Live Oak Bank wants $20,000 of your money for 90 days. In exchange they'll give you $300. That's a 1.5% return over three months, which annualizes to about 6%. You could also just buy a 3-month Treasury and get roughly the same thing without having to remember to keep exactly $20,000 in an account you opened specifically to chase a signup bonus.
The offer expires October 16. This gives you about a month to realize you're the kind of person who responds to bank signup bonuses. You'll open the account. You'll transfer the money. You'll set a calendar reminder for 90 days from now. Then you'll forget about the calendar reminder because you set it on your phone and your phone has 47 other notifications that day.
Day 89 you'll accidentally withdraw $200 to cover something stupid. A vet bill. A dinner you couldn't afford. Courtside seats to a WNBA game you attended ironically but actually enjoyed. The balance drops to $19,800. You miss the bonus. Live Oak Bank sends you an email explaining the terms you agreed to. You forward it to your spouse with the subject line "This is bullsh*t."
The most efficient move is doing nothing. Park your $20,000 in a high-yield savings account that doesn't require you to perform like a circus animal for $300. But efficiency doesn't activate the dopamine receptors. The bonus does. The bonus makes you feel like you won something.
You didn't win. You moved money around and agreed to let a bank you've never heard of hold it hostage for 90 days in exchange for what amounts to three tanks of gas.
Photo by Cameron Roberson on Unsplash
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