Get Your Free Money – Just Be Aware

Here's a Way To Thank Yourself in 2025

The race to give away deposit bonus money is heating up.

Back in the 1950s and 1960s, the banking industry came up with deposit bonus programs. Back then, you’d get things like a set of knives, glasses, or other dinnerware when you made a significant deposit. Over the years, these programs expanded and found their way into almost every retail business.

Credit card companies have taken this idea to the next level. They offer bonus points, airline miles, and other perks to get you to sign up. The catch? They’re hoping you’ll rack up finance charges that more than cover the cost of those bonuses. Every bonus deal comes with some strings attached, so it’s important to know what you’re getting into.

Some brokerage firms take a different approach. They might give you a bonus in the form of stock in their company. While this might sound appealing, it adds another layer of risk. If the brokerage firm struggles or its stock value drops, your "bonus" could lose its worth.

For short-term savers and investors, it’s usually best to focus on getting the highest real annual percentage rate (APR) you can find for your deposits. Look for rates you’re comfortable locking in. For example, with rates fluctuating right now, locking in a rate like 4.75% for five years might seem attractive if you think rates will drop. However, if rates rise, you’ll be stuck until the account matures, which could leave you wishing you had waited.

For long-term investors, some bonus offers are worth considering, especially if they come with rates as high as 20%. These deals work particularly well for those thinking about a Roth IRA conversion. Why? A Roth conversion can come with a hefty tax bill, but if you can earn a 20% bonus deposited tax-free into your Roth, that’s a huge win. In fact, it can effectively cut the cost of the taxes in half. A 40% tax hit is reduced to just 20% when you factor in the bonus. 

Of course, these long-term bonus plans come with restrictions. Most have a no-touch clause for at least one year, meaning you can’t make any withdrawals during that time. After the first year, you’re usually allowed to withdraw up to 10% annually without penalties. This means it’s possible to access the full 20% bonus within three years, penalty-free.

I personally like these long-term bonus plans for Roth IRAs. They’re a natural fit for long-term goals and can really amplify the benefits of a Roth conversion.

On the other hand, for short-term perks, I don’t mind signing up for a new credit card if the rewards are worth it. For instance, if the bonus points get me a free trip to Hawaii right away, that’s a fair deal in my book.

The key takeaway is this: Always know the terms before jumping into a bonus offer. Whether it’s a credit card, a deposit account, or a long-term investment, understanding the fine print ensures you get the most value out of the deal without unexpected