Why These 2 Big Savings Account Bonuses Aren't Worth Signing Up For

If you're thinking about opening a new savings account or checking account, you might be tempted by some of the splashy new bank sign-up bonuses. Banks are paying cash for new customers who open savings accounts (and checking accounts) in 2024. That's because banks are trying harder to compete for your money -- they need your deposits, and they're willing to pay. 

But not all of these cash sign-up bonuses for bank accounts are actually a great deal. Some exciting-looking bank bonuses come with rules, limits, and a few big problems that can make other savings accounts a much better place for your money. 

Let's look at a few savings account bonuses that might cost you more than they're worth -- and what you should do instead. 

1. Wells Fargo savings account bonus ($525 as of April 2024)

As of April 25, 2024, Wells Fargo is offering a cash sign-up bonus of $525 for new savings account customers. You have to open your new savings account at a Wells Fargo branch, with a special code that Wells Fargo will send to you via email if you sign up. The offer is valid until June 25, 2024. 

$525 sounds like a lot of money, right? What a great deal! But here's the problem: To get that $525 bonus, you must deposit $25,000 into your newly opened savings account. 

Here's why a $525 bonus on $25,000 of savings is not such a sweet deal: You can earn 5% APY (or higher) on the best savings accounts! If you have $25,000 of cash, putting it into a 5% APY savings account for a year would give you $1,250 of interest income. That's more than twice what Wells Fargo is offering with this bonus. 

And other than the $525 cash bonus, your new Wells Fargo savings account won't pay you much interest. As of April 25, 2024, Wells Fargo savings account rates for my home ZIP code were paying yields as low as 0.01% APY. Even if you choose a higher-yielding Wells Fargo Platinum Savings account, you'd earn just 0.25% to 2.51%, depending on balance. 

You can do better than that. Even a $525 cash bonus doesn't make these low-yield savings accounts a good choice. Just go open one of the best savings accounts or best money market accounts instead. 

2. TD Bank savings account bonus ($200 as of April 25, 2024)

TD Bank is another major bank that is offering a generous sounding bonus to open a new savings account: $200! (Offer is valid through June 30, 2024.) You can choose from two different types of TD Bank savings accounts: TD Simple Savings or TD Signature Savings. 

But here's the catch: To get that $200, you have to deposit $10,000 into your new TD Bank savings account. And even the best rate on a TD Signature Savings account, for a balance of $10,000, is only 2% APY as of April 25, 2024. (TD Simple Savings pays only 0.02% APY -- and that low rate is "simply" not competitive with any of the best savings accounts.) 

Want a higher yield on your savings? You can earn 4.00% (for accounts over $100,000) with a TD Signature Savings account. The best money market accounts and savings accounts can do better than that, for a lower balance.  

Bottom line 

Don't be dazzled by some of these new savings account bonuses, especially from big banks that pay little interest. If you have to deposit $25,000 just to earn a few hundred bucks, it's not a good deal. Instead of paying attention to the cash bonus, pay attention to the actual APY on the savings account.

The best savings accounts and money market accounts don't need to dangle big cash bonuses, because they're paying you 5% APY (or higher) as of April 25, 2024. A high  APY on your savings is like a built-in cash bonus that pays you all year long!