About the Bank Account Bonus Calculator
This bank bonus calculator tells you what a sign-up promotion is really worth. Banks advertise offers like "$300 when you deposit $5,000 for 90 days", but the headline number ignores tax, monthly fees you might trigger, the low interest rate on the new account and what the same money would have earned elsewhere. Enter the bonus, the required deposit, how long the money must stay and the account terms, and the calculator returns the effective annual yield of the deal after tax, plus how much better (or worse) it is than a high-yield savings account.
It is built for people who "churn" checking and savings bonuses, and for anyone weighing a single promotion against keeping their emergency fund where it is. Because the effective APY annualizes the gain over the holding period, short, small-deposit offers often show yields far above any savings rate, while large-deposit offers can turn out barely better than a good high-yield account.
Assumptions: the bonus and interest are taxed at the marginal rate you enter (in the US, bank bonuses are generally reported as interest on Form 1099-INT), fees are not deductible, and the money is held for exactly the required period. The effective APY is compounded, so it is directly comparable with the APY banks quote on savings accounts.
With the default inputs, the effective apy of the offer (after tax) is 20.08%. Change any value above to recalculate instantly.
How to use the bank account bonus calculator
- 1Enter the advertised bonus and the deposit you must bring in.
- 2Enter how many months the money must stay in the account to earn the bonus.
- 3Add the new account’s APY and any monthly fee you would actually pay.
- 4Enter your marginal tax rate and the APY your money earns today.
- 5Compare the effective APY and the advantage over your alternative.
Formula and method
The net gain G is the bonus B plus the interest the required deposit D earns in the new account at its APY a for m months, reduced by your marginal tax rate t, minus any monthly fees F you pay. Bank bonuses are taxable income, so the after-tax figure is what actually lands in your pocket.
The effective APY annualizes that gain: it is the yearly compounded rate that would turn D into D + G over m months. Because it is a true APY it can be compared with savings rates directly. The alternative is what the same deposit would earn after tax at the APY you would otherwise receive; the difference is the real advantage of switching.
- G
- Net after-tax gain from the offer
- B
- Bonus amount
- D
- Required deposit
- a
- APY of the new account (decimal)
- m
- Months the deposit must be held
- t
- Marginal tax rate (decimal)
- F
- Monthly fee paid
Worked examples
$300 bonus for $5,000 held 3 months
After 22% tax the $300 bonus is worth $234, plus a few cents of interest at 0.01%. Earning $234.10 on $5,000 in three months is an effective APY of about 20.1%. Leaving the money at 4% would have earned only $38.43 after tax, so the offer wins by about $196.
$400 bonus for $15,000 held 4 months at 0.5%
The deposit earns about $24.96 in interest. Bonus plus interest after 24% tax is $322.97, an effective APY of about 6.6% — good, but far less dramatic than the headline because a large deposit is tied up. It still beats a 4% savings account by about $173.
$200 bonus with a $12 monthly fee
Six months of $12 fees cost $72, so the $156 after-tax bonus nets just $84 — an effective APY of about 8.6%. Meeting the fee waiver (often a direct deposit) would more than double the gain.
Frequently asked questions
Are bank account bonuses taxable?+
Yes. In the US, cash bonuses for opening a deposit account are generally treated as interest income and reported on Form 1099-INT when they total $10 or more (a few banks use Form 1099-MISC instead). They are taxed at your ordinary income tax rate, federal and usually state.
How do I calculate the APY of a bank bonus?+
Divide the after-tax gain by the deposit you must keep, then annualize it over the holding period: APY = (1 + gain ÷ deposit)^(12 ÷ months) − 1. A $234 gain on $5,000 for three months works out to roughly 20% APY.
Is a checking account bonus worth it?+
It is worth it when the after-tax bonus exceeds the interest you give up by moving the money, plus any fees, and you can meet the requirements (direct deposit, minimum balance, number of transactions) without hassle. Small-deposit, short-hold offers usually score best.
Does opening bank accounts for bonuses hurt my credit?+
Most banks use a soft inquiry or ChexSystems report rather than a hard credit pull when you open a deposit account, so credit scores are usually unaffected. Some banks do a hard pull — the offer terms or a phone call will tell you.
What if I close the account early?+
Many banks claw back the bonus or charge an early closure fee if the account is closed within a set period, often 90 to 180 days. Check the terms and include any closure fee in the monthly fee field or subtract it from the bonus.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.