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5 Reasons to Ignore Bank Sign-Up Bonuses

Aug. 9, 2018
Banking, Checking Accounts, Savings Accounts
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Bank sign-up bonuses can be appealing, whether they jump-start a stalled savings account or are a little extra in a large nest egg. But before you commit to a bonus, read the fine print. You should also consider other factors, such as account fees and restrictions, and how much your money could earn elsewhere.

Some banks offer $50, $100 or even $200 for new accounts, but that’s not always a good enough reason to join. Here are five reasons it may make sense to skip the bonus offer.

» Want to see the best bonuses? Check out what banks are offering this month

1. You could end up paying more in bank fees

Many banks that offer sign-up bonuses for checking require you to maintain a minimum balance — $1,500 at some banks — or pay a monthly fee. If you’re not prepared, that $12 or so per month could eat into your bonus. Here’s more information on avoiding checking account fees.

If you’re trying to cut expenses, a free checking account at a bank that doesn’t offer a sign-up bonus could be a better deal.

2. The bonus may not be as big as it seems

Shantel Moses of Brooklyn, New York, says she received a sign-up bonus of $50 to join an online bank a few years ago.

“Everything was great until it came time to do my taxes,” Moses says. That’s because the bank sent her a form stating that the bonus should be counted as taxable income. “After taxes, the 50 bucks was really more like 30 bucks,” she says.

And, when it comes to savings, a large signing bonus won’t make up for a lackluster annual percentage yield over time, especially if you have a lot to deposit.

See some of the best bonuses to decide if they’re worthwhile:

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at Chase Bank

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at Discover Bank

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at HSBC Bank

Chase Total Checking® Bonus


Minimum qualifying deposit


When you'll get it

Within 10 business days of first direct deposit
(Expires 10/15/2018)

Discover Savings Bonus


Minimum qualifying deposit


When you'll get it

By Nov. 5, 2018
(Expires 10/8/2018)

HSBC Advance Checking Bonus


Minimum qualifying deposit


When you'll get it

Around 8 weeks after requirements met
(Expires 11/2/2018)

Get more details on how to qualify for this bonus.
Get more details on how to qualify for this bonus.
Get more details on how to qualify for this bonus.

3. You might have to work for the money

Some banks require you to enroll in direct deposit before you can receive a checking bonus. If an automatic deposit isn’t received within a certain time frame — say, 60 days — you might not get the benefit at all. Another common requirement is to complete a certain number of debit-card transactions each month.

Banks may also require you to keep your checking or savings account open for 90 days before you’re eligible for the reward. Even then, it could take an extra couple of weeks for the funds to arrive.

» Want top rates? Try a high-yield online savings account

4. You could get hit with an account closing fee

If you choose to switch from one bank to another to get a sign-up bonus, but you opened your last account within the past year, your old bank may charge you money to close the account. Some financial institutions have fees of around $25 to close an account that was opened within the previous 180 days.

5. You could still get a bonus without switching

When Moses joined her online bank, she decided there was no need to switch again. But that didn’t mean she had to forgo free money.

“I referred my niece and got another bonus,” Moses says.

If you come across a sign-up bonus offer, compare that bank with your current one and other options. You may decide that it’s better to stick with what you have, or that a different financial institution’s offerings will give you more bang for your buck.

NerdWallet staff writer Alice Holbrook contributed to this report.

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