Incentives for Starting a Bank Account

Written by vicki a. benge
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Incentives for Starting a Bank Account
A simple savings account offers a secure way to save for the future. (Comstock/Comstock/Getty Images)

Different banks offer new customers various incentives for starting a bank account, from free checks to cash upfront for opening a new current account. Standard passbook savings and money market accounts are subject to incentives also, including introductory interest rates above the market average, small initial deposits and no limits on withdrawals. The substance for starting any new bank account is in the fine print. Incentives may come with hidden requirements.

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Free Cash

For decades, the larger banks have offered new customers something free upfront to open a new account. The gift may be something as simple as an alarm clock or a toaster. In contemporary times, more and more banks use a cash incentive to attract new customers. A £65 cash bonus is a common incentive for opening new accounts. Often banks do this in an effort to attract longtime customers who purchase other products they offer. However, according to MSN Money, some banks that offer free cash for opening an account quickly make that money back plus much more through requiring the customer to abide by restrictions, which permits the bank to charge ATM fees or something similar.

Free Checking

A common incentive for enticing customers to open a new current account is what the bank calls "free checking," which usually translates to no monthly minimum average balance required. Free current accounts are directed toward potential customers who write checks for monthly bills and cover day-to-day purchases with a debit card and cash. This incentive is used to attract new customers that are likely to use additional bank services, such as opening a savings account, investing in a certificate of deposit or applying for a loan.

Teaser Interest Rates

What the banking industry calls a teaser interest rate is utilised to draw new customers into opening some type of new savings account -- passbook savings, money market or CD. A teaser rate is generally significantly higher than the average rate of the bank's competitors on similar products. However, a teaser rate usually lasts for a short time; six months is common. After the initial rate period has passed, the bank may lower the interest rate below the current average to recoup the funds.

Security and Convenience

Two legitimate incentives for starting a bank account, regardless of which institution the new customer may choose, are convenience and security. A current account with debit card services is by far much safer than packing around a pocket full of cash. A current account and savings account within the same bank usually permit the customer to transfer funds from one account to another, enhancing security and providing convenient quick access to personal funds. Checks are convenient for paying monthly bills and balances insured by the Federal Insurance Deposit Corporation up to certain limits.

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