U.S. Bank Is Offering a $200 Bonus for New Accounts. Here's Why It's Not Worth the Effort

Banks are competing harder for your deposits, and sometimes that competition comes in the form of bank sign-up bonuses. The best bank account bonuses can give you a few hundred dollars to open a new checking account or savings account. If you've been looking for a good reason to switch banks, getting a cash bonus for a new account could be an added dash of motivation.

But some bank savings account bonuses just aren't worth the effort. They require you to deposit significant amounts of cash and leave the money in an account that earns near-zero interest. The best savings accounts (as of May 6, 2024) are paying 5% APY or higher, which is often a better deal than any savings account sign-up bonus.

Let's look at a new savings account bonus offer from U.S. Bank and see if the numbers make sense.

U.S. Bank Standard Savings Account offer: $200 for a new savings account

As of May 6, 2024, U.S. Bank is offering a new savings account sign-up bonus where you can get $200 for opening a new U.S. Bank Standard Savings Account. The U.S. Bank new savings account bonus is part of a larger promotion where you can get up to $500 for opening a new U.S. Bank Smartly® Checking account. Both offers are valid through June 27, 2024.

To earn the $200 savings account bonus, you have to do two things: First, you must deposit $15,000 into your newly opened U.S. Bank Standard Savings Account by July 17, 2024. And this $15,000 amount must be "new money" to U.S. Bank. (You can't double-dip by opening a new U.S. Bank Smartly® Checking account, setting up direct deposits, earning that checking account bonus, and then moving your checking account cash into a savings account.)

And here's the second big rule: You have to leave your $15,000 savings account minimum balance deposited until Oct. 31, 2024. So if you deposit your money on July 17, that means you have to leave your cash in the bank for 3.5 months to earn $200.

Why the U.S. Bank savings bonus is not a great deal

U.S. Bank might be a wonderful place to have a bank account, with an excellent mobile banking app and friendly customer service. But here's the problem with the U.S. Bank savings account bonus: The U.S. Bank Standard Savings Account only pays 0.01% (as of 3/24/2023).

If you have $15,000 of cash, U.S. Bank is basically telling you, "Give us your money, and we'll pay you near-zero interest -- but here's a couple hundred bucks." Let's say you take it up on the offer, and you then leave your money deposited for 12 months. After one year, you'd have earned $200 on your savings (plus $1.50 from that low APY). That adds up to an annual yield of only about 1.34% APY. The best high-yield savings accounts are paying much more than that!

How much you can earn with the best savings accounts

If you have $15,000 of cash savings, you're almost always going to be better off just putting it into a high-yield savings account. Don't put your cash into a near-zero interest account just to get a few hundred bucks of one-time "bonus" money. Let your savings earn the maximum interest instead.

Let's look at the minimum timeframe required for this U.S. Bank savings account bonus. Assuming you deposit your $15,000 on the last possible day (July 17) and leave it in the bank until Oct. 31, your money is tied up for 3.5 months.

How much interest could you earn instead in 3.5 months with the best savings accounts? Let's assume you put your $15,000 into a bank savings account or money market account that pays 5% APY. After 3.5 months, you'd have earned $214.98 of interest! That's more than the $200 bonus offered by U.S. Bank.

Bottom line

If you like the overall banking experience and features offered by U.S. Bank, and if you're thinking about opening a new banking relationship with U.S. Bank, then the bank's new checking account bonus (up to $500 with qualifying deposit activity) could be worth pursuing.

Unfortunately, U.S. Bank's $200 savings account bonus just isn't a good deal compared to the APYs on the best CDs and savings accounts. Skip this bonus and put your $15,000 of cash into a harder-working account that will help your money grow faster.