Many people are switching banks this summer thanks to lucrative offers being made by more than a dozen of the top 50 banks in the United States.

For example,  Fifth Third Bank is offering $200 to new customers who deposit $100 in a new checking account using their direct deposit program. When you open a basic checking account at Chase Bank, you’ll get $150 bonus and, if you open their Premier Plus Checking account using $100 and directly depositing it, you’ll get a $250 bonus.

John Gower, a senior banking analyst for, had this to say about this new rush by banks to give cash bonuses to new customers: “In the past, banks have used interest rate deals or promotions as incentives, but because rates are so low right now, that can only go so far,” he says, adding that “instead, they’re turning to cash bonuses.”

Free money? Really?!

Let’s face it, banks wouldn’t be giving out money if there wasn’t something to gain and, right now, that “something” is existing bank customers who are on the fence about whether they should switch banks.

The thing is, it’s so expensive and time-consuming to switch banks these days that many consumers simply stick with the bank they’re using even though they might want to leave. According to Accenture, over 25% of consumers would like to switch but feel that it’s too much stress and hassle.

Using a little bit of cash as an incentive to get them to budge, banks are hoping that these consumers will make the switch.

Christina Lavingia of says that “it’s not going to pay off for them if a customer only opens an account, dumps the funds and walks away,” adding that “they want a customer who’s going to maybe get a credit card or mortgage and eventually, they’ll make a lot of money that way.”

That being said, many banks are asking their new customers to show them a bit of commitment in order to prove that they’re going to stick around, something they need to do before they get their  bonus.

One of the ways they do that is by requiring their new customers to enroll in a direct deposit program and/or actively use a lot of their checking features. For example, Santander has an offer to give $20 per month for a year to each new customer as long as they enroll in a direct deposit program, deposit $1500 or more into their checking account within a month of opening the account and use the bank’s online banking features to pay at least two of their bills per month.

Free money now, higher fees later

Now, lest you think that a bank offering you free cash is also offering you checking accounts that are free, think again. The fact is, ever since the beating that banks took during the financial crisis of 2008 they’ve been ramping up their consumer fees like mad. It’s extremely hard to find a free checking account these days for example, and the average that most banks charge is $12.50 a month to have a checking account and, if you overdraw your account, a $30 overdraft fee.

Financially speaking, there’s no way banks can afford to get rid of these fees but, on the other hand, they can’t afford to lose more customers either. They’re offering these cash bonuses in hopes that they will attract new customers but be able to keep their fee schedules the way they are.

Rajesh Kandaswamy, a banking analyst with Gartner, says that “Banks are struggling to raise revenue and so you see them launch price-based strategies such as cash rewards,” adding that “since it is more difficult to win new bank customers compared to retain them after, upfront cash award attract them to banks instead of reducing ongoing fees.”

The fact is, some of the offers being made aren’t half bad as long as you check for loopholes. In some cases, if you bank where the fees are the same or even higher, it might be a good time to switch and, even though you won’t be paying lower fees, at least you’ll get a cash bonus out it.