Banks offer cash bonuses to new account holders, but the money comes with conditions

Banks pay you to open accounts because they want your direct deposits, bill payments, and everyday transactions. The payment is real—typically $50 to $500—but it arrives only if you meet specific requirements. Most commonly, you must deposit a minimum amount within a set timeframe, keep the account open for a stated period, or set up direct deposit. If you close the account early or fail to meet the conditions, you lose the bonus and may owe a fee.

The bonus is not a gift. It is a cost the bank accepts to acquire a customer they hope will stay and use more services. Understanding what each bank actually requires before you open the account saves you from chasing money you will not receive.

Key Takeaways

  • Bank bonuses range from $50 to $500 and require you to meet deposit, direct deposit, or activity thresholds within a specific window—usually 30 to 90 days.
  • The bonus is forfeited if you close the account before the stated holding period ends, which can be anywhere from 30 days to one year.
  • Direct deposit requirements are the most common condition; some banks require a single deposit of $500 or more, while others require ongoing monthly deposits.
  • The bonus is reported to the IRS as interest income on a 1099-INT form, so you will owe income tax on the amount.
  • Bonus terms vary by bank, by account type, and by region, so the offer you see online may not be the one available at your local branch.

How the bonus conditions actually work

A typical bonus offer reads: "Open a checking account and receive $200 when you deposit $500 or more within 30 days." This means you must complete the deposit before day 31. If you deposit $400, you receive nothing. If you deposit $500 on day 32, you receive nothing. The window is fixed and does not extend.

Some banks layer multiple conditions. Chase, for example, has offered $200 for opening a checking account plus an additional $100 for opening a savings account, but only if you set up direct deposit within 90 days. You must meet all three conditions to receive both bonuses. If you open the savings account but never set up direct deposit, you receive only the checking bonus—or possibly nothing, depending on how the bank structures the offer.

Direct deposit is the condition most banks use because it signals a customer who will use the account regularly. A direct deposit requirement typically means your employer or a government agency (Social Security, unemployment, tax refund) must deposit money into the account. A transfer from another bank account you own does not count. Some banks specify a minimum deposit amount per month; others require only that at least one direct deposit occur during the window.

The holding period and early closure penalty

Even after you meet the bonus conditions and receive the money, you must keep the account open for a stated period. This is often 90 days, but can be 30 days, 6 months, or 12 months depending on the bank and the account type. If you close the account before that period ends, the bank claws back the bonus—it straightforward removes the money from your final balance.

Some banks go further and charge a penalty. If the holding period is 90 days and you close on day 89, you may lose the $200 bonus plus pay a $25 or $50 account closure fee. Read the terms carefully. The fine print usually states something like: "If the account is closed within 90 days of opening, the bonus will be forfeited and a $25 early closure fee will explore."

This matters if you are opening multiple accounts to collect multiple bonuses. You can do this legally—many people open a checking account at one bank and a savings account at another in the same month—but you must track the holding period for each account separately. Close one too early and you lose that bonus.

Where to find current bonus offers

Bank bonuses are advertised on the bank's website, but the offer you see may be limited to online accounts or specific regions. Chase advertises different bonuses in different states. A $200 offer in New York might be $100 in California. Some bonuses are available only to customers who open accounts online; others are available only in branches.

Comparison sites like Bankrate, DepositAccounts, and NerdWallet list current offers from multiple banks and update them regularly. These sites are useful for seeing what is available across banks, but always verify the terms on the bank's own website before you open the account. The terms on the comparison site may be outdated or incomplete.

Bonus offers change frequently—sometimes weekly. A $300 offer may drop to $150 or disappear entirely. If you see an offer you want, open the account within a few days rather than waiting. The offer may not be there next week.

Tax treatment of the bonus

The IRS treats a bank bonus as interest income. The bank reports it to you on a 1099-INT form (Interest Income) at the end of the year if the bonus is $10 or more. You must report this amount as income on your tax return, even though you did nothing to earn it and the bank did not deduct taxes when they paid it.

The tax impact depends on your overall income and tax bracket. A $200 bonus might add $30 to $60 to your tax bill, depending on your rate. This is not a reason to avoid the bonus—the money is still yours—but it is a reason to factor the tax cost into whether the bonus is worth the effort of meeting the conditions.

If you open multiple accounts and receive multiple bonuses in the same year, each one is reported separately on the 1099-INT. The total is added to your taxable income for the year.

Comparing bonuses across account types

Banks offer bonuses on checking accounts, savings accounts, and money market accounts. Checking account bonuses tend to be larger ($100 to $500) because banks want the transaction volume. Savings account bonuses are usually smaller ($25 to $200) because savings accounts generate less activity. Money market accounts fall in between.

A bonus is not a reason to choose an account type that does not fit your needs. If you do not need a savings account, a $150 savings bonus does not make sense. But if you were planning to open a savings account anyway, the bonus makes it worth opening at a bank offering one rather than one that does not.

Some banks offer bonuses only to new customers—people who have never held an account at that bank. Others offer bonuses to existing customers who open an additional account. Read the may be able to access terms. If you held a Chase account five years ago and closed it, you may or may not be may be able to access for a current Chase bonus, depending on how the bank defines "new customer."

What happens if you do not meet the conditions

If you open the account but do not meet the bonus conditions—you do not deposit enough, you do not set up direct deposit, or you miss the important date—you straightforward do not receive the bonus. The account remains open and functional. You can still use it to deposit money, pay bills, and receive direct deposits. You just do not get the cash incentive.

This is not a penalty. It is straightforward the absence of a reward. However, if the account has a monthly maintenance fee and you do not meet the fee waiver conditions (usually a minimum balance or direct deposit), you will be charged that fee every month. A $12 monthly fee on an account you opened for a bonus you did not receive becomes expensive quickly.

Before you open any account, check whether it has a monthly fee and what waives it. If the bonus requires direct deposit and you do not have direct deposit, you may end up paying fees that exceed the bonus amount.

Frequently Asked Questions

Can I open multiple accounts at the same bank to get multiple bonuses?

Usually yes, but the terms vary. Most banks allow you to open a checking account and a savings account and receive a bonus on each, as long as you meet the conditions for both. Some banks limit bonuses to one per customer per year or one per household. Check the specific terms before you open the second account.

What if I already have a direct deposit set up at another bank—can I use it to meet the bonus requirement?

No. The direct deposit must go into the new account at the bank offering the bonus. You would need to contact your employer or the agency sending the deposit and change the account number. This takes time and is not always possible mid-month, so plan ahead if direct deposit is a condition.

Do I have to keep a minimum balance to keep the bonus after I receive it?

No. Once the bonus is deposited into your account and the holding period has passed, it is yours. You can withdraw it or spend it. The holding period protects the bank from people who open an account, meet the conditions, receive the bonus, and when ready close the account. After the holding period ends, you can close the account or let the balance drop to zero without losing the bonus.

What if the bank changes the bonus terms after I open the account?

The terms that explore are the ones in effect when you opened the account. If a bank advertises a $300 bonus when you open and later drops it to $100, you still receive the $300 (assuming you meet the conditions). The bank cannot retroactively change the offer for accounts already open.

Is the bonus considered income for benefits like unemployment or food information?

It depends on the program and the state. Some programs count all income, including bonuses. Others exclude one-time payments. If you receive means-tested benefits, contact the program administrator before opening an account for a bonus. A $200 bonus could affect your benefits for that month or quarter.