Banking is a competitive business. To lure new customers, some banks will pay you hundreds of dollars in a cash bonus to open a new checking or savings account. Show Are these offers smart for consumers? "As the old expression goes, 'There’s no such thing as a free lunch,'" says Daniel M. Yerger, president of MY Wealth Planners in Longmont, Colorado. "Incentives often require minimum deposits of several or tens of thousands of dollars in addition to minimum balance requirements for weeks or months, or the incentive is pulled back or never granted." One key factor to consider is whether you'll get more than you would earn in interest if you leave your funds where they are. "Add up the bonus and interest earned for the required period, and divide (that) by the required balance to get an idea of the percentage rate of return," says David Wattenbarger, president of DRW Financial in Chattanooga, Tennessee. "If it's not meaningfully better than the rate in (your) current account, it may not be worth the effort." The effort involved could include opening the account, depositing funds, setting up new direct deposits and payees for online banking, and remembering your new online banking login and password. What Are Some Rules That Apply to Bank Account Bonuses?To earn a cash bonus when you open an account, you may have to:
Cash incentives are considered a form of interest, so you may owe income tax on the bonus, too. These promotions typically are just for new customers and may be available only for a limited time. Promotions may not be available in all states.
Despite their appeal, new account bonuses may not be worth the effort unless there's more to the offer than just the extra cash. "These offers really only make sense for consumers if the other features of the bank account – service level, locations of branches, interest rates offered – are appealing," Yerger says. "People should say yes if it’s icing on the cake where their banking decision is concerned; but if they’d only open the account for the cash bonus, it’s seldom worth it." Monthly service fees should be a consideration as well. "Signing up for a new account to get a bonus doesn't make sense if there are expenses and fees that erode the value of the bonus," Wattenbarger says. If you find a cash bonus offer that you like, be sure to read the terms and conditions of the account and the offer before you sign up. Deposit Insurance Scheme Singapore dollar deposits of non-bank depositors and monies and deposits denominated in Singapore dollars under the Supplementary Retirement Scheme are insured by the Singapore Deposit Insurance Corporation, for up to S$75,000 in aggregate per depositor per Scheme member by law. Monies and deposits denominated in Singapore dollars under the CPF Investment Scheme and CPF Retirement Sum Scheme are aggregated and separately insured up to S$75,000 for each depositor per Scheme member. Foreign currency deposits, dual currency investments, structured deposits and other investment products are not insured. Foreign Currency DepositsForeign currency deposits are subject to exchange rate fluctuations that may provide opportunities and risks. Earnings on foreign currency deposits would be dependent on the exchanges rates prevalent at the time of their maturity if any conversion takes place. Exchange controls may be applicable from time to time to certain foreign currencies. You should therefore determine whether any foreign currency deposit is suitable for you in the light of your investment objectives, financial means and risk profile. Any pre-termination costs will be deducted from your deposit. What banks give you money when you open an account?Citibank: cash bonuses of $300, $700 or $1,500 for new checking accounts in eligible account packages with an initial minimum deposit of $15,000, $50,000 or $200,000, respectively, and required activities. Cash bonuses of $20 to $2,000 for new savings accounts with an initial minimum deposit of $10,000 to $1 million.
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