High-yield savings accounts are paying far more than they did last year.
Alexey Poprugin/Dreamstime
High-yield savings accounts are now paying far more than they did last year — see the best savings account rates you may get now here — and sometimes banks are even sweetening that deal with cold, hard cash for opening a savings and/or checking account with them.
“There are some favorable promotions in the market for opening a new account or making an initial deposit. These vary from $100 up to $2,000 as long as certain requirements are met,” says Kevin Barr, certified financial planner and director of financial planning at Facet Wealth.
That said, there is, of course, the fine print to consider. “While a few hundred bucks in exchange for minimal effort sounds nice, I’d urge consumers to peruse the fine print and think through the total cost of ownership. What do you have to do in order to earn the bonus? Besides opening the account, you might also have to arrange direct deposits ranging from hundreds to potentially thousands of dollars per month and minimum balance requirements are common, too,” says Ted Rossman, senior industry analyst at Bankrate.
Consider a few other things, too: The fees associated with the account and the opportunity cost of opening it. “As nice as a short-term bonus might be, that doesn’t necessarily mean the account is the best fit for you over the medium or longer term. Let’s say you get an intro bonus of $200, but the account doesn’t pay any interest; instead, you might be better off moving your money to a savings account that doesn’t offer an introductory bonus but does pay a hefty interest rate on your deposits,” says Rossman.
See the best savings account rates you may get now here. So what’s the deal with that $2,000 bank account bonus?
Most of the easier-to-qualify-for bonuses for bank accounts are between $100 and $300 (we made a chart of many of them below), but Citi Citigold Checking offers up to $2,000. The big catch with this account is that to get the max bonus of $2,000, you need to have a balance of $300,000 or more to qualify (sigh).
The balance on your 20th day after opening your account will determine your maximum eligible cash bonus and you must maintain the required minimum balance required in your eligible account(s) for at least 60 days from the 21st day. This is only available to new Citibank checking customers, and you can read other fine print here.
Some other good cash-bonus offers are below, but read the fine print before opening an account — note that we did not include all qualifications for each account in this chart, just an overview of the offer.
Other things you may want to consider, along with hefty sign-up bonuses, are ATM access, ease of use, customer service, fees and minimum balance requirements. Additionally, Rossman says you should look for government insurance on your deposits provided by the FDIC for banks and the NCUA for credit unions. “Most of the banks with the best rates aren’t household names, so insurance provided by the FDIC and NCUA represents important peace of mind,” says Rossman.
One final thing to remember: Bank bonuses are typically considered taxable income, so you’ll want to set aside some of the total for tax season, says Chanelle Bessette, banking specialist at NerdWallet .
