KeyBank’s Checking Bonuses and Future Impact of Overdraft Fee Changes

I’ve been reporting on KeyBank checking account bonuses since 2006. KeyBank has a long history of offering checking account bonuses, many of which get extended several times before new ones are introduced. The latest KeyBank bonus offer is one of these, and it has again been extended. Now through June 17, 2022, KeyBank is offering a $200 bonus for opening a new checking account. As stated on the landing page, the following must be met to qualify for the $200 bonus:

• Use offer code: ONAS0522
• Open a Key Smart Checking®, Key Advantage Checking®, Key Privilege Checking® or Key Privilege Select Checking® account online by June 17, 2022.
• Make ONE direct deposit of at least $500 within the first 60 days of account opening.
• Minimum opening deposit required.
• Your gift will be deposited into your account within 90 days of meeting requirements if your account is open and not overdrawn.
• Offer redeemable online only.

Eligible Checking Accounts

The Key Smart Checking® is a non-interest bearing account, which has no monthly maintenance fee or minimum balance requirement. The Key Advantage Checking®, Key Privilege Checking® and Key Privilege Select Checking® are interest bearing accounts, which have waivable monthly maintenance fees. Descriptions of these four checking accounts can be found on the bonus landing page.

The fine print on the bonus landing page lists the following restrictions and limitations:

• Direct deposit transactions are limited to: payroll, Social Security, pension and government benefits.
• Accounts titled as Trust Accounts, Estate and No Access are excluded from eligibility.
• Employees of KeyBank, its affiliates and subsidiaries are not eligible for this offer.
• Limit one gift per qualifying account.
• Limit one gift per individual.
• The value of your gift will be reported on Form 1099-INT and deposited into your account within 90 days of meeting requirements.
• If you close your account within the first 180 days of account opening, you will be charged a $25 account early closure fee.
• Offer not available to individuals who have had a KeyBank checking account or a KeyBank Hassle-Free Account® in the last 12 months.
• Accounts overdrawn or closed at the time of gift payment are not eligible.

Availability

Headquartered in Cleveland, Ohio, KeyBank is one of the nation’s largest retail banks. As stated on the online application, the $200 bonus is offered to U.S. citizens (18 years or older) who live in Alaska, Colorado, Connecticut, Idaho, Indiana, Maine, Massachusetts, Michigan, New York, Ohio, Oregon, Pennsylvania, Utah, Vermont, or Washington.

Applying for the $200 bonus can only be done online, using offer code ONAS0522. Note: the offer code begins with the letter “O” and the fifth character is a zero.

Bank Overview

KeyBank, has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 3.34% (excellent) based on March 31, 2022 data. In the past year, KeyBank has increased its total non-brokered deposits by $6.81 billion, an excellent annual growth rate of 4.73%. Please refer to our financial overview of KeyBank (FDIC Certificate # 17534) for more details.

Originally established in 1849 as the Society National Bank of Cleveland, KeyBank has rebranded several times and acquired 31 other banks since 1979. Currently the 19^th largest bank in the country, KeyBank has assets in excess of $183 billion and more than 4.3 million customer accounts.

Overdraft Fee Reductions and the Future of Checking Account Bonuses

Last month, KeyBank announced that it’s eliminating NSF fees and reducing overdraft fees on its checking accounts. These changes are expected to take effect in late 2022, and they’re similar to changes that many other large banks have announced in the last year. Banks have been under pressure from regulators, Congress and the press to reduce overdraft fees. KeyBank is the latest to jump on the bandwagon.

The reduction in overdraft fees may be helpful for those who regularly overdraft their accounts, but for savers and bonus chasers, this may not be good news. Overdraft fees are a source of profits for banks, and lower overdraft fees may lower the profitability of checking accounts. That could pressure banks to cut back on bonus offers. Also, lower overdraft revenue may pressure banks to cut back on debit card rewards, such as high interest rates on reward checking accounts.

I thought about this possibility of fewer and smaller checking account bonus offers when I noticed that the only KeyBank checking account that doesn’t qualify for this current bonus is the Hassle-Free Account, which is the new KeyBank checking account that doesn’t have overdraft fees.

Bottom Line

Even though rates have been rising in the past few months, checking and savings bonuses still offer a significant return not available in either a liquid account or short-term CD. To use my standard example, earning $200 in six months (avoiding the $25 early closure fee) in a top-rate online savings account (currently earning 1.25% APY) would require a minimum balance of approximately $32k.

If you don’t qualify for the Key Bank checking bonus, our full list of the best savings and checking account bonus offers can help you find a bonus that fits your financial needs.

The above information and rates are accurate as of 5/24/2022.