This Bank Is Offering a $2,500 Bonus -- but It's a Lousy Deal

At first, a $2,500 bonus to open a new bank account sounds amazing. That's how much Wells Fargo is offering when you open a Premier checking account and meet deposit requirements. I know it got my attention -- until I read all the terms, which include bringing over $250,000 in deposits.

If you have that much available, this might still seem like a great bonus opportunity. It's $2,500 for very little work. But like many bank bonuses, this is a situation where appearances are deceiving. Even if you can earn the bonus, it's more trouble than it's worth.

A lot of time and money for a (comparatively) small reward

Here are the key terms for this bonus offer and the Wells Fargo Premier checking account:

• You must open a Premier checking account by April 1, 2024.
• The offer is only available in branches. You need to get an offer code (which you can do by providing your email on the Premier Checking offer page), go into a branch, and provide the code to a banker.
• You must bring $250,000 or more in new deposits to qualifying linked Wells Fargo accounts by day 45. You also need to maintain at least a $250,000 balance through day 90.
• The Premier Checking account has a $35 monthly service fee. To avoid that, you need at least $250,000 in qualifying balances in linked Wells Fargo banking and investment accounts.

After you fulfill the terms, Wells Fargo will deposit your bonus within 30 days.

There are two reasons this is a lousy deal, as far as I'm concerned: It's too much money, and it's too much work. For starters, who wants to spend an hour or more visiting a Wells Fargo branch?

Sure, you can earn $2,500, but you need to deposit at least $250,000. That's a 1% return, and it's going to take you about three months to earn it. Or, you could just put all that money in any of the best high-yield savings accounts. Some of these are currently earning 5% or more per year. Every three months, you'd get a return of 1.25% -- on a $250,000 balance, that's $3,125. Want to lock in your interest rate? There are plenty of top CDs paying 5% or more.

You also need to keep $250,000 in qualifying balances to avoid the $35 monthly fee. To be fair, you could open an investment account with Wells Fargo instead of leaving all that money in a checking account. But that's even more work. The bottom line is that if you have $250,000, there are better ways to use it than chasing a 1% return with Wells Fargo.

Be selective about bank bonuses

Bank bonuses can be a good way to make some extra cash. I'm all for bonus opportunities, and there have been years where I've made over $1,000 this way.

But it's easy to get drawn in by big bonuses that aren't as good as they seem. That's especially true right now, since lots of savings accounts and CDs have high rates. If a bonus requires you to deposit a large amount of money, ask yourself: How much would I earn if I just kept this money in a savings account? Often, the bonus is similar to what you'd earn in interest.

Also, think about how much work it will take to earn the bonus and manage the account. Here are a few more examples of questions to consider:

• Are there several requirements to earn the bonus, such as depositing money and receiving direct deposits?
• Will you need to keep a certain amount of money in the account to avoid a monthly service fee?
• Will you continue using this bank account, or will you cancel it as soon as you can?

My rule is that I'll only go for bonuses that are easy to earn and provide a reasonable return on my money. For example, I opened a checking account because it had no monthly fee and offered a $250 bonus, just for setting up direct deposit. Earning that bonus was as simple as it gets, and I like the account so much that I'm still using it.

Make banking as simple as possible

Everybody's time has value. Spending hours on banking usually isn't time well spent.

All you need is a checking account that doesn't charge you any monthly fees and a high-yield savings account. If you have those, you'll be able to manage your money every month and earn a competitive rate on your savings.

If a bank bonus catches your eye, read through the terms to learn more about it. You may occasionally find a good deal that you don't want to miss. But for the most part, it pays to keep it simple with banking, so you can spend your time on more important things.