Susan Tompor

Detroit Free Press

Checking accounts aren't typically a trendy topic at backyard barbecues. But banks are building more buzz this summer by offering everything from $100 gift cards for NBA merchandise to $400 cash bonuses for opening new checking accounts.

Throwing money on the table, of course, always gets people talking. But if you don't dig deep into what's required here, that so-called "easy money" could end up taking more cash out of your wallet than you'd expect.

"Banks want to make this account sticky. They want this to be your home base for a long period of time," said Claes Bell, a data analyst for Bankrate.com, who reviewed checking account promotions.

"It's important for people to look at the fine print."

This summer, I spotted cash bonus offers for opening a new checking account in newspaper ads, direct mail pitches sent to my home, and even envelopes that come in the mail stuffed with all sorts of coupons for restaurants and dry cleaners and others.

I found a coupon for a $400 bonus for new customers who open a Chase Premier Plus Checking account and set up direct deposit. Chase said the $400 bonus is part of a test-marketing effort and was sent to a small sampling of individuals.

But here's an offer that some might want to refuse. Why? To avoid a monthly service fee, you must keep an average daily balance of $15,000 or more in checking, savings or other balances. Or you can have automatic payments to your qualifying linked Chase mortgage from your Chase account.

Otherwise, you'd be hit with a $25 monthly service fee.

A survey of promotions in the 10 largest U.S. markets indicated that cash bonuses can range from $50 to $400 for new customers who open a checking account, according to a review by Bankrate.com.

Many times, the offers are made for a limited time, may only be available in specific markets or might be mailed to select consumers.

Banks want your checking account business to be able to build a broader relationship, perhaps by marketing a credit card, brokerage services or a mortgage to you later.

"This is about acquiring customers more than it is about acquiring checking accounts," said Bell, of Bankrate.com.

Some recent promotions:

Fifth Third Bank sent some direct mail promoting a $200 welcome bonus for opening a new Fifth Third Preferred Checking account in the Chicago area and Detroit.

Citibank offered a $400 bonus regarding new checking accounts in markets including New York, San Francisco and Washington, D.C., according to the Bankrate.com survey.

PNC Bank is offering up to $300 in all PNC markets. The bonuses start at the $50 level and apply to a new PNC Virtual Wallet.

Michigan Schools & Government Credit Union is advertising a $100 cash bonus with a new checking account.

A $100 gift card to the NBAStore.com was offered in Dallas and Houston by BBVA Compass, which has operations throughout the Sunbelt, according to Bankrate.com.

Before just opening an account, ask a few questions:

Is there a fee to close the account?

You could face a closing fee, maybe $25 or so, or even lose the entire cash bonus, if you close that account too early.

Chase, for example, notes in its fine print that if the checking account is closed by the customer or Chase within six months after opening, the bank will deduct the bonus amount after closing.

What's the minimum balance required to avoid a monthly service fee?

It doesn't make sense to sign up for a checking account to get a $200 bonus, if you'd end up spending $300 in a year on monthly service fees if you don't maintain the required minimum balance.

A Fifth Third offer noted that its preferred checking has a $25 monthly fee, which is waived when deposit and investment accounts reach a combined total of $100,000 or more at any time during the month.

How often do you need to use a debit card?

You need to make at least 10 purchases with a PNC Bank Visa Debit Card to qualify for the bonus, along with other requirements, to get that bonus money deposited into your account.

Others might require that you make 40 purchases with a debit card within 30 days to get that bonus.

Is bonus cash free money?

Not according to the tax man. The bonus cash is treated as taxable interest income and reported to the Internal Revenue Service on IRS Form 1099-INT.

If you're in a 25% tax bracket, the $100 bonus only adds up to $75. It's even less if your tax bracket is higher.

Do you really want to go through the hassle of closing an old checking account?

No one is required to close an old bank account before opening a new one somewhere else. But most bonus deals require that you sign up for direct deposit with that new account. Maybe you deposit part or all of your paycheck. Or a Social Security check.

And the new account could require a minimum balance to avoid monthly fees.

Will you need to re-do how you pay your bills? Will you need to make changes to get bills automatically paid from the new account, instead of the old one?

"Banks don't make it easy for you to switch your accounts," warned Bell, of Bankrate.com.

Contact Susan Tompor: 313-222-8876 or stompor@freepress.com. Her columns can be found at www.freep.com/susantompor.