These 2 banks are now offering a $2,000 bonus when you sign up for their checking accounts. Should you bite?

Flashy bank account sign-up bonuses are becoming harder to ignore. For example, Citi with their Citi Priority account and Chase with their Chase Private Client account are now offering $2,000 for rolling over your cash (details below). And they’re not the only ones paying high bonuses these days.

Experts say that while sign-up bonuses are certainly worth considering, you should also look into whether you may be able to earn bigger rewards over the longer term with something like a high-yield savings account. Indeed, many of these accounts are now paying upward of 4% guaranteed, which is more than they have in about 15 years. You can see the highest savings account rates you may get now here. Below we’ll help you figure out whether the high bonus is the right option for you.

How do you choose between the high initial reward or the longer term high yield? 

The answer isn’t always cut and dry, says Ted Rossman, senior industry analyst at Bankrate. “Consider the amount of the bonus and the specific terms,” Rossman says, adding that there are questions with every bank offering you may need to consider. “Is there a waiting period before the bonus is paid out? How long do you need to keep the funds in the account before withdrawing them?”

Note too that depending on the offer, most banks require various levels of activity or steps before receiving a cash reward: these might include setting up direct deposit, making a certain number of debit card transactions each month, or keeping your funds with that bank for a set period of time, to name a few. Ask yourself: Can I meet these requirements? You also want to look at what an account pays in interest and what that may amount to, over the longer term, as compared to a big bonus with potentially a lower interest rate; do the math.

One big potential hurdle is that you typically have to be financially equipped to qualify for those big bonuses. A huge $5,000 offer from Chase for opening a high-yield savings account seems great at first glance, but you need at least $1 million to qualify for that reward. And although you won’t need seven figures to qualify for the $2,000 sign-up bonus that comes with that Chase Private Client checking account, not everyone has the $250,000 minimum account threshold required to get in on the action, or the $300,000 or more that’s required for that Citi Priority account. (You can find details on the other requirements for both the Chase and Citi accounts here and here.)

Those high-dollar requirements may knock you out of the running for the bigger bonuses. But there are also a slate of other bank account bonuses that are more modest and easier to qualify for. Take SoFi, for example. Opening a savings account with this online bank earns a $250 bonus after you’ve moved over $5,000 in direct deposits during a 25-day evaluation period. While that may not be nearly as flashy as some of the larger bonuses out there, it can add up. Yes, that is only a one-time bonus, but add that to a normal 3.75% APY that comes with a typical high-yield account and the rewards could add up. (You can see the highest savings account rates you may get now here.)

 “Another way to look at it is that your $250 bonus was more than the interest you earned,” Rossman says, adding that “even after five years, you’d have more earnings in [an] account yielding 3.75% with a $250 introductory bonus than you would if you earned 4.5% for five years without an introductory bonus.” Another bank with a decent signup bonus now is Huntington Platinum Perks Checking, which has a $600 bonus for depositing $25,000 in a new Huntington checking account within 90 days.

Ben Reid, general manager at M1 Spend, says that although earning a few hundred dollars will almost always beat your interest earnings over the short term, there are additional considerations. “Finding a bank partner that makes your life easier and earns a competitive interest rate should be top-of-mind when creating your wealth-building plan,” Reid says. (You can see the highest savings account rates you may get now here.)

If you opt for the high APY approach

If you’ve weighed the above considerations, and it’s high rates you’re after, these high-yield savings accounts and checking-account combination deals can bring in an APY that’s more than 15x the industry average of 0.33%, according to the FDIC. (Check out the full list here).

• Varo Savings Account: 5.00% APY
  • Set up electronic deposits for your paycheck, pension or government benefits from your employer or government agency totaling $1,000 and ending the month with a positive balance in both a Varo Bank Account and Savings Account. Balances that don’t meet the requirements and additional balances over $5,000 will earn 3% APY. 
• Centier Bank, Connect Savings: 5.00% APY
  • Link your checking and savings account and Centier Bank will reward your efforts with a premium savings rate. Just be sure to make the minimum deposits and follow the steps in the fine print. 
• MySavingsDirect MySavings Account: 4.35% APY
  • The rate offered by MySavingsDirect remains one of the best in the high-yield savings account market. Just fill out your online application and get started.

MaxMyInterest CEO Gary Zimmerman adds that any “bank that’s offering the best rate today may not offer the best rate three months from now,” and that “it pays to shop around, not just once, but on an ongoing basis, to make sure you’re always earning the highest yield.” (You can see the highest savings account rates you may get now here.)

Calculate the fees

Whether you opt for a high bonus, a high APY, or somewhere in the middle, fees can often peck away at those potential gains. Although down 11% in the past year, the average checking account overdraft fee was still $29.80 at the end of 2022, according to Bankrate’s latest checking account and ATM fee study. Other levies that can take away from any interest gains? Out-of-network ATM transaction fees averaged at $4.66, their highest since 2019; and the average non-customer fee hit a record high of $3.14 per transaction at the time of the report. 

That said, you should do your due diligence to see what fees are associated with enrolling in any bank account, Reid says. “You should assess all fees associated with the account and also estimate the amount of interest that will accrue over time,” he says.