Bank Account Bonuses, I’m Over You: All the Reasons I’m Done

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Bank Account Bonuses

Why I Think I’m Done with Bank Account Bonuses

To probably no one’s surprise here, obtaining lucrative rewards heavily depends on us picking up new credit cards.  Sometimes, for a variety of reasons, hobbyists won’t get new credit card welcome offers.  For instance, the banks turn them down, or individuals self-impose a ban to please a bank (but not this writer).  Some turn to a solid rewards  alternative in these situations – bank account bonuses.  I’ve done so plenty in the past, but I think I’m done with bank account bonuses long term.  Here’s why.

Worthy Bank Account Bonuses Are Minimal

Many hobbyists tout the easy money available thanks to bank account bonuses.  But generally, the straightforward bonuses float around a few hundred bucks.  Sure, certain banks tout more significant offers, sometimes well over a thousand bucks.  However, those bigger ones often require more convoluted activities, sometimes involving locking away significant balances in accounts earning inferior interest, if any.  Those big bonuses are smaller when you take away the lost interest (and time, as I’ll describe later).  I’d rather focus on credit card welcome offers that earn superior levels of rewards.

No Ongoing Rewards Angle

Most of the time, once an account holder achieves a bank account bonus, the benefits of holding the account are over.  Unlike credit card rewards, customers largely don’t obtain continuing rewards for using the account.  Very few banks provide rewards for debit card purchases.  That one-time bonus may be sweet, but the honeymoon’s over quickly.  The drudgery comes next.

Bank Account Bonuses
Ready to sock all of this away and make nothing off it long term?

Account Maintenance Is a Drag

Many banks require you keep the account open for a certain period of time, or they will claw back the bonus.  On top of that, they require certain account activities on a routine basis to keep the bank account fee-free.  Sometimes, it’s a minimum account balance (again, earning low or no interest – ouch).  Or an account holder has to make a certain number of debit card purchases per month.  Also, customers may need to arrange ongoing direct deposits.

Cumulatively, the time and effort to conduct all of those tasks adds up.  That $100 bonus that allegedly took one hour to earn ends up costing bank account holders much more time.  And unlike other assets, I cannot replenish time.

Closing Bank Accounts Isn’t Always Easy

Perhaps it’s just me, but I seem to have a tougher time with closing bank accounts than credit card accounts.  Given the variety of banks, it’s natural they each have different processes or wrinkles related to closing accounts.  Credit card account closures have been quick and easy for me as compared to bank accounts.  Not coincidentally, closing bank accounts is probably my least favorite aspect of our hobby.  It’s hard to clearly explain why – I just can’t stand it.

Bank Account Bonuses

I Just Have Way Too Many Already

Not surprisingly, I have more bank accounts than I care to already.  It’s not fun having balances of $500-$1k spread across a variety of random bank accounts.  Opening more accounts would just make it worse.  Indeed, the first step in resolving a problem is admitting I have one.

Bank Account Bonuses Are No Longer Fun

This all adds up to a basic reality for me currently.  I don’t have fun earning bank account bonuses anymore.  Increasingly, I focus my hobby activities on plays and processes I enjoy.  Now, I’m fine earning less rewards if that means I’m having more fun along the way.  If I’m not enjoying the journey, why bother?  Of course, others can justify the “work,” thanks to what they earn on bank account bonuses.  I’ve just reached the point where I can’t.

I’m loving consistent, uncapped 3.75x earning on my Citi Premier, thanks to our current bank account bonus.

The One Bank Account Bonus I’d Pursue

Despite all of this, there’s one bank account bonus I’d jump at signing up for again.  Which?  A Citi checking account bonus earning ThankYou Points!  We’re currently in the midst of one, and it’s a blast.  We only earned 10k points for signup activities, but the real fun is the ongoing bonus angle.  All spend on the Citi Premier Card associated with the offer earns 25% extra points for the first year after bank account opening.  I’m loving the uncapped 3.75x earning at grocery stores, specifically.  Unfortunately, one must be targeted for this type of bonus.  But if we’re ever offered this bank account bonus again, we’ll jump at the opportunity.

Conclusion

Surely, chasing bank account bonuses is a worthy effort for many hobbyists.  I just don’t happen to be one of them anymore.  If I were to start over with the bank account bonuses, I would primarily focus on those that offer multiple benefit angles, such as the Citi account I mentioned above or these options.  Obviously, seizing on hobby opportunities can lead to big rewards.  Saying yes is easy.  Saying no is tougher, but it’s sometimes the better call.  It is for me with bank account bonuses.  Are you still pursuing bank account bonuses?  Why or why not?

Benjy Harmon
Benjy is a fan of points, miles, and financial independence (FI). An experienced world traveler, husband, and father, he currently focuses on roaming throughout the USA expense-free (or close to it). He enjoys helping others achieve their FI and travel goals.

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20 COMMENTS

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20 COMMENTS

  1. I’m not sure how some of you find the CC bonus game fun. Is it fun to stand in line trying to remember if that offer was Chase or Amex and which card? Maybe it’s the Q2 category? Or should I just use the darn 2% card ‘cause it’s a sure thing. Wait, I still need some spend on that new card, don’t I?
    I can satisfy a bank bonus while I’m listening to something or even sleeping if it’s automated. YMMV

  2. I look at each deal, what they’re offering, and the hoops I’m being asked to jump through. If there’s no direct deposit requirement, I’m interested. If it doesn’t require a large deposit for a long time at below-market interest rates, I’m very interested. If there’s a low/no minimum balance or easy downgrade path I’m very very interested.

  3. I am finding more banks are requiring CFPB complaints. During the pandemic, I am willing to do them, but once I am out and about, I am done.

  4. Benjy, I agree wholeheartedly. I know Mark loves these bank bonuses which is a bit of a shock because I don’t take him for being the most patient with that kinda stuff.

    But for me, as others has mentioned, it’s he constant babysitting that annoys me the most.

    Having to set to the account, hope he the DDs hit before the grace period of getting things going. If not, one has to call to see if they’ll waive the fee.

    The the process of closing. Some want you to visit a branch to close. Some require a constant signing and sending of papers.

    My time is greater than the little monetary gain to be had by most bonuses.

  5. Another reason:. Bonuses often don’t post, then you have to waste time to try to fight for it, or just give up and move on. Especially a problem with smaller banks, or shitty ones like botw. Banks that require DD is a pain too, as DPs often aren’t accurate or available. And the bonuses are taxable. No thanks, not worth my time. I’ll only go for the best bonuses from reliable banks.

    • WR2,
      Thanks for highlighting something that’s in plain sight to many in our hobby – a bonus doesn’t show up! I’ve had extremely slow bonuses eventually post, where I thought they would never arrive. I was lucky they all did – so many have had to fight tooth and nail for them.

  6. Citibank is a complete mess. If you go for their offers, be prepared to babysit and make sure you know the customer service number. You’ll call it. A lot.

  7. I gave up on bank offers long ago. The reason is the 1099 form they issue. If you are in a high tax bracket, which is likely to get even higher soon, the after tax return is significantly reduced, unlike bonuses for credit cards.

    • Exactly. Taxable, which hits higher earners harder because a higher % of the bonus is lost to tax. And the bonus is generally not worth the time and hassle needed for it all. I got Chase and Schwab recently because I wanted their accounts anyway, but I’m not going to spend my (limited) time churning these. It’s not fun. Churning cards can be kind of fun.

    • Barnum,
      As much as I’m over bank account bonuses, the 1099 aspect was tolerable for me. But I can totally understand how bonus is mostly for naught at the higher tax brackets.

      • High tax bracket here. As I said somewhere else, I treat these as a way to claw some earnings off money at rest, when in higher interest times I would use CDs or a HYSA. Both of those were taxable, so I’m not that hurt with these being 1099 as its the same. Still, a 40%+ bite does suck. Need to get one of those Swiss or Cyprus based accounts i guess.

  8. As a retiree, I can redirect my SS check where I want easily. Problem is that ss.gov takes 2 months to get it redirected, so it makes getting these much harder with the shorter time you have to get the money in the account. A recent bank account made it very hard to get my money out and kept charging me $25 per month. They would limit the wire transfer to less than you had in the account, and then hit you again with $25. They then would limit you to one wire transfer per month, and again hit you with the monthly fee. I finally go all my money out and then got a notice saying I owed another $25.

    I am done with these too, unless the details are more clearly spelled out and more time to get the money into the account.

  9. Bank account bonuses are still good. IF there are lucrative offers. $100 not so much. $400+ sure depending on the requirements. Don’t worry about lost interest, rates are zero now. I look at bank bonuses as my way of generating returns on money at rest, what I would usually use a HYSA for, however currently rates are too low. This money is my cash emergency fund, so I have no problem letting 5k or 20k sit there for 3 or 6mo. It would be sitting in my usual savings account anyway. Bank bonuses don’t don’t credit file, and if you run in 2P mode there’s very minimal extra effort required to double every advertised bonus. Problem right now is I don’t see many good bonuses, and no I won’t do anything requiring debit swipes per mo, that’s work. I’d rather let 5k sit there and go get it later when I complete the terms for the bonus.

    • Having a standard for exactly how much is worth your time definitely helps. I did, but increasingly nothing is worth my time now.

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