How to optimize $2k bonus for Chase private banking

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bdcorell
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Joined: Wed Nov 06, 2019 12:51 am

How to optimize $2k bonus for Chase private banking

Post by bdcorell » Wed Nov 06, 2019 12:58 am

Chase has a $2k bonus for opening a private banking account (usually comes up as a Google ad when searching for Chase private banking). Unfortunately, the minimum deposit (which is $250k) must be kept for 90 days in either checking, savings, or managed brokerage account; YouInvest (which allows no-fee ETF purchases) is specifically excluded. This is a problem since the managed brokerage account has a ~1.2% annual fee. So if I want to, say, keep my funds in ETFs, I'd be paying 0.3% over the 90 days in fees to Chase -- which means I'd lose 1.2% * 90/365 * $250k = $750 out of the $2k bonus. (Of course, checking/savings are even worse -- they pay no interest.)

Does anyone know of any tricks to avoid this $750 overhead? Like getting a lower fee on the managed brokerage account, etc?

Thanks!

pkcrafter
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Re: How to optimize $2k bonus for Chase private banking

Post by pkcrafter » Wed Nov 06, 2019 3:28 pm

Welcome to the forum. I don't have an answer to your question except to say don't invest with Chase, so I'll bump your question up for additional comments.

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

lakpr
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Re: How to optimize $2k bonus for Chase private banking

Post by lakpr » Wed Nov 06, 2019 3:54 pm

Too much money to be moved, for too little benefit. I would have simply passed on the offer.

Get a couple of their Chase Sapphire Preferred cards (self + spouse), if you don't already have them, and spend $4000 each within the first 90 days, and you will have earned almost the $1250 net benefit you will have received through this $250k deposit.

[ 50k UR points, and can be redeemed for travel at 1.25 exchange rate at the UR portal for travel, and personally I find the UR portal is competitive with other travel portals like Expedia ]

tfunk
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Joined: Sat Apr 02, 2016 11:50 am

Re: How to optimize $2k bonus for Chase private banking

Post by tfunk » Wed Nov 06, 2019 6:40 pm

Are you sure you are required to have the banker "manage" your account?

A couple of years ago, we signed up for Chase Private Client mainly to get the Chase Sapphire Reserve credit card with the 100,000 bonus points (offer now expired. We also use many of the other benefits such as free domestic and international wires and reimbursement of ATM fees

We were required to meet with the private banker and discuss his management fees. However, we were not required to use his "expertise" We just purchased some zero commission Vanguard mutual funds online through the brokerage account. Chase has a list of these zero commission funds.

Not sure if this is still the procedure but a $2,000 bonus sounds pretty good to me if you can avoid the management fee.

Topic Author
bdcorell
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Joined: Wed Nov 06, 2019 12:51 am

Re: How to optimize $2k bonus for Chase private banking

Post by bdcorell » Fri Nov 08, 2019 4:06 pm

Thanks for the answers! I already do have a Chase sapphire, so I guess I can't do it again :)
tfunk wrote:
Wed Nov 06, 2019 6:40 pm
Are you sure you are required to have the banker "manage" your account?

A couple of years ago, we signed up for Chase Private Client mainly to get the Chase Sapphire Reserve credit card with the 100,000 bonus points (offer now expired. We also use many of the other benefits such as free domestic and international wires and reimbursement of ATM fees

We were required to meet with the private banker and discuss his management fees. However, we were not required to use his "expertise" We just purchased some zero commission Vanguard mutual funds online through the brokerage account. Chase has a list of these zero commission funds.

Not sure if this is still the procedure but a $2,000 bonus sounds pretty good to me if you can avoid the management fee.
It seems that to buy any ETF I have two options: through the managed brokerage (1.2% fee) or through unmanaged brokerage account (YouInvest, 0% fee). Unfortunately, YouInvest is explicitly excluded from the $250k minimum requirement, so if I move funds there I lose my $2k deposit...

I'll double check just to be sure, and will update this thread if I find there's an option to buy ETFs directly.

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dratkinson
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Re: How to optimize $2k bonus for Chase private banking

Post by dratkinson » Sat Nov 09, 2019 3:26 am

The short answer. The right hand giveth. The left hand(s) taketh away. I'd pass.



The long answer.

I'm in the stage of life where I'm trying to simplify my life, so no longer chase account opening bonuses or bank teaser rates. Instead I find it much simpler to get my bonuses by using a 2% CC to pay for my monthly bills (set up on ABP) and home projects to make my life easier. CC cashback is tax-free---IRS considers it to be a cost reduction, not income.


Account opening bonuses and bank teaser rates are taxed as ordinary income (believe reported on 1099INT and Sch B part 1). Uncle sugar and his nephews at state will NOT thank you for your volunteer work that increases their revenue---researching and relinking your financial life to move around $250K.


What will be your bonus after you pay the Chase fees + fed/state taxes as ordinary income?

What are your fed + state tax brackets? If like me---22% fed + 5% state---then you'll be allowed to keep $710* (=(2000 x (1-.22-.05) - 750) after-taxes and fees. You'll keep less if in higher tax brackets. So Chase + uncle sugar + his nephews get more of your $2K bonus than you.

* Notice the math order of operations. You'll be taxed on the full $2K bonus, because it's reported on a 1099INT. The Chase $750 fee is additional. Bwaa-ha-haa :twisted:

I compute your actual return on your investment and work to be <0.3% (=710/250K), only a third of your expected <1% (=$2K/250K). Neither seems to be worth the effort.



What would be your annual tax-free bonus if you set your monthly bills to pay using your creditors' ABP (automatic bill payment) plans and target the payments to your cashback CC?

ABP is an easy one-time setup, and runs forever to simplify your bill-paying life and pay you cashback. If like me---living expenses of $2K/mo, paid by ABP tied to 2% CC---then you'll earn $480/yr (=$2K/mo x 2% x 24mos).


Bottom line. I much prefer an easy one-time setup that earns $480/yr tax-free and simplifies my bill paying life forever, to a harder setup and many sticky fingers that leave me with a one-time $700.



Welcome.



Edit. Second thoughts.
Last edited by dratkinson on Sat Nov 09, 2019 7:56 pm, edited 2 times in total.
d.r.a, not dr.a. | I'm a novice investor, you are forewarned.

sharukh
Posts: 224
Joined: Mon Jun 20, 2016 10:19 am

Re: How to optimize $2k bonus for Chase private banking

Post by sharukh » Sat Nov 09, 2019 10:09 am

bdcorell wrote:
Wed Nov 06, 2019 12:58 am
Chase has a $2k bonus for opening a private banking account (usually comes up as a Google ad when searching for Chase private banking). Unfortunately, the minimum deposit (which is $250k) must be kept for 90 days in either checking, savings, or managed brokerage account; YouInvest (which allows no-fee ETF purchases) is specifically excluded. This is a problem since the managed brokerage account has a ~1.2% annual fee. So if I want to, say, keep my funds in ETFs, I'd be paying 0.3% over the 90 days in fees to Chase -- which means I'd lose 1.2% * 90/365 * $250k = $750 out of the $2k bonus. (Of course, checking/savings are even worse -- they pay no interest.)

Does anyone know of any tricks to avoid this $750 overhead? Like getting a lower fee on the managed brokerage account, etc?

Thanks!
Also note the 2k bonus is taxable, so effective benefits are even less

Nummerkins
Posts: 351
Joined: Tue Jun 01, 2010 4:41 pm

Re: How to optimize $2k bonus for Chase private banking

Post by Nummerkins » Sat Nov 09, 2019 5:02 pm

Do the $1000 Chase Sapphire checking bonus instead. You tie up $75k and YouInvest does count. Have your spouse do one too, now you're at $2000 using less money with good investment options.

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