You will give me $200? Yes please!

At this point I'm sure that almost everyone has received some sort of promotion from a bank offering you money to open an account (savings, checking, credit card etc.)  I've mostly been ignoring these offers but the offer I'm looking at right now will give me $200 for opening an account.  By depositing $1500 in the account and leaving the account open (and ignoring it for 6 months) I fulfill all the requirements to get the $200.  Those are fairly easy requirements for me at the moment.  The only question left is how does this compare to the interest I would be earning if I left that $1500 in my high interest savings account?

First, let's look at a simple version illustrating how much interest I would get each month on $1000 using 1% APY.

Here is an example of what a 1% APY interest rate would earn in the month of June (with 30 days) on $1000.

Now, to do the calculation with my real numbers for a 6 month period (roughly 180 days, I'm clearly doing some rounding...but the exercise still proves the point.)

Full Disclosure: This is what it would be if they only gave me interest once every six months.  I've found that banks usually do this on a monthly basis, meaning you should get a bit more because of interest accumulating on the interest you've already made.  I've chosen to use back-of-the-envelope math to illustrate my point.

Wow.  If I left that $1500 where it was I would earn $194 LESS.  Clearly it's a smart move to take advantage of this $200 offer!  Just out of curiosity I wanted to figure out what the equivalent interest would be.

Wow again!  After writing out those numbers I finally took my own advice and got around to opening the account.  It took about 30 minutes so we're looking at $400 per hour.  Too bad these opportunities aren't more common!

I have not been asked or compensated for writing this article about Chase bank (other than perhaps through ads thanks to adsense).  I'm simply stating my experience. Please seek the advice of a professional for your own personal situations.

Current Financial Goals

One of the things I've found since I've started to pay attention to my finances, is that my financial goals are regularly shifting.  How I think about my finances and of what importance goals are have been slowly moving around.  This makes reaching those goals a bit tough as they are moving targets.  Here are my present goals:

CASH

Cash Emergency Fund:
I live in an earthquake area.  I think it's important to have cash (and water!) on hand just in case...

SAVINGS LINKED TO CHECKING

Slush Fund:
The goal is to have one full month's worth of expenses.  I know many people set aside some money every month for upcoming and irregular expenses such as car insurance.  None of my irregular expenses are more than a typical months worth of expenses.  In addition, I like to have a full month of savings easily accessible to my checking account such that I can pay the bills if something happens to my paycheck (there were 5 months straight that my university messed up my paycheck...I may have become paranoid) so I aim to have a months worth of salary in my slush fund.