Switching Banks for a Checking Account Bonus? 3 Things You Need to Know

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KEY POINTS

  • Checking account bonuses can incentivize you to switch banks, but you need to read the fine print.
  • You also need to tie up the loose ends with your old bank account before you begin using the new one.

Here's how to make the switch without causing yourself major financial headaches.

Everyone could use a little extra cash these days, and there are plenty of bank accounts offering. Checking account bonuses have become a popular tool banks use to draw in new customers, but they're not as simple as they first appear. Here's what you need to know about them before you open that new account.

1. You won't get your bonus immediately

Opening a checking account with the new bank usually isn't enough to get the bonus. Most have additional criteria you must meet in order to get it. Some of the most common requirements include:

  • Opening the account within a certain time period
  • Using a special code at account opening
  • Depositing a certain amount of funds
  • Receiving a certain amount of monthly direct deposits
  • Maintaining a certain balance over the first several months after account opening

You need to check all the required boxes in order to earn the bonus, and even then, you don't get it right away. Once you've met all the necessary criteria, it may take the bank weeks or even months to deposit your bonus into your account.

Because of this, it's a good idea to read all the terms of the bonus offer before you open the bank account. Often, this is buried in the fine print at the bottom of the web page that describes the bonus. If you have any questions about what you find there, reach out to the bank for clarification before you open the account.

2. You can't forget about automatic bill payments

When making the transition to the new bank account, be sure to switch over any automatic bill payments you have set up with your old checking account. Failure to do so could cause your bank to charge you overdraft fees. The creditor could also charge you late payment fees and interest.

Look through your past bank statements for your old bank account and make note of any recurring payments that come out of your account. You may want to go back up to a year to catch irregular payments that may only come up once every few months.

Jot these down and enter their payment information into your new checking account once you get it set up. Then, cancel the recurring payments in your old bank account so you aren't paying twice each month.

3. Your old bank account could charge you fees

If you leave your old checking account open, take a moment to check its fee schedule. Some checking accounts, especially those at brick-and-mortar banks, charge monthly maintenance fees to those who fail to maintain a certain balance. This could eat away at the savings you do leave in this account or it could cause you to rack up overdraft charges.

You should either make sure you leave at least enough in the old bank account to avoid monthly fees or close it altogether. If you close it, make sure you move all the funds and automatic bill payments, as discussed above, before doing so.

A checking account bonus can be the cherry on top for an already-great bank account, but switching banks is a pain. So you should only do it when you think you'll actually use the account long term. If not, you're better off sticking with the bank accounts you have and skipping the bonus.

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Rates as of Jul 22, 2024 Ratings Methodology
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APY: 4.25%

Rate info Circle with letter I in it. 4.25% annual percentage yield as of July 22, 2024

APY: 5.26%

Min. to earn APY: $1

Min. to earn APY: $1

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