In today’s competitive banking landscape, many financial institutions are offering cash bonuses to entice new customers to switch over.
But how much money does it take for someone to consider leaving their current bank?
A recent study by GOBankingRates surveyed 1,000 adults and found that a generous sign-up bonus was the top factor in choosing a new bank, even ranking higher than 24/7 customer service, low deposit requirements, and a wide variety of products and services.
Big Bucks or Cheap Change?
The study found that the biggest percentage of respondents, 24%, would only consider switching banks for a sign-up bonus of $1,000 or more. While this type of payout is not uncommon, most people won’t qualify for such a large bonus, even if a bank is offering it.
For example, Citi currently offers bonuses up to $2,000, but to qualify, customers must deposit at least $300,000. Similarly, Chase is offering a $2,000 bonus, but only for private clients depositing $250,000 or more.
On the other hand, the second largest group of respondents, 19%, would switch for a bonus of $100 or less. Banks such as Marcus by Goldman Sachs, Axos Bank, Chase and Bank of America currently have this type of offer available for new customers.
The Middle Ground
The majority of respondents, about 14%, wouldn’t consider switching for less than $500-$1,000, with most falling somewhere in between.
The study found that bonuses in the $200-$300 range are common among both traditional and online banks, without requiring unreasonable qualifying conditions.
Is the Bonus Worth the Switch?
While a cash bonus may seem like a great incentive to switch banks, experts warn that it’s important to consider the potential costs of closing fees and transferring costs, as well as the tax implications of the bonus.
Matthew Coan, owner of the personal finance website Casavvy, suggests that “if you can get lower fees, a higher interest, and a signup bonus, it is an easy financial win for the consumer.” However, he also advises that consumers “do their homework to make sure they’re getting a good offer.”
In conclusion, while a bank bonus can be a great incentive to switch, it’s important to consider all factors before making the move.
It’s essential to evaluate whether the bonus is worth the inconvenience and potential costs, and whether the new account is at least as good as the one you currently have.
