Mitchell & Nemitz, PA

Banks regularly compete for new customers by offering cash bonuses, higher interest rates, and other perks. By periodically reviewing your options, you may be able to earn extra money while gaining access to better products and services. Here are some ideas to make banks compete for your business.

Your paycheck is worth something to a bank

Banks want customers who deposit money regularly, which is why many offer sizable cash bonuses for opening a new account and will often provide higher savings rates for direct depositors. To qualify, you may need to set up direct deposit or keep the account open for a specified period. If your paycheck is already being deposited somewhere every two weeks, redirecting it temporarily can sometimes turn an ordinary banking activity into a few hundred dollars in extra income.

Don’t let your savings work for free

A savings account that pays next to nothing has a hidden cost: the interest you could be earning elsewhere. Move some or all of your savings to a bank willing to pay more for it. Your bank benefits from holding your money. Make sure you benefit, too.

One bank doesn’t have to do everything

There is no rule saying all of your financial life has to live under one roof. One bank might have convenient branches and ATMs, another might offer an attractive checking bonus, and a third might have an excellent high-yield savings account. Maintaining more than one banking relationship lets you pick the best features from each institution rather than accepting one bank’s entire package. A second account can also provide a useful backup if your primary account is temporarily inaccessible because of fraud concerns, technical problems, or a lost debit card.

A $300 bonus can come with homework

An eye-catching bonus for opening a new checking or savings account is only worthwhile if you actually qualify for it and avoid unnecessary fees. Before opening an account, check the monthly fees, minimum balance requirements, direct-deposit rules, deadlines, and how long you must keep the account open. Closing an account too quickly could mean forfeiting the bonus or paying an early-closure fee. And remember that bank bonuses may be taxable income, so keep any tax documents the bank sends you.

Loyalty is nice. Leverage is better.

Your relationship with a bank is ultimately a business relationship. The bank benefits from your deposits, transactions, and continued business, so there is no reason you should feel obligated to stay when a competitor offers significantly more value. So look around. Compare bonuses, rates, fees, ATM access, and customer service.

When banks have to compete for your money, you’re in a much better position to make your money work for you.