Banks are offering $300 of ‘free’ money – here’s how to get the cash

A handful of national banks offer hundreds of dollars in cash bonuses for opening a new account.

Banks want to entice as many Americans as possible to deposit their money with them and want to prevent customers from switching to higher-yield accounts or money market funds during a period of high interest rates.

Competition for customers is increasing and banks are willing to pay a hefty bribe.

Chase and Wells Fargo are leading the way, currently offering a $300 bonus to customers who open a new checking account and set up automatic deposits.

“We have successfully deployed promotion and retention strategies to acquire and retain new customers in the consumer and small business banking sectors,” Wells Fargo Chief Financial Officer Mike Santomassimo said of the strategy earlier this week.

Bank of America is also offering new customers a $200 cash bribe.

“Our mandate to our team is to grow our deposit base slightly faster than the economy,” Bank of America Chief Financial Officer Alastair Borthwick told analysts on a call this week.

“That means you have to have a broad pricing policy to achieve that,” he explained.

Citi is offering a promotional rate of 5 percent on new savings accounts for the first 90 days.

According to data from Curinos, the average cash bonus when opening a new checking account rose to $400 earlier this year, up from $130 in 2016.

Before you switch, it may be worth taking a moment to consider whether this is the best deal for you in the long term.

For example, some banks with offers now require customers to maintain a higher balance in order to deposit the money into the bank, otherwise fees will be charged.

Chase requires customers to make a direct deposit of at least $500 each month to earn the bonus. They will then not have to pay the $12 monthly maintenance fee for the new account.

Chase is also offering a $300 switching bonus for new customers

Any cash bonuses you receive from switching accounts will be reported to the IRS and taxed as interest.

It’s also important to look at any perks you get in your checking account, such as a mortgage savings account or helpful tools for traveling abroad.

Even if your checking account offers a reasonable interest rate, switching to a cash offer may not be beneficial in the long run.

But “if you can get $300 in your pocket tomorrow, that is more attractive to some people than the deferred payment of 4 percent interest,” Adam Stockton, managing director of Curinos, told the Wall Street Journal.