Strategy 65 of 107
Bank account sign-up bonuses, without credit pulls
What it is
Open FDIC-insured checking or savings accounts that pay a bonus for direct deposit or a balance; most do not pull credit.
Steps
- Open FDIC-insured checking or savings accounts that pay a bonus for direct deposit or a balance; most do not pull credit.
- Meet the terms, keep the account open as required, then move on.
- Bonuses are taxable interest; send the after-tax amount to principal.
Repeat: A few times a year.
Measure: Bonuses received after tax (enter as a yearly amount).
Try it in the calculator Enter its amount in "Yearly amount to principal". Add a payoff goal of 5 years to see what is still needed.
Risks
- Fees and early-closure clawbacks.
- Too many accounts at once can flag banking reports; keep records.
Who it fits
Average household, Single, Married couples, Newlyweds, College students, Higher earners
Needs
Any homeowner with a mortgage.
How predictable
Depends on people or program rules (tenants, family, IRS records, lenders)
A worked example (hypothetical, not guaranteed)
Picture a hypothetical household (average household). They owe $300,000 at 6.5% with 30 years left. The required payment is $1,896 a month, and that payment, which comes from income, never changes in this example.
They follow the steps: open FDIC-insured checking or savings accounts that pay a bonus for direct deposit or a balance; most do not pull credit.
Suppose it brings $6,000 once a year on principal. The loan would be paid off in 17 years 11 months instead of 30 years, saving about $173,949 in interest. To finish in five years, they would still need about $3,488 a month more from other strategies. That is why the five-year sequences stack several at once.
The amount above is chosen only to show the arithmetic. It is not an estimate of what this strategy will produce for anyone. Put real numbers from the fact finder into the calculator.
Sources and more information
- IRS Topic 403: Interest received irs.gov
- FDIC: Your insured deposits fdic.gov
Where to get help
Related strategies
- 64. Selling another property? Carry the note and route its payments to principal
- 63. Business owners: pay your children for real work
- 62. Self-employed: take the home office deduction and send the tax saved to principal
- 61. Merge households: a parent sells, moves in and shares the costs
- 69. Rent the whole house out and live somewhere free or cheaper
- 70. Move into the accessory unit and rent the main house