Why are banks giving away so much free money: perhaps your bank is currently running a promotion in which it is offering cash to consumers who open a deposit account or related product. If so, you are not alone.

• Position: MARKETING NEWS

The personal finance website, GOBankingRates, El Segundo, Calif., recently examined promotions being run by the 50 largest U.S. banks. The website determined that more than 25 percent (13 banks) this summer were advertising cash-back offers ranging up to $250.

Why all the free money promotions? The website says that the number of customers switching banks is currently modest, only about 10 percent, which means there are fewer customers than usual up for grabs. As a result, banks are searching for creative ways to attract new customers. And giving away free money appears to be a winner.

The website quotes a manager from Santander Bank, Boston, who says that the institution has experienced a 20 percent increase in checking accounts since offering the cash-back incentive. The bank is offering to pay customers up to $240 over a one-year period if they meet a minimum opening deposit requirement for a specified checking account, have direct deposits of $1,500 or more into the account and pay two bills through billpay during the statement cycle--resulting in a $20 bonus being awarded each statement cyde for 12 months.

GOBankingRates found a variety of incentives being promoted. Fifth Third Bank, Cincinnati, is giving a $200 bonus for opening a direct deposit of $100 or more with a new deposit account. BMO Harris Bank, Chicago, is offering $150 for consumers who open an Everyday Checking Account and $200 for opening either a Select Checking...