Some brokers, banks will pay for accounts

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Kathy Kristof

If you want a great return on your money, forget about the interest rates and look for accounts that offer cash bonuses.

In an effort to poach customers from their competitors at a time when interest rates are excruciatingly low, banks and brokers are offering cash giveaways.

Although these bonus payments won’t make you rich, they do offer a certain return in an environment where a risk-free yield is otherwise elusive.

Stock and investment accounts

Among those that have gotten into the act is Fidelity Investments, which recently launched an Individual Retirement Account matching program. If you transfer assets in a traditional, Roth or rollover IRA invested with another company to Fidelity, the Boston-based mutual fund giant will match a portion of your subsequent contributions for three consecutive years.

How much can you get? That depends on how much you deposit now and add to the account later. Fidelity’s match is only on new contributions — after your initial transfer — and the match ranges from 1 percent to 10 percent of the new contribution, depending on the amount of the initial deposit.

If you transfer the minimum amount of $10,000, your match is 1 percent. To get the top 10 percent match, you must transfer at least $500,000 to Fidelity. At present, the government limits annual IRA contributions to $5,500 ($6,500 for those over age 50), so Fidelity’s match would range from $55 to $650 a year.

Both TD Ameritrade and E*Trade offer deals that are based on the amount of money you shift into new accounts. If you transfer $250,000 or more, both E*Trade and TD Ameritrade will pay $600 and provide a number of commission-free trades.

Motif Investing, an online brokerage, is offering a similar deal. Those who transfer at least $5,000 to a Motif IRA before the end of 2015 can get a one-time bonus of $150.

Note, however, that neither Motif nor Fidelity pay cash if you’re transferring assets from a company-sponsored retirement plan. You need to bring in money from a competitor. (TD Ameritrade and E*Trade make no such demand.)

Banking bounties

And brokers are not the only ones trying to poach IRAs. Ally Bank is paying bounties of $100 to $500 for IRAs transferred from other institutions, depending on the size of the deposit. Ally’s program is set to expire at the end of May.

Don’t need another IRA? You can get a bonus just for moving your checking and savings accounts. Open an “extra20” checking and savings account at Santander Bank and follow the program rules (which include paying at least two bills a month online and having money direct deposited monthly), and you’ll get $20 a month indefinitely.

While Santander has a few branches in the area, they are slated to close at the end of May. But if you’re willing to bank online, you can still take advantage of the offer. Visit them at www.santanderbank.com/us.

What are all the bonuses about? They’re a way to get customers to open “sticky” accounts — financial industry jargon for business that is impractical or hard to move to another firm. That gives the financial institution time to hook you on its service and win over more of your business, said Mark Schwanhausser, research analyst at Javelin Strategy & Research, a consulting firm in Pleasanton, Calif.

“They want a chance to impress you,” he said. “It’s not a bet on an immediate profit. It’s a bet on a long-term relationship.”

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