A Guide to Bank Account Churning for Passive Income

Bank Account Churning

Whoever said there’s no such thing as free money obviously never tried bank account churning. Often, with a minimal investment and just a few minutes of time, you can get banks to pay you hundreds of dollars using this simple financial hack.

In this article, I’ll review “bank account churning,” how much money you can make doing it, and how to find the best bank account bonus offers.

What is Bank Account Churning

Bank account churning is the strategy of opening new bank accounts to profit from their sign-up bonuses and promotional offers.

It’s similar to credit card churning, except bank account churning doesn’t have the potential hazard of lowering your credit score. This makes it a comparatively low-risk, high-reward strategy.

Banks need your cash to stay in business. So they’ll incentivize you to park your money with them by offering promotions like sign-up bonuses. These are tools that banks use to compete with one another to encourage people to use them.

A bank’s promotional offer could look something like this: Open a checking account with $1,000 and maintain that balance for two months in exchange for a sign-up bonus of $200!

That’s a guaranteed 20% return on your investment with virtually no risk involved.

The premise is quite simple.

Say you have $1,000 parked in a bank account with low interest rates. It’s doing practically nothing by sitting in that account. In fact, your funds are likely losing value as inflation increases.

So you think to yourself: How can I put these thousand bucks to good use without risking its loss?

This is where bank account churning comes in.

Bank Account Bonus Offers

You can repeat the process with a different bank offering a different sign-up bonus after you receive your payout from the first one.

Even better, your money is still available for withdrawal while you wait if you need it in an emergency, though you’d probably lose out on the bonus. But you weren’t making money in your previous account anyways, so who cares?

So now that you know what bank account churning is. Let’s review how much you can actually make doing it.

How Much Money Can You Make With Bank Account Churning

Like practically all side hustles, how much you can make with bank account churning depends on how aggressively you pursue it.

Most often, bank sign up bonuses will be somewhere in the range of $150 to $500 for meeting a couple of requirements. And, in general, the greater the sign-up bonus, the more extensive those requirements.

Naturally, your goal should be to pursue deals with the largest sign-up bonuses and lowest deposit requirements.

For example, a promotion that offers $500 in exchange for simply opening a checking account and maintaining two month’s direct deposit from your job is a relatively good one.

That’s because the conditions of the offer are minimal, and the return is high.

If you pursue just two promotions like that per year, you will have made yourself $1,000. And, to boot, your only constraint would be which account your money is being deposited into. You can still move it out afterwards.

You don’t need to stop there, however. If you’re very aggressive with your bank account churning side hustle, the sky’s the limit. You can open multiple accounts and pursue multiple sign-up bonuses concurrently. The result could be thousands of dollars in virtually free money each month.

Some Offers Are Much Better Than Others

However, on the other end of the spectrum are sign-up bonuses you’ll want to avoid. These are promotions that either require very high minimum balances or conditions that will tie large sums of your money up for months or years on end.

A real life example of this is an offer that I recently received from a bank in Chicago. The conditions of the offer were to open a savings account with a minimum balance of $15,000 for three months in exchange for $200.

That’s an annualized return of around 5%, and it would tie up a lot of money. At that point, I’d rather look elsewhere.

Simply put, the return on investment was too low.

Especially since I could take that same money and spread it across a couple bank accounts to make even more in bonuses.

When the bonus becomes too low, I’d rather put $15,000 toward a down payment on a new real estate venture or some other investment. Though I suppose it’s much better than leaving it in a bank account earning practically nothing in interest.

So, to sum up, how much money you can make bank account churning depends entirely on your strategy. If you pursue large bonus offers with few conditions, you can end up earning a nice bit of coin.

How To Find Bonus Offers

Here’s how to find the best bank account bonus and sign up offers:

  1. Get online: A simple Google search, something like “bank sign-up bonus offers”, should garner a bevy of results. As of 2020, there were 4,377 FDIC-insured commercial banks in the United States. So there will be no shortage of bank account churning opportunities out there, if only you do a little research.
  1. Look for local offers: Oftentimes, local banks will mail you promotional offers that can be great bank account churning opportunities. But if they aren’t contacting you, check with your local or regional banks and ask them about their promotions. You never know what type of deal you can get. I’ve found that the local offers tend to be the best.
  1. Become a repeat customer: See if banks that you’ve left will try to entice you to return with new bonus offers. Do realize that many banks restrict you from pursuing the same offer multiple times within a certain period of time, so be careful assuming you can do this.

And finally, here’s a quick pro tip: read all of the fine print.

Sometimes the conditions of a bank’s promotion require you to leave your account open for some time even after the bonus funds have been sent to you. Regardless of the details, ensure that you understand the full extent of the bank’s requirements.

Conclusion – An Easy and Lucrative Side Hustle

Bank account churning is a wonderful side “hustle,” if it can really be called that. It’s one of the easiest ways to make significant cash.

And it often only requires a few minutes to get started with.

So churn away and see how much you can make with this simple yet effective strategy.

This website, and any communication stemming from it, while hopefully informative, should not be taken as financial or legal advice. Assume all links are affiliate links. I am an Amazon affiliate.

Jack Duffley

Jack Duffley is a real estate investor and attorney based in Houston, TX.

Recent Posts