Over the past year, the Federal Reserve has worked tirelessly to tame a record-high inflation rate. As a result, the federal funds rate has been raised consistently in 25-to-75 basis-point increments in an effort to get the economy running smoothly once again. The catch: Raising rates raises the cost of borrowing. But for savers and checking account holders, it's not all bad news. Having fewer borrowers means banks look for other ways to reel in new customers, often in the form of higher annual percentage yields (APYs) or lucrative checking account bonuses.
One of the highest checking account bonuses available right now now: Citibank's "New to Citi Checking Cash Bonus Offer."
Citibank’s checking account cash bonus: $2,000
For a limited time, Citibank is offering a cash bonus of $200, $500, $1,000, $1,500, or even $2,000 to new customers who open a Citibank, Citi Priority, Citigold, or Basic Banking checking account between now and Apr. 4, 2023.
To qualify for the bonus, you must:
- Be a new customer (who is at least 18 years of age) and have not owned a Citi checking account in the last 180 days. Your checking account must be opened via phone or online using a residential or home address (not a mailing address) in an eligible location. The offer is valid in most U.S. states and select markets in Florida and Illinois.
- Enroll in the New-to-Citi Checking Cash Bonus Offer on the same day you open your new Checking Account. You can enroll online or by contacting a Citibank representative via telephone.
- Make a qualifying deposit on the 20th day (or 30th day if you opened your account by phone) after you open your account. Citibank will check your balance, which will determine the maximum bonus you can potentially earn. Cash deposits, Citi Global Transfers, Citi debit cards, and transfers between Citibank accounts do not qualify. You must fund your account using enhanced direct deposit, checks, or wire transfers.
- As long as you maintain at least a $10,000 balance every day in your eligible checking account for 60 calendar days starting on the 21st day, you will remain eligible for a bonus. However, if your balance falls below that threshold for even one day during this “maintenance period,” your maximum bonus will change.
- To remain eligible, your checking account must remain open and in good standing from the time it’s opened until you receive your bonus, which should be paid within 30 days of meeting all of the eligibility requirements.
View this interactive chart on Fortune.com
Is it worth opening a Citibank account for the bonus?
Citibank’s new checking account bonus is one of the more lucrative offers on the market at the moment, but it may not be the best fit for every account holder.
According to the most recent Survey of Consumer Finances, Americans keep an average of $41,700 in their transaction accounts (that includes checking, savings, money market, call accounts, and prepaid debit cards). The high minimum deposit requirement to be eligible for the maximum bonus of $2,000 is a staggering $300,000, which is likely out of reach for most consumers.
Another thing to keep in mind: The checking accounts that qualify for this bonus all charge monthly service fees. Granted, these fees can be waived by meeting certain minimum balance requirements, but the lowest requirement is $1,500-plus.
If you have the cash available, this bonus offer could be worth your while. And in the grand scheme of things, Citibank is a larger bank with a vast ATM network, a developed mobile and online banking platform, and a long list of financial products and services for individuals and businesses alike.
However, if you don’t have at least $10,000 to deposit into your account and a minimum of $1,500 in your account each month to qualify for the minimum bonus offer of $200, it likely makes more sense to explore other bonus opportunities with lower deposit and balance requirements, and potentially higher bonuses. A bonus can be a nice short-term boost, but a new account is a long-term commitment and should be considered carefully.
"Every financial institution you do business with is required to collect nonpublic information, including your Social Security number and details about your employment, assets, and income,” says Herman (Tommy) Thompson, Jr., a certified financial planner at Innovated Financial Group, LLC. "Each new account is another opportunity for cybercriminals to gain access to your information. So, you have to ask yourself if a $500 account opening bonus at a new institution is worth the hassle of keeping track of a new account, a new app on your phone, and more of your data floating around in cyberspace."
Other ways to earn more money
Checking account bonuses are offered by some financial institutions (usually for a limited time) to incentivize new customers to open an account. This usually comes in the form of a cash bonus deposited directly into your account after meeting certain minimum balance, direct deposit, or qualifying purchase requirements. But there are other ways to earn money:
- Lock up your funds in a certificate of deposit (CD): A CD is a type of savings account that offers a high fixed interest rate on a lump-sum deposit for a set period of time. The catch: Withdrawing your funds before your CD matures at the end of your term will likely result in hefty fees, so this option may only be worth your while if you know you won't need your funds before then.
- Put your savings in a high-yield savings account: High-yield savings accounts offer a bit more flexibility than a CD and earn higher annual percentage yields (APYs) than traditional savings accounts. Plus, in an high-inflation environment, savings accounts are likely to boast even higher APYs—upwards of 10 times the national average.
- Open a money market account: A money market account is another kind of deposit account that offers the best of both checking and savings account features. These accounts typically offer much higher APYs than checking accounts, but in many cases include some of the same features including check writing, debit card access, and the ability to make withdrawals and deposits via ATM.
The takeaway
A lucrative bonus can help kick-start your checking account and be a nice incentive to open a new account, but it shouldn’t be the sole deciding factor in whether to open a new checking account. Make sure you understand the eligibility requirements for any bonus being offered, rates, and fees before committing to a new account.
