How Bank Bonuses Work: A Complete Beginner's Guide

Banks spend billions of dollars every year trying to attract new customers. One of the most effective ways they do this is through sign-up bonuses — cash rewards you can earn simply by opening an account and meeting a few basic requirements. If you've never taken advantage of a bank bonus before, you're potentially leaving hundreds (or even thousands) of dollars on the table.

What Is a Bank Bonus?

A bank bonus is a cash incentive offered by a bank or credit union when you open a new checking, savings, or money market account. Most bonuses range from $100 to $600, though some high-value promotions can offer $1,000 or more. The bank gives you this money as an incentive to move your banking relationship to them.

Think of it like a welcome gift. The bank knows that once you set up direct deposit and start using their account, you're likely to stay for years. That long-term relationship is worth far more to them than the upfront bonus they pay you.

How Do You Qualify?

Every bank bonus has specific requirements you must meet within a set timeframe. While the exact terms vary by offer, most bank bonuses require one or more of the following:

• •Direct deposit — This is the most common requirement. You'll need to set up a recurring direct deposit from your employer, usually totaling a specific amount (like $500 or $1,000) within the first 60-90 days.
• •Minimum deposit — Some bonuses require you to deposit a minimum amount when you open the account (e.g., $15,000 or $25,000 for higher-tier bonuses).
• •Debit card transactions — A few banks require you to make a certain number of debit card purchases within the qualifying period.
• •Account maintenance — You typically need to keep the account open for a minimum period (usually 6-12 months) to avoid having the bonus clawed back.

Step-by-Step: How to Earn a Bank Bonus

• •Find a bonus offer — Browse current offers and compare bonus amounts, requirements, and fees. Look for offers with requirements you can easily meet.
• •Check eligibility — Many bonuses are only for new customers who haven't held an account with that bank in the last 12-24 months. Some are limited to specific states.
• •Open the account — Apply online (most applications take 10-15 minutes). Make sure you apply through the bonus offer link to ensure the promotion is attached to your account.
• •Meet the requirements — Set up direct deposit or make the required deposit within the specified timeframe. Mark your calendar so you don't miss the deadline.
• •Wait for the bonus — Most banks pay the bonus within 10-15 business days after you meet the requirements, though some take up to 90 days.
• •Decide whether to keep the account — After you've received the bonus and met any minimum holding period, you can either keep the account or close it and move on.

Watch Out for Monthly Fees

Many checking accounts that offer bonuses come with monthly maintenance fees, typically ranging from $12 to $25 per month. However, these fees can almost always be waived by meeting certain conditions:

• •Maintaining a minimum daily balance (usually $1,500-$5,000)
• •Setting up recurring direct deposits above a certain amount
• •Being enrolled in a qualifying loyalty or rewards program
• •Linking other accounts at the same bank (savings, investment, etc.)

Are Bank Bonuses Taxable?

Yes, bank bonuses are considered taxable income by the IRS. The bank will report the bonus on a 1099-INT or 1099-MISC form if it exceeds $10. You'll need to include this income when you file your tax return. However, even after taxes, the bonus is still free money you wouldn't have otherwise earned.

Do Bank Bonuses Affect Your Credit Score?

Opening a bank account may involve a soft credit inquiry (also called a "soft pull"), which does not affect your credit score. Some banks perform a ChexSystems inquiry, which checks your banking history rather than your credit. In rare cases, a bank may do a hard credit pull — we note this on each offer page so you know what to expect.

Common Mistakes to Avoid

• •Missing the deadline — Set calendar reminders for when your direct deposit or minimum balance needs to be in place.
• •Not reading the fine print — Requirements like "new customers only" or state restrictions can disqualify you.
• •Closing the account too early — Most banks require you to keep the account open for 6-12 months or they'll claw back the bonus.
• •Forgetting about monthly fees — Factor in any monthly fees that might eat into your bonus if you can't get them waived.
• •Not using the bonus link — Always apply through the promotional link. Opening an account through the regular website may not attach the bonus to your account.

Ready to Earn Your First Bonus?

Bank bonuses are one of the easiest ways to earn extra money with minimal effort. Once you understand the process, it becomes second nature. Browse our current bank bonus offers to find the best deal for you — we update our listings daily so you always have access to the latest promotions.