Bank Account Promotions
Bank Account Promotions
Banks are desperate to attract new customers, they will offer strong incentives to move an account to them. These incentives may be worth several hundred dollars in bonuses or reduced fees for those who qualify.Are bank account promotions too good to be true?
Despite the headlines advertising a bonus of several hundred dollars to suitable customers who open a new checking or savings account with various banks, there are always 'conditions' that have to be met. Some accounts have a limited acceptance period which pressures the potential customer to act quickly. Many banks require a substantial opening deposit, which must be maintained for a set period of time, or a minimum monthly level of deposits to the account in order to qualify for a bonus or reduced fees. It should be noted that some banks 'give with one hand while taking back with the other' by imposing large monthly fees on the accounts. This could be between 12-25 dollars per month, which will make the one hundred dollar bonus when opening the account seem less attractive. Some banks offer a cash-back bonus, for a set period of time and to a maximum amount, where payments into the account will attract a bonus of up to three percent of their value. Some banks may provide checking accounts that also allow fee free ATM withdrawals or reimbursement of fees when using another bank's ATM machines. In all cases it is likely that there will be conditions regarding minimum balances, which can be quite substantial in some cases, or minimum levels of deposits each month in order to obtain the promotion bonuses. It would be wise to read the 'small print' before accepting the offer of a bonus to open a new bank account. Online banking makes it much easier for customers to ensure that they stay within the bank's limits and ensure that they continue to qualify for any promotion bonuses.Savings accounts promotions
Checking accounts are the 'bread and butter' of the banking industry and provide a large amount of the income they make in the form of charges and fees. However, banks also offer savings accounts, therefore they will often provide incentives for existing customers to open such an account to supplement the checking account. A savings account will provide an amount of interest on the balance each month while still allowing, in most cases, instant access to the funds. Many people try to maintain both a checking account, that will generally not provide any interest on the balance, and a savings account so as to take advantage of the interest paid by the bank.In terms of promotions, a bank may require a customer to maintain a checking account with them before allowing them to obtain promotion rates. Another hurdle put in place by some banks, when offering promotional rates, is that the initial deposit in the savings account cannot be funds from an existing account with the bank. This will require a potential customer to transfer funds from another bank, which may incur a fee or loss of interest on that account. The headline rates advertised by banks to attract new customers are often very attractive. However, 'there is no such thing as a free lunch' so it would be wise to take an overview before entering into any agreement.
