I received a coupon code from chase, giving me an extra $300 dollars if I open a checking account. It looks too good to be true so I carefully read the fine print. Please, if you do receive one like this, read the fine print. There are very few banks that do not charge service fee, and chances are you’re signing up for one. Here’s the cost associated with opening a checking account:
1. I need to sign up for direct deposit – cost $0
2. I need to keep the account open for 6 months. At an interest rate of .01% APY, keeping $15,000 means that I’m foregoing $12 of interest every month if I keep it on my savings account at Capital One 360 at 1% APY. Total cost is $60.
3. I need to keep a balance of $15,000 in chase account or have an automatic payment to chase mortgage account, otherwise I will need to pay $25 for service fee. My mortgage is not from chase so that is not an option. Total fee for 6 months is $150.
Rationally, the best way to avoid the fee is to move money from my savings account to checking account. As long as interest rate keep at 1%, I’m better off opening a new bank account and hold on to it for less than 25 months or close it after 6 months.
For customers signing up without $15K, or mortgage from Chase, I will translate this marketing to this “Get $150 as a new Chase checking customer and make sure to close the account after 6 months”
This marketing scheme just didn’t work for me. I’m not a fan of multiple accounts and it is just not worth the hassle.
If you truly want a free savings and checking account, I recommend, Capital One 360. I’ve been a customer since 2006, when it was ING Direct. Capital One eventually acquired them. They lack physical location, but have an awesome interest rate. You can withdraw from any AllPoint ATMs. These are usually ATMs located in the gas station, 7-eleven, grocery stores, restaurants and bars — yes, I mean bars.