What a Bank Account Bonus Really Pays

The Research Desk's guide to promotional savings rates covers the rate-teaser side of this subject, so this chapter does not repeat it. Credit card welcome offers, transfer bonuses, referral payments and wage bonuses are out of scope. This guide is about cash bonuses on bank checking and savings accounts.

What are you trying to find out?

• You saw an offer and want to know what it really pays. Jump to the worked cases. You will leave with one percentage you can compare against anything else you could do with the money.
• You are comparing two offers of different sizes. The bonus amount alone cannot rank them. A $400 offer that needs $10,000 sitting in the account can return less than a $150 offer that needs $1,000.
• You did a bonus before and the payoff felt smaller than advertised. Fees, a longer hold than you planned and a balance larger than you expected are the usual reasons, and each one shows up in the arithmetic below.

What is a bank bonus, in terms you can compute with?

An offer is easier to judge once its parts have names. These terms are used in every chapter of this guide.

A federal rule for bank deposit accounts, Regulation DD, treats any gift or payment worth more than $10 for opening an account, keeping it or adding money as a "bonus." A bank that offers one must tell you the amount, when you will get it, and any balance or time conditions. An ad that states a bonus must also state the account's APY (annual percentage yield, the yearly rate on a deposit including compounding), the time requirement, the minimum balance and when the bonus is paid. These rules cover banks. Credit unions follow a similar rule from the National Credit Union Administration, which this guide does not cover. Citations: 12 CFR 1030.2(c), 1030.4(b)(7) and 1030.8(d).

The rule that matters most for arithmetic is in the definition of APY: it reflects only interest and does not include the value of a bonus (12 CFR Part 1030, Appendix A). A bonus is never part of an advertised yield. When this chapter scales a bonus to a year, it produces a comparison figure of its own, and that figure is not an APY.

How do you turn a bonus into a return?

A bonus is a reward for tying up money, so the natural question is: what did the tied-up money earn? Three steps answer it.

1. Net bonus equals the bonus minus the fees you pay during the hold.
2. Return over the hold equals net bonus divided by the average balance you keep in the account.
3. Annualized return equals the return over the hold, times 365, divided by the hold in days.

In words: net bonus, divided by average balance, times 365, divided by hold days, then times 100 to get a percent. It is a simple yearly scale-up with no compounding.

Two choices in that formula deserve a plain explanation.

The balance is the money you tie up, not the money the bank asks you to move. Suppose an offer asks for $1,000 of direct deposits and you deposit your pay, spend most of it and keep $400 in the account on an average day. Your average balance is $400, and that is the denominator, because that is what the bonus is paying you for. If you also keep a cushion in the account to avoid a fee or an overdraft, that cushion counts too. The rule is simply: what stays in the account that would otherwise be somewhere else.

The hold is as long as the account has to stay open, not only the deposit window. An offer that asks for deposits within 90 days of opening and then pays the bonus weeks later, with the account required to stay open until the payment, ties you up for the longer period. Using the shorter number flatters the return. The chapter on direct deposit thresholds and the hold covers how to read the timing.

The calculator above computes net bonus after an estimated tax rate and fees. Set its tax rate to zero and its net bonus equals the net bonus in this chapter: $300 with a $5 monthly fee over 3 months nets $285 either way. It stops there, though. It does not divide by the money you hold, and its own disclaimer says it omits the minimum-balance cost and lost interest. This chapter and the next supply that missing piece.

What does the arithmetic look like for a hypothetical Bank A?

All three cases below use a made-up "Bank A". The figures are round numbers chosen to show the mechanics. They are not any real bank's offer.

Case 1: a small bonus on a small balance

Bank A pays $200 if you keep an average of $2,000 in a new account for 90 days. The net bonus is $200 and the return over the hold is $200 / $2,000 = 10%. Scaled to a year it is 10% x 365 / 90 = 40.56%.

Case 2: the same bonus on a large balance

Now Bank A's same $200 sits against an average of $20,000 for the same 90 days. The return over the hold is $200 / $20,000 = 1%, and annualized it is 4.06%. The bonus did not change. The balance multiplied by ten and the percent return fell to a tenth.

Bigger balance, smaller return. A bonus rewards tying up money at a rate that falls as the balance rises, so a headline bonus without the balance beside it tells you almost nothing about the return.

Case 3: a $10 monthly fee

Bank A pays $150 for keeping an average of $3,000 for 150 days, and charges $10 a month for 5 months that you cannot avoid. The fees total $50, a third of the bonus ($50 / $150 = 33.3%). The net bonus is $150 minus $50 = $100. The return over the hold is $100 / $3,000 = 3.33% and annualized it is 8.11%. Without the fee the same offer returns 5% over the hold and 12.17% annualized.

Regulation DD requires a bank to disclose the fees it may charge and the conditions for charging them (12 CFR 1030.4(b)(4)), and a bank may not call an account "free" or "no cost" if a maintenance or activity fee may be charged (12 CFR 1030.8(a)(2)). A bonus on a "free" account that carries a conditional fee is a normal arrangement, which is why the fee schedule goes in the arithmetic. A fee that a requirement waives costs nothing while you meet it and a lot when you do not. The chapter on clawbacks, closures and traps covers fee traps. A clawback is when a bank takes a bonus back after paying it.

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

Hypothetical cases show the mechanics. Here is the same arithmetic on one real published offer.

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 Chase Total Checking offer page states these terms:

• Bonus: $400 for new customers.
• Requirement: $1,000 or more in direct deposits within 90 days of enrolling in the offer.
• Payout: within 15 days after the requirements are met, with the account open and unrestricted at payout.
• Monthly fee: $15, waived by any one of several conditions: $500 or more in qualifying electronic deposits, a $1,500 daily beginning balance, a $5,000 average beginning-day balance, or a linked qualifying checking account.
• Offer end date: January 27, 2027.

These are this offer's terms on this date, and not a pattern for other banks.

The page does not require a held balance. It asks for $1,000 of deposits, not $1,000 left in the account. So the "money tied up" is your choice, and the return depends on how much you leave in. The table assumes three average balances and two fee cases. The fee case charges $15 in each of three monthly cycles, $45 in total. That is an assumption to show the arithmetic, not a statement of how the bank bills, and a waiver condition removes it.

A very high percentage on a small balance says little. The dollars are $400 at most.

Two things stand out. First, a bonus that looks large on a $1,000 deposit requirement can show a very high annualized percentage, but a percentage that large on a few days of small money says little about whether the account is worth your effort. Second, the fee changes the dollars more than the percentage: $45 is 11.25% of the $400. Whether the fee applies to you depends on whether you meet one of the waiver conditions, which are the bank's terms and can change.

This check leaves out tax on the bonus (see the chapter on taxes), your time (the chapter on hourly value), whether you qualify (the chapter on eligibility), exact timing, and what the same money would earn elsewhere (the chapter on bonus versus savings). The offer page is the authority, and this check will be out of date once it changes.

What does this return leave out?

The return here is a pre-tax, pre-time figure on money that you would otherwise leave somewhere else. Four things can change the answer.

• Tax. A cash bonus is generally taxable income. The chapter on taxes shows the after-tax value.
• What the money would have earned. The money you tie up could earn interest in a savings account instead. The chapter on bonus versus savings builds that comparison, including the savings rate at which the bonus and the savings account tie.
• Your time. The hours spent applying, funding, moving a deposit and tracking are a cost. The chapter on hourly value prices them.
• Eligibility and the risk of missing a step. A bonus you do not qualify for returns nothing, and a missed condition can zero it out. The chapters on eligibility, direct deposit and the hold and clawbacks and traps cover both.

How do you check an offer in five minutes?

1. Find the bonus and the requirement. Write the amount, the deposit total or balance, and the window.
2. Find the longest period the account must stay open. Include the payout wait.
3. List every fee that could apply in that period and whether a condition waives it.
4. Decide the balance you will actually keep. Use an honest average, including any cushion.
5. Compute net bonus, divided by average balance, times 365, divided by hold days.
6. Compare the figure with what the same money earns elsewhere, then take off tax and time.

If the result is lower than the alternatives, skipping the offer is a sound decision. Many offers do not clear that bar for many people, and passing on one is a result, not a failure.

Limits of this guide. This is education, not tax or financial advice. The tables use made-up round numbers and one dated offer, and they show the arithmetic, not what any bank will pay you. Credit union rules were not covered.

For the tax side of this subject, see the Research Desk's guide to tax on savings interest. The what can go wrong when you switch banks guide covers the account-opening and funds-availability side.