Introduction

Banks of all sizes have struggled to keep customers coming in as they try to get back on their feet after the economic downturn. The move by the Federal Reserve to keep interest rates artificially cheap was one of the many effects of the Great Recession. This move has made it harder for savers to get returns on their deposits and harder for banks to get new account holders.

Banks let you put money away for regular spending or the future. When you open a bank account, you have an account number that lets the bank know who you are. It's like a driver's license for the bank you choose to use. When users open an account with a bank, they sometimes give you a small gift. Banks that charge you to open an account want to get more people to do business with them.

Promotions are a common way for community banks to get new customers to open an account. Often, these promotions come with cash. You have to meet certain requirements, like making the minimum opening deposit, and your account usually has to be open over a certain amount of time, at least as long as it takes to earn the cash bonus.

Rewards for Opening New Accounts

Half of the bank customers surveyed said they were happy with their banking services. These banks are always looking for new customers, and cashback rewards prove to be a win-win for both banks and customers. So, banks and credit unions started giving cash rewards to new customers who opened savings accounts with them. It was a creative way for them to get more business.

For example, if a person puts $100 into a new bank account and gets a $200 reward, that's a 300 percent return on the investment (ROI). It sounds like a fantastic idea, but it needs to be looked at more closely like anything that seems too good to be true.

Pros and Cons of Paid Accounts

The Costs Behind the Rewards

There are many ways for financial institutions to make money. The Wall Street Journal says that they make money from the average of over 30 possible fees on checking accounts. Some of these fees are monthly maintenance, NSF (not enough funds), overdraft, document statement, and dormant account fees. But a cashback promotion can be good for both banks and customers as long as customers are aware of the traps that could endanger their deposits.

But when you open that account, ensure you've done your homework. Make sure that the profile you open fits your needs. Before accepting an offer, ensure you meet all the minimum requirements by reading all the details and the fine print.

Commissions will be Excessive

It would be best if you always read the fine print because many people have very powerful interests that are hard to explain.

Available New Account Bonuses

Based on data from the Insurance Company, some of the largest banks in the United States by deposits asked them about their cashback offers. Even though some of these banks may relay in certain parts of the country, their offers may be available all over the country because most of them require you to apply online. These deals are valid as of February 2020 and are in no specific order.

Calling All Heads of Households

With these deals, banks would like to attract people who run their households. This customer is more likely to need a home loan, credit cards, or other loan repayments in the future, and they will probably open new accounts where they keep their main checking accounts. They might also be more likely to move their current accounts and loans to the new bank. To get people to do this, banks offer discounts on multiple products to make the deal even sweeter.

But people need to be aware of the fees that come with closing and moving accounts. They have to figure out how much money they will get if they open an account versus how much it will cost them to close or move their money.

Conclusion

Banks stay competitive by giving signup bonuses to new customers. That's why a Bank promotion that pays you to open an account earns more. Read the offer's details and the fine print to ensure the account you choose is right for you. Some banks might require the reader to open an account online to get a bonus. You may have to make a first deposit or set up cash deposits into your new account to qualify.