Is Churning Checking Accounts Worth It

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How’s it going everybody this is pete the bush today i’m gonna talk about turning bank accounts for cash over here you see several solicitations for opening a bank account and usually they give you several hundred dollars of value or even in cash this first one gives you three hundred fifty dollars but you have to deposit about ten thousand dollars in there and

You have to hold it in there for about three months three hundred fifty dollars is actually pretty good because this translates to about three and a half percent yield however you don’t have to wait a full year you only need to put your money in there for only three months if you put ten thousand dollars in an online savings account you’ll likely only get about a

Hundred thirty dollars instead i have over here a citibank offer one is called city priority and one is called city gold this one is forty thousand thank you points and this one is fifty thousand thank you points however it comes with a pretty hefty requirement of having to keep fifty thousand dollars in there over a three month period now these guys they charge

You about a thirty dollar monthly fee to open these accounts and hold it there if you don’t hold fifty thousand dollars now over three months if you do not have this 50 thousand dollars you have to pay ninety dollars instead of putting your fifty thousand dollars into this checking account instead you take this and put it on a high-yield online savings bank

And you get about a one point three percent apy on that which means every single year you’ll yield about six hundred fifty dollars every single quarters about one hundred sixty-two dollars so this means it’s just better to pay that penalty fee and just keep your fifty thousand dollars on our online high-yield savings account so you just open this thing up and

Let them charge you that thirty dollars every single month so you can think of it as okay i’m gonna take this fifty thousand points but i have to pay ninety dollars for at the end of the three months of course you just close the account and then you walk away with about four hundred dollars of value i want to note that a lot of these checking accounts has hoops


That you have to jump through the city gold checking account requires you to have one bill payment for two consecutive months and also $750 worth of debit card purchases now the debit card purchases instead of putting it into this debit card assume you have a two percent cashback card this would translate to another fifteen dollars of loss if you have to funnel

The $750 through their debit card instead on top of this setting up this bill payment also cost you a little bit of time i’ve done several of these checking account bonus turnings before one being bank of the west and the other being usbank now my experience with these is generally the time it takes to set everything up costs about one to two hours by the time

You’re done with everything in the end is one or two hours worth of your time you also need to put a chunk of money maybe $10,000 or $20,000 into this checking account and in return you get about anywhere between three hundred to five hundred dollars now this hsbc deal was actually pretty good and i actually did not get this myself because i happen to be very very

Busy at the time when these great deals come sometimes you can’t catch them all because maybe you have other things that you have to do putting ten thousand dollars in there and getting three hundred fifty dollars back it’s pretty good this translates to three and a half percent and if you are able to do this every three months it means a fourteen percent gain if

You happen to put your ten thousand dollars in and right when the cutoff happens you take it back out and you find some other use for it if you just take this ten thousand dollars and stick it in the high-yield savings accounts such as discover or such a synchrony bank or goldman sachs bank you would get one point three percent apy now i know this number is not

Going to stay constant and it’s going to increase a little bit over the next few years instead you can invest in something in bonds which does have a little bit of principal risk the one i personally like it’s a california municipal bonds it yields about five point six percent and it’s tax-free so in effect it’s kind of like seven percent or so the graph i have

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With opening these accounts is because you have to go in and open up these accounts and it will cost you anywhere between half an hour to one hour just you know to wait in line in the bank and then get this account opened it is something that is not scalable therefore you cannot just look at this and go oh this is an effective 14% yield so you can’t really stick

Like ten thousand dollars here and then maybe you have two more ten thousand dollar chunks to do this with you just can’t find another bank that has such a good offer so you might have some cash around and you might not be able to deploy at all in this scheme where you keep on opening up checking accounts and collecting the bonus another reason to not turn these

Checking accounts is because it takes time when you open up these accounts it might take anywhere from half an hour to one hour when you close these that counsel also take half an hour to one hour so when you look at this $350 you have to subtract the opportunity cost for that $10,000 if you put it in a high-yield savings account so it’s subtract another $30 from

This so you’re really only gaining $320 on top of this you’re going to be taxed on this at whatever tax rate that you happen to be by the time you’re done jumping through all the hoops satisfying the bill payments setting everything up going into the branch in total it might cost you about two hours so divide this in half each hour might may be net you about $150

You might be able to do a little bit quicker than that but that is general ballpark of what you’re gonna earn now when you look at brand new checking account bonus offers like this you have to ask yourself how much is your time worth outside of your work what i mean by this is if you’re on a salary and you have a certain fixed amount of hours that you go into work

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You can’t actually value your time by the amount that you’re paid in your salary job because you cannot just go oh this year i’m gonna work one hour more and get a certain amount more the way i like to value my time is how much would actually earn outside of my day job so let’s say i’m at a regular job and i want to work one hour more will i earn an incremental

Amount more because i spent this one hour doing more work you also have to think about if you put this incremental one hour worth of work during your salary job maybe you could get a higher bonus maybe not but if you do your work based on gigs maybe you can take on more gigs and then you would get more income so i hope you enjoyed this way of thinking about opening

Brand-new checking accounts just to churn them for the bonus or not basically you think about it as two forks in the road one of them is to spend the time to churn this checking account the other one is to work on whatever job you have that earns you an incremental more amount some people that are not working at all and basically have a lot of free time sure you

Can just go and open these accounts close them all the time you know you’re just spending your time earning this cash back basically don’t forget to give me a like on this video comment down below let me know if your regular checking account bonus turner if you’re interested in supporting this channel check out my audible link down in the video description below

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Is Churning Checking Accounts Worth It By BeatTheBush

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