Banks play an important role in managing finances; individuals or corporate clients offer different financial solutions. Still, with the advancement in technology banking sector all made important steps to revamp their old systems and implement new modern solutions; as per a survey, almost more than half of customers prefer transactions over mobile phones.

Mobile phones and fin techs revolutionized the whole concept of banking; fin techs are digital banking solution providers; they perform all the necessary functions through an App, and they are more convenient, easy to understand, and user friendly. Almost half of the banking customers in recent years prefer to use these apps. But bank offers many lucrative services and bonuses to keep and bring back new or old customers. A bank account Bonus is one of them.

Bank Account Bonuses:

Bank account bonuses are offers that a bank present to attract or make its potential customers; it's a win-win situation for both the bank and the customer, the bank gets a new customer, and a customer gets some deposit in the form of a bonus. Still, theirs is a catch; the bank offers the bonus if certain conditions or requirements are fulfilled.

Usually, bonuses on opening a new account are the most common and rewarding in most customers' opinion. However, the requirement or condition must be met to avail of these bonuses.

Bonuses on Checking Accounts:

These bonuses are most common and easy to find, offered by multiple banks and credit unions; their popularity is they are most likely to pay off for the same institutions. To avail of this type of bonus, you need to direct deposit a certain amount in your account or set it up, the amount will remain there for a specific period, and you have to make payments using your debit card.

The requirements mentioned above are the most common to fulfill to get the bonus; however, some banks have fewer conditions than others, but almost all banks offer a checking account bonus on opening a new account. Banks place these requirements or conditions to make a stronger bond with their customers.

By using the bank services a couple of times, customers get used to it, and the ratio of switching an account from one bank to another is low; in this way, the bank builds a healthy relationship with their customers and charges fees against their services.

Cost Behind the Bonuses:

The cost behind these bonuses is evaluated as the fees the bank and other financial institutions take from its customers in the form of service; according to The Wall Street Journal, on average, a bank charges a potential of 30 fees on a single account, 30 may sound a large number but the fees or checkpoints are very negligible. Customers don't feel it when the bank deducts them.

Before opening an account in any bank, do some research, make sure that the account you want to open suits you and serves your purpose well, and also you can meet all the requirements to get the maximum benefit in terms of bonuses and other perks. Read all the details before accepting the offer.

Bonuses on Savings Accounts:

The number of banks offering savings account bonuses is limited, but options are available if anyone wants them. The reason behind it is its initial deposit which is considerably large. Usually, it is required to deposit $10k to $25k to availing the bonuses on saving accounts as the bonus amount is also larger than other accounts.

Although saving accounts brings new assets, individuals who know how to earn more bonuses consider it easy to shift their savings and increase their bonus earnings; it is also why limited banks offer them or discourage these type of bonus.

Are Bonuses worth it?

You may find many options or offers by different banks to open a bonus account with them, but don't fall for any lucrative offers without researching and being aware of the pitfalls. Few worth considering factors before opening such accounts are as under:

Requirements to Qualify:

Always read the conditions or requirements that need to be fulfilled to open a bonus account, especially in a bonus saving account, which requires depositing a large initial amount to open it. Some bonus checking accounts also require direct deposit, which may be a problem for many as many employers don't offer these services to their employees; you have to check before opening such an account. Other requirements include using a debit card for a certain number in a month, which may be challenging for some people.

Consider Interest Rates:

While shortlisting banks that offer bonuses, you can also evaluate it in terms of the interest it offers; if it offers a very thin margin as compared to your other bank, you may consider opening an account on this basis, as it saves you from the trouble of switching bank accounts and also increases the benefits by paying competitive rates and bonuses.

Take into account your Credit Score:

A credit score is crucial for applying for and availing different financial services, but it may get affected when you open or apply for a new bank account; some banks pull credit scores on this act, but it may not affect you in the long term, but it has consequences if you are planning something at the moment, also if you have too many inquiries on your credit reports, it may intensify your credit score in negative.

Fees and Taxable Interest:

Consider fees when you are planning to open a bonus account, the bonus may look attractive, but at the same time, bank service charges are also considerably high, which levels the bonus you get. Other than that, taxable interest is also a factor; on receiving a bonus while opening an account, it comes under the earning on interest category, which is taxable.

Final Thoughts:

Banks offer different bonus accounts to new customers to increase their customer base, the offers are lucrative, but they come with certain requirements and conditions; before opening these types of accounts, one must read all the conditions.

If opening a new account is a hassle, and you are satisfied with your old one, check or compare the offerings on opening a new bonus account; if the difference is very thin, stick with your older account to avoid the hassle.