Disadvantages of a bank signup bonus

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SciurusVulgaris
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Disadvantages of a bank signup bonus

Post by SciurusVulgaris » Thu Oct 10, 2019 8:57 am

Banks have been offering signup bonuses for years now. Many of these just require creating and maintaining an account for <6 months, sometimes with a requirement to maintain a balance, or direct deposit a paycheck (or a portion of a paycheck, sometimes an ACH transfer will work). Seems almost too easy.

But what are the disadvantages of opening bank accounts with the sole purpose of getting the signup bonus?
  • The labor of reading the bank’s requirements, open the accounts, and transfer funds.
  • A small risk doing ACH transfers and setting up direct deposit to the new bank.
  • The bank may now have more information about you, they’ll know your employer or other banks you’ve done an ACH transfer from.
  • You need to remember to close the account, or you'll have a larger surface area for hacking, or bank fees sneaking up on you.
Is there anything else? If you do this frequently, do banks give you a black mark?

wootwoot
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Re: Disadvantages of a bank signup bonus

Post by wootwoot » Thu Oct 10, 2019 8:58 am

So the disadvantage is that you have to do some work for the money? They don't just hand out cash?

runner3081
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Re: Disadvantages of a bank signup bonus

Post by runner3081 » Thu Oct 10, 2019 9:09 am

Another report on your ChexSystems file. In isolation, not an issue, but if you do a ton, may prevent future account openings.

arf30
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Re: Disadvantages of a bank signup bonus

Post by arf30 » Thu Oct 10, 2019 9:16 am

After doing a few of these, I decided the mental hassle of tracking a bunch of extra accounts and having to leave money sitting in them for X amount of time wasn't worth a few hundred dollars here and there. (But to each their own)
Last edited by arf30 on Thu Oct 10, 2019 9:28 am, edited 1 time in total.

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RickBoglehead
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Re: Disadvantages of a bank signup bonus

Post by RickBoglehead » Thu Oct 10, 2019 9:26 am

arf30 wrote:
Thu Oct 10, 2019 9:16 am
After doing a few of these, I decided the mental hassle of tracking a bunch of extra accounts and having to leave money sitting in them for X amount of time wasn't worth a few hundred dollars here and there.
This ^^^

Back in the day (1982 - 1984), interest rates were 15%. Banks would offer bonuses for 18%. I would drive to bank A, pull my money in a cashier's check, and drive to bank B and get a 20% increase in interest. 20%!

However, 20% is only relevant, to me, when it's big dollars. If I have a 15% rate on $100,000 for a year, I get $15,000. An 18% rate gets me $18,000, so I've gained $3,000. That's interesting.

When rates are 1.8%, and a 20% higher rate is 2.16%, that's the difference between $1,800 and $2,160 in a year. So for the same energy that I used back in '82 - '84 to get $3,000, I could now get $316. $316 whole dollars. Note - simply interest is used in the comparison for easy of explanation).

To do this today I don't even need to drive. I need to a) unlock some credit reports, b) apply for an account, c) ach money and lose interest during the movement, d) ensure that the bank pays me the rate they promised and when they don't, fight for it, e) remember to pull the funds when the rate drops, f) ach the money again and lose interest... g) setup the account in Quicken, h) track yet another 1099 for taxes

Well, I've lost interest. :D

When we fully retire in 2021, I plan on spending some time looking at maximizing credit card bonuses as well as maybe bank bonuses, and carefully track these things:

- the absolute dollars I make
- the amount of time that it takes to make these dollars
- what I didn't do during that time that I could have done, time I will never get back

Edit - I did take advantage of the October 2018 promo that Ally had, where you got up to $1,000 per person for moving funds to Ally. I had funds at Vanguard in Prime Money Market due to a higher rate, moved them to Ally (already had accounts) and qualified for the bonuses, plus I changed the Raise Your Rate CDs 3 or 4 times to ratchet the rates up. That was worth it in absolute dollars.
Last edited by RickBoglehead on Thu Oct 10, 2019 10:39 am, edited 1 time in total.
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Re: Disadvantages of a bank signup bonus

Post by MotoTrojan » Thu Oct 10, 2019 9:31 am

arf30 wrote:
Thu Oct 10, 2019 9:16 am
After doing a few of these, I decided the mental hassle of tracking a bunch of extra accounts and having to leave money sitting in them for X amount of time wasn't worth a few hundred dollars here and there. (But to each their own)
I also have been cooling it; lot of stress to manage it (also fun but comes in way of work/family). But I went on a bender opening enough banks and credit cards over 3 months to net $4K after tax. Moving forward I plan to stick to CC offers only due to easier management and no taxes. Maybe 1 per quarter max.

rich126
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Re: Disadvantages of a bank signup bonus

Post by rich126 » Thu Oct 10, 2019 9:35 am

I think I've only done one of these about 10+ years ago with Chase. I think it was an easy $150. I've thought about doing it again and for the right price and minimal inconvenience I might do it again when I have more time. I don't mind getting bonuses but I'm not one who chases them and also not looking to get something for nothing.

I've done a number of credit card bonuses but nothing as extreme as some and most cards I keep for years.

I'm really surprised how some of these companies will allow people to do this multiple times, even with a few years required between bonuses.

I've thought about the brokerage bonuses but again that seems like a lot of money to move around. I guess I'm too lazy to do this stuff much and/or feel guilty when I have zero intention of keeping money there.

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Re: Disadvantages of a bank signup bonus

Post by barnaclebob » Thu Oct 10, 2019 9:37 am

The effort of having to sign up for the account, create online logins, transfer money around, change my direct deposit, remembering to look for another 1099-INT, etc isn't worth the effort for the bonuses.

There have been a couple stories on here about the bonuses not going correctly. I think a recent one involved Fidelity. The OP didn't click the link through the promotional email and just manually opened the account. They wouldn't give him his bonus.

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greg24
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Re: Disadvantages of a bank signup bonus

Post by greg24 » Thu Oct 10, 2019 9:53 am

The hassle factor is pretty big for me.

It seems like sharing your financial details with many organizations would raise your risk of identity theft.

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SciurusVulgaris
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Re: Disadvantages of a bank signup bonus

Post by SciurusVulgaris » Thu Oct 10, 2019 10:29 am

Not much of a report of a hidden disadvantages so far, although I admit to feeling a bit guilty knowing that I'd be gaming the system too. And the risk of identity theft is real, but I'm not sure how to measure it.

As for the hassle, I agree that the hoops are annoying. I realized though, that I'd get a better return on some bank bonuses than I would on my ESPP. I think that they'd be an equivalent hassle which I'm willing to put up with.

THY4373
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Re: Disadvantages of a bank signup bonus

Post by THY4373 » Thu Oct 10, 2019 11:01 am

On disadvantage of bank signup bonuses vs credit card bonuses is the former are taxed while the latter are generally not (there are some exceptions but those are generally bonuses that don't required spend such as referral bonuses).
Last edited by THY4373 on Thu Oct 10, 2019 11:59 am, edited 1 time in total.

deltaneutral83
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Re: Disadvantages of a bank signup bonus

Post by deltaneutral83 » Thu Oct 10, 2019 11:09 am

I'm not sure what the actionable part of identity theft is in these circumstances. Once you open an account they have your info for life i imagine. So if you ride the wheel around to the same 4 or 5 brokerages for a few years then are you really giving a new institution your info? When you get a new employer and a new 401k, that's new too. Is there really anyone out there above the age of 35 that hasn't had 20 different institutions with your info. Do you really feel safer with 20 vs 25?

The hassle factor is personal, so I'm not sure that's worth commenting. Someone with a $500k income (which is $200-240 an hour annually) will obviously not be worried about a $1,000 bonus because it quite frankly might not actually be worth 2 hours of their time once taxes are accounted for. I don't see how the math doesn't work for someone on a <$200k income and sizable assets to move around. Again, the identity theft stuff and the one extra 1099 MISC form is simply not an issue worth griping about to me. In fact, most posters who do find this to be an issue spend more time typing out the post than they do entering that 1099 info in if they happen to DIY their taxes.

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Nate79
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Re: Disadvantages of a bank signup bonus

Post by Nate79 » Thu Oct 10, 2019 11:56 am

I do about 1-2 of bank bonuses, 1-2 brokerage bonuses and 1-2 credit cards per year max. It's too difficult to do much more than that due to the time of keeping all the accounts straight, meeting the requirements, etc.

protagonist
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Re: Disadvantages of a bank signup bonus

Post by protagonist » Thu Oct 10, 2019 12:46 pm

Not many more hassles than you mentioned.

Except at times , despite thinking you did everything by the book, you never got your money.

A few years back when interest rates were even lower than they are now, I made about $3000 in one year off bank signup bonuses. I might have gotten a few hundred dollars in interest if I hadn't made the effort. I am pretty sure I spent no more than 5-10 hours of labor in the process, tops, and it was easy labor, so that was a pretty good yield given the energy I put into it...probably less effort than I spend researching CDs and joining new credit unions to maximize my yield.

But I, like others here, got a bit burnt out on it....it is profitable but unless I need the money (which I don't), I'd rather do other things.

I did apply for one this year..30 minutes or less of work and tying up I think about $2K for a week or two and $10 for 3-4 months got me $600. It's the only one I have done in years (I got a targeted mailing offer).

SrGrumpy
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Re: Disadvantages of a bank signup bonus

Post by SrGrumpy » Thu Oct 10, 2019 1:15 pm

barnaclebob wrote:
Thu Oct 10, 2019 9:37 am
There have been a couple stories on here about the bonuses not going correctly. I think a recent one involved Fidelity. The OP didn't click the link through the promotional email and just manually opened the account. They wouldn't give him his bonus.
I think it was eTrade ... The chap was pretty annoyed, but hadn't follow the instructions, IIRC. Anyway, clearly people on higher incomes don't need to chase these bonuses as assiduously as those of us on the margins.

TheDDC
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Re: Disadvantages of a bank signup bonus

Post by TheDDC » Thu Oct 10, 2019 2:05 pm

My wife and I have made around $7,000 doing bank and CC bonuses over the period of a year. I haven’t done a brokerage one yet.

I don’t need to go to great lengths for extra cash really as cash flow isn’t a problem for us (obligatory BH humblebrag), but “rich or not” makes no difference in this case as $7k is hard to ignore for most anyone. That’s a trip to Vegas or two. There’s really no work entailed to get bank bonuses other than to read extensively and avoid account fees. Or greatly mitigate fees. I have only gotten burned once and that one time was my fault (I think) when I didn’t apply the coupon code properly with Chase. In that case the worst thing that happened was... I didn’t get the bonus. But I didn’t lose any money.

doctorofcredit.com and hustlermoneyblog.com are good places to start.

-TheDDC
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Re: Disadvantages of a bank signup bonus

Post by ladycat » Thu Oct 10, 2019 2:23 pm

I recently opened an account at Simple bank to get the bonus, then realized it wasn't worth the hassle to maintain another account for the relatively small bonus. I never funded the account or activated the debit card. Then asked them to close the account. I also couldn't bring myself to do business with a bank that addressed me as "Hey" <first name> in their official communications and used other "catchy" phrases. Maybe silly, but it rubbed me the wrong way and indicated a potential lack of professionalism and competance.

Other than getting the Fido 2% cash back Visa, I don't plan on opening any other banking accounts. The 3 I have (local credit union, Barclays, Marcus) will suffice.

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Re: Disadvantages of a bank signup bonus

Post by rocket354 » Thu Oct 10, 2019 2:42 pm

I'm pretty big on CC bonuses. I did the bank account bonus gig for a short while but have mostly stopped. The reasons, in no particular order:

1) Time invested is usually more than CC bonus; Sometimes have to send in photocopy of ID, usually have to fill out more online forms, etc.
2) There is more of an opportunity cost. Any money that goes to a bank account is money that isn't invested. So getting $300 for transferring $10,000 isn't really $300, it's $300 - X, where X is whatever I would have earned otherwise.
3) There are often holding periods for the money. Not always, but sometimes they bank needs a minimum balance for three months (see again #2)
4) There is often direct deposit requirements, which have to be set up (see again #1)
5) You usually need the account for a minimum of, say, 6 months. There are often fees associated if the account falls below thresholds or a certain number of transactions don't take place, so you have to manage it for a time, then remember to go back and close it.
6) Bank bonuses are typically taxable, so you lose more off your bonus, and have to do additional work and track it at the end of the year.
7) One more institution has your information, meaning data leaks or outright fraud are that much more likely
8) more hard credit pulls, making it harder to do the more profitable and easier CC bonuses (too many recent inquiries/open accounts)

Add it all up and the time, hassle, mental real estate, etc, that goes into them was more than I was willing to do. The one bank that made it very profitable and very easy to do was Capital One, so I recommend them for anyone who wants easy free money. There were one or two other banks that weren't that bad. But for the rest, those bonuses quickly became a real pain, and so I retreated back to the wonderful tax-free and less-work world of CC bonuses.

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Re: Disadvantages of a bank signup bonus

Post by whodidntante » Thu Oct 10, 2019 3:20 pm

For me, it's like picking up found piles of hundred dollar bills from the ground. I like the game aspect of knowing the rules and playing by them. I have earned dozens of bonuses and have not been denied one yet.

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Re: Disadvantages of a bank signup bonus

Post by UpperNwGuy » Thu Oct 10, 2019 3:25 pm

I don't do it. Too much trouble for such a small amount of money.

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Re: Disadvantages of a bank signup bonus

Post by SrGrumpy » Thu Oct 10, 2019 3:41 pm

ladycat wrote:
Thu Oct 10, 2019 2:23 pm
I recently opened an account at Simple bank to get the bonus, then realized it wasn't worth the hassle to maintain another account for the relatively small bonus.
For those wondering, Simple Finance is offering up to $500. Thumbs up from Doctor of Credit (and me):

https://www.doctorofcredit.com/simple-f ... ngs-bonus/

batpot
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Re: Disadvantages of a bank signup bonus

Post by batpot » Thu Oct 10, 2019 4:31 pm

SrGrumpy wrote:
Thu Oct 10, 2019 3:41 pm
ladycat wrote:
Thu Oct 10, 2019 2:23 pm
I recently opened an account at Simple bank to get the bonus, then realized it wasn't worth the hassle to maintain another account for the relatively small bonus.
For those wondering, Simple Finance is offering up to $500. Thumbs up from Doctor of Credit (and me):

https://www.doctorofcredit.com/simple-f ... ngs-bonus/
A few mouse clicks is too much hassle for $500? :o

ladycat
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Re: Disadvantages of a bank signup bonus

Post by ladycat » Thu Oct 10, 2019 6:31 pm

batpot wrote:
Thu Oct 10, 2019 4:31 pm
SrGrumpy wrote:
Thu Oct 10, 2019 3:41 pm
ladycat wrote:
Thu Oct 10, 2019 2:23 pm
I recently opened an account at Simple bank to get the bonus, then realized it wasn't worth the hassle to maintain another account for the relatively small bonus.
For those wondering, Simple Finance is offering up to $500. Thumbs up from Doctor of Credit (and me):

https://www.doctorofcredit.com/simple-f ... ngs-bonus/
A few mouse clicks is too much hassle for $500? :o
For the max bonus $500 both spouses had to participate, and that was not going to happen. Less than $200 after taxes to have another bank account with $10k parked in it for a few months....and then moving the money out & closing it, in my opinion, was not worth the effort or mental overhead. Some of their customer reviews were not encouraging and I'm making efforts to reduce bank accounts, not get more. As I said, I was tempted by the lure of easy money (created the account), but got a bad vibe from their communication style and some reviews so I didn't want to risk having problems with an account that was then linked to my core checking account.

renue74
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Re: Disadvantages of a bank signup bonus

Post by renue74 » Thu Oct 10, 2019 7:39 pm

I did the Western Union money cards a few years ago....I can't recall, but I think the interest way was great. It was a super pain to unravel from them.

About 5 years ago, I did a huge credit card binge and accumulated 1M points over various airlines and hotels. I liked doing that and we used points for a ton of flights to Europe and domestic. But I grew less interested.

I've recently considered banking bonuses...but I just haven't started yet. The poster who just mentioned $7K in bonuses...that's great! I would look at it as fun money for vacations or something.

TheDDC
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Re: Disadvantages of a bank signup bonus

Post by TheDDC » Thu Oct 10, 2019 9:19 pm

renue74 wrote:
Thu Oct 10, 2019 7:39 pm
I did the Western Union money cards a few years ago....I can't recall, but I think the interest way was great. It was a super pain to unravel from them.

About 5 years ago, I did a huge credit card binge and accumulated 1M points over various airlines and hotels. I liked doing that and we used points for a ton of flights to Europe and domestic. But I grew less interested.

I've recently considered banking bonuses...but I just haven't started yet. The poster who just mentioned $7K in bonuses...that's great! I would look at it as fun money for vacations or something.
Haven't looked into Western Union. Hmm. It was actually fun for us - logging into a random bank account and seeing *boom* bonus drop. $7,336 to be exact... and still going. Playing with the bank's money risk-free. The 1M CC points is awesome, too, if you are a position to travel. With two youngins we aren't in a position to do much flying. That money is getting piled into the mortgage.

To the OP: I would say the only thing to watch out for is hard pulls. The soft pulls are fine. CC offers are a hard pull, but if you hold the card longer than a few months before closing then your score will rev back up pretty quickly.

-TheDDC
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Re: Disadvantages of a bank signup bonus

Post by JBTX » Thu Oct 10, 2019 9:35 pm

ladycat wrote:
Thu Oct 10, 2019 6:31 pm
batpot wrote:
Thu Oct 10, 2019 4:31 pm
SrGrumpy wrote:
Thu Oct 10, 2019 3:41 pm
ladycat wrote:
Thu Oct 10, 2019 2:23 pm
I recently opened an account at Simple bank to get the bonus, then realized it wasn't worth the hassle to maintain another account for the relatively small bonus.
For those wondering, Simple Finance is offering up to $500. Thumbs up from Doctor of Credit (and me):

https://www.doctorofcredit.com/simple-f ... ngs-bonus/
A few mouse clicks is too much hassle for $500? :o
For the max bonus $500 both spouses had to participate, and that was not going to happen. Less than $200 after taxes to have another bank account with $10k parked in it for a few months....and then moving the money out & closing it, in my opinion, was not worth the effort or mental overhead. Some of their customer reviews were not encouraging and I'm making efforts to reduce bank accounts, not get more. As I said, I was tempted by the lure of easy money (created the account), but got a bad vibe from their communication style and some reviews so I didn't want to risk having problems with an account that was then linked to my core checking account.
Please show me where "both spouses have to participate".

ladycat
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Re: Disadvantages of a bank signup bonus

Post by ladycat » Thu Oct 10, 2019 9:42 pm

JBTX wrote:
Thu Oct 10, 2019 9:35 pm
ladycat wrote:
Thu Oct 10, 2019 6:31 pm
batpot wrote:
Thu Oct 10, 2019 4:31 pm
SrGrumpy wrote:
Thu Oct 10, 2019 3:41 pm
ladycat wrote:
Thu Oct 10, 2019 2:23 pm
I recently opened an account at Simple bank to get the bonus, then realized it wasn't worth the hassle to maintain another account for the relatively small bonus.
For those wondering, Simple Finance is offering up to $500. Thumbs up from Doctor of Credit (and me):

https://www.doctorofcredit.com/simple-f ... ngs-bonus/
A few mouse clicks is too much hassle for $500? :o
For the max bonus $500 both spouses had to participate, and that was not going to happen. Less than $200 after taxes to have another bank account with $10k parked in it for a few months....and then moving the money out & closing it, in my opinion, was not worth the effort or mental overhead. Some of their customer reviews were not encouraging and I'm making efforts to reduce bank accounts, not get more. As I said, I was tempted by the lure of easy money (created the account), but got a bad vibe from their communication style and some reviews so I didn't want to risk having problems with an account that was then linked to my core checking account.
Please show me where "both spouses have to participate".
Must have been a different offer than the one that's posted now.

CashConfessions
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Re: Disadvantages of a bank signup bonus

Post by CashConfessions » Thu Oct 10, 2019 9:53 pm

Understand the angst on both sides.

If you're going down this rabbit-hole (and I'm willing to as a pretty well-compensated single guy), you absolutely have to set up a spreadsheet. Recommended fields are below for a CC or bank account (please add/correct where I've missed out):

Date you you opened the account
Amount that has to be spent before the cut-off period (for CC)
Last date to spend funds before the cut-off period (for CC)
Amount of the bonus
Date you should expect the bonus
Annual fee (if applicable)
Annual fee date (if applicable)
Date you can close the account without penalty
Date you closed the account

JBTX
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Re: Disadvantages of a bank signup bonus

Post by JBTX » Thu Oct 10, 2019 10:16 pm

I have done bank bonuses and will selectively do so, but they are more of a hassle and less lucrative than credit cards.

1. Bank bonuses are typically taxable as interest. So that $500 bonus just became $375.
2. You are forgoing interest somewhere else of approx 2%. A $20k deposit over 3 months would have netted you $100 (or $75 net of taxes). That $375 just went to $300. Still may be worth doing, but that is a 40% haircut.
3. If you go to the bank, you will be assured it gets set up, but that is a hour spent at the bank.
4. Unless you have tons of cash lying around there is only so much you can do at once.
5. If you do it online, the setup may fail. I whiffed on a chase one and separately on a citi one. The identification process can trip you up if your information is not 100% exactly the same all the time. On a citi one I screwed up the first time, went back and successfully redid it, but then their fraud dept shut it down and returned the money, and I waited 30 days required waiting period and did it but then was told I was ineligible for bonus for having account opened within 180 days - even though they shut it down. But I was able to get it done for my wife and eventually got the bonus.
5 I have read with chase that if you ACH large amounts in to fund it that often their fraud dept throws up a flag and then you have to get on a 3 way conference call with both banks to get it sorted out.

If I get slam dunked I may take a break but eventually jump back in. Credit cards are much more straightforward, it is just there is a limit to how much you can do after an initial nice windfall.

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Re: Disadvantages of a bank signup bonus

Post by Ron Ronnerson » Thu Oct 10, 2019 10:42 pm

CashConfessions wrote:
Thu Oct 10, 2019 9:53 pm
Understand the angst on both sides.

If you're going down this rabbit-hole (and I'm willing to as a pretty well-compensated single guy), you absolutely have to set up a spreadsheet. Recommended fields are below for a CC or bank account (please add/correct where I've missed out):

Date you you opened the account
Amount that has to be spent before the cut-off period (for CC)
Last date to spend funds before the cut-off period (for CC)
Amount of the bonus
Date you should expect the bonus
Annual fee (if applicable)
Annual fee date (if applicable)
Date you can close the account without penalty
Date you closed the account
I've done a lot of bank bonuses over the past few years and this is excellent advice. I think of bank bonuses as work and try to minimize the amount of time it takes to earn the bonus. Organization is key. It lowers the chances of not fulfilling the terms to earn the bonus and reminds you whether or not you even qualify for a particular offer. For example, if you had an account with a certain bank a year ago and if a new bonus offer with that same bank states that you couldn't have been their customer during the past two years, the spreadsheet can come in very handy.

I also use the calendar on my phone to remind myself when I need to initiate transfers of money, close accounts, verify test deposits, and so on. All of this takes time but there is a learning curve. If you go after the best offers and figure out how to minimize the time spent, the rate can be over $100/hour.

There is usually tax to pay on the bonuses and that definitely should be taken into consideration. Also, some banks require you to tie up money and they pay little interest so the lost interest should be accounted for as well. I have found that it is generally best to go after offers where they either pay a decent interest rate in addition to the bonus or require a relatively small deposit (under $5k or so) to earn the bonus. This way, the amount of lost interest is not too bad.

If you go after these bonuses early on and increase your investments (preferably in a tax-advantaged account) by the same amount as the bonuses earned, the money will hopefully grow to be a lot more in the years ahead.

Compared to credit card and brokerage bonuses, I would rank bank bonuses as my least favorite. However, I still find some of the offers to be worthwhile.

I'm a teacher and can tutor for $60/hour or teach summer school at $50/hour. However, I prefer going after these bonuses instead as it's a lot less effort for a much better hourly wage. This work takes organization and a willingness to read fine print carefully.

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celia
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Re: Disadvantages of a bank signup bonus

Post by celia » Fri Oct 11, 2019 12:01 am

More disadvantages:
* The money you need to deposit can't be used for something else during the time it is "tied up".
* If you forget to move it after the specified time period is over, you could be losing out on other opportunities.
* If you die or become unable to handle your affairs, your POA or relative may not know where you have "hidden" some money that might be needed for your care.
* It makes your financial life a bit more complicated each time you take up an offer.

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Re: Disadvantages of a bank signup bonus

Post by 808 » Fri Oct 11, 2019 2:50 am

CashConfessions wrote:
Thu Oct 10, 2019 9:53 pm
Recommended fields are below for a CC or bank account (please add/correct where I've missed out):

Date you you opened the account
Amount that has to be spent before the cut-off period (for CC)
Last date to spend funds before the cut-off period (for CC)
Amount of the bonus
Date you should expect the bonus
Annual fee (if applicable)
Annual fee date (if applicable)
Date you can close the account without penalty
Date you closed the account
I would add Date Bonus Received.

I haven't played the CC bonus game in awhile so YMMV but, IIRC, some CC issuers (Chase, I believe was one) use the date the bonus was received versus the date the card was approved when determining if you qualify for a new bonus "x" period after the previous.

808
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Re: Disadvantages of a bank signup bonus

Post by 808 » Fri Oct 11, 2019 3:05 am

JBTX wrote:
Thu Oct 10, 2019 10:16 pm
5 I have read with chase that if you ACH large amounts in to fund it that often their fraud dept throws up a flag and then you have to get on a 3 way conference call with both banks to get it sorted out.
I had this happen with Citi. Opened the accounts (Savings and Checking) per the terms of the offer, linked from Citi to my external institution, verified the two micro deposits, then pulled funds from the external account into Citi. The funds were deducted from my external institution, showed up briefly in my NEW Citi account, then Citi zeroed-out the account. They also cancelled / removed the ACH link. I didn't receive a call but there was a secure message that said the transfer was reversed. It took a few days for the $$$ to show up back in my external account and I was a little nervous during that period. I ended up pushing funds from the external account into Citi and eventually got the bonus.

02nz
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Re: Disadvantages of a bank signup bonus

Post by 02nz » Fri Oct 11, 2019 9:27 am

Checking bonuses often have requirements on direct deposit or even use of bill payment and/or debit card, so more to track. And there's often a minimum balance to avoid fees, so there's an opportunity cost in lost interest. Savings bonuses can be more attractive - if the interest rate is competitive there's little to no opportunity cost there, and the requirements are generally much simpler - keep X balance for Y days. Discover, Capital One, and Ally have had good bonuses like this. I'm hoping Ally runs another $1000 bonus like the one they did late last year.

sallyann2
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Re: Disadvantages of a bank signup bonus

Post by sallyann2 » Fri Oct 11, 2019 10:40 am

I posted a new thread about this, but maybe this is a better place to inquire. Has anyone tried Bank of Blue Valley? They seem to have a good interest rate on their checking account and a good sign up bonus.

https://www.bankbv.com/personal-banking ... nts/Kansas

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SciurusVulgaris
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Re: Disadvantages of a bank signup bonus

Post by SciurusVulgaris » Fri Oct 11, 2019 11:02 am

808 wrote:
Fri Oct 11, 2019 2:50 am
CashConfessions wrote:
Thu Oct 10, 2019 9:53 pm
Recommended fields are below for a CC or bank account (please add/correct where I've missed out):

Date you you opened the account
Amount that has to be spent before the cut-off period (for CC)
Last date to spend funds before the cut-off period (for CC)
Amount of the bonus
Date you should expect the bonus
Annual fee (if applicable)
Annual fee date (if applicable)
Date you can close the account without penalty
Date you closed the account
I would add Date Bonus Received.

I haven't played the CC bonus game in awhile so YMMV but, IIRC, some CC issuers (Chase, I believe was one) use the date the bonus was received versus the date the card was approved when determining if you qualify for a new bonus "x" period after the previous.
Maybe also:
  • Link to bank or card website (for convenience)
  • Link or file name of the offer (text copied locally)
  • Minimum balance requirements (for bank bonuses)
  • Savings requirements (for bank bonuses)
  • Date savings requirements will be met (for bank bonuses - set calendar reminder)
  • Direct deposit requirements (for bank bonuses)
  • Date direct deposits requirements met
  • Special circumstances to be called out

batpot
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Re: Disadvantages of a bank signup bonus

Post by batpot » Fri Oct 11, 2019 12:32 pm

ladycat wrote:
Thu Oct 10, 2019 9:42 pm
JBTX wrote:
Thu Oct 10, 2019 9:35 pm
ladycat wrote:
Thu Oct 10, 2019 6:31 pm
batpot wrote:
Thu Oct 10, 2019 4:31 pm
SrGrumpy wrote:
Thu Oct 10, 2019 3:41 pm


For those wondering, Simple Finance is offering up to $500. Thumbs up from Doctor of Credit (and me):

https://www.doctorofcredit.com/simple-f ... ngs-bonus/
A few mouse clicks is too much hassle for $500? :o
For the max bonus $500 both spouses had to participate, and that was not going to happen. Less than $200 after taxes to have another bank account with $10k parked in it for a few months....and then moving the money out & closing it, in my opinion, was not worth the effort or mental overhead. Some of their customer reviews were not encouraging and I'm making efforts to reduce bank accounts, not get more. As I said, I was tempted by the lure of easy money (created the account), but got a bad vibe from their communication style and some reviews so I didn't want to risk having problems with an account that was then linked to my core checking account.
Please show me where "both spouses have to participate".
Must have been a different offer than the one that's posted now.
looking at the offer, it's $500 on $20k, and must sit until end of Jan 2020.
Treating it like a 4 month CD, this is equivalent to 7.5% APY :greedy

TheDDC
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Re: Disadvantages of a bank signup bonus

Post by TheDDC » Fri Oct 11, 2019 2:23 pm

02nz wrote:
Fri Oct 11, 2019 9:27 am
Checking bonuses often have requirements on direct deposit or even use of bill payment and/or debit card, so more to track. And there's often a minimum balance to avoid fees, so there's an opportunity cost in lost interest. Savings bonuses can be more attractive - if the interest rate is competitive there's little to no opportunity cost there, and the requirements are generally much simpler - keep X balance for Y days. Discover, Capital One, and Ally have had good bonuses like this. I'm hoping Ally runs another $1000 bonus like the one they did late last year.
DD requirements are insanely easy to hit, though. Just look at this list: https://www.doctorofcredit.com/knowledg ... -deposits/

I am gradually becoming less interested in holding large sums of money in an institution for long periods of time as part of the bonus. Though for the negative nancy type who thinks the market will only return 1% (a baseless claim, and really useless one at that) over 10 years, this might be the best way to invest! :P

The Discover $20k savings bonus is particularly nice as it allows cumulative deposits to count as a lump sum to meet the requirement. As long as people are capable of reading the fine print of these offers, there's good money to be had.

-TheDDC
Refreshingly, a double barrel shotgun blast of truth...

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Re: Disadvantages of a bank signup bonus

Post by snowman » Fri Oct 11, 2019 6:36 pm

I absolutely love bank bonuses, don't see any disadvantage. Since we are low income, it's a very nice supplement. The only 2 requirements to play the game successfully are being organized, and ability to read and follow the rules.

Spreadsheet, as mentioned above, is absolutely essential! I would not attempt to play the game without it.

Ability to read and follow the rules is underrated, IMO. I would say majority of adults in this country fail that simple test. That's the main reason people get burned and stop doing it, and also why banks keep offering the same bonus year after year and still make money off of it. It also goes back to rule #1 - keep the spreadsheet!

I also consider reading people's comments on DoC's website as a requirement if you aim at 100% success rate. Things like what's considered DD and what's not at a particular bank, and does the bank have a track record of not paying bonus even when all the rules were followed. For those reasons, I never attempted to go after Citi or HSBC bonuses, and I only go after banks where I know my ACH transfer will be coded as DD.

Between me and my wife, we net about $3.5-$4K annually in bank bonuses, taxed at 12%. About $3K in brokerage bonuses (not taxed - retirement accounts only), and about $1K in CC bonuses (we just don't spend that much). For higher earners (and spenders) - which seems to be majority on this board - I'd say CC bonuses are much more lucrative, require less work and organization, and not being taxed is a nice extra bonus.

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Re: Disadvantages of a bank signup bonus

Post by jeffyscott » Sat Oct 12, 2019 9:09 am

MotoTrojan wrote:
Thu Oct 10, 2019 9:31 am
arf30 wrote:
Thu Oct 10, 2019 9:16 am
After doing a few of these, I decided the mental hassle of tracking a bunch of extra accounts and having to leave money sitting in them for X amount of time wasn't worth a few hundred dollars here and there. (But to each their own)
I also have been cooling it; lot of stress to manage it (also fun but comes in way of work/family). But I went on a bender opening enough banks and credit cards over 3 months to net $4K after tax. Moving forward I plan to stick to CC offers only due to easier management and no taxes. Maybe 1 per quarter max.
Earlier this year, I was planning on doing sequential bank bonuses, but decided to drop it due the extra hassles and research required compared to credit card bonuses.

I too plan on one card per quarter, alternating between me and spouse. That should keep Chase options open. We don't spend much, so usually have trouble meeting much more than one $2000-3000 spend requirement per quarter anyway.
Time is your friend; impulse is your enemy. - John C. Bogle

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CardinalRule
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Re: Disadvantages of a bank signup bonus

Post by CardinalRule » Sat Oct 12, 2019 12:19 pm

Do most banks do "hard pull" credit checks when opening new accounts?

tibbitts
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Re: Disadvantages of a bank signup bonus

Post by tibbitts » Sat Oct 12, 2019 1:20 pm

I only do Chase savings bonuses and just transferred to close my latest savings account after a little over the 6mo requirement. When I retire and have more time I might do more. I did one credit card bonus this year but have trouble meeting the minimum spend except for last couple months of the year, so I'm thinking of doing one more soon. I average maybe one card bonus every year or two.

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Re: Disadvantages of a bank signup bonus

Post by whodidntante » Sat Oct 12, 2019 1:46 pm

CardinalRule wrote:
Sat Oct 12, 2019 12:19 pm
Do most banks do "hard pull" credit checks when opening new accounts?
I've opened a ridiculous number of bank accounts so I can answer this based on experience bordering on data. Most banks/credit unions (I'll just say banks from here) will not pull credit reports from Transunion, Equifax, or Experian as long as you opt-out of overdraft protection which is a form of credit. Any bank that does pull credit reports will typically be known in the churning community.

It's more common for a bank to pull a ChexSystems report. Some banks are highly sensitive to the information on that report, such as the number of accounts opened over a certain timeframe. Others don't seem to mind what it says unless there is derogatory information on the report. Some banks also pull ChexSystems for each account opened, not just for new customers. Synchrony, for example, pulls ChexSystems for each CD you open. And I'm not guessing; I have seen my ChexSystems report and it's on there. Early Warning Systems and Telecheck are competitive reporting agencies that keep records on naughty banking customers. Opening "too many" accounts is subjective and a lot of banks don't seem to mind.

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Re: Disadvantages of a bank signup bonus

Post by abuss368 » Sat Oct 12, 2019 1:48 pm

I know of someone who does this like it is a hobby! Makes nice cash each year doing it.
John C. Bogle - Two Fund Portfolio: Total Stock & Total Bond. "Simplicity is the master key to financial success."

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Re: Disadvantages of a bank signup bonus

Post by abuss368 » Sat Oct 12, 2019 1:48 pm

Believe the cash is taxable and reported at year end correct?
John C. Bogle - Two Fund Portfolio: Total Stock & Total Bond. "Simplicity is the master key to financial success."

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whodidntante
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Re: Disadvantages of a bank signup bonus

Post by whodidntante » Sat Oct 12, 2019 1:55 pm

abuss368 wrote:
Sat Oct 12, 2019 1:48 pm
Believe the cash is taxable and reported at year end correct?
That depends.

Some bonuses are linked to debit card usage, requiring a certain volume of transactions, and are considered a rebate similar to credit card rewards. This would not be taxable, for the same reason that a credit card spending bonus is not taxable.

However, a bonus that is not linked to debit card usage is most likely taxable income.

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abuss368
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Re: Disadvantages of a bank signup bonus

Post by abuss368 » Sat Oct 12, 2019 3:22 pm

whodidntante wrote:
Sat Oct 12, 2019 1:55 pm
abuss368 wrote:
Sat Oct 12, 2019 1:48 pm
Believe the cash is taxable and reported at year end correct?
That depends.

Some bonuses are linked to debit card usage, requiring a certain volume of transactions, and are considered a rebate similar to credit card rewards. This would not be taxable, for the same reason that a credit card spending bonus is not taxable.

However, a bonus that is not linked to debit card usage is most likely taxable income.
Thanks. I did not know about a debit card linked transaction so that would make sense. I was only aware of the cash only which was taxable.
John C. Bogle - Two Fund Portfolio: Total Stock & Total Bond. "Simplicity is the master key to financial success."

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