Here’s What Happens When You Earn a New Bank Account Bonus

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You can earn a few hundred dollars every time you open a new bank account with these promotions. This is how they work. 

When all is said and done, banks are businesses. That makes us their customers.

Like any other businesses, banks use a variety of methods to draw in new customers. One of my particular favorites is the new account bonus. And no, we’re not talking about the small appliances common in the days of yore.

New account bonuses are wonderful lump sums of money — usually hundreds of dollars’ worth of money. And it just appears in your account. Well, sort of. Some other stuff happens first. Here’s how it works.

Earning the new account bonus

Alright, so long before the welcome bonus hits your bank account, you’ll need to earn it. The requirements for earning a new account bonus vary based on the specific promotion. Some common requirements include:

Depositing a certain amount of new money into the accountReceive a certain number and/or amount of direct depositsMaking a certain number of debit card transactionsMaintain a certain minimum account balance

Additionally, every bonus will have a specific time requirement in which you need to perform these tasks. Three months is typical for things like debit card transactions and deposits. But if you need to maintain a certain balance, the requirements could be up to six months.

Waiting for its arrival

Once you’ve met the requirements, your part is done. You don’t need to do anything else; the bonus will show up in your account automatically. For you, it’s now a waiting game.

How long your bonus takes to arrive will vary. Sometimes, it shows up a few days after you’ve met the requirements. More often, it takes a few weeks. And, occasionally, it may take a month or two.

Most promotions will have fine print that says you could wait eight or 12 weeks. If you don’t see the welcome bonus hit your account after that, it’s time to reach out to the bank and ask it to check on your status.

Post-bonus considerations

After the welcome bonus clears your account, it’s yours to do with what you wish. You can use it to pay off credit cards. You could buy a nice dinner. You could move it to a high-yield savings account. It’s your cash at this point.

Most banks prohibit you from earning more than one new account bonus per account type per year (or two or four, depending on the bank). So, you could earn a bonus on a checking account, then earn one on a savings account. But you can’t open the same checking account twice in a row and earn the same bonus.

That said, you can go to a different bank and open an account there to earn its new account bonuses. But be careful. There is such a thing as too many new bank accounts.

You see, banks talk to each other. Specifically, they use something called ChexSystems to monitor all sorts of things, including how many new bank accounts you’ve opened recently. If a bank feels like you’re trying to game the system, they could potentially blacklist you from opening new accounts with them.

Oh, and don’t forget about the potential tax considerations. Many credit card sign-up bonuses are treated like rebates, so you don’t (usually) need to count them as income on your taxes. Bank account bonuses, on the other hand, tend to come with 1099-INT forms — that is, they’ll be reported as income. So, you’ll need to pay income taxes on them.

A welcome bonus

Sure, opening a new bank account can be a bit of a pain. But that new account bonus can make any bother well worth it. Who wouldn’t welcome an extra $200 or $300 right now?

Just be sure to read all the fine print before you open the account. Get to know the requirements, and the timeframe in which you need to meet them. And pace yourself. With a little planning, you could be the happy recipient of a new account bonus in just a few weeks.

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