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Bank Account Churning

A lot of people have heard about credit card churning, where you cycle through a bunch of different credit cards’ sign-up bonuses and make potentially thousands of dollars a year. But today I’m talking about bank account churning.

Normally, savings accounts have ridiculously low interest rates. But right now, with interest rates at historic highs, banks are doing what they can to get people to deposit money. To do this, they’re offering a combination of higher interest rates in high yield savings accounts (HYSAs) and sign-up bonuses for new customers.

I’ve historically always used Ally as my HYSA of choice. They often have the best interest rates around (right now 3.3%) and, in my experience, great customer service. But recently, I’ve seen some ads for sign-up bonuses for savings accounts and decided to take the plunge. Although I’m fairly loyal to Ally, my plan is to move my money to these new accounts for just as long as I need to collect the bonus and then immediately transfer it back to Ally.

For a variety of reasons, personal and rational, I have about $50,000 in my HYSA. That amount gives me the latitude to try out a couple offers at once.

Here are the two offers I’m starting with:

  • Open a Chase Total Checking account, receive a direct deposit, and earn a $300 bonus

  • Open a Chase Savings account, deposit $15,000 within 30 days of opening the account, hold the money in the account for 90 days, and earn a $200 bonus

  • Do both and get an additional $400 bonus, for a total of $900

With $15,000 in my Chase Savings account for 90 days (combined with their abysmal .01% APY), I’m earning an effective APY of 24.01%. That’s way better than any anticipated market return and way better than any savings account return.

  • Deposit $25,000 into a Discover Online Savings Account, hold it there for at least 30 days, and earn a bonus of $200.

Unlike Chase with its .01% APY, Discover offers a competitive 3.3% APY. Between the regular APY and the bonus, my effective APY on this deposit is 12.9%. Again, way better what I’d expect to make on the market and about 4x better than my original HYSA rate.

So between these two offers, I expect to make a guaranteed $1,100 just for parking my money in two new accounts. Sounds like a win to me!

Once my bonus periods are done, I plan to look for new offers I’m eligible for. I’ll keep cycling through until the offers dry up, or I need to spend my money. Right now, Marcus, SoFi, Citi, Bank of America, HSBC, BMO Harris, TD Bank, and Huntington Bank all have solid savings account bonuses. So I’ll try to figure out which one is the best bang for my buck and move to one of those next, assuming they’re still available.

What are your thoughts about bank account churning? Any pitfalls I’m not considering? Any good offers I consider next time around?


Hi, I'm Brigid Friedman

A young lawyer's honest journey to (hopefully) financial independence.

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