Compare bonus dollars with forgone yield
| Situation | What to do next |
|---|---|
| Large balance required | Measure interest forgone on the full locked amount. |
| Short easy requirement | Check fees and payout timing. |
| Complex activity rules | Assign value to the chance of missing the bonus. |
Map the bonus rules
Record new-money requirements, deposit deadlines, minimum holding period, activity and payout date.
Translate the bonus into conditions and dates. Record the qualifying deposit, direct-deposit rule, holding period, payout date and any fee that could apply while waiting. Note whether existing customers or transferred balances are excluded before moving cash. Keep proof that every requirement was completed and the date the reward should arrive.
Build a no-bonus baseline
Estimate interest the same balance could earn in the best realistic alternative during qualification and payout.
Compare the bonus plus expected interest with a competing account over the same number of months. Do not annualize a one-time bonus as though it repeats every year.
Build a reliable cost comparison
Include failure cases
Price the outcome if the balance dips, a fee applies or the account closes before the required date.
Check what happens after qualification. A low ongoing APY, required idle balance or early closure charge can reduce the apparent advantage. Keep tax records for both bonus and interest reporting.
Keep these three outcomes separate
Convert the bonus into dollars after every requirement and fee.
A bonus can dominate for a short period while a higher APY wins over longer periods.
Cash tied up to qualify has an opportunity cost.
Primary sources
- FDIC: Deposit account basicsOfficial reference ↗
- IRS Publication 550Official reference ↗
Answers to check before you act
Is a bank bonus the same as APY?
No. A bonus is a conditional one-time payment; APY expresses annualized deposit yield.
Can a bonus be taxable?
Financial institutions may report qualifying bonuses as interest income. Retain tax documents and use current IRS guidance.