How you can make money by moving funds around banks.
A note is in order here: you will not become a millionaire from this, and it does require some work. That being said, you can get a good return on some money and you can say with some slyness “Yeah, I’m stickin’ it to the Man”
In all seriousness, here’s the game.
1. Find a bank that is offering a signup bonus for opening an account.
2. Deposit required funds.
3. Collect bonus.
4. Close account.
5. Rinse and Repeat.
Ideal Criteria
- Low initial required deposit
- Worthwhile bonus amount
- No or low minimum balance requirement
- No fees
Things to watch out for:
Offers that aren’t worth it.
An example would be an offer to deposit five thousand dollars in a savings account for a twenty-five dollar bonus. This ties up too much money with not enough incentive.
Fees.
Watch out for account minimums, inactivity fees, general account fees, and the ever popular, JustBecauseWeCanAndDontThinkYouWillNotice fee.
Too many hoops to jump through.
An example would be an account that requires direct deposit as well as 10+ debit transactions each month, with two being over a hundred dollars each. This is too much trouble and usually not worth the hassle.
Remember, every fee and penalty incurred on the new account lowers your profit. Also, the longer the money sits in the account, the lower your profit. This is because you could have the same funds in a higher interest account, earning more.
This is all well and good in theory, but does it really work in practice?
Personally, I have made around a $1000 in the past year using about $1500 of my own money. Obliging financial institutions have included, ING direct, Bank of America, and E*Trade, among others.
Where do I start?
Try Bankaholic for current offers.
With the current economic environment, you may not find as many options as there used to be, but you never know. All you need is some spare fun money and a little bit of discipline to track your “investments”