Each year when I do my taxes, I end up having to gather dozens of different 1099-INT forms. For those of you that don’t know what these are, a Form 1099-INT is the documentation that you receive whenever you earn anything that is classified as interest income. The interest you earn on a bank account, for example, is the most obvious type of 1099-INT income. If you have a savings account at any bank, you’ve likely received these forms in the past.
Most people only get one or two of these forms each year. I end up with dozens of them. That’s because I open a ton of different bank accounts each year to earn lucrative bank signup bonuses. I also have a lot of cash that I keep in different “mega” high-yield savings accounts, which results in a 1099-INT for each of them as well. Combine that with my wife’s various bank accounts, not to mention my regular bank accounts that I have, and you end up with what some might consider an unwieldy number of forms.
This money all adds up though. Indeed, this past year I surprised myself with how much I was able to earn in bank interest income, bringing in nearly $14,000 worth of interest. That’s a huge amount! A minimum wage job pays about $15,000 per year, which means the interest I earned from bank accounts was almost enough to be a really low-paying job.
For most people, earning that much interest in a year would require a huge amount of cash – easily over a million dollars in cash depending on your bank’s interest rate. I’m not rich enough to have that much cash, but what I can do is maximize the cash that I do have by utilizing different strategies that allow me to earn far more interest than what most people can earn.
I sometimes wonder whether it’s worth the time to do this. But when I think about how much cash I’d need to save to generate this type of income, I’m convinced that this is worth doing.
Here’s how I think about all of the 1099-INT income that I’m able to earn and why doing all of this makes sense to me.
Mega High-Yield Savings Accounts And Bank Bonuses
Your typical savings account these days pays less than 1%. At the time I’m writing this, most regular online savings accounts are paying around 0.5% interest. That’s not a lot of interest – and it doesn’t make it very appealing to keep a ton of cash in the bank when you’re getting so little back. But with the right strategies, you can actually get very appealing returns on your cash. It just requires a bit of upfront work and research.
The first strategy I use is to take advantage of what you could call mega high-yield savings accounts. These are savings accounts that pay much more than the 0.5% interest that many banks currently offer – often 3% to 5% interest. The catch with these banks is that they typically require some sort of upfront setup work and limit the amount that you can have earning these mega high-yield rates. Once you set them up though, these accounts can run themselves (I probably spend 30 minutes per year to maintain these accounts – primarily just to withdraw the interest that accumulates).
It’s a bit much for me to go into a ton of detail in this post, but here are some other posts I’ve written detailing exactly how I’ve set up these mega high-yield savings accounts:
- Where To Get 5% Interest Savings Accounts Now That Insight Is Gone
- Getting More From My Emergency Fund With 3% and 5% Interest Savings Accounts
At the moment, I have a little over $34,000 earmarked as an emergency fund that earns 3% to 5% interest in FDIC-insured savings accounts (specifically, $13,000 earning 5% interest and a little over $21,000 earning 3% interest). This is divided between 15 different bank accounts between me and my wife. It sounds overwhelming, but they don’t require any work beyond the initial setup. And since I treat this money as my emergency fund, I think of it as one big pool of money that I don’t need to look at very often.
We’re also saving a downpayment for a house, which means we’ve had to keep a big chunk of cash saved over the past year or so. For this, we’ve been taking advantage of HMBradley, which is another mega high-yield savings account that’s currently offering 3% interest on up to $100,000 if you meet certain requirements. It’s not difficult for me to meet these requirements and having that much cash earning 3% interest means I get a lot of interest each month ($3000 per year of interest or about $250 per month).
These mega high-yield accounts allow me to increase my interest earnings, but it’s not enough by itself for me to get to $13,000 or more of interest income in a year. To hit that mark, I also take advantage of bank account bonuses, which is the second strategy that I use to increase my interest income. This is when banks offer new customers cash if they meet certain requirements – typically direct depositing a certain amount, or using a debit card a certain number of times, or keeping a certain amount with the bank for a particular length of time.
Over the last few years, I’ve been able to earn thousands of dollars worth of bank account bonuses, allowing me to dramatically boost my interest income. Last year, I earned over $10,000 worth of bank account bonuses.
For the most part, you don’t need much cash to earn a decent amount from bank account bonuses. And even beginners can likely earn four-figures worth of bank account bonuses each year without a ton of work. Like with the mega high-yield savings accounts, bank bonuses are far too big of a topic to cover here, but you can read all about how bank bonuses work in my Ultimate Guide to Bank Account Bonuses.
Is it Worth The Hassle?
One caveat with the way I earn all of this extra interest income is that it’s not exactly passive. The mega high-yield accounts are passive at this point, but many of them required some setup work to make them passive. This isn’t to say it was a lot of work, but it was more than just simply opening a bank account.
Bank account bonuses are decidedly not passive. They require me to do research with each account and make sure that I’m meeting all of the requirements. But that also doesn’t mean they require a lot of work either. Most bank accounts pay $100 or more and the time it takes me to complete the requirements for each account means I’m typically earning $100 or more per hour for my time.
So is it worth the hassle? In the grand scheme of things, an extra $13,000 or so isn’t really that big a deal, especially since I’m paying ordinary income tax on those earnings.
But there are a few things that help me justify doing all of this. First, it helps to think about how much you’d need to have saved in a regular bank to earn this type of interest income. Consider this. Your typical high-yield savings account these days pays around 0.5% interest. To earn $13,000 worth of interest in a year, you’d need to save $2.6 million in a typical high-yield savings account. That’s a ridiculous amount of cash and really shows you how little interest your cash is earning. When you see this perspective – how much it takes to earn that same amount of interest – it suddenly seems much more reasonable to go through the trouble of setting up mega high-yield savings accounts and getting bank bonuses.
Second, and perhaps more importantly, taking advantage of all of these different high-yield bank accounts and bank account bonuses forces me to save more money than I otherwise might. It’s a bit of a game for me at this point – how much can I earn with all of these different bank accounts and bank bonuses? In many years, it’s a lot.
Final Thoughts
I earned nearly $14,000 worth of interest income last year. When you think about it, that makes my interest income a side hustle in itself basically.
Doing all of this isn’t something you have to do. It works for me because I enjoy the challenge of figuring out all of these different strategies to earn more on my cash. Depending on your situation and how you value your time, you might opt to keep things more simple. But even setting up a few mega high-yield accounts and earning a few bank bonuses each year can have value.
If you put $3,000 into a few mega high-yield accounts earning 5% interest, you’d get $150 of interest in a year. As a point of comparison, you’d need $30,000 in a savings account earning 0.5% interest to earn that same $150. That’s a big difference.
Add in $1,000 worth of bank account bonuses in a year (something attainable for most people) and you’re now generating the same amount of interest income as if you had $230,000 in a regular savings account.
When you come at it with that perspective, it makes a lot of sense.
More Recommended Ebike/Scooters
Check out these other ebikes/scooters I've had the chance to do a review for:
- GEN3 Outcross Bike – The GEN3 Outcross is a solid, affordable fat tire ebike that does a good job of doing what I need it to do. It works great for city riding, giving me a smooth ride in all conditions. It’s works really well as a winter ebike since the fat tires give it good traction over snow and ice. Check out my GEN3 Outcross Review.
- Himiway Escape Bike – The Himiway Escape is an interesting bike for anyone looking for a moped-style ebike. If you’re a gig economy worker, the Himiway Escape is particularly interesting and it’s possible to think of it as an investment, especially if you can opt to do deliveries with the Himiway versus using a car. It’s not cheap, but you can definitely make your money back when you compare the mileage you’ll put on your car versus using an ebike. Check out my Himiway Escape Bike Review.
- Espin Sport Bike – The Espin Sport is a good ebike for someone who is looking for an ebike that feels and rides more like a regular bike. There are many ebikes that are really only bikes in name. In reality, they’re basically electric mopeds. The Espin Sport, by contrast, is a bike you could probably ride without the battery and you’d feel like you’re just riding a regular bike. Check out my Espin Sport Review.
- Varla Eagle One Scooter – The Varla Eagle One is an excellent scooter that can make sense for a lot of people. It can work as a primary mode of transportation. You can use it to work on gig economy apps like DoorDash, Uber Eats, and Grubhub. And it can also be a recreational vehicle if you’d prefer to use it for that. Check out my Varla Eagle One Review.
- Fucare H3 Scooter – The Fucare H3 is a fun scooter and I’ve enjoyed testing it out. For a daily commuter or quick trips or errands, the Fucare H3 is probably the scooter I’ll use. It’s portable and easy to maneuver, so it’s just easier to take on the road when I need it. Check out my Fucare H3 Scooter Review.
More Recommended Investing App Bonuses
For additional investing app bonuses, be sure to check out the ones below:
- M1 Finance ($10) – This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $10 for opening an account. Check out my M1 Finance Referral Bonus – Step-By-Step Guide.
- SoFi Invest ($25) – SoFi Invest is an easy brokerage account bonus that you can earn with just a few minutes of work. Use my SoFi Invest referral link, fund your SoFi Invest brokerage account with $100 and you’ll get $25 of free stock. I also have a step-by-step guide for the SoFi Invest referral bonus.
- Moomoo (5 free stocks) – Moomoo is a free investing app currently offering 5 free stocks (usually worth around $75-$100) if you open an account using a referral link and deposit $2,000. Read my Moomoo referral bonus guide for more information.
- Webull (5 free stocks) – Webull also gives you 5 free stock valued between $3-$3,000 each if you open an account using my referral link. Here’s a guide I wrote about how to earn your free stocks using Webull.
- Robinhood (1 free stock) – Robinhood gives you a free stock valued between $2.50-$225 if you open an account using my referral link.
- Public (1 free stock) - Public gives you a free stock valued between $3-$70 if you open an account using my referral link.
More Recommended Bank Account Bonuses
If you’re looking for more easy bank bonuses, check out the below options. These bonuses are all easy to earn and have no fees or minimum balance requirements to worry about.
- Chime ($100) - Chime is a free bank account that offers a referral bonus if you use a referral link and complete a direct deposit of $200 or more. In practice, any ACH transfer into this account triggers the bonus. This bonus is easy to earn and posts instantly, so you’ll know if you met the requirements as soon as you move money into the account. I wrote a step-by-step guide on how to earn your Chime referral bonus that I recommend you check out.
- Upgrade ($100) – Upgrade is a free checking account that’s currently offering a $100 referral bonus if you open an account and complete three debit card transactions. These bonus terms are easy to meet, so it’s well worth doing this bonus as soon as you can. Importantly, this bonus says that it’s now scheduled to end on October 31, 2022. As long as you get your account opened before October 31st, you should be eligible. Here’s a post I wrote with more details: Upgrade $100 Referral Bonus – Step By Step Directions.
- SoFi Money ($350) – SoFi Money is a free checking account from SoFi. They’re currently offering a $25 referral bonus if you open a SoFi account with a referral link and deposit $10. You can also make an additional $300 as well if you complete a direct deposit. This is a good bank that is also 100% free, so you won’t have to worry about managing this account. Here’s a post I wrote with instructions on how to earn your SoFi Money bonus: SoFi Money Referral Bonus: Step By Step Guide.
- Fifth Third Bank ($250) – This offer is limited to customers in the following states: Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, North Carolina, Ohio, Tennessee, West Virginia, and South Carolina. If you don’t live in one of those states, you won’t be able to open an account online but you can still open an account in-branch if you happen to be visiting a city that has a branch. This is a fairly easy bank bonus to earn, especially since there are plenty of data points showing what will trigger the direct deposit requirement. In addition, you can open the Fifth Third Momentum Checking bank account, which comes with no monthly fees or minimum balance requirements. Read my guide on this bonus here.
- Current ($50) – Current is a free fintech bank that’s offering new users a $50 referral bonus after signing up for an account using a referral link.Current is an easy bonus to earn and also gives you access to three savings accounts that pay you 4% interest on up to $2,000. That means you can put away up to $6,000 earning 4% interest. That’s very good and makes Current an account I recommend to everyone. Check out my step-by-step guide on how to earn your Current Bank bonus.
- OnJuno ($100) – OnJuno is a fintech/neobank that is currently offering a $100 referral bonus if you open an account using a referral link and complete a direct deposit of $250 or more. The account has no fees or minimum balance requirements. Even better, the bonus posts immediately after you meet the requirements. If you can meet the direct deposit requirements, OnJuno is an easy bank bonus that’s worth snagging. Check out my OnJuno referral bonus guide here.
- Varo ($50) – Varo is a free fintech banking app similar to Chime or Current. It’s currently offering a $50 bonus to new users that open a new Varo account with a referral link. The bonus for this bank is very easy to meet, all you need to do is spend $20 within 30 days of opening your Varo account. Check out my step-by-step guide to learn how to earn this bonus.
- Fairwinds Credit Union ($100) – Fairwinds Credit Union is offering a referral bonus for users that sign up using a referral link. Fairwinds has no fees or minimum balance, so this is a particularly easy bonus to earn. Since this is a smaller credit union, my gut instinct tells me this offer won’t be around long, so if you’re in a position to meet the bonus requirements, grab this bonus before it’s gone. Here is my step-by-step guide on how to earn your Fairwinds Credit Union bonus.
- Novo Bank ($40) - Novo bank is a free business checking account that’s currently offering a $40 bonus if you open a Novo business checking account using a referral link. In addition to being a good bank bonus, Novo is also a good business checking account. It has no monthly fees or minimum balance requirements and operates a good app and website. Indeed, it’s the business checking account I currently use for this blog. Check out my post on how to easily open a Novo account.
- Spiral ($50) – Spiral is a fintech bank that's currently offering new customers a $50 signup bonus after opening a free checking account with them. The Spiral referral bonus is especially good because it's a free checking account and doesn't require a direct deposit to earn the bonus. Here is my step-by-step guide on how to earn your Spiral Bank bonus.
- One Finance ($50) – One Finance is a fintech bank that’s currently offering a $50 signup bonus if you open an account using a One Finance referral link and have a direct deposit of $250 or more. This is a completely free bank account with no minimum balance requirement, so if you can meet the requirements, it’s worth doing. Check out my One Finance referral bonus guide here.
- Albert ($150) – If you can manage to do a real direct deposit, Albert is an easy account you can use to earn a referral bonus. Here’s a review about Albert I wrote. And here’s a step-by-step guide on how to earn your Albert referral bonus.
- Netspend ($20 + 5% Interest Savings Account) – Netspend is a company that provides 5% interest savings accounts. If you sign up using my referral link, you’ll get a $20 signup bonus once you make your first deposit into your Netspend account of $40 or more. That means you get a 5% interest savings account and a free $20 to start! Make sure to check out my in-depth guide on how to set up these accounts.
Kevin is an attorney and the blogger behind Financial Panther, a blog about personal finance, travel hacking, and side hustling using the gig economy. He paid off $87,000 worth of student loans in just 2.5 years by choosing not to live like a big shot lawyer.
Kevin is passionate about earning money using the gig economy and you can see all the ways he makes extra income every month in his side hustle reports.
Kevin is also big on using the latest fintech apps to improve his finances. Some of Kevin's favorite fintech apps include:
- SoFi Money. A really good checking account with absolutely no fees. You'll get a $25 referral bonus if you open a SoFi Money account with a referral link, and an additional $300 if you complete a direct deposit.
- Upgrade Bank. Upgrade is a free checking account that’s currently offering a $100 referral bonus if you open an account and complete three debit card transactions. These bonus terms are easy to meet, so it’s well worth doing this bonus as soon as you can. Note that it’s now scheduled to end on October 31, 2022.
- Novo Bank. Novo bank is a free business checking account that’s currently offering a $40 bonus if you open a Novo business checking account using a referral link. It’s the business checking account I currently use for this blog.
- M1 Finance. This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $10 for opening an account.
- Personal Capital. One of best free apps you can use to monitor your portfolio and track your net worth. This is one of the apps I use to track my financial accounts.
Feel free to send Kevin a message here.
Was this one or two player mode? It sounded like it was between two people, so it was really more like $7000 each yes? Still not too shabby.
Even without having tons of $$ in the other accounts (my emergency fund is pretty low, since my COL is low- been making up time in my retirement accounts) I’m still getting on average $3-4k a year from bank bonuses alone. I don’t have the cash on hand to do any. of the bigger bonuses (that require $15-20k to sit in a bank for 3 months or whatever). It is definitely a reliable source of income for me for the past 5 years and I plan to keep doing it into FIRE whenever that happens.
This is 2 player mode between me and my wife. $3-4k is great! You’d need 700k to 800k cash to get that same amount in a regular savings account!
Kevin, I received all my 1099 INT’s except Chime…..I just looked at my account and used the amount I earned in 2020 which I entered on my tax return. If you gain access to the Chime 1099 INT can you share with your readers how to access it?
Thank you.
I haven’t been able to figure out to get your 1099-INT online. I received one for me but my wife never got hers. You don’t need it to report it, so I would just report it with the numbers you have.
Chime 1099 was a weird one. They sent one of us a separate email with a unique website and code. You then enter the code and your account number to access the 1099 from the website. Only one of us got the email with the code so I had to call to ask for my information. Turns out the code and website was the same for both of us. Not sure why they couldn’t just put it on the online account page.
Dragons on Fire! Please tell us the site code to enter. That is what I need! And provide the website too-I don’t remember what it is.
I wish I had your energy – 14K is worth the effort.
I just opened the chase preferred card (thanks for the recommendation) to get those bonus points – so that’s a start. Now to spend the 4K – any ideas?
Just an FYI- you probably should have an idea of how you meet the minimum spend BEFORE you apply for the card.
But, rent or mortgage payment (using plastiq for that) groceries, transportation (IDK about you, I’ve had to work in person all year), normal spending, bank account funding….get ya started?
Paying taxes is the easiest way to hit spend quickly. If you can afford to float it until you get your refund, then you’re in good shape to hit the spend in one go.
Check this post:
The Benefits Of Paying Taxes With Your Credit Card
Kevin, I was just looking over your ‘Resources’ page. Simple Bank is still on there, but, as know, it is shutting down this year.
https://www.simple.com/blog/simple-is-closing
Yeah I gotta update that. Wrote a post recently about which bank I’ll be switching too now that Simple is gone. I’m Switching Banks – But Which Bank Should I Use?
Wow. I honestly would never have thought about this. I recently opened up a new brokerage account to get a $1000 bonus, and thought I was mighty smart. But this is a brilliant tactic. Especially in this day in age, I used to have a money market account paying 1.5%, but now I have struggled to figure out what exactly to do to make even that. Boom!
Accidentally Retired, since it is over $600 bonus that the broker will pay you, then next year you will receive a 1099 MISC. If you do your own taxes with a program, ie TurboTax, the 1099 MISC will cause you headaches. I had to contact TT expertise for assistance to get my taxes filed on time.
They knew what to do and guided me through it after giving them remote access.
Thanks Joe – I have been using an accountant for the past five years (after using Turbo Tax), but had to switch after running into too many edge cases.
You’re the king of bank bonuses. I’ve done it for consecutive years but nowhere even close to your level. We are a one-household income family so that limits flexibility with the direct-deposit requirement. That said, we still have managed to get a good chunk of cash. Every time we do our taxes, we usually say we’re done and that we need to simplify our finances but honestly, it is too hard to pass on “free” money. In 2021, we haven’t done anything given that we have been refinancing assets, had to get a vehicle (hit and run = totaled), and have been in the process of acquiring real estate. We are only in Q1 of 2021 so we will see. By the way, I got both our Chime 1099-INT wo any issues using the web app.
There’s still plenty of time for 2021. Always more bank bonuses every year!
Do some more reading and you’ll find that true direct deposit is rarely required to trigger a Direct Deposit requirement.