Intro to Churning: How To Make Bank Bonuses Work For You
It’s no secret that most big US banks don’t pay interest and charge monster fees. We’ve written before that you don’t need them — and better options are out there. But when they offer you cash to open an account, it might be worth hearing them out. Not because you want a new bank, but because you want their money.
The cost of doing business: Many large banks send out pretty laminated mailers touting big bonuses for opening accounts — you’ve probably tossed many into the recycling. But surprisingly, some of these offers are attractive — they’re the cost that banks pay to get you to come try out their product, hoping you’ll stay, pay banking fees, and open other products that make the money. Sometimes you might stick around. But you can also just do what the Steve Miller Band suggested in their 1976 hit: take the money and run.
- Most major banks are offering some sort of bonus at any given time — often between $250 and $500 — for opening accounts, depositing funds, or sending your paycheck there.
- Not all bonuses are created equally: Wells Fargo’s $400 checking bonus, for example, only requires $3K in direct deposits within 90 days, while others, like Capital One’s savings account offer, vary based on how much you deposit.
Churn ‘til you Earn
Sites like Doctor of Credit maintain exhaustive lists of the best offers, making it easy to compare terms and earn multiple bonuses each year. The money adds up — and in many cases, once you’ve earned the bonus and met the requirements, you can close the account and come back later for a repeat.
- Most banks limit how often you can qualify — usually once every 12 to 48 months — so it’s important to track when you open and close accounts.
- Some people stagger bonuses across household members — and once you’re in, many banks offer referral bonuses, letting you stack even more rewards by bringing others on board.
Word of caution: Credit card bonuses are a different game, with hard pulls, creditworthiness, and account velocity all in play. But in bank account land, many use soft pulls and check against third-party agencies like ChexSystems. That’s why it’s prudent to open accounts responsibly — some people take a gradual approach, keeping it to 5-10 offers per year that report to ChexSystems or other third parties — while following the rules to maintain good customer status.