Contents
The Offer
- U.S. Bank is offering a $250 bonus when you fund a new investment account with at least $25,000.
Our Verdict
Unfortunately self directed investment accounts aren’t eligible for this bonus so I don’t think this is really worth considering.
Hat tip to derthsidious
1%? hard pass…
DOA. thanks for posting tho! 🙂
Holding period is three months, which is 1% gain or 4% APY. But you have to interact with one of their advisors and likely get charged fees for a customized portfolio. Probably will not be able to park your passive investments and collect the $250. Pass.
Yes, this is a terrible offer, but please allow me to nitpick: APY is a time value of money (TMV) concept that’s really not applicable in most broker bonus situations, incl. this one.
If you have $X of stock at Broker A which you plan to hold indefinitely*, and move it over to Broker B for a bonus, the rate of return is “infinite.”
You would certainly want to consider any switching/incremental costs, like advisory fees, but you’re not “lending” any money to the broker, unlike when you open a bank account or CD, so TMV and APY are not relevant.
* or at least for the duration of the required hold period.
Allow me to nitpick the nitpick: in the scenario of moving assets from broker A to broker B (assuming “plan to hold indefinitely”), I agree the rate of return is technically “infinite”.
But for someone who does not have a long term portfolio, but does have $25k available to churn bonuses in the marketplace, which includes both brokers and banks, then the APY comparison does matter. In this case, you are “lending” to the broker or bank. Using APY helps to clarify the best offers available.
Ideally, the APY comparison should include the SUB plus any interest/dividend income earned in the new account during the holding period (if any). Offers should also be compared to just holding $25k in a high yield savings vehicle (currently yielding around 4% APY).
Not sure what I wrote is worth arguing about, unless it is just to be argumentative.
*Deposits at a bank are recorded as a liability in the bank’s accounting, since the bank owes that amount to the depositor. The depositor is lending money to the bank and some banks pay interest to attract deposits. In the case of moving investment assets to a broker, you are parking, so I agree with you there.
*SGOV yields around 4%, and some high yield savings also yield around 4%.
*Using math to determine what are the best offers shouldn’t be controversial. I can’t believe someone actually argues against this, but OK.
https://www.doctorofcredit.com/robinhood-1-boost-on-deposits-unlimited-cash-bonus/#comment-1859811
Believe it or don’t, lol
So this is not your first rodeo, what a thread, wow lol.
lmao…now you can truly understand my comments below
I give up. Ignorance is bliss. Have a blissful day.
Sometimes you have to know when to give up arguing with certain people. I’m still working on that! 😉
I wonder if tuphat’s real name is Eric as well since he’s been arguing this point from his lonely island for almost a year now 😀
It’s still useful for comparing to comparing to other brokerage bonuses, etc. If your stocks are tied up in Broker B, you can’t use those stocks for a different bonus at Broker C at the same time.
They’re not “tied up.” If Broker C offers a better bonus, move the stocks there & forego the Broker B bonus. Presumably the stocks would have still been sitting Broker A if they hadn’t been moved to begin with. What’s the difference?
If the rate of return is infinite at Broker B and infinite at Broker C, how do you know which one is better?
I’d start with: “Is X greater than Y?” Imagine two hot dog stands, side by side. One offers 1 free hot dog, the other offers 2 free hot dogs, no purchase required at either. Both are “infinite” returns, but 2 are better than 1, imho.
…and there it is.
LOL
Promotions with a holding period always tie you up. If you decide to move to a different broker after signing up, you are giving up the unrealized accrued bonus. Just imagine if there is a better offer two months after you sign up, and you could have wait one more month to get the bonus. Will you move or not move? There is always an opportunity cost associated with the choice of which offer to sign up.
I assume you’re hypothecating something like this: Broker A offers a $1X bonus for parking your stock there for 3 months, and you bite. At the end of 2 months, Broker B comes along with a more enticing $2X bonus, for, say, a 5 month hold. “Damn,” you say, “If only I hadn’t tied up my stock with Broker A, I’d jump on that, but I’d be walking away from my ‘unrealized accrued bonus.'”
In this example, there’s no “opportunity cost” of having first gone with Broker A, then shifting to Broker B. You simply traded $1X for $2X. True, you have to wait until 7 months total have passed to collect the $2X, but that’s the same as had you done nothing at time zero.
Considering offers like these come along all the time, and many have anti-churn/lifetime language, it might be better to let an offer go and snag it “next time”.
/picard.gif
I can’t help if Picard can’t understand some basic Ferengi math.
WTF are you even going on about?
USBANK stays in the news whether good or bad!
Pretty pathetic, USB.
Robinhood announced they will be doing investment advisory now probably prompted this from USB.
Also Robinhood announced bank accounts now as well so keeping my eyes opened for a bonus from them when that gets released.
I highly doubt those have anything to do with each other. US Bank has offered this deal in the past.