Anyone looking for a little free money this summer should consider cashing in on a banking trend that’s becoming increasingly commonplace. Eager to capture a percentage of the consumers who are idly considering switching banks each year, financial institutions across the country are paying customers hundreds of dollars for their summer bank promotions— all just to open an account with them.
According to the World Retail Banking Report 2013, just 10 percent of bank customers report they’re likely to change their bank within six months. With new business in low supply — but high demand — banks are having to find new and inventive ways to increase their customer base. Their solution? Offer cash-back bank promotions for customers who open a deposit account or similar product.
Why Are Banks Giving Away Free Money?
The thing is, it’s working. Amandio Sena, senior vice president of the consumer banking division of Santander Bank — the largest bank by assets in Massachusetts — told The Boston Globe the bank has experienced a 20 percent increase in checking accounts since introducing a free money incentive when customers open a checking account.
“The product continues to be very popular with our customers,” Sena told GOBankingRates. “They love the flexibility to decide when and how to spend their $20 monthly bonus — or whether to just leave it alone and watch their nest egg grow.”
Household checking and savings accounts increase the assets and total deposits of a bank, building its value as a financial institution and its ability to make investments. More importantly, the fees earned on deposit accounts are a significant source of revenue for any bank; the average checking account comes with over 30 potential fees, according to The Wall Street Journal.
The benefit to the consumer is obvious. The Corporation for Enterprise Development found that 127.5 million Americans — more than 40 percent of the country — are liquid-asset poor. With the Fed keeping interest rates near record lows, a savings account isn’t always enough to make it from paycheck to paycheck. But cash-in-hand could help many consumers cover basic expenses or finally have enough money to start an emergency fund.
Summer Bank Promotions That Are Offering Free Money
GOBankingRates surveyed the 50 biggest banks in the United States based on total deposits, as reported by the FDIC, uncovering a number of institutions offering customers free money for opening an account.
At many of these banks, receiving a wad of cash comes at minimal effort to the consumer; for example, Fifth Third Bank customers receive $200 for enrolling in a direct deposit of $100 or more with a new account — effectively tripling their money. The Huntington National Bank is offering $100 cash-back just for opening an account. BBVA Compass Bank offers a potential reward of $100 for using the institution’s peer-to-peer payment service.
“The Pay People with Popmoney Sweepstakes is a fun way to get more customers to give the service a try and see just how easy making a payment can be,” said Cody Sparks, multichannel sales and promotion director for BBVA Compass.
Below are some of the best bank promotions this summer offering free money; the banks listed aren’t the only institutions doing this, by far. Consumers looking to boost their deposits this summer should check with banks and credit unions in their local markets for more offers.
BBVA Compass Bank: Enter a raffle for the chance to win $100 by sending money through the Pay People with Popmoney®.
BMO Harris Bank: Earn $150 for opening an Everyday Checking account, $200 for opening either a Select Checking or Portfolio Checking account with a qualified direct deposit until Sept. 30, 2014.
Capital One: Make a total of three debit card purchases or Person2Person payments within 45 days of opening a 360 Checking account to earn a $50 bonus.
Chase Bank: Receive a $150 bonus when you open a Total Checking account with a $100 opening deposit and enrollment in direct deposit and $250 when you open a Chase Premier Plus Checking account with $100 and direct deposit enrollment. Deal is available until Oct. 15, 2014.
Citibank: Earn $10 each month through Dec. 31, 2014 by enrolling in the offer by July 31 and performing at least one online bill pay, mobile check deposit or outgoing Popmoney® transfer.
Fifth Third Bank: If you received a postcard offer from Fifth Third Bank, you can get a $150 cash bonus when you open an Essential or eAccess checking account with direct deposit. Get $200 for enrolling with an automatic direct deposit of $100 or more. Get $250 for opening a new Preferred, Enhanced or Established Checking account with $100 direct deposit. Accounts must be opened by Aug. 31, 2014 or by the date on the postcard to qualify.
First Republic Bank: Checking and savings account holders who download the bank’s free Trusteer Rapport online banking protection software receive $25.
KeyBank: Open an eligible KeyBank checking account online, enter offer code ONFT0614 and place at least $1,000 in cumulative direct deposits within 60 days after account opening to receive $150. This offer only applies to new customers who have not had a KeyBank checking account in the last 12 months, and is available until Oct. 3, 2014.
PNC Bank: Open a new PNC Virtual Wallet® to get $100 in cash-back rewards, or a Virtual Wallet with Performance Spend to earn $200 and a Virtual Wallet with Performance Select to earn $300 upon opening. Promotion available until Aug. 29, 2014. Customers must establish a qualifying direct deposit to the account and make at least one payment with PNC Online Bill Pay to receive the bonus.
Santander Bank: Meet a minimum opening deposit requirement, have direct deposits of $1,500 or more into the extra20 Checking account and pay two bills through the Online Banking BillPay tab within the monthly service fee period to be credited $20 to your extra20 Savings account, for up to $240 in one year.
TD Bank: Children enrolled in kindergarten through fifth grade receive $10 toward a new or existing Young Saver account upon reading 10 books this summer before Aug. 31, 2014.
U.S. Bank: Earn $100 in rewards with the S.T.A.R.T. savings program when you pair a Silver, Gold or Platinum Checking account with a Package Money Market Savings account. Depositors also earn a $50 U.S. Bank Rewards Visa® Card when they save $1,000 and receive another $50 Rewards Card if funds are maintained for a year.
Photo credit: stevendepolo