I recently directed my unemployment benefits to a new Chase account. They have a promotion where if I get a total of $1,000 in direct deposits, they give a $400 bonus.
Before doing this, I wanted to do some research because I read a few things online suggesting that earning interest from unemployment benefits could be “illegal,” which confused me. My goal is simply to get the bonus and then withdraw all the money and close the account.
My question is: Does this plan make sense? Can I realistically get the bonus and close the account without issues? Is there anything else I should watch out for regarding interest or taxes?
Would love to hear from anyone who’s done something similar or has experience with Chase promotions.
Directed my unemployment benefits to a new Chase account, questions about the bonus, interest, and taxes
byu/Strict_Station1173 inCreditCards
Posted by Strict_Station1173
2 Comments
> because I read a few things online suggesting that earning interest from unemployment benefits could be “illegal,”
What you’re ultimately asking is whether depositing unemployment payments into a regular interest bearing bank account is illegal. The answer is no. I’m not sure where you even came across this idea.
This is also a credit card sub.
You’ll get a 1099-INT next year for taxes owed on the $400 bonus. I don’t see why your source of money being unemployment payments would matter. You’re not technically earning interest from your deposits, you’re getting a sign up bonus (which is taxed as interest income, kinda).
If you can spare the cash for a week or two, you should open wells fargo account for another $400 bonus which you can just send directly from Chase (ACH/Instant transfer, not zelle). Check Doctor of Credit for other interesting bank bonuses. Capital One, for example, you could also do with the same money (2x $500 deposits, can be cycled back and forth technically!).