In 2020, I made $5,000 signing up for bank bonuses without leaving my couch! I love free money! If I can do it, you can too…
Back in the 70s, banks used to offer you a brand-new toaster when you opened a new checking account at their company.
Times are a little different now, and, well, everyone already has a toaster.
In the age of digitalization, almost all financial transactions are done online and mobile banking is ubiquitous. To attract new customers, many banks will simply offer you cash when you open an account with them when you meet specific requirements (more on that later).
So, if you are looking to make easy money with no risk, then bank account churning is for you.
What are Bank Account Bonuses?
Bank Account bonuses are used as an incentive to attract new customers by offering a monetary bonus and are usually between $50 and $200 when a new account owner meets specified terms and conditions. The terms and conditions can be as basic as having 2 direct deposits of $500 or more or can be a little more complicated.
Why do companies offer bank bonuses?
Have you ever heard the term sticky customer? A sticky customer is someone who is unlikely to change service providers because put simply, it’s too cumbersome for them to leave.
How long have you had your main bank account? I’ve had Chase since 2011. Therefore, this technically makes me a sticky customer, yet I often wonder, “Are there other banks offering better services?” Probably. But is it easy to close your bank, and update all your linked accounts to the new bank for the average customer?
Definitely not. A huge pain.
In an effort to attract new customers, many banks offer monetary incentives when new customers meet the relatively easy requirements as laid out by the bank. Bank deposits are a very cheap source of funding for banks, so companies can then turn around and lend that money out at much higher rates.
A $200 bonus per customer is a drop in the bucket for them when can then turn around and make a huge profit off of your deposits.
But, BIG DOGS gotta eat too. In 2020, I made $5,000 bank account churning. Here are the points you need to know to get started.
1. Find an Easy Bonus to Start With
One of the easiest bonuses currently around is from Aspiration Bank. All you have to do is open an Aspiration Bank Spend & Save Account and spend $250 on their debit card and you will earn a $50 Dollar Bonus.
This is really easy to earn. I just paid for my groceries one weekend to meet the spending requirement.
Don’t want to do the Aspiration Bank Bonus? Don’t worry you can also check out EveryBankBonus. It’s basically an aggregator of the banks that are offering new customer bonuses.
2. Don’t Sign Up For Too Many Bonuses at Once
Don’t open a bunch of bank accounts and hope you’ll remember to meet all requirements. Start with 1 or 2 accounts with minimal requirements and read the fine print carefully. As you become more experienced you’ll learn to be able to churn multiple bank accounts at once.
When I first started, I only did about 10 total bonuses during my first year. As of May 2021, I currently have 10 accounts open right now, but I’ve been doing this for 3 years now.
Many of the fintech companies such as SoFi, Chime, or One Finance often offer referral bonuses. If you sign-up for a bonus and know a friend or significant other who might be interested too, this is an easy way to increase your bonuses.
3. Read the Fine Print
To be eligible for the bonus, there’s usually a short list of requirements that need to be met. These requirements are usually listed at the bottom of the page.
Requirements Commonly Include:
Having X number of direct deposits within X days
Spending X amount of money within X days
Having X number of debit card purchases per month
Having X Total Amount of direct deposits
Having X Amount of Money in the account for X days
In general, the requirements aren’t usually too cumbersome. However, as a beginner, start with 1 or 2 accounts at a time.
4. Keep Track of the Details
This will make your life much simpler later on. When you become an experienced bank account churner and have multiple accounts open at the same time, keeping track of the details will be critical.
Simple details such as:
Date Account Opened
Date Requirement Met
Date Bonus Posted
Date Account Closed
Here is a downloadable Excel Churning Spreadsheet that I actually use:
Now, that’s great Adam. But, I still have a bunch of unanswered questions….
Questions Before Starting Bank Bonus Churning
How do I know the bank I opened an account at is a legit bank?
The FDIC Website lists all the banks that are actually FDIC insured.
P.S. Many of the new fintech companies out there aren’t actually banks themselves and only partner with an FDIC-insured bank. So don’t get confused by that.
Should this be the case, be sure to check the FDIC site for the partner bank. The partner bank is usually listed at the bottom of the website. I recently wrote a piece on a new Fintech firm, HMBradley, where I discuss this topic.
This seems like a lot of work, is bank account churning work my time?
Last year, my wife and I opened (and closed) 21 bank accounts to make about $5000 in income for 15 hours of work (15.75 hrs. to be exact). That’s roughly $317 per hour or $238 per bank bonus. Each bank account will probably take 45 minutes total (opening, closing, setting up direct deposit, and occasional customer service call).
So, Yes. Bank Account Churning is worth your time.
Does Venmo Count As A Direct Deposit?
Unfortunately, Venmo doesn’t count as a Direct Deposit. I wish it did, that would make things alot easier. Using Venmo is a P2P (Peer to Peer) transaction.
Can I Do Bank Account Churning Without Direct Deposit?
There are some banks that offer bank bonuses just for depositing cash and letting it sit for a certain period of time.
But, there are other ways too.
A Fake Direct Deposit
For many people, constantly updating your bank account information at your employer isn’t possible. An alternative is a fake direct deposit. In order to do this, you need to do an ACH Push.
For background, there are 2 types of ACH Transfers
ACH Push: This is what happens when you get paid. Your employer pushes the money into your account
ACH Pull: This is what happens have you have an automatic payment setup. For example, your cell phone company automatically pulls money from your account every month to pay your bill.
How to Fake A Direct Deposit: A Real Example
From: Bank Account A (Chase)
To: Bank Account B (Bank of America) (This the account where you want the bonus to post)
So you PUSH the Money from Chase To Bank of America.
Now, ACH transfers sometimes work and sometimes transfers don’t. It’s more trial and error than anything.
You will also receive a 1099-INT at tax time from the bank. A 1099-INT is sent when you receive $10 or more in interest from a bank or individual.
Don’t worry, the form is very simple and is just a few extra keys into Turbo Tax.
How Long Do I Need To Keep The Account Open?
Most banks don’t require you to keep the bank account open after you are paid the bonus. Also, In many cases, you can even have little to no money in the account after you meet the requirements and still get paid the bonus. Every bank is a little different, so read the fine print to be sure.
How long does it take for a bonus take to post?
Most banks will post the bonus to your account between 45 – 60 days. In general, banks will advertise that it can take up to 90 days to post. Some companies post the bonuses immediately after the requirements are met. I call these instant grat bonuses. A few of my favorite are:
You can also check out everydatapoint.com to see the average number of days it took for a bonus to post (as reported by other users).
The Bottom Line
Bank account churning is an easy side hustle without having to leave the comfort of your house. You can make a decent chunk of change with very little work and no risk.
In fact, the bank bonus subculture is insane! It’s hard to believe banks actually pay you to open accounts. However, as stated earlier they’re making money too. Anyway, who knows who long this game will last – but it’s best to take advantage of it while you can.
Ready to start? Earn your first $50 with this easy bonus from Aspiration!
Founder and author of realworldpersonalfinance.com [RWPF]. A blog dedicated to personal finance for millennials that want its readers to know they can be perfectly imperfect. Over the past 10 years, his net worth went from -$108,000 to $365,000, mainly through debt reduction, living below his means, and navigating the corporate world. There have been mistakes along the way, and he is still learning too. He's here to offer honest opinions and real insight that's based on his own personal experiences.