Why Most Checking Account Bonuses Are a Better Deal Than Savings Account Bonuses

If you're looking for the best bank bonuses, focus on checking accounts -- not savings accounts. Many of the most prominent sign-up bonuses for savings accounts are not a great deal. The banks typically want you to commit a sizable chunk of cash in exchange for a one-time lump sum of a few hundred dollars, followed by an embarrassingly low annual percentage yield (APY). Just skip the savings account bonus and open one of the best high-yield savings accounts instead!

Checking account bonuses are a much more intriguing proposition. If you're thinking of switching banks or just want a new checking account in addition to your current bank, the best sign-up bonuses for new checking accounts can be worth pursuing.

Let's look at a few reasons why checking account bonuses can be a better use of your time, effort, and money.

Checking account bonuses often pay more money

Several of the best checking account bonuses are offering $300 to $400 to open a new checking account. Meanwhile, major national banks like U.S. Bank and TD Bank are offering savings account bonuses that only pay $200 -- and only if you deposit at least $10,000 (for TD Bank) or $15,000 (U.S. Bank).

Better checking bonus offers are often available even from within the same big bank. For example: U.S. Bank offers up to $500 for a new checking account bonus (valid through June 27, 2024), but only $200 for a new savings account. Skip the paltry savings account bonus and get the checking account instead!

Considering that most checking accounts don't pay interest, getting a few hundred dollars of cash could sweeten the deal. Given the choice between earning 0% APY on a typical checking account and opening a new checking account and getting $300 or $400 (or more), a checking account bonus suddenly helps your cash earn a one-time "yield" in a new way.

Checking account bonuses are easier to earn

Every bank has rules and limits for how to earn a new account bonus. After all, banks don't want people to game the system; if banks are giving you money for your deposits, they ideally want your deposits to stick around long enough to be worth the bank's expense.

But checking account bonuses, in general, don't make you jump through as many hoops as the savings account bonuses do. For example, Huntington Bank is offering a $400 checking account bonus (through June 22, 2024) where you can get $400 just for opening a new qualifying account and setting up direct deposits. That's it! No other big rules or minimum deposits; just set up your paycheck to go to your new checking account.

Meanwhile, some big banks like Wells Fargo are offering savings account bonuses that force you to lock up your money for months in a near-zero APY account. Wells Fargo offers a $525 savings account bonus (valid through June 25, 2024), but there are huge strings attached: You must deposit at least $25,000 and leave it deposited for at least 90 days.

TD Bank requires you to put $10,000 of deposits in your new savings account for 90 days, and leave your account open for at least six months just to earn a $200 bonus. And if you close your account before the full six months is up, TD Bankcan claw back your bonus!

The worst savings accounts pay the biggest bonuses

Here's the ultimate problem with some of these big banks' savings account bonuses: They require you to deposit significant sums of money, and then they ask you to settle for miserably low APYs.

Here, in descending order, are the "best" APYs you can get with each of these three big banks that are offering savings account bonuses (as of May 15, 2024):

• TD Bank: 4.00% (for accounts over $100,000) APY
• Wells Fargo: 0.25% to 2.51%, depending on balance. (this is also a special relationship rate, for the Wells Fargo Platinum Savings; the best savings accounts pay about 20 times more than this)
• U.S. Bank: 0.01% (as of 3/24/2023) (ugh, why do people put up with this?)

If you have $10,000 or $15,000 or $25,000 sitting around, you have so many better choices for what to do with that money. Open one of the best CDs. Or put your cash in a money market account. Heck, just open one of the best savings accounts!

All of these other options give you 5.00% APY (or more). You're almost always going to earn more yield on your savings with an actual high-yield savings account or fixed-rate high-yield CD. Opt for that instead of a one-time (inadequate) bonus, followed by several months of even less impressive APY.

Bottom line

I suppose it's possible to come out ahead on these miserly banks' savings account bonuses if you're good at timing the offers, leaving your cash deposited just barely long enough to qualify for the bonus, and then quickly moving your money to a higher-yield account.

But is that really how you want to spend your life -- reading the fine print on deposit account agreements, staying one step ahead of stern, vengeful bank executives? I'd rather just park my cash in a high-yield savings account and go be happy.

Pursuing checking account bonuses can be a better option, especially if you're actually in the market for a new banking relationship. Whichever checking account bonus you choose, make sure you understand the rules and be prepared to account for the extra income on your taxes.