Bonus or Savings Rate? Finding the Crossover

The chapter on what a bonus really pays turned a bonus into a return on the money you hold. This chapter asks the next question: what did that money give up by sitting in the bonus account instead of a savings account? The shared terms (bonus, hold period, net bonus, average balance) are defined there. The Research Desk's guide to promotional savings rates covers the other side, a savings rate that comes with conditions.

Where would the money have been without the bonus?

• It is in savings now and an offer asks you to move it. The crossover tells you what moving costs in interest you give up.
• It would have stayed in checking anyway. Then it was earning little, the interest you give up is small, and the cost of the hold is close to zero.
• The deposits are mostly spent each month. Read the section on what counts as money held before anything else.

What is the crossover?

The savings rate at which both choices pay the same is called the tie rate (or crossover). If your savings rate is lower than the tie rate, the bonus pays more. If it is higher, savings pays more.

Over a hold of d days, a balance B in savings at a rate r earns B x r x d / 365 in simple interest. The bonus account pays the bonus plus whatever interest it pays on the balance. Three quantities fall out of that:

• Interest forgone is the savings interest you give up by keeping the money in the bonus account, minus the bonus account's own interest. If the bonus account pays nothing, it is all the savings interest. Economists call this an opportunity cost.
• Net advantage is the bonus minus interest forgone. Positive means the bonus beats leaving the money in savings.
• Tie rate is the savings rate at which net advantage is zero: bonus / balance x 365 / days x 100, plus the bonus account's own rate if it pays one.

The break-even bonus is the same thing from the other side: the smallest bonus that ties at a given savings rate, which equals the interest forgone.

All of this uses simple, non-compounded interest over the hold, the same convention as the previous chapter. It leaves out tax on both sides (see the chapter on taxes), your time (the chapter on hourly value) and the chance of missing a condition.

Savings rates are quoted as APY (annual percentage yield, the yearly rate including compounding). A bonus is not part of any APY (12 CFR Part 1030, Appendix A). So this chapter compares both as dollars earned over the same days.

What does it look like for a hypothetical Bank A?

Bank A pays a $300 bonus. The bonus account pays no interest. The savings account you would otherwise use pays a hypothetical 4.00%. That 4.00% is a placeholder to show the arithmetic. It is not a current rate.

On $10,000 held for 90 days, savings earns $10,000 x 4.00% x 90 / 365 = $98.63. The bonus beats it by $300 - $98.63 = $201.37. The tie rate is $300 / $10,000 x 365 / 90 = 12.17%. At a 4.00% savings rate the bonus pays more by a wide margin; savings would need to pay 12.17% to tie. The break-even bonus at 4.00% is $98.63.

If the bonus account itself paid a hypothetical 0.50% on the balance, it would earn $12.33 over the hold, interest forgone falls to $86.30, net advantage rises to $213.70 and the tie rate rises to 12.67%.

Balance by hold: net advantage at a hypothetical 4.00%

Net advantage of a $300 bonus against savings at a hypothetical 4.00%, bonus account paying nothing, in dollars. Negative means savings pays more.

Balance by hold: the tie rate

The savings rate (percent) at which the same $300 bonus ties with savings. If your savings rate is below the number, the bonus pays more.

A $300 bonus on $25,000 held for 180 days ties with a 2.43% savings rate. At a 4.00% rate savings pays more by $193.15, which is the negative cell in the first table. The same bonus on $2,000 held for 60 days ties only at 91.25%, far above any savings rate. The size of the balance and the length of the hold do almost all the work, and the savings rate decides which side of the line you fall on.

The tools on this site help with the live side. The bonus versus savings guide in our deposit guides runs a similar comparison after tax, and the bank switch ROI calculator handles a savings-to-savings move. This chapter adds the tie rate and the balance-by-hold view and does not replace them.

For a benchmark, the savings rate we track, refreshed with each site build, is 4.27% APY. Put that beside the tie rates in the second table. It is a benchmark and not an offer: the rate you can get depends on the account, and the tie rates above are for the money you keep in the account, not what you deposit.

What counts as money held?

The crossover applies to a balance that would otherwise have been earning a savings rate.

Money that was already parked. If $8,000 would have stayed in a low-rate checking account anyway, the interest forgone is the gap between the savings rate and what checking pays, and the hold costs little. The bonus then looks even better than the tables show.

Money you move out of savings to qualify. This is the table's case. Every day in the bonus account costs the savings interest.

Pay that arrives and is spent. A $7,500 direct deposit total can be met by paychecks that land and leave within days. The average balance in the account is then far below $7,500, and the interest forgone is far below what the table shows for a $7,500 balance. The tie rate is then much higher, which favors the bonus. Use your own average, not the deposit total. The chapter on hourly value prices the hours these deposits take to arrange.

What does one real offer look like, as of October 5, 2026?

Real-offer check, as of October 5, 2026

This is a dated snapshot of one offer, taken from the bank's own page. It is not a recommendation or a ranking. Offers change, so check the bank's page before you act.

Next re-check due November 4, 2026.

The American Express Rewards Checking offer page states a $300 cash bonus for $7,500 or more of qualifying direct deposits that post within 90 days of opening. The page says the bonus may take up to 8 to 12 weeks to pay after the requirements are met. It also says the account must stay open and in good standing until the bonus is delivered, and it gives February 1, 2027 as the last day to open an eligible account. The page states no monthly fees; the account schedule governs. The page also limits who can get the bonus today: it names holders of certain American Express consumer cards and existing American Express savings or CD customers, and it excludes anyone who has or had a Rewards Checking account. These are this offer's terms on this date, and not a pattern for other banks.

The page does not require that $7,500 sit in the account. It asks for deposits, not a held balance. So the average balance is yours, and the table shows three: $1,000, $3,750 and $7,500, which is everything staying in the account. It also shows two holds. One is 90 days. The other is 174 days, which is 90 days plus the 12-week (84-day) payout wait the page describes as a maximum. The 174 days is a worst-case assumption for the arithmetic, not a promise about when the bonus posts. Savings is a hypothetical 4.00%, and the account is assumed to pay no interest.

In this table the bonus pays more than savings at every balance shown, using the assumed 4.00% and an account that pays no interest. That is arithmetic, not a recommendation. It says nothing about tax, the hours it takes, whether you qualify, or the closure condition, which forfeits the bonus if the account is closed before it is awarded. The offer page is the authority, and this check goes out of date when it changes.

If the tie rate is below the rate you can actually get, savings pays more, and skipping the offer is a sound result.

Limits of this guide. This is education, not tax or financial advice. It compares dollars, not risk: a bonus is paid only if every condition is met, while savings interest accrues each day. It uses simple interest and a flat savings rate, so a savings rate that falls during the hold lowers the interest forgone. Only your own records can tell you your balance.

For tax on the savings side, see the Research Desk's guide to tax on savings interest. For a different feature that sometimes comes with a checking account, getting paid earlier, see early direct deposit. The chapters on eligibility, direct deposit and the hold and clawbacks and traps cover what can go wrong.