How I Earned Thousands of Dollars in Bank Account Bonuses — And How You Can Too

Earning travel rewards can be an excellent way to save hundreds or even thousands of dollars on flights, hotel stays, and more. But there are some aspects of every trip that can be tough to cover with points and miles, such as food, local transportation, and more.

The best cash back credit cards help, but in my experience, I can get a lot more value out of travel rewards instead of cash back. As a result, I’ve turned to bank account bonuses to earn the extra cash needed to help make my trips even cheaper — if not completely free. Keep reading to find out how to make money to lower your travel expenses.

How bank account bonuses work

Bank account bonuses are financial incentives offered by banks and credit unions to attract new customers or reward existing ones.

Why do banks offer account bonuses?

Banks and credit unions stand to make more money the more customers and deposits they have. Banks and credit unions typically use cash deposited by their customers to help operate their other business arms, such as loans and investments, which helps generate income.

That's partly why many banks run promotional offers every once in a while that help you earn a bonus after opening a bank account and completing certain requirements.

These requirements can depositing a minimum amount, setting up direct deposits, or using your debit card a number of times. This means that you can use ACH transfers, your salary, and other methods to fulfill the requirements for earning a bank account bonus.

How did I benefit from bank account bonuses?

Although switching your bank accounts from one institution to another can be a pain, the financial incentives you may earn can make it worthwhile.

In that sense, bank account bonuses are in the same vein as credit card welcome offers. Sign up for a checking or savings account and meet certain requirements, and you’ll receive the promised reward.

Over the years, I’ve opened checking accounts with roughly 20 different banks and credit unions to take advantage of these account offers. For a while, I was earning $2,000 to $3,000 every year from this little side hustle, all of which I deposited into a vacation fund savings account. The bonuses I earned ranged from $50 to $500 each.

What are the requirements for bank account bonuses?

The requirements you need to meet to qualify for a bank account bonus can vary, but you’ll typically need to do one or more of the following over a set promotional period, which is usually two or three months:

• Meet a minimum dollar amount for direct deposits from your employer or the government
• Make a specified number of purchases with your debit card
• Deposit a certain amount of money and leave it there for a set period
• Make a minimum number of bill payments from your account

The terms of the promotion will outline the exact requirements you need to meet and when you’ll receive the bonus — it can happen promptly once you’ve lived up to your end of the deal, or it can take a while. Checking the fine print for the number of weeks, months, or statement cycles it takes may help you find the answer.

You can also use online banking or a mobile app as a convenient way to track your progress toward meeting the bonus requirements.

What are the drawbacks of bank account bonuses?

Bank account bonuses can be a great way to boost your savings or checking balance, but they also come with some drawbacks. For example, you may have to:

• Pay taxes on the bonus amount
• Keep the account open for a certain period of time
• Pay monthly fees if you don’t meet the minimum balance or activity requirements

You should also read the promotion's fine print carefully and make sure you understand the terms and conditions of the bonus offer before you apply.

How to find a bank account bonus

While some banks may advertise their promotions, some other banks may not advertise that they’re offering a bonus on their checking or savings accounts. Sometimes promotions are sent in the mail to a targeted group of people.

That's why it can be challenging to find and keep track of all the different promotions that are going on both locally and nationally.

That's why I prefer following the Doctor of Credit blog, which crowdsources information about the best bank account bonuses going on at any given time. You can compare bonuses offered on a national level, as well as ones available only for select regions or states.

Keep in mind that there’s no guarantee you’ll be able to open an account with every bank and credit union. Many financial institutions use what’s called a ChexSystems report to view your activity with past and current banks. Some may deny your application if you’ve opened too many accounts during a short period.

5 tips to get the most out of bank account bonuses

Bank account bonuses are one of the ways to make extra cash, which you can use to supplement your travel rewards — or use for anything else you want, for that matter.  

But there are some recommended practices to consider that can help ensure you qualify for and get the most out of each bonus.

1. Apply for the ones you can easily earn

A lot of bank account bonuses have direct deposit requirements, which sounds easy. But unless you can update your payroll information online or are friends with the payroll manager, it can be difficult to make frequent changes to your direct deposits.

Some bank account bonuses require you to make a deposit — sometimes thousands of dollars — and leave the cash there for a set period to meet an average daily balance requirement. This period might be up to six months. If you’re going to opt for one of these promotions, make sure you won’t need the cash during that time.

Some other bonuses may require account holders to add new money to their accounts, which typically defines as money coming from other financial institutions. 

2. Keep an eye on fees

Credit unions typically don’t charge monthly maintenance fees on their personal checking accounts, but it is more common with banks. Check to see whether the account you’re applying for has a monthly fee, and how many fees you’ll end up paying if you qualify for the account.

For example, I once considered an account with a $300 bonus, but there was a $19 monthly fee and an early termination fee — the amount of the bonus — if I closed the account within six months. With the monthly fee, my net profit on the account would’ve been $186.

Fortunately, the bank offered to waive the monthly fee if I had $500 directly deposited into the account each month, so I got the full $300. But if I hadn’t been able to avoid the fee, I wouldn’t have signed up.

Keep in mind that some bank account bonuses come with a stipulation that if you close your account within a certain time frame (often six months or less), you may be on the hook for an early termination fee if you close the account within a certain number of days of account opening. You could also lose your bonus.

3. Have a system to keep track of your accounts

If you’re thinking about opening more than one bank account, use a spreadsheet to keep track of your accounts. Ensure that you understand the minimum balance requirements and the minimum opening deposit for the account before applying for a bank account bonus.

I keep a spreadsheet that contains the following columns:

• Bank name
• Bonus amount
• Requirements
• Date opened
• Bonus earned date
• Bonus received date
• Monthly fee, along with requirements to avoid
• Early termination penalty

Keeping your accounts organized can help ensure you do everything necessary to earn each bonus, and also avoid fees that can eat into the value you earn. Even with a spreadsheet, though, it’s important to know your limits. For example, the processing of transactions and the counting of business days may vary depending on the bank's policies. This may lead you to make an error.

4. Read the fine print

Most bank account bonuses I earned came with lengthy terms and conditions, and there may be limitations and exclusions that can keep you from earning the cash.

Additionally, some banks and credit unions may use your Social Security number to run a hard inquiry on your credit report when you apply for an account, even though you’re not applying for credit. Take the time to read the fine print for each offer before you apply for an account.

Another thing to keep in mind is that these bank account bonuses can quickly change. Plan to take a screenshot or a record of the terms and conditions so you can keep track while you work to meet the requirements.

5. Don’t forget about taxes

Interest earned from a bank account is considered taxable income by the Internal Revenue Service (IRS). Bank account bonuses are classified as interest income by banks and credit unions.

You can expect to get a Form 1099-INT from each financial institution at the beginning of the tax season each year, which you should use to declare that income when you file your taxes.

Because roughly 75% of Americans got a tax refund in 2023, most people won’t need to set aside any cash to pay the tax bill on the money they’ve received. But just keep this caveat in mind in case you do end up with a tax bill.

Bank account bonuses FAQ

Bank account bonuses: bottom line

Traveling on points and miles is never really free. You’ll often be on the hook for taxes and fees on airline tickets, resort, parking, or other fees on hotel stays, and a slew of other trip-related expenses that don’t necessarily fall under the travel category on your credit card statement.

But by supplementing your travel rewards with bank account sign-up bonuses, you can get the cash you need to cover those extra costs. But be careful to avoid overdoing it so you don’t end up with unnecessary fees.

Bank account bonuses can be a great way to save even more money on future travel. Explore the market to find new bank account bonuses available and choose the one that suits your needs. You can also check out our list of the best side hustles to find more ways to earn money for upcoming trips.