Bank and App Sign-up Bonuses: How They Work and How to Avoid the Gotchas

Many banks, investing apps, cash-back sites and delivery services will pay you to become a customer. These sign-up bonuses range from a few dollars in app credit to several hundred dollars for opening a checking account. They're real money, but they come with rules, and missing one of them is the most common way people lose a bonus.

There are two common kinds:

• Public promotions, which any new customer can get by signing up during the offer.
• Referral bonuses, where an existing customer shares a referral code or link. When you join with it, the company pays you a bonus, and usually rewards the person who referred you too.

Either way, the company is paying for a new customer instead of spending the money on advertising. The bonus is paid once you meet the requirements.

Read the terms on the company's own site before you sign up. The most common requirements are:

1. Open the account with the code or link. Adding a code later often doesn't count.
2. A first deposit or purchase, sometimes with a minimum amount.
3. Direct deposit. Many bank bonuses need a paycheck or other "direct deposit" of a set amount within a set time. What counts as direct deposit varies by bank.
4. Keep the money there. Some bonuses require keeping a balance for 60 to 90 days.
5. A deadline. Requirements usually have to be met within 30 to 90 days of opening.

• Using the code too late. Enter the code or use the link when you open the account, not afterwards.
• Missing the fine print on direct deposits. Transfers from another bank you own may not count.
• Closing the account too soon. Some banks take the bonus back, or charge a fee, if you close the account within a few months.
• Monthly fees. Check whether the account has a monthly fee and how to avoid it (often a minimum balance or a direct deposit).
• Not being eligible. Many bonuses exclude people who had an account with the company recently.

Yes, when you sign up on the company's own website or app. A referral code only tells the company who referred you. You never share your login or account details with the person whose code you use, or with us. For banks, check the account is FDIC-insured (or NCUA-insured for credit unions); for brokerages, look for SIPC membership.

Opening a checking or savings account usually doesn't involve a hard credit check, though some banks look at your banking history (through a service such as ChexSystems), and opening many accounts in a short time can lead to denials. Credit card sign-up bonuses do involve a credit application, which can affect your credit score.

Often, yes. Bank bonuses are commonly reported as interest income, and some other bonuses as miscellaneous income; the company may send you a tax form. Bonuses that are really a discount on something you buy are often treated differently. Rules depend on your situation, so check the program's terms or ask a tax professional.

• Do one or two at a time, so deadlines are easy to track.
• Start with programs you'd actually use: a free checking account, a brokerage you'd invest with anyway, or a delivery app you already order from.
• Check what other people say. Each program page on ilove.deals shows how many people say the code worked.

Browse current offers: referral codes and sign-up bonuses.