Bank New-Money Deposit Offers: Qualifying Funds, Holding Periods, and Costs

Read the new-money definition before moving cash

A promotion may exclude transfers from other accounts at the same institution, money already held under the customer’s name within a lookback period or balances moved between related brands. Some offers require an external transfer initiated from another bank, while others look at the net increase in relationship balances. Read the published terms for household and entity eligibility, account types, geographic restrictions, opening channel and promotion code. “New to this savings account” is not necessarily the same as “new to the bank.”

Ask for the measurement date, whether pending or unsettled transfers count and whether incoming wires, cashier’s checks, payroll deposits or internal sweeps qualify. Do not ask an employee to classify an internal transfer as external money if the written rules exclude it. Keep proof of where the funds originated and when they settled. If the offer is targeted to a specific customer, save the email and screenshot with the required terms rather than relying on a public advertisement that may have different eligibility conditions.

If you already hold $40,000 at Bank A and move $20,000 from its checking to its promotional savings, the offer may count $0 as new relationship money. Moving $20,000 from a separately chartered Bank B could count, but only if the specific promotion permits that source and timing.

Map opening, funding, balance, and payout dates

Write down the account-opening deadline, latest qualifying funding date, minimum required balance, required holding period, payout date and any condition that must remain true until the incentive is paid. A promotion may require a specific “new money” net increase on one date and maintenance of an average or daily threshold afterward. A missed funding deadline can disqualify a deposit even when money eventually arrives. Network processing cutoffs and holidays therefore matter to a supposedly simple account offer.

Do not spend an expected bonus before it appears as an actual credit. If you intend to close the account immediately after qualifying, check for early closure fees and clawback language. Some banks reduce promotional rates after a stated introductory period, while others use balance tiers with different yields on different slices of funds. Read whether promotional APY applies to all qualifying funds, only a capped portion or only for a fixed number of months.

An offer might require $25,000 by November 30 and retention through February 28 for a $250 bonus. Depositing $24,950 misses the stated threshold even though the shortage is only $50. Keep a cushion when the terms require a minimum daily or average balance.

Compare cash incentives with interest and opportunity costs

A fixed cash bonus is not the same as an annualized interest rate. If a bank offers a $300 bonus for keeping $30,000 for 90 days, that is a 1% gain over that period before taxes or fees, not automatically a guaranteed 4% APY. Annualizing a short promotion can be a comparison exercise but risks overstating repeatability because the bonus may be one-time only. Compute the interest you would forgo by leaving the same money at an existing bank and subtract any transfer or maintenance charges.

For example, a hypothetical alternative earning 4% simple annual interest on $30,000 over 90 days would produce about $295.89 before taxes, assuming a 365-day basis and steady balance. A $300 one-time incentive might therefore offer only a small incremental gain if the promotional account itself paid no interest. If both accounts pay interest, include that too. A headline cash amount cannot be evaluated without its funding duration and the lost return on displaced cash.

Suppose two banks pay identical base interest but one offers a $150 incentive after 120 days, with a $12 monthly account fee for four months. The headline difference becomes $102 before taxes and any other charges. A lower minimum qualifying balance can change the percentage comparison.

Account for FDIC insurance and tax reporting

Moving money between deposit accounts at the same FDIC-insured bank generally does not create a new insurance limit. The owner’s balances in the relevant ownership category are aggregated according to FDIC rules. When an offer uses a fintech platform or deposit broker, establish which legal banks actually hold the funds and whether qualifying records support any claimed insurance. A higher promotional return does not increase the statutory coverage amount for a single ownership category.

Tax reporting matters too. Cash bonuses and gifts connected to deposit accounts can be reported under income rules depending on the offer’s nature, and bank interest is generally taxable unless a specific exception applies. The IRS instructs taxpayers to report taxable interest even if no Form 1099-INT is issued. Do not assume a promotion is tax-free simply because the bank labels it “reward,” nor that every reward is necessarily reported the same way. Retain the terms, payout record and tax documents for proper classification.

A customer with $235,000 in individual savings at one bank who adds $30,000 for a bonus could reach $265,000 in the same single-ownership category. Without other qualifying arrangements, $15,000 would exceed the $250,000 illustrative standard limit. The bonus does not insure the excess.

Track qualification and avoid an expensive early exit

Create a one-page timeline listing funding confirmation, daily balance requirements, debit or direct-deposit conditions, rate expiration and bonus payout. Save the final offer terms and any changes communicated by the bank. If the bonus has not arrived by its promised time, ask which requirement the bank believes was missed and request a documented review. Describe the account opening date, actual posted deposits, running balance and promotion code instead of demanding payment without evidence.

Do not close an old account until the replacement deposit clears and ongoing payments have been migrated safely. Maintain the new account through the required holding period only if the economics and risk remain acceptable. A bank may pay a promised bonus but then reduce its savings rate, so continue comparing long-term yield after the introductory period ends. The right promotion is one you qualify for under written terms, that respects your liquidity needs and leaves a genuine after-cost benefit.

If the offer earns $200 but a premature closure triggers a $200 clawback and $25 closure charge, the apparent gain can become a $25 loss before considering taxes or transfers. Confirm the earliest contractually safe exit date in writing.

Editorial Verdict

A “new money” offer is a conditional contract, not a universal invitation to earn free cash by moving balances between accounts. Read how the bank measures genuinely new funds, the funding and holding deadlines, minimum balances, payout terms and clawback provisions. Compare the net bonus plus actual interest against the return you would otherwise earn, bank fees, transfer friction and taxes. Moving balances at one insured bank does not automatically create additional FDIC coverage. Keep a dated evidence file and avoid closing an account merely because a promotional banner says the reward is available; qualification, posting and permitted exit are different steps.

Frequently Asked Questions

Does transferring between two accounts at the same bank count as new money?

Often not, but the answer depends entirely on the promotion’s written definition and lookback terms.

Is a $300 bonus for 90 days the same as a 4% APY?

No. A one-time incentive cannot necessarily be repeated and must be compared with interest, fees and the required balance.

Can I withdraw funds immediately after the bonus appears?

Check the written minimum holding period, clawback conditions and any account closure charges first.

Sources

• CFPB — Regulation DD account disclosures
• CFPB — Regulation DD subsequent terms
• FDIC — Deposit insurance ownership limits
• IRS — Interest income