, you may be tempted by account bonuses. For instance, a bank may offer a $250 cash bonus when you open a checking or savings account. But the offer may come with a contingency, such as a requirement that you make at least one direct deposit during a certain period.

So, when you’re looking to set up a bank account, be sure you also consider factors that might make a bonus less attractive. Here are five mistakes to avoid when you’re trying to earn a bank account bonus.

1. Not Making Direct Deposits

Some financial institutions may require a certain number of direct deposits, such as paychecks or government benefit checks, during a certain period in order to score a bonus. Furthermore, the amount of the cash bonus might go up or down based on the amount of each direct deposit.

If you don’t make the required direct deposit or deposits within a period of time, you might lose out on the cash bonus or higher annual percentage yield (APY). To ensure you get the bonus, be sure to make a qualifying direct deposit within the time frame outlined by the financial institution.

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

2. 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 pay 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. Furthermore, the bank may require you to maintain a minimum balance for a set period, such as 60 days. And if your balance falls into a lower bonus tier during that period, your cash bonus might decrease from, say, $500 to $200.

To dodge this kind of scenario, be sure you’re able to maintain the necessary minimum balance. Or look for a financial institution that doesn’t require a minimum balance in order to collect a bonus.

3. Failing to Make a Minimum Number of Transactions

You may find a credit union that pays a generous APY for checking accounts, but only as long as you make a minimum number of transactions each month to qualify for these rates. For example, you may be able to land a sky-high APY of 6% on balances up to $10,000, but only if you record 15 or more monthly debit card transactions of at least $10 each.

So, in this instance, you’d need to be mindful of meeting the transaction requirement. If that doesn’t happen, the APY may go down or may even plummet to 0%. If you don’t regularly rack up a lot of debit card transactions, you may want to hunt for a financial institution that doesn’t mandate a minimum number of debit card transactions yet still furnishes a bonus.

4. Opening an Account Only for the Bonus

Sure, a bonus for opening a bank account sounds sweet. But you shouldn’t set up an account simply because you can earn a bonus. In addition to considering whether a financial institution offers a bonus, be sure to ask yourself these questions:

• What fees will you be charged, such as monthly maintenance fees and ATM fees? Will the bonus be enough to offset the fees? And can the fees be waived?
• How widespread is the financial institution’s ATM network? If you’d need to scour your area to locate a fee-free ATM, the bonus might not be worth it.
• How much interest will my money collect? 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 speed on technology? For instance, does it provide 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

Lots of banks and credit unions entice customers with bonuses. But you should do your homework before opening a bonus-equipped account. The financial institution may insist that you maintain a minimum balance or make direct deposits, for instance, to qualify for a bonus. Particularly if you’re uncertain whether you can meet the requirements, you may want to explore other options—even if it means giving up the chance to bag a bonus.

At O1ne Mortgage, we understand the importance of making informed financial decisions. If you have any questions or need assistance with your mortgage needs, don’t hesitate to call us at 213-732-3074. Our team of experts is here to help you navigate the complexities of the mortgage process and find the best solutions for your financial goals.