Our world is more connected than ever, so it only makes sense that our bank accounts could be that way as well. You can link your accounts online to make banking easier, so you can make payments and transfers with more ease without ever setting foot in a bank.
Linking Internal Bank Accounts
If you have more than one bank account you’re not alone. According to one Bankrate survey survey, 50% of Americans have accounts with more than one bank. If you have multiple accounts at a single bank, whether it be a checking account, a savings account, or a brokerage account, they are typically fairly easy to link.
Accounts that exist at the same bank are particularly easy to link since your bank already has all of your banking information. Banks sometimes offer incentives to encourage you to link your accounts, such as the waiving of certain fees or offering special services to customers.
Linking your checking and savings accounts may—depending upon your bank—also offer you some overdraft protection. Overdrafts occur when you use a check or debit card to pay more than you have in your checking account.
Overdraft coverage fees can be some of the most expensive fees banks charge, costing on average around $34 and possibly even more. With this coverage, banks use their own money to cover the transaction, and fees can add up quickly, as many banks may charge an extended overdraft fee if you don’t address a negative account balance (typically within five days). So it’s worth taking measures to avoid them.
With overdraft protection, if your checking account is linked to another savings or checking account when you overdraft you can have money from your savings automatically transferred to cover the transaction. That way, you can avoid bouncing checks and potentially overdraft fees. You can also avoid missing payments that ultimately could have a detrimental effect on your credit score.
Your bank may charge an overdraft protection fee, but these are typically much cheaper than the overdraft coverage fee. Even so, it’s a good idea not to get in the habit of using this option very often.
Linking your checking or savings accounts to your brokerage account can also be a convenient way to manage the money you plan to invest. For example, some banks will allow you to set up automatic transfers between your checking and brokerage accounts so that you can invest regularly.
Linking External Bank Accounts
You aren’t limited to linking accounts that exist within a single bank. You can often link checking and savings accounts across banks or with outside brokerage firms. You can also link your bank accounts to make automatic payments or to payment apps.
You’ll need a little bit of extra information in order to link accounts you hold at different institutions, including the name and address of your bank, your account number, your routing number and other requirements.
For your checking account, this information can be found on the bottom of your checks. For other accounts, this information can be found online, or you can call your bank and ask for it.
To link an account, go to your bank online and click on an option to make transfers or add an account. You’ll be prompted to enter your account information.
Once you provide the account information, you will likely be asked to verify the accounts. Your bank usually does this by sending a small deposit to your account—usually only a few cents—and prompting you to verify the amount that was deposited into your account.
This allows the bank to see that the link between the accounts was made successfully. If the amount you report matches the amount that was sent, then the link is approved and the bank will remove that deposit from your account.
Linking external accounts offers many of the same benefits as linking internal accounts, including offering overdraft protection and a convenient way to set up automatic transfers. You may miss out on some of the perks that banks offer to customers who link accounts within the bank, however.
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Linking Other Types of Accounts
You can also link your bank accounts to payment apps such as PayPal or Venmo , which draw money directly from your bank account when you make a peer-to-peer payment or a purchase from a business. When you link these accounts, you’ll be asked to provide your account information, and you may be asked to perform a deposit verification.
You may also be able to use your bank account information to make direct payments through online bill pay. You’ll be asked to provide your account number and routing number.
Carefully track the bills you’re paying in this way, lest some fly under the radar. For example, you may pay your gym membership with a direct payment from your checking account. But if you stop going to the gym, you don’t want to forget that this payment is automatically being debited from your account.
Downsides to Linking Accounts
Linking your bank accounts can be a very convenient way to accomplish most of your banking from work or from home. There are some potential drawbacks, however. First, it’s recommended to be cautious sharing your account information.
For example, you may want to limit the number of apps you link to a bank account. The more of your information that’s floating around out there, the more chances there are for it to potentially fall into the wrong hands.
Remember, too, that linking your accounts means there’s an extra level of detail you have to pay attention to. Consider that while linking your savings and checking can be great to avoid overdrafts, you’ll want to be careful not to get in the habit of overdrafting. Doing so can chip away at your savings.
Similarly, you’ll want to keep an eye on minimum balances. If one account is drawing money from a second account, be sure that the amount in the second account doesn’t fall drop below any required account minimums. Dropping below minimums can trigger additional fees.
Some banks may cap the number of times that you can withdraw money from a savings account in any given month. Going over this number can trigger additional transaction fees.
So again, you’ll likely want to be aware that you aren’t accidentally overusing your savings account by linking it to other accounts you might use frequently. If this happens often, you might consider reorganizing your budget so you don’t end up spending more than you have available.
Linking your bank accounts can be a great way to manage your finances without making a trip to the bank. Linking can help you optimize your finances by allowing you to use the accounts that offer the best interest rates or other perks while still being able to make transfers between them—even if they’re at different institutions.
When you open a SoFi Checking and Savings account, you’ll save, spend, and earn—all in one product. You can easily access your money and track your expenses. Plus, there are no fees. And to make managing your finances even easier, you can link SoFi Checking and Savings to other accounts as you see fit.
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SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.
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SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
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