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Paying Bonuses - Conditionally

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Question: 
Are there any restrictions about how an institution pays cash bonuses? For example, can you offer a $50 cash bonus to be deposited into a savings account after the customer opens a demand deposit account?
Answer: 

Such a program would be acceptable so long as your state laws aren't violated. Regardless of the account into which the money is put, if the payment is an incentive to open the demand deposit, the money will be considered a payment for that account. Accordingly, to avoid being considered interest under Regulation Q, it would have to fit the restrictions found in Section 217.101(b) - because it’s greater than the de minimis amounts in Section 217.101(a).

First published on BankersOnline.com 8/30/10

First published on 08/30/2010

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