Opening a Chase checking account for the bonus

I hope everyone had a lovely weekend! It was absolutely gorgeous here, a great start to spring! :)

Ever since I moved, I’ve been getting the occasional offer to open a Chase checking account and get a free $125. That’s not a bad deal, but I was reasonably busy with moving, settling in, etc. and I didn’t have the energy to sort out the fine print, so I felt it was better to ignore it. I missed one offer back in December/January and then a couple weeks ago, I got one via email for a $200 bonus! So of course I jumped on that pretty quickly.

Some details on the deal:

  • I have 60 calendar days to deposit at least $100 and then the bonus will be deposited within 10 business days.
  • Offer has an expiration date.
  • Offer is not available to those with existing Chase checking accounts.
  • Offer is not available to those who closed a Chase checking account within the last 90 days or if you closed your last Chase checking account with a negative balance.
  • The account to be opened is a Chase Total Checking account.
  • One can only receive one checking account-related bonus per calendar year.
  • Bonus is considered interest.
  • The account must be kept open for six months or the bonus will be lost.

The catch? The account has fees, unless you follow their rules, which is exactly why I left banks for credit unions several years ago. Here are the options to avoid the monthly service fee:

  1. Receive a direct deposit of $500 or more in the checking account.
  2. Have a daily balance of $5,000 or more across your Chase checking, savings, and other accounts.
  3. Have a daily balance of $1,500 or more in the checking account.

The direct deposit one is annoying since I have my cash flow set up nicely, so Option #1 is out. I am perfectly happy with my current savings accounts structure and Chase has even lousier savings account rates than my online bank does, so Option #2 is out.

That leaves Option #3, which makes this entire thing like locking $1,500 up in a 6-month CD with an early withdrawal penalty of 100% of the interest earnings. How much would I earn on $1,500 with Ally in six months? About $7, assuming that their interest rates don’t go any lower. So $200 is $193 more in those 6 months than I would otherwise get and then I can close the account and transfer the money back to my online bank.

I was trying to decide what to do with the extra $200 and came up with a few options:

  1. Make a principal only payment on the mortgage.
  2. Leave it in the Chase checking account until I close it out.
  3. Transfer it to my online savings account.

I ended up going with option #3 because if I had left the money in my online savings account, it would have been earning interest which I would have left there. I was a bit of a dumbo and transferred the $200 to my online savings account on the last business day in March, which means my March net worth update doesn’t reflect the $200 bonus since the money is off in the space between banks until April 1st.

Readers, what have you done lately to get a bit more yield out of your savings?

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  1. #1 by StackingCash on March 31, 2013 - 11:05 pm

    I did this last year! Except my conditions were a little different. I was offered 125 for opening a checking AND 150 for opening a savings account. I also had to lock up 10k for 6 months. Another downer was the income tax on the deal. It took about an hour to open the account also. I felt the deal was worth it. Closed the accounts after 6 months. Just received another offer for 150 to open a checking account, I’m waiting for more…

    • #2 by Leigh on April 1, 2013 - 7:02 am

      I’m not sure I would lock up $10k for 6 months for only $250 – at that point, I might as well throw the $10k at my 2.5% mortgage. I don’t really see the income tax as that big of a deal since even after taxes, it’s far more of a return than I would otherwise get.

      • #3 by StackingCash on April 1, 2013 - 10:29 pm

        I would’ve put 10k into my 6.25% mortgage but it’s been paid off for a few years now :) Cash is my only investment. I only do savings accounts, now you know why that $275 off my 6 month 10k investment would be worth it (5.5% interest compared to my “high yield online savings” of .8%)

  2. #4 by NoTrustFund on April 1, 2013 - 4:39 am

    This is a great deal, especially if you want to switch banks anyway. I was offered something like this recently but thought about how many hours it would take to transfer everything and change all our direct deposits, automatic savings, and bill pay and decided ti wasn’t worth it. And I’d been really happy with our bank.

    Since then I’ve had a really bad experience with my current bank that would make me much more likely to jump if I saw such an offer again!

    • #5 by Leigh on April 1, 2013 - 7:04 am

      Very true, but I didn’t switch banks! All I did was transfer in $1,500 from my online savings account to waive the monthly fee and I’ll transfer it back to my online savings account when I close it out in 6 months.

  3. #6 by cashrebel on April 1, 2013 - 5:00 am

    That comparison to a cd is a great way to think about it. I used to make monthly savings deposits and monthly index fund investments, but since I’ve got 10 months savings in my emergency fund, I just doubled index fund contributions. Its a pretty cool feeling

    • #7 by Leigh on April 1, 2013 - 7:06 am

      That’s an awesome feeling!! I remember when I stopped saving for my emergency fund and switched over to car/down payment and it was pretty awesome :)

  4. #8 by nicoleandmaggie on April 1, 2013 - 6:48 am

    I haven’t thought that the additional hassle was worth $200! Of course, we pay hourly for childcare and have two kids, so our time and mental space both have a pretty high marginal cost.

    We did do this with Wells Fargo a few years back when we were looking at getting a big bank in addition to our credit union anyway. We chose Wells Fargo over the other options even though it wasn’t offering quite as much cash because there were fewer catches.

    • #9 by Leigh on April 1, 2013 - 7:08 am

      It wasn’t that much hassle! I opened the account online and linked it to the account with the funds online. Took about five minutes. I have a credit card with Chase, so I can easily check on the balance when I check on my credit card.

      Yeah I’m not a huge fan of the big banks’ catches, which is why I won’t actually switch to using this account…

      • #10 by nicoleandmaggie on April 1, 2013 - 7:18 am

        *that* part isn’t the hassle. It’s all the OTHER stuff. Generally they want direct deposit etc. In this case it looks like they just want high deposits, but all the offers we’ve gotten have wanted more complicated things or they start charging fees. (We’re fee-free from Wells Fargo only because we have a mortgage with them.)

        • #11 by Leigh on April 1, 2013 - 7:26 am

          Oh yeah agreed!! That’s why I left my big bank a few years ago – it was way too complicated to avoid the fees. I wouldn’t have gone for this offer if they wanted spending or direct deposits. Leaving things exactly the way they’re working is so much better.

  5. #12 by dan23 on April 1, 2013 - 3:26 pm

    I switched from Ally to CIT Bank. 1% and free wires if you have 25k (.9% otherwise).
    By the way, I believe bank bonuses, unlike credit card bonuses get taxed. Not yield on savings, but I did an NFL card for $400 statement credit a month or two ago. There are new credit card bonuses all the time – I generally wait for ones worth in the $500 range or 50k mile range. With a friend to help you could use Amazon Payments (up to 1k a month) to help meet minimum spend requirements if you can’t otherwise.

    • #13 by Leigh on April 1, 2013 - 5:46 pm

      Yup, bank bonuses are taxed and you’ll get a 1099 for them, just as if it was a CD or a savings account. I’d rather get taxed on money than not get it at all though!

      Switching banks for your savings account isn’t a bad idea either. With how little (< $30,000) I have in savings these days, it's not as good of a ROI as it was back before I bought my condo.

  6. #14 by Harry @ PF Pro on April 1, 2013 - 3:51 pm

    Sounds like a pretty good deal, no credit check right? That’s the only thing I’m worried about with these checking bonuses. The bonuses are generally much lower than credit card sign up bonuses so if there’s a credit check it’s not worth it IMO.

    • #15 by Leigh on April 1, 2013 - 5:43 pm

      I’m not sure if there was a credit check, to be honest. I’m due to check one of my credit reports in another month or so and I’ll let you know if I see anything there.

  7. #16 by TJ on April 2, 2013 - 11:41 am

    Chase does not pull your credit when youy open a deposit account online.

    Don’t know about in branch.

    • #17 by Leigh on April 2, 2013 - 6:02 pm

      Thanks for sharing! That’s good to know.

  8. #18 by Cheryl on April 3, 2013 - 4:44 am

    So how much are the fees on the Chase checking account?

    • #19 by Leigh on April 3, 2013 - 8:15 am

      To avoid the monthly fee, I need to do one or more of the following:

      1. Receive a direct deposit of $500 or more in the checking account.
      2. Have a daily balance of $5,000 or more across your Chase checking, savings, and other accounts.
      3. Have a daily balance of $1,500 or more in the checking account.

      I chose to deposit $1,500 and leave it there until I close the account.

  1. March 2013 net worth update (+3.0%) | Leigh's Financial Journey
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  3. April 2013 net worth update (+2.0%) | Leigh's Financial Journey
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  5. July 2013 net worth update (+9.4%) | Leigh's Financial Journey
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