Checking Account Grace Period
If you have been following along with my retire early thanks to bank account bonus series, then you know that I love myself some bank bonus offers. They are a great way to supplement credit card earnings. I use them to offset my credit card fees, to cover some travel expenses points can't and, of course, to pad my retirement account. I had a recent offer that had two different options, and I went back and forth on which one to grab for a bit. That was until I looked at the terms a little closer and decided to shoot my shot. I planned on taking advantage of the checking account grace period, and it ended up paying off in spades. Paid off to the tune of $1,500!
My Offer
This was a targeted business checking offer from Huntington Bank. While their standard offer is pretty good, this was even better. As noted above, I had two options to choose from:
- Earn a $750 bonus with a minimum deposit of $5000
- There is a $20 monthly fee unless you have $10,000 in your Huntington accounts
- Must make $5,000 in deposits within 60 days of account opening, and maintain
- Earn a $1500 bonus with a minimum deposit of $20,000
- There is a $40 monthly fee unless you have $50,000 in your Huntington accounts
- Must make the $20,000 in deposits within 30 days, and maintain a $20K plus balance for 60 days after that.
The common thing to focus on here is the monthly fees. The $750 bonus is really good at $5,000, but it would come with a fee for $20 unless I parked $10,000 in account. That is much more approachable than the $50,000 in parked funds required to avoid the $40 fee on the other account. If I looked at this as a $750 bonus for depositing $10,000 it is still an amazing deal. I still went for the $1,500 bonus anyway.
Why I Decided To Go Big
If the requirement for the $1,500 bonus was to deposit $50,000 then I would have taken the $750 offer. The requirement of the offer was only for $20,000 though. This was unique, since bank bonuses usually require at least what it takes to keep the account free. That pesky $40 fee is annoying though. It is something that would drive people away from taking the better option.
How about we assume that there would be $120 in fees taken out for the $1,500 offer. We could simply call it a $1,380 offer for $20,000 in deposits, which sounds pretty tempting to me. So, I decided to take the larger offer.
I deposited $20,200 at account opening. That extra $200 is important here, and something many people mess up on. It is the buffer that I need in case the fees are charged. Not preparing for checking account fees can cost you the entire bonus. Had I deposited only the required $20,000 my account would have dipped under the minimum threshold for the offer. Always give yourself a buffer! Whether that is spending a little bit beyond the minimum spend required on a card or giving a cushion in a bank account bonus deposit, you want to have a buffer built in. Turns out I didn't need it though, and that was the ace up my sleeve.
Checking Account Grace Period
I put the the extra $200 in my deposit just in case they hit me with monthly maintenance fees, but I figured I might not end up paying anything. That is because many banks give a 60 or 90 day grace period for new accounts. They offer this time as a way to build your balances up to the required heights. That is exactly what happened with my Huntington Bank business checking account too. My $1500 bonus posted yesterday and I was never charged a fee. Even while I assumed that this would happen I still planned for the worst case scenario. It is better to have that $200 in there and not need it then to need it and not have it.
I plan on going to my local Huntington Bank branch today to downgrade my business checking account to the free version. Then I will decide on whether to keep it or not long term a few months down the road. I do see a targeted business card credit card offer in my login so I will probably take them up on that first.
Yes, I Realize This Was Not The Better Offer
This section is for all the number crunchers out there. I realize that if I had taken the same approach with the $750 offer it would have given me a better return. That is in terms of the yearly APR. I took the lower offer, in terms of APR, because I am big game hunting over here. I needed the bigger payout to have a shot at my goal for 2025. Plus, decisions on APR return can not be made in a vacuum anyway.
Checking Account Grace Period: ToP Thoughts
If you start kicking the tires on some bank account bonuses remember to avoid immediately dismissing the larger offers. The requirements may be better than you think, even if they have a large monthly fee. It might make sense to even eat a few months of monthly fees to get the bigger score. Just be prepared for it and add some buffer to your accounts if you go this route. You may get rewarded with a bigger payout than you expected thanks to the checking account grace period. Let me know if you have ever made a similar decision over in the ToP Facebook Group.
