Many leading banks are trying to lure new customers to open checking accounts by offering them upfront cash incentives. The incentives vary from bank to bank and from state to state, but if you are lucky, you can get up to $200 in cash if you accept the bank’s offer.
Both large and small banks have been struggling to maintain their revenues and profitability since the financial crisis unfolded. With their weak financial health they had to themselves get stricter on who they were offering their products to. Then as the full force of the recession hit the economy, consumers became cautious and stopped shopping around for financial products.
The final blow is coming in the form of regulatory changes like the new credit card legislation, which will put increased restrictions on the banks. All these factors have dried up the revenues for banks and they are having to resort to special offers to find new customers.
Although the deal sounds great, you should be aware of a few things before you happily sign up for a new account. First of all, you should be cautious about the terms and conditions of the new account. There could be charges like ATM fees or you might have to agree to direct deposits, which could counterbalance the incentive that the bank has been offering you. The bank might also ask you to maintain a minimum balance in the account.
Another problem is that you might not even qualify for the incentive. Although the schemes are marketed as if they are for everyone, there is usually some fine print that contains qualification conditions. The bank can use your detailed information to decide whether you will be profitable for them in the long run and only then offer you the benefit.
A good customer profile for a bank is someone who is likely to spend a lot. For example, if you have just got a job, they will be happy to give you an account as you are likely to make lots of purchases in the near future and they can sell their other products like credit cards and investment offers to you.
Once you have carefully looked at the details of the offer and the terms involved, and if the bank is willing to give you the upfront cash, then you can confidently go ahead and grab the incentive that they are offering. Two banks offering these incentives include Chase Bank and Bank of America.