Get Free Money from Banks and Make Them Pay You Hundreds

Here’s a quick update on my $10,000 resolution: yesterday I made $270 to tuck away, bringing the total income needed into the four figures! I earned $20 being part of a research study done over Zoom, which took roughly an hour to complete with the researcher. The other $250 took much less time and with a much higher payout. Specifically, thanks to being able to get free money from banks.

“Free money from banks”. Not a string of words you expect to hear, especially when you don’t see “it’s impossible to get” preceding it. But it’s true! Several banks will offer you a bonus if you both open an account with them and complete one or two other requirements; these are either “keep at least $### in your account” or “get paid at least $### and have it deposited into your account”. If you have more than that amount in an emergency fund, the former is calling your name. Otherwise if you make at least $500 a month you can go for the latter; if you’ve got a high-paying job then the free money goes up from there.

Anyone really into finances you might’ve heard this referenced as bank account churning. I love that “churning” has become the de facto word for describing this. Much like ye olde ancestors would churn cream to make butter, we’re now churning our hard-earned cash into MORE cash! I had to make the connection to butter after falling down a Wikipedia rabbit hole and discovering the existence of a butter museum in Ireland. Which I now desperately need to visit during post-pandemic travel. Which I’ll pay for with the free money I got from banks.

The Requirements and Results

Normally I’m pretty leery of big corporate banks offering a bonus whatever, thanks to many a warning about their fine print T&C that could make a Fae blush. Now that I run this avocado blog, however, I’m more willing to test out the particulars of financial matters. After tentative experiments with this here are my current hard numbers:

5 – the number of banks that have paid me a bank account bonus

2 – the total amount of hours I’ve spent reading the fine print, opening accounts, and hitting the requirements

My consensus is: this is seriously easy money, as long as you’re able to take advantage of it. High earners can do this in their sleep, especially with a hefty savings account to boot. Those that are scraping by may still be able to get free money from banks, but only if (in most cases) their paychecks come with a direct deposit option that’s easily changed. Those paid with physical checks or with cash have much narrower choices for bank account churning, if there is a choice at all. I couldn’t have done this at my last job as changing where my deposit went involved paperwork, 8-10 business days, and other general hassles.

If you can take advantage, however, it can become a very lucrative path to extra income with very little work involved. Churning has more than one meaning in the financial world, but here it’s about earning a profit by opening a bank account or credit card.

Ever hear an offer like “hey, sign up with us and get FREE POINTS/MILES/CASHBACK aslongasyoualsodothesethingsinaspecifiedamountoftime”? Churning is about taking them up on that offer. Well, taking them all up on that offer.

Yep, Free Money from More than One Bank

I had first heard of churning as it relates to credit cards. Credit card churning was a funky world of glittery accounts and perks I wanted to grab at, at least until I found out what it takes to earn said perks. Credit card companies dangle these offers with the goal of getting you to spend, i.e. “spend $3,000 in 3 months on this card”. That set amount of money you generally varies between $1,000 and $4,000 over 90 day periods. Without my rent my regular monthly spending is in the $600 range, so any churning I’d do would be pretty limited to the lower end. I thought churning just wasn’t in the cards for me UNTIL BANK ACCOUNTS MADE THEMSELVES KNOWN.

For bank account bonuses, the rules are different, sending my frugal heart into joyous ecstasies. Instead of requiring you to spend, earning bank account bonuses (most of them, at least) requires you to save. Bank account churning cares much more about you doing two things with their accounts: use the debit card (no specific amounts needed, just that you’re using it a certain number of times) and set up a direct deposit. Plus, it’s cold hard cash instead of branded “points”. We love liquidity with our assets, after all.

Obviously the more bank accounts you open, the more money you earn. If you’re only trying for one reward it’s easy to start. My first churn was with Cambridge Savings Bank who ran a $400 promo in spring of 2020. (They’ve been great!) I got hooked on it and even busted out a SPREADSHEET to keep track on more of it!

In all its lovely glory

If you want to actually plan this out, you’re going to need to figure out a way to keep track of it all. I threw together a spreadsheet to tell me when I’ve opened each bank account and what steps I need to take for the free money from said banks.

Notice there’s also a column for waiving the monthly fees, because these are banks that are looking to squeeze everything they can from you. Said monthly fees aren’t that much – maybe $10? – but letting them charge you a monthly fee easily eats into whatever free money you accrue. Banks offer this because they’re assuming the average account opener will roll over and accept the slow leeching year over year. It gives me more than a whiff of predatory behavior and it’s why I’m vigilant about keeping my money for myself.

Other requirements bank put on you include keeping the bank account open for a set amount of time. They don’t want people going in to open an account, earn the bonus, and immediately close the account. If you go this route, you’ll have to keep the account(s) open for quite some time. I plan on keeping mine open for at least a year before closing the ones I don’t want.

Again, the most lucrative bonuses (paying $300-$400) are only “easy” to earn if you have a high enough income to match it. Well, that, and being able to change your direct deposit information in between paydays. In my case, what’s cool about being part of a software company is how everything else is high-tech… including our payroll portal, which makes it easy-peasy to change where you want it to go.

Lessons Learned in Getting Free Money from Banks

There are plenty of great resources out there that give you a roundup of the banks offering these bonuses. My roundup of choice is via the genius behind Doctor of Credit, with a page that updates every month on every little bank account bonus offer they can find. It’s now routine to peruse the page each month and see what new accounts I can open. This can be determined via other factors outside of the strictly financial, mainly including what state you live in.

The main issue I need to keep in mind is how taxes come into play. These bank account bonuses are treated in the US tax code as extra income when it comes time to file. Luckily we all know this won’t cause problems with our tax brackets; I’m mostly curious on whether these will mean I’ll end up owing the government something for the first time ever. I’ve only ever gotten tax refunds so we’ll have to see what happens!

This is more of an overview than a hard-hitting instruction guide on how to get free money from banks. If you choose to follow in my footsteps on earning them, here are my top items to keep in mind:

1. The bigger ones require big paychecks or big emergency funds
2. This is easy if your payroll makes it easy to change
3. Remember you’re paying taxes on this cash
4. Credit cards pay you for spending, bank accounts pay you for earning
5. It takes strategy to earn several at a time
6. This is some seriously easy money

I’d love to hear if you’ve tried something like this and your experience with it. Happy churning!

Cover image credit: Nathan Dumlao via Unsplash