Banks Glossary

The IRS tax form banks issue for interest and bonuses paid to a depositor during the calendar year. Most bank signup bonuses are reported as interest on a 1099-INT and are taxable as ordinary income.

Why it matters: A $400 bonus is roughly $280 after federal and state tax at most income levels. Always factor post-tax value when comparing bank bonuses against credit-card cashback (which is rebate, not income).

Example: Almost every Bonus Bandit bank review notes that the bonus is reported as interest on a 1099-INT.

The US batch-based electronic payment network used for direct deposit, bill pay, internal transfers, and P2P. ACH rails are the substrate of nearly every bank-bonus direct-deposit requirement, but not every ACH transfer qualifies as a "direct deposit" under a given bank's rules.

Why it matters: Understanding ACH classification (PPD payroll vs. WEB P2P vs. internal transfer) tells you whether a given inbound transaction will be counted toward a bonus.

Example: Brokerage push transfers from Fidelity, Schwab, or treasury accounts ride ACH rails and have historically been coded as direct deposit at many banks — though terms vary by bank and change over time.

A reversal of a previously-credited bonus, usually triggered by closing the account inside the hold period, dropping below a balance threshold, or failing to maintain qualifying direct deposits. The clawback can debit the account or trigger a collection notice if the account has already been closed.

Why it matters: A bonus you can't keep is worse than no bonus, because closure + clawback usually also puts you on an internal "do not bonus" list for several years.

Example: Most BB bank reviews include explicit clawback language because early-closure terms are the single biggest source of "bonus posted, then disappeared" complaints.

A consumer-reporting agency that tracks closed deposit accounts, overdrafts, fraud flags, and account-opening history. Most US banks pull a ChexSystems report before approving a new checking or savings application.

Why it matters: A negative ChexSystems file can block account approval regardless of credit score. Chronic bonus-chasers with too many recent account openings can also be denied.

Example: BMO Smart Advantage Checking is ChexSystems-sensitive; reviewers report denials for applicants with multiple recent closures.

An ACH transfer from an employer, pension, Social Security, or government source that meets a bank's definition of qualifying activity. Most $200–$400 checking bonuses release only after one or more qualifying direct deposits land within a fixed window after account opening.

Why it matters: Banks usually exclude Zelle, Venmo, wires, mobile check deposit, and internal transfers — even when those arrive over ACH rails. If your "direct deposit" is not the type the bank counts, the bonus will not post.

Example: BMO's $400 Smart Advantage Checking bonus requires $4,000 in qualifying ACH direct deposits within 90 days; Zelle, Venmo, wires, and mobile check deposits explicitly do not count.

A second consumer-reporting database, owned by a consortium of large US banks, that tracks fraud history, account abuse, and unpaid overdrafts. Some issuers pull EWS instead of or in addition to ChexSystems.

Why it matters: A bank can decline an account for an EWS flag even when ChexSystems is clean. EWS-only flags are easier to miss because consumers rarely think to check the EWS file.

Example: Several big-bank checking bonuses (Chase, Wells Fargo) rely on EWS data when underwriting new account applications.

Citi's stricter direct-deposit definition used to qualify checking bonuses. EDDs include ACH payroll, pension, Social Security, and government benefits, plus Zelle and P2P sent via ACH (Venmo, PayPal); mobile check deposit, teller deposits, wires, debit-card P2P, and internal Citi transfers do not qualify.

Why it matters: EDD eligibility decides whether the Citi $325 bonus posts. Citi's definition is narrower than most banks, so workarounds that succeed elsewhere often fail here.

Example: The Citi $325 checking bonus requires $3,000 across at least two separate EDDs within 90 days of opening.

The set of conditions — direct deposit, balance, account linkage, age, student status — that exempt an account from its monthly maintenance fee. Most checking bonuses are only worth pursuing if you can sustain the waiver path for the bonus holding period.

Why it matters: Without the waiver, monthly fees can absorb 10–25% of the bonus inside one year. Reading the waiver criteria is the single most important fee step.

Example: Wells Fargo Everyday Checking waives the $10 monthly fee via qualifying direct deposit or a $500 daily balance.

The minimum length of time you must keep the account open after the bonus posts to avoid clawback. Hold periods commonly run 90 days from account opening or 90 days from bonus posting, sometimes longer.

Why it matters: Closing an account during the hold period almost always triggers a clawback or an early-closure fee, and may put you on internal bank do-not-bonus lists for years.

Example: BMO charges a $50 early-account-termination fee on closures inside 90 days of opening, separate from any bonus clawback.

The lowest balance the account must maintain on any single business day to avoid a monthly maintenance fee or to remain eligible for a bonus. Some banks calculate this as an average daily balance over a statement cycle instead.

Why it matters: A bonus that pays $300 can be wiped out quickly if you trip the $12–$30/month fee three or four times by going below the minimum.

Example: Citi Priority's $30/month service fee is waived with $30,000+ combined average monthly balance across linked Citi deposit, retirement, and investment accounts.

A bank's overall rule for what counts toward unlocking the bonus. Most often this means direct deposits, but some promotions accept ACH push transfers, debit-card purchases, or balance maintenance instead.

Why it matters: Reading the qualifying-activity definition is more important than the headline bonus amount, because everything else flows from whether you can actually trigger it.

Example: Citi has historically accepted ACH test deposits as qualifying activity in some promotional windows; that flexibility tightens with each new cycle.

A nine-digit identifier that locates a US bank in the ACH network. Each bank has one or more routing numbers; the correct one for direct deposit may differ from the wire routing number.

Why it matters: Routing the wrong direct deposit (a wire routing number into payroll, for example) is one of the more common reasons bonuses fail to post.

Example: BMO requires direct deposits routed via BMO's ACH routing number to count toward the qualifying-activity total.

A soft credit pull does not affect credit score and is invisible to other lenders; a hard pull is recorded on your bureau file and is visible for two years. Most checking applications use a soft pull plus a ChexSystems/EWS check; some banks (Chase, Wells Fargo) pull hard on certain product applications.

Why it matters: Hard pulls cost ~5 points and stack with other recent inquiries; soft-pull bonuses are much easier to churn without slowing down credit-card SUB plans.

Example: Citi's checking bonus uses a soft credit pull; many regional bank bonuses do the same.

The minimum window a bank requires between bonuses on the same account type for the same customer. Common lookbacks: 12 months (BMO), 24 months (Chase), 12–24 months (Wells Fargo), 365 days for Citi checking. Some banks treat closing and reopening as separate accounts; others do not.

Why it matters: You can be denied a bonus simply because you held the same account type in the past year. The lookback is rarely advertised on the bonus landing page — only the fine print.

Example: Citi's 365-day prior-customer lookback is the strictest in the industry and the main constraint on repeat Citi checking SUBs.

A same-day, individually-cleared transfer between banks. Wires cost $15–$35 and post within hours, but most banks explicitly exclude wires from "qualifying direct deposit" definitions.

Why it matters: A wire is the fastest way to fund an account but usually the wrong way to trigger a bonus. Read the offer terms before funding.

Example: Citi's EDD definition explicitly excludes wires from qualifying activity for the $325 checking bonus.