Banks are offering $300 of 'free' money - here's how to get the cash

A handful of national banks are offering hundreds of dollars in cash bonuses for simply opening new accounts. 

Banks are keen to entice as many Americans as possible to park their money with them and avoid customers moving to higher yielding accounts or money market funds in a period of elevated interest rates. 

As such, competition for customers is heating up and banks are prepared to offer a decent bribe. 

Leading the way is Chase and Wells Fargo who are currently offering a $300 bonus to customers opening a new checking account and who set up direct deposits. 

'We've successfully used promotion and retention-oriented strategies to retain and acquire new balances in consumer and small business banking,' Wells Fargo chief financial officer Mike Santomassimo said of the strategy earlier this week. 

Bank of America also offers a cash bribe of $200 for new customers.

'Our instructions to our team are to grow our deposit base a little bit faster than the economy,' Bank of America chief financial officer Alastair Borthwick told analysts on a call this week. 

'That means you have to price across the board to achieve that' he explained. 

Meanwhile, Citi has a promotional rate of 5 percent on new savings accounts for the first 90 days.

The average cash bonus offer for opening a new checking account climbed to $400 earlier this year, up from $130 in 2016, according to Curinos data. 

Before switching banks however, it can pay to do the math and work out if this is the best deal for you in the long run. 

For example, some banks with offers are now requiring customers to maintain a higher balance to bank the cash or face a fee. 

Chase requires customers to make a monthly direct deposit of at least $500 to earn the bonus and not have to pay a $12 monthly maintenance fee on the new account.  

Any cash bonuses made by switching accounts are reported to the IRS and taxed as interest. 

It is also important to consider any perks gained on your current bank account, such as mortgage savings or useful overseas travel tools. 

Equally if your current account offers a decent interest rate, it may not be beneficial in the long run to switch for a cash offer. 

However, 'if you could get 300 bucks in your pocket tomorrow, that's more compelling to some people than the delayed gratification of a 4 percent interest rate,' Adam Stockton, managing director at Curinos told the Wall Street Journal.