How Long Does It Take a Mobile Deposit to Clear?

How Long Does It Take a Mobile Deposit to Clear?

Most of us crave convenience when it comes to banking today, so it’s good news that mobile deposits typically only take a day to clear. After all, we live in a very fast-paced world with movies on demand and groceries ordered and dropped off within minutes. We expect a lot these days, and most of the time, mobile deposits deliver. But that also may explain why people can get frustrated when it takes a bit of time for their mobile deposits to clear.

The answer to the question, “How long does it take a mobile deposit to clear?” is usually around one business day. If you are experiencing delays, there could be an easy explanation for why that’s happening. Read on to learn more about how mobile deposits work, why delays happen, and how to avoid them.

Can You Deposit a Check Online?

Nowadays there’s no need to drive to the bank or hunt down an in-network ATM to deposit a check, as many banks and credit unions make it possible to deposit a check online using a smartphone. Typically, the process is pretty fast and straightforward. All someone has to do is endorse the back of their check, open the mobile app, log in, and take a picture of the front and back of the check.

Each banking app will have a slightly different process in place for uploading checks, but most are easy and fast.

When are funds available after mobile deposit? Let’s discuss.

How Long Does a Mobile Check Take to Deposit?

So, exactly how long does a mobile deposit take? Once the account holder uploads their check to the mobile app, it may only take a matter of minutes. That’s just about as fast as depositing cash. Or it can take a few days for the bank to verify the check. The amount of the check can impact this timeline, as can the rules and processes each bank has surrounding mobile deposits. All of that being said, generally consumers can expect mobile deposits to take a business day to complete.

What Factors Might Cause Mobile Deposit Delays?

As briefly noted, certain delays can slow down the mobile deposit process. Knowing how to avoid these delays with future deposits can help speed up the timeline.

Here’s a few factors that can slow down deposits (or stop them all together if not fixed):

•   Not endorsing a check before depositing it. Before cashing a check by using a mobile app, it’s vital to always endorse the check before taking the photo of it or the bank won’t be able to accept it. Alongside a signature, it’s also common to need to include a bank account number on the back of the check or to write “for mobile deposit only” under the signature.

•   Forgetting to get both payee signatures. If a check has two people listed on it, both of them will need to endorse the check with their signatures for it to be eligible for a deposit.

•   Uploading blurry images. A steady hand comes in handy as banks need a clear image to complete a mobile deposit. It helps to take a photo of the check on a plain, dark background and in good lighting so the picture is very crisp and clear.

•   Adding mismatched amounts. In addition to uploading a photo of the check, the mobile app will require the user to manually enter the check amount. That amount needs to match the amount on the check exactly, or your deposit may be delayed.

•   Not indicating a payee. The check uploader needs to make sure their name is on the Paid to the Order of line. If this section is blank or doesn’t say the correct name, the check won’t be deposited. Take some time to review that the entire check is filled out correctly.

•   Making a duplicate deposit. Trying to deposit the same check twice to your bank account can cause confusion. If someone uploads a check for the first time and receives a duplicate error message, they can contact their bank to work through the issue.

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Benefits of Mobile Banking

The option to enjoy mobile check deposits is just one of the many benefits associated with mobile banking. Here are a few other advantages worth keeping in mind.

1. Convenience

Mobile banking is super convenient. It’s possible to conduct a lot, if not all, of the banking business we used to do in-person at a branch or ATM from the comfort of our own homes or while on the go. It’s possible to review account balances, transfer funds between bank accounts, and deposit checks using mobile banking.

2. Timesaving

Not having to find time to drive or walk to a bank (which can be so hard to pull off on busy days) during their operating hours can be a major boost to productivity. A 30- to 60-minute round trip to the bank can now be replaced by simply logging onto a mobile bank account on a computer or smartphone. Most mobile banking activities can be completed in just a few minutes.

3. Accessibility

All anyone needs to participate in mobile banking is a smartphone and a WiFi or data connection. That means they can take care of their banking from almost anywhere. Of course, you do want a secure, not public, connection when managing financial matters to avoid banking scams.

4. Easy to Manage Finances

Mobile banking features can make it simple and speedy to stay on top of transactions, fraud alerts, and budgeting goals.

Alternatives to Checks

If someone doesn’t like to make payments or receive money via check, they have a few other options at their disposal that work well with mobile banking.

•   Automated Clearing House (ACH) and Electronic Funds Transfer (EFT). Both an ACH and EFT are easy electronic ways to transfer funds from one financial institution to another via computer-based systems with intervention from bank staff members.

•   Credit and debit cards. When it comes to making payments, credit cards and debit cards are a simple option when someone doesn’t have cash on hand or wants to shop online.

•   Digital wallets. Also known as e-wallets or mobile wallets, digital wallets make digital payments easy and secure. All someone needs is access to a smartphone or computer to make a payment.

The Takeaway

Across the board, mobile banking is a modern and convenient financial tool for consumers. Being able to deposit checks from home or while traveling instead of having to find a branch location or ATM is one huge perk of mobile banking.

So how long does a mobile deposit take? Mobile deposits can clear in just a few minutes, but it’s best to expect about one business day. And by following a couple of quick checkpoints, you can avoid any hitches that could cause a delay. Because in today’s impatient world, there’s no need to wait much to get access to your money.

In fact, banking with SoFi includes all the usual conveniences, plus access to your paycheck up to two days early. How’s that for fast? When you sign up for our online bank account with direct deposit, that early access is one great benefit, along with a whopping 1.25% APY and none of the usual bank fees.

Bank smarter and faster with SoFi.


Are mobile check deposits available immediately?

When are mobile deposits available? In some cases, a mobile check deposit can be available within just a few minutes of uploading the check into the mobile banking app. However, it usually takes around one business day for deposits to go through. Following instructions from the bank carefully regarding uploads can speed up the deposit timeline.

How long does it take for a mobile deposit to go in?

Some consumers may wonder, how long does it take a mobile deposit to clear? It usually takes a business day for a mobile deposit to show up in a bank account, but if all goes well and no delays occur, a mobile deposit may appear within just a few minutes.

Why is my mobile deposit taking so long?

Mobile deposit delays can be caused by a variety of factors such as using a blurry photo of the check, entering information incorrectly, or not endorsing the check properly. Double-check all key details before submitting the deposit to speed up the timeline.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2022 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
SoFi members with direct deposit can earn up to 1.25% annual percentage yield (APY) interest on all account balances in their Checking and Savings accounts (including Vaults). Members without direct deposit will earn 0.70% APY on all account balances in their Checking and Savings accounts (including Vaults). Interest rates are variable and subject to change at any time. Rate of 1.25% APY is current as of 4/5/2022. Additional information can be found at
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Photo credit: iStock/RyanJLane

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What Is a Minimum Opening Deposit?

Guide to Minimum Deposits

When it comes to managing your financial life, among the most important hubs are your bank accounts, but sometimes opening one can involve a minimum deposit. These accounts allow you to deposit funds, pay bills, transfer money, and save for everything from an emergency fund to the down payment on a house. Many financial entities may require a minimum deposit—an initial amount of money—in order to get started.

Fortunately, there are banks, credit unions, and other financial institutions that don’t require a minimum opening deposit so you can stash and spend your money even if you’re low on cash. Others may require one, sometimes in exchange for additional premium services.

It’s important to understand what a minimum deposit is, how it works, and how to open a bank account to get the most out of your money. We’ll explore those topics here.

What Is a Minimum Deposit?

A minimum deposit is the amount of money you need to open an account with a financial institution. It can also refer to the minimum balance you must maintain in order to receive certain perks or avoid fees.

Whether you’re starting a new checking or savings account, you’ll probably notice that some financial institutions may require a minimum opening deposit. But banks are competing for your business, so many financial institutions will waive minimum deposit requirements in order to entice first-time customers. Accounts that ask for a higher opening deposit tend to provide extra services.

Recommended: How Much Money is Required to Open a Checking Account?

How Do Minimum Deposits Work?

If you’re wondering why minimum deposits exist, let’s explain how they work. Some financial institutions need minimum deposits and balances to help pay for overhead expenses, such as administrative fees or direct deposit services. Having minimum deposits and balances helps banks and credit unions ensure that they are taking in enough money to lend to other customers. They also stand to profit from fees if account requirements aren’t met.

You might consider a minimum opening deposit as an entry fee into the world of checking and savings. Maintaining a required minimum amount allows you to stay in game, avoid fees, and keep the benefits outlined in your account agreement.

You may wonder if the opposite scenario applies: Is there a maximum limit to an initial opening deposit? That’s not usually the case. In fact, the bigger your opening deposit, the more benefits you may get. You may qualify for a better annual percentage yield (APY) when you deposit and maintain a higher amount of money in your account.

Still, it’s worth noting that you may be able to get perks even without a minimum opening deposit. Even with zero down or $25, banks and credit unions may offer a network of fee-free ATMs, incentives for using direct deposit, no minimum balance fees, and overdraft coverage.

Recommended: How to Set Up a Direct Deposit

Real World Example of a Minimum Deposit

Let’s say you want to open your first-ever checking or savings account. To do so, a bank may ask you for a minimum deposit. This could cost anywhere from $25 to $100 to open a standard checking account. Let’s say it’s $100 to open the account, and there is a minimum monthly balance of $100 as well in order to avoid fees. You would open the account with $100 in cash or via a transfer or check. Then, you would have to be sure that, as you are paying bills, you don’t dip below that $100 mark if you want to dodge account charges. So you would either need to meticulously balance your checkbook or use online alerts to warn you about when your funds were sliding down close to $100.

While $100 may be a common enough number for standard bank accounts, on the higher end, some premium accounts require significantly higher minimum deposits. There are investment accounts that require five-figure opening deposits. But these accounts typically include benefits such as oversight from a financial advisor who can help with estate and retirement planning.

Ready for a Better Banking Experience?

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Types of Minimum Balance Requirements

When researching checking and savings accounts, keep in mind that there are typically two types of minimum balance requirements. Let’s clarify those terms, since they can sometimes be used interchangeably and cause confusion. They are:

Minimum Opening Deposits

When applying for a new checking or savings account, many credit unions and banks will ask you for an opening deposit. To pay this, you can use a check or money order, a debit card, or transfer money from an outside banking institution or an account at the same bank. Some financial entities require no minimum opening deposits at all.

Minimum Monthly Deposits

Some banks and credit unions may waive service fees and award higher interest rates if you make a minimum monthly deposit, say $500 or more, through qualifying direct deposits into your account. The amount required differs among financial institutions and types of accounts.

Be aware that some accounts might charge a fee if you slip below a minimum monthly balance. If you sign up for one of these accounts and want to avoid those charges, you need to take note of when your funds will be available. If you do opt for one of these accounts, you can often set up alerts on your bank’s app to let you know when your funds are slipping below a certain threshold.

Opening a New Account

Starting a new checking or savings account isn’t rocket science. Banks and other financial entities want to make the process as simple as possible in order to attract new customers. Nowadays, you don’t have to physically go into a bank to open a new account. With online banking services available, sometimes all it takes is a few clicks to get your account up and running.

Besides the minimum deposit requirement, there are a few steps to take to prepare for opening a new account.

Choose the Right Account

There are different kinds of checking and savings accounts. Which one you pick depends on your goals, lifestyle, and the perks you want out of the account. Consider these options before making your choice:

•   Checking accounts. This is the place to store your money for everyday spending. You’ll be able to access it via a debit card, mobile banking services, and checks. Typically, these accounts offer no or very low interest, but high-yield checking accounts can give you a better rate. You’re most likely to find more competitive rates at online banks vs bricks and mortar ones.

•   Savings accounts. If you are looking for a place to store your cash and make it grow, a savings account with a competitive interest rate can be a solid choice. With a high-yield savings account, you could potentially earn up to ten times more than the interest on a standard savings or checking account.

Some banks and financial services offer the best of both worlds — linked checking and savings accounts which can give you added convenience and other benefits.

When choosing any kind of account, be mindful about convenient perks and pesky fees. Here are some things to consider as you evaluate how accounts stack up and which one is right for you:

•   The minimum deposit required

•   Monthly service fees

•   Overdraft fees

•   Out-of-network ATM fees (Tip: Choose a bank with ATMs close to your home and places you frequently go)

•   Online banking services, including a mobile app for check deposits, online bill payments, and direct deposit features

•   The annual percentage yield (APY)

•   Cash-back debit card services

Gather Documents

To open a new checking, savings, or even other investment accounts, most financial institutions require at least two forms of government-issued IDs, including:

•   A valid passport, driver’s license, or other government-issued photo IDs

•   Social security card or individual taxpayer identification number

•   Birth certificate

•   Utility bill with your current address

•   Student accounts may require a student ID or school acceptance letter as proof of enrollment

Confirm Eligibility

Make sure you meet the bank or credit union’s age and eligibility requirements. You usually need to be at least 18 years old to open a traditional checking or savings account. If you are a student or under 18, a parent may have to be involved in the process. Check the guidelines before you begin.

Fill Out the Application

Once you’ve found the right account and gathered the required documents, you are ready to fill out the application. This can be done in-person at a bank or credit union, or online from the comfort of your home.
The application form is likely to be straightforward. You’ll provide your basic personal and contact information, indicate what type of account you want, and upload or provide proof of identification. If you open an account online, this can all be done in minutes.

Recommended: How to Open a New Bank Account Online

Deposit the Minimum

After you’ve entered all your information on the new account application, the final step is to make the minimum opening deposit. If no minimum deposit is required, you can fund your new account with as little or as much money as you wish. If you do need to make a deposit, this can be done via cash or a check if applying in person. Otherwise, you can link your new account to an existing one and transfer in some funds. That’s it; you’re done! You’ll be all set with your new account.

The Takeaway

A required minimum deposit is only one factor to consider when choosing a new checking, savings, or other type of account. And not every financial institution requires one; in some cases, you can get started with no money at all. However, besides a minimum deposit, there are other things to consider — the type of account, fees, annual percentage yields (APYs), and types of banking services offered. In the end, choose the one that provides the most functionality for your lifestyle and growth for your money.

While you’re shopping for an account, take a look at what SoFi offers. When you open our linked Checking and Savings with direct deposit, there’s no minimum deposit and no minimum monthly balance or other account fees. You’ll earn 1.25% APY which outpaces the national average for checking accounts by a longshot!

Ready to start spending, saving, and earning all in one place? Sign up for SoFi.


Is there a minimum amount you can deposit in a bank?

Some banks and credit unions may require a minimum deposit of $25 to $100 in order to open a checking or savings account. Beyond that, there’s no minimum amount necessary to deposit per week or month, but some accounts may require a daily minimum requirement to avoid fees or closing the account.

What is the minimum requirement for a savings account?

Some basic savings accounts may require a minimum deposit between $25 to $100. They may also require you to maintain a minimum daily or monthly balance — between $300 to $500 . But some savings accounts have no minimum deposit or minimum balance requirements. It can pay to shop around.

Which banks don’t require a minimum balance?

Financial institutions that don’t require a minimum balance to start a checking account as of press time include: Capital One 360 Free Checking, Ally Interest Checking, Alliant Credit Union High-Rate Checking, and SoFi Checking and Savings.

Photo credit: iStock/pinstock

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2022 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
SoFi members with direct deposit can earn up to 1.25% annual percentage yield (APY) interest on all account balances in their Checking and Savings accounts (including Vaults). Members without direct deposit will earn 0.70% APY on all account balances in their Checking and Savings accounts (including Vaults). Interest rates are variable and subject to change at any time. Rate of 1.25% APY is current as of 4/5/2022. Additional information can be found at
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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Having a Savings Accounts on Social Security Disability

Are You Allowed to Have a Savings Account While on Social Security Disability?

If someone is applying for disability benefits, they may be relieved to learn, yes, you can have a savings account on Social Security disability. While there are certain financial factors that can disqualify someone from Social Security eligibility, having a savings account is not one of those factors.

But of course, there are some subtleties to be aware of with any benefits matter, so let’s take a closer look. Here, we’ll share:

•   A better understanding of how Social Security works

•   The difference between SSDI (Social Security Disability Insurance) and SSI (Supplemental Security Income)

•   Who’s eligible for Social Security disability benefits

•   What the guidelines are for having a savings account while receiving benefits

•   What can lead to disqualification for benefits.

Let’s learn more about this important topic.

What Is Social Security?

First, let’s take a closer look at how Social Security works. There’s a reason the Social Security program is so well known: It has been providing financial support to Americans for many decades. Social Security benefits are designed to help maintain the basic well-being and protection of the American people. These benefits have been around since the 1930’s in response to the economic crisis caused by the Great Depression. Today, one in five Americans currently receive some form of Social Security benefits — one third of those are disabled, dependents, or survivors of deceased workers. More than 10 million Americans are either disabled workers or their dependents.

Can I Get Social Security Disability Insurance or Supplemental Security Income with a Savings Account?

So, can you have a savings account on Social Security disability? You may be thinking you can’t have that kind of asset if you want to qualify. Well, we have good news here. It is indeed possible to receive Social Security Disability Insurance (SSDI) or supplemental security income if you have a checking or a savings account. Even better, it doesn’t matter how much money is held in that account. There are other program requirements that must be met to qualify for SSDI, but how much money someone has or doesn’t have in the bank isn’t one of them.

Eligibility for SSDI

In order to be eligible for SSDI benefits, the individual must have worked in a job or jobs that were covered by Social Security and have a current medical condition that meets Social Security’s definition of disability. Generally, this program can benefit those who are unable to work for a year or more due to a disability. It provides monthly benefits until the individual is able to work again on a regular basis. If someone reaches full retirement age while receiving SSDI benefits, those benefits will automatically convert to retirement benefits maintaining the same amount of financial support.

Eligibility for SSI

Here’s a bit more about the Supplemental Security Income (SSI) program and who is eligible for SSI benefits. It is a federal support program that receives funding from general tax revenue, not Social Security taxes. This program provides financial support to help recipients cover basic needs such as clothing, shelter, and food.
This program provides aid to aged (65 or older), blind, and disabled people who have little or no income (or limited resources). To qualify, participants must be a U.S. citizen or national, or qualify as one of certain categories of noncitizens.

What You Have to Tell SS about Your Assets if You Want Benefits

Can you have a savings account on SSI or SSDI? There are certain assets (in this case, they’re known as resources) that must be disclosed in order to qualify for benefits through the SSI program. However, there aren’t any such limits in place for the SSDI program.

What the value of someone’s resources is (aka their financial assets) helps determine if they are eligible for Social Security benefits. If a recipient has more resources than allowed by the limit at the beginning of the month (when resources are counted), they won’t receive benefits for that month. They can be eligible again the next month if they use up or sell enough resources to fall below the limit.

Eligible resources can include:

•   Cash

•   Bank accounts (checking account, regular savings account, growth savings account; whatever you have)

•   Stocks, mutual funds, and U.S. savings bonds

•   Land

•   Life insurance

•   Personal property

•   Vehicles

•   Anything that can be changed to cash (and can be used for food and shelter)

•   Deemed resources

The term “deemed resources” refers to the resources of a spouse, parent, parent’s spouse, sponsor of a noncitizen, or sponsor’s spouse of the Social Security benefits applicant. A certain amount of these deemed resources are subtracted from the overall limit. For example, if a child under 18 lives with only one parent, $2,000 worth of deemed resources won’t count towards the limit. If they live with two parents, that amount rises to $3,000.

Recommended: What are the Different Types of Savings Accounts?

How Much Can I Have in My Savings Account and Receive SSI or SSDI?

For the SSI program, the total resource limit (which includes what’s in a checking account) can not be more than $2,000 for an individual or $3,000 for a couple. Again, there are no asset limits when it comes to the SSDI program. If someone is applying for the SSDI program, they can surpass that $3,000 limit, and it won’t matter as it doesn’t apply to them.

SSA Exceptions and Programs

Not every asset someone owns will count towards the SSI resource limit (remember, there is no such limit for the SSDI program). For the SSI program, there are some exceptions regarding what counts as a resource. The following assets aren’t taken into consideration:

•   The home the applicant lives in and the land they live on

•   One vehicle—regardless of value—if the applicant or a member of their

•   household use it for transportation

•   Household goods and personal effects

•   Life insurance policies (with a combined face value of $1,500 or less)

•   Burial spaces for them or their immediate family

•   Burial funds for them and their spouse (each valued at $1,500 or less)

•   Property they or their spouse use in a trade or business or to do their job

•   If blind or disabled, any money they set aside under a Plan to Achieve Self-Support

•   Up to $100,000 of funds in an Achieving a Better Life Experience account established through a State ABLE program

The Takeaway

When applying for Social Security benefits, having a savings account may or may not impact your eligibility. It depends on which program they are applying for. It is possible to have a savings account while receiving SSDI benefits. It’s also possible to have a savings account while receiving SSI, but there are limits regarding how much the value of the applicant’s assets (including what’s in their savings accounts) can be worth to qualify for support.

If you happen to be in the market for a savings account, take a look at what SoFi has to offer. When you sign up for our linked online bank account, with direct deposit you’ll earn a super competitive 1.25% APY so your money grows faster. And you won’t pay any of the usual bank fees.

Are you ready to bank smarter with SoFi?


Does Social Security look at your bank account?

That depends. If someone is applying for Supplemental Social Security Income (SSI) benefits, their personal assets are taken into consideration when it comes to eligibility. With Social Security Disability Insurance (SSDI), applicant assets aren’t taken into consideration.

Does money in the bank affect Social Security disability?

No, money in the bank doesn’t affect Social Security disability benefits. There is a $2,000 to $3,000 limit (varies by household) for the SSI program, but the SSDI program does not take personal assets into account when determining eligibility.

How much money can I have in my account on disability?

Personal assets aren’t taken into account, including savings, when applying for the SSDI program. If you’re wondering if you can have a savings account on Social Security disability, the answer is yes. A savings account is allowed.

Photo credit: iStock/MicroStockHub

SoFi members with direct deposit can earn up to 1.25% annual percentage yield (APY) interest on all account balances in their Checking and Savings accounts (including Vaults). Members without direct deposit will earn 0.70% APY on all account balances in their Checking and Savings accounts (including Vaults). Interest rates are variable and subject to change at any time. Rate of 1.25% APY is current as of 4/5/2022. Additional information can be found at
SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2022 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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FAFSA for Grad School and How It Differs from Undergrad

Guide to FAFSA for Graduate Students

Graduate school can boost your marketability, help you pursue your academic and professional interests, help you make connections and potentially increase your earnings.

When you’re ready to invest in your future by attending graduate school, your thoughts may also turn to paying for grad school. Does FAFSA® cover graduate school?

In short, yes. The FAFSA application can be used by graduate students to apply for financial aid. Graduate students may qualify for federal grants, work-study, and federal student loans by completing the Free Application for Federal Student Aid (FAFSA). (You may already be familiar with the FAFSA from filing it when you were an undergraduate.) The FAFSA is a form that you must fill out every year if you want to be considered for federal student aid for your graduate school program.

Do You Have to Fill Out FAFSA for Graduate School?

While filling out the FAFSA is not required to attend graduate school, students who are interested in receiving federal student aid as graduate students will need to fill out the FAFSA. For example, you may not want to file the FAFSA if you have the money stashed away for graduate school or if you plan to pay for graduate school using a combination of tuition reimbursement money from your employer and money from your weekly paycheck.

Recommended: FAFSA Guide

Grad School Financial Aid Eligibility

How do you become eligible for financial aid in graduate school?

In addition to meeting basic FAFSA requirements, like being a U.S. citizen or qualifying noncitizen, you’ll need to fill out the FAFSA to become eligible for aid. You can file the FAFSA graduate school form after October 1 preceding the year you plan to attend graduate school. For example, if you plan to attend graduate school beginning in the fall of 2023, you can fill out the FAFSA beginning on October 1, 2022. Check on the financial aid deadlines at the graduate schools at which you plan to apply.

You’ll also need to sign up for an FSA ID (if you don’t already have one for your undergraduate years), which is your login. You can use your FSA ID to sign your Master Promissory Note (MPN) (your loan agreement), apply for repayment plans, complete loan counseling, and use the Public Service Loan Forgiveness help tool.

Grants, work-study, and federal student loans may help you in paying for grad school. Let’s walk through each of these types of financial aid.

Recommended: I Didn’t Get Enough Financial Aid: Now What?


Grants are primarily need-based awards, though some grants are awarded based on merit. Like scholarships, grants generally do not need to be repaid once you complete your program (except in certain circumstances, such as not completing your enrollment period).

Grants can come from the federal government, your state, your graduate school, or a private or nonprofit organization.

Some grants, such as the Pell Grant and FSEOG Grant, are reserved for undergraduate students only. Furthermore, grants such as the Iraq and Afghanistan Service Grants require you to be under 24 years old or enrolled in college at least part-time at the time of a parent’s or guardian’s death. If you don’t meet those requirements, you cannot receive this type of grant.

However, graduate students may qualify for a TEACH Grant, which means that you could receive up to $4,000 per year if you plan to complete coursework related to education. You must teach at a school or educational service agency that serves low-income students for four years, teach in a high-need field and complete the required four years of teaching within eight years after you graduate.

There may be additional grants available to you depending on your course of study.

Recommended: Grants For College – Find Free Money for Students


You may be familiar with work-study programs through your undergraduate institution. Graduate students are also eligible for the Federal Work-Study Program, which provides part-time jobs to students who demonstrate financial need.

Work-study is available to both full-time or part-time students, though your graduate school must participate in the Federal Work-Study Program. Your school’s financial aid office can give you more details about the work-study program and the types of jobs available to you. Your program may offer assistantships or teaching roles to help you pay for school.

Federal Student Loans

Just like any other loan, you must repay federal student loans with interest. However, the federal student loans you can get in graduate school are slightly different from those you can take out in undergraduate school. For example, you cannot take advantage of Direct Subsidized Loans, which are loans in which the government pays the interest while you are in college and also during the grace period. Direct Subsidized Loans are only available to undergraduate students with demonstrated need.

However, you can take more money out in Direct Unsubsidized Loans compared to what you could access in your undergraduate years, which we’ll go over in the next section.

Direct Unsubsidized Loans

What exactly is a Direct Unsubsidized Loan? It’s a loan that offers a low, fixed interest rate and flexible repayment options. However, unlike a Direct Subsidized Loan, the government does not pay the interest while you’re in college and during the grace period. Graduate students can tap into up to $20,500 at an interest rate of 5.28%, for the 2021-2022 school year.

Grad PLUS Loans

To qualify for a grad PLUS loan, also called a Direct PLUS Loan, you must be a graduate or professional student enrolled at least half-time in a program that will lead to a graduate or professional degree or certificate. You must not have an adverse credit history or must meet additional criteria to be considered if you do not meet credit standards.

You can borrow up to the cost of attendance of your graduate school program minus other financial assistance you get. The current interest rate for Direct PLUS Loans for graduate students is a fixed 6.28%.

All students must meet general eligibility requirements for federal student aid to qualify for loans.

Tips on Filling Out FAFSA as a Grad Student

When you fill out the FAFSA as a graduate student, what can you expect? Continue reading for more information on when you’ll hear back and the average disbursed amount you can receive.

When Will You Hear Back?

You’ll submit your Federal Student Aid (FSA) ID and information about your Social Security number or Alien Registration Number, bank account balances and investment account information as well as federal income tax information. Your dependency status will differ, however, because you’re no longer considered a dependent student and will not input your parents’ information onto the FAFSA.

Once you submit the FAFSA form, you’ll receive a Student Aid Report (SAR) in up to three weeks and can learn basic information about your aid eligibility through that report.

It’s a good idea to contact the graduate school you plan to attend to determine any other information you must submit to qualify for other types of institutional aid.

The university will then review your FAFSA information and other documents and send you a financial aid award that details the scholarships, grants, and federal student loans you can receive. You may receive your financial aid award not long after you receive your acceptance letter to the graduate school. However, every school is different, so it’s a good idea to ask the admission or financial aid office of your school for more information.

Average Disbursed Amount

Graduate Unsubsidized Loans have borrower caps. Again, you can access $20,500 at a current interest rate of 5.28%. Direct PLUS Loans have no maximum amount you can borrow and the fixed interest rate is 6.28%. You can borrow up to the cost of attendance for the institution with a Direct PLUS Loan.

Recommended: What Is Cost of Attendance?

FAFSA for Grad School vs Undergrad

Let’s take a look at all the amount of money you can receive based on the FAFSA results across both undergraduate and graduate school, including the limits to unsubsidized loans. (The unsubsidized amount is aggregated across all years of graduate and undergraduate school.)


Dependent Students

Independent Students

First-Year Undergraduate Annual Loan Limit $5,500 (not more than $3,500 in subsidized loans) $9,500 (not more than $3,500 in subsidized loans)
Second-Year Undergraduate Annual Loan Limit $6,500 (not more than $4,500 in subsidized loans) $10,500 (not more than $4,500 in subsidized loans)
Third Year and Beyond Undergraduate Annual Loan Limit $7,500 per year (not more than $5,500 in subsidized loans) $12,500 (not more than $5,500 in subsidized loans)
Graduate or Professional Student Annual Loan Limit Not applicable (graduate students are independent students) $20,500 (unsubsidized only)
Subsidized and Unsubsidized Aggregate Loan Limit $31,000 (not more than $23,000 can come from subsidized loans) $57,500 for undergraduates (not more than $23,000 can come from subsidized loans); $138,500 for graduate or professional students (not more than $65,500 in subsidized loans, and this includes an aggregated amount from undergraduate school)

Alternatives to Federal Aid

What alternatives to federal aid exist for graduate school? Let’s take a look at private student loans, grants, scholarships, fellowships and assistantships, and employer tuition assistance.

Private Student Loans

Private student loans are offered by financial institutions such as a bank, credit union, or another type of private student loan lender. Just like private student loans for undergraduates, you can get private student loans for graduate school, and you may be familiar with this process if you obtained private student loans to help you pay for your undergraduate education.

Private student loans usually carry a higher interest rate than federal student loans. Your interest rate will be based on factors including your credit score and income. To get a private student loan, you’ll fill out an application and the lender determines your rates and terms. It’s often possible to hear back from a private student loan lender quickly.

However, it’s important to recognize that you lose out on several federal benefits with private student loans, including income-driven repayment programs (where you pay back your loans based on your income level), loan forgiveness (in which you don’t have to repay your loans), and deferment options (where you put off paying off your loans).


You can find research grants at the graduate and professional level, such as the Research Publication Grants in Engineering, Medicine, and Science through the American Association of University Women . Certain grants are only restricted to graduate students, such as the prestigious Fulbright Graduate Degree Grants , sponsored by the U.S. Department of State.

Your state may also distribute grant money for students based on need or interest. The financial aid office at your graduate school will have more information about both graduate school-specific and organization-specific grants.


Just like grants, you can receive scholarships from a number of sources, including your graduate school, local organizations, philanthropic associations, and more. Also similar to grants, you do not have to pay scholarships back.

Look for scholarships from professional associations in your field. Your graduate school department or career department can often help you find scholarships based on your qualifications.

Fellowships and Assistantships

Graduate fellowships provide financial support to graduate students and vary widely in their purpose, duration, and requirements. They are often awarded at a specific stage in the educational continuum.

An assistantship, on the other hand, also provides financial support, except they provide experience in a profession under a faculty or staff member. They vary depending on the academic department’s needs, funds available, and graduate student qualifications. They may include teaching, research, or administrative duties.

Graduate departments can offer more information about fellowships and assistantships.

Employer Tuition Assistance

If you work for an employer that offers tuition assistance, your company may cover some or all of the costs of your education as long as you meet the program’s eligibility requirements.

You may even be able to access tuition assistance through a part-time job. Your human resources office will have details about tuition assistance, qualifications, and reimbursement procedures.

The Takeaway

When you’re trying to put together the best ways to finance your graduate school education, it often requires you to take a look at many different sources of money, including saving money for grad school, grants, scholarships, fellowships and assistantships, federal student loans, private student loans, and more. And the answer to the question, “Do you fill out FAFSA for grad school?” is yes — if you want to qualify for federal aid.

Private student loans are one of the most common ways to finance your graduate school education, and SoFi offers low fixed rates or variable interest rates on private student loans to fit your budget.

Learn more about how a SoFi private student loan could help you pay for graduate school.


How much can FAFSA disburse for graduate school?

Graduate students can borrow up to $20,500 in unsubsidized loans each year. PLUS loans are also an option, and allow students to borrow up to the cost of attendance.

Is financial aid harder to qualify for graduate students?

It’s not necessarily harder to qualify for financial aid. However, in terms of federal student loans, graduate students are subject to different FAFSA requirements, including dependency status — you are independent for financial aid purposes and no longer tied to your parents’ income. In addition, graduate students are ineligible for Direct Subsidized Loans and subject to borrowing limits.

Do you need to make a new FAFSA account for graduate school?

No, you do not need to make a new FAFSA account for graduate school. You can keep the same FSA ID that you had during your undergraduate years. However, you will have to file the FAFSA for graduate school every year prior to the start of a new academic year.

Photo credit: iStock/sturti

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Target Date Funds: What Are They and How to Choose One

A target date fund is a type of mutual fund designed to be an all-inclusive portfolio for long-term goals like retirement. While target date funds could be used for shorter-term purposes, the specified date of each fund — e.g. 2040, 2050, 2065, etc. — is typically years in the future, and indicates the approximate point at which the investor would begin withdrawing funds for their retirement needs (or another goal, like saving for college).

Unlike a regular mutual fund, which might include a relatively static mix of stocks and bonds, the underlying portfolio of a target date fund shifts its allocation over time, following what is known as a glide path. The glide path is basically a formula or algorithm that adjusts the fund’s asset allocation to become more conservative as the target date approaches, thus protecting investors’ money from potential volatility as they age.

If you’re wondering whether a target date fund might be the right choice for you, here are some things to consider.

What Is a Target Date Fund?

A target date fund (TDF) is a type of mutual fund where the underlying portfolio of the fund adjusts over time to become gradually more conservative until the fund reaches the “target date.” By starting out with a more aggressive allocation and slowly dialing back as years pass, the fund’s underlying portfolio may be able to deliver growth while minimizing risk.

This ready-made type of fund can be appealing to those who have a big goal (like retirement or saving for college), and who don’t want the uncertainty or potential risk of managing their money on their own.

While many college savings plans offer a target date option, target date funds are primarily used for retirement planning. The date of most target funds is typically specified by year, e.g. 2035, 2040, and so on. This enables investors to choose a fund that more or less matches their own target retirement date. For example, a 30-year-old today might plan to retire in 38 years at age 68, or in 2060. In that case, they might select a 2060 target date fund.

Investors typically choose target date funds for retirement because these funds are structured as long-term investment portfolios that include a ready-made asset allocation, or mix of stocks, bonds, and/or other securities. In a traditional portfolio, the investor chooses the securities — not so with a target fund. The investments within the fund, as well as the asset allocation, and the glide path (which adjusts the allocation over time), are predetermined by the fund provider.

Sometimes target date funds are invested directly in securities, but more commonly TDFs are considered “funds of funds,” and are invested in other mutual funds.

Target date funds don’t provide guaranteed income, like pensions, and they can gain or lose money, like any other investment.

Whereas an investor might have to rebalance their own portfolio over time to maintain their desired asset allocation, adjusting the mix of equities vs. fixed income to their changing needs or risk tolerance, target date funds do the rebalancing for the investor. This is what’s known as the glide path.

How Do Target Date Funds Work?

Now that we know what a target date fund is, we can move on to a detailed consideration of how these funds work. To understand the value of target date funds and why they’ve become so popular, it helps to know a bit about the history of retirement planning.

Brief Overview of Retirement Funding

In the last century or so, with technological and medical advances prolonging life, it has become important to help people save additional money for their later years. To that end, the United States introduced Social Security in 1935 as a type of public pension that would provide additional income for people as they aged. Social Security was meant to supplement people’s personal savings, family resources, and/or the pension supplied by their employer (if they had one).

💡 Recommended: When Will Social Security Run Out?

By the late 1970s, though, the notion of steady income from an employer-provided pension was on the wane. So in 1978 a new retirement vehicle was introduced to help workers save and invest: the 401(k) plan.

While 401k accounts were provided by employers, they were and are chiefly funded by employee savings (and sometimes supplemental employer matching funds as well). But after these accounts were introduced, it quickly became clear that while some people were able to save a portion of their income, most didn’t know how to invest or manage these accounts.

The Need for Target Date Funds

To address this hurdle and help investors plan for the future, the notion of lifecycle or target date funds emerged. The idea was to provide people with a pre-set portfolio that included a mix of assets that would rebalance over time to protect investors from risk.

In theory, by the time the investor was approaching retirement, the fund’s asset allocation would be more conservative, thus potentially protecting them from losses. (Note: There has been some criticism of TDFs about their equity allocation after the target date has been reached. More on that below.)

Target date funds became increasingly popular after the Pension Protection Act of 2006 sanctioned the use of auto-enrollment features in 401k plans. Automatically enrolling employees into an organization’s retirement plan seemed smart — but raised the question of where to put employees’ money. This spurred the need for safe-harbor investments like target date funds, which are considered Qualified Default Investment Alternatives (QDIA) — and many 401k plans adopted the use of target date funds as their default investment.

Today nearly all employer-sponsored plans offer at least one target date fund option; some use target funds as their default investment choice (for those who don’t choose their own investments). Approximately $1.8 trillion dollars are invested in target funds, according to Morningstar.

What a Target Date Fund Is and Is Not

Target date funds have been subject to some misconceptions over time. Here are some key points to know about TDFs:

•   As noted above, target date funds don’t provide guaranteed income; i.e. they are not pensions. The amount you withdraw for income depends on how much is in the fund, and an array of other factors, e.g. your Social Security benefit and other investments.

•   Target date funds don’t “stop” at the retirement date. This misconception can be especially problematic for investors who believe, incorrectly, that they must withdraw their money at the target date, or who believe the fund’s allocation becomes static at this point. To clarify:

◦   The withdrawal of funds from a target date fund is determined by the type of account it’s in. Withdrawals from a TDF held in a 401k plan or IRA, for example, would be subject to taxes and required minimum distribution (RMD) rules.

◦   The TDF’s asset allocation may continue to shift, even after the target date — a factor that has also come under criticism.

•   Generally speaking, most investors don’t need more than one target date fund. Nothing is stopping you from owning one or two or several TDFs, but there is typically no need for multiple TDFs, as the holdings in one could overlap with the holdings in another — especially if they all have the same target date.

Example of a Target Date Fund

Most investment companies offer target date funds, from Black Rock to Vanguard to Charles Schwab, Fidelity, Wells Fargo, and so on. And though each company may have a different name for these funds (a lifecycle fund vs. a retirement fund, etc.), most include the target date. So a Retirement Fund 2050 would be similar to a Lifecycle Fund 2050.

How do you tell target date funds apart? Is one fund better than another? One way to decide which fund might suit you is to look at the glide path of the target date funds you’re considering. Basically, the glide path shows you what the asset allocation of the fund will be at different points in time. Since, again, you can’t change the allocation of the target fund — that’s governed by the managers or the algorithm that runs the fund — it’s important to feel comfortable with the fund’s asset allocation strategy.

How a Glide Path Might Work

Consider a target date fund for the year 2060. Someone who is about 30 today might purchase a 2060 target fund, as they will be 68 at the target date.

Hypothetically speaking, the portfolio allocation of a 2060 fund today — 38 years from the target date — might be 80% equities and 20% fixed income or cash/cash equivalents. This provides investors with potential for growth. And while there is also some risk exposure with an 80% investment in stocks, there is still time for the portfolio to recover from any losses, before money is withdrawn for retirement.

When five or 10 years have passed, the fund’s allocation might adjust to 70% equities and 30% fixed income securities. After another 10 years, say, the allocation might be closer to 50-50. The allocation at the target date, in the actual year 2060, might then be 30% equities, and 70% fixed income. (These percentages are hypothetical.)

As noted above, the glide path might continue to adjust the fund’s allocation for a few years after the target date, so it’s important to examine the final stages of the glide path. You may want to move your assets from the target fund at the point where the predetermined allocation no longer suits your goals or preferences.

Pros and Cons of Target Date Funds

Like any other type of investment, target date funds have their advantages and disadvantages.


•   Simplicity. Target funds are designed to be the “one-stop-shopping” option in the investment world. That’s not to say these funds are perfect, but like a good prix fixe menu, they are designed to include the basic staples you want in a retirement portfolio.

•   Diversification. Related to the above, most target funds offer a well-diversified mix of securities.

•   Low maintenance. Since the glide path adjusts the investment mix in these funds automatically, there’s no need to rebalance, buy, sell, or do anything except sit back and keep an eye on things. But they are not “set it and forget it” funds, as some might say. It’s important for investors to decide whether the investment mix and/or related fees remain a good fit over time.

•   Affordability. Generally speaking, target date funds may be less expensive than the combined expenses of a DIY portfolio (although that depends; see below).


•   Lack of control. Similar to an ordinary mutual fund or exchange-traded fund (ETF), investors cannot choose different securities than the ones available in the fund, and they cannot adjust the mix of securities in a TDF or the asset allocation. This could be frustrating or limiting to investors who would like more control over their portfolio.

•   Costs can vary. Some target date funds are invested in index funds, which are passively managed and typically very low cost. Others may be invested in actively managed funds, which typically charge higher expense ratios. Be sure to check, as investment costs add up over time and can significantly impact returns.

What Are Target Date Funds Good For?

If you’re looking for an uncomplicated long-term investment option, a low-cost target date fund could be a great choice for you. But they may not be right for every investor.

Good For…

Target date funds tend to be a good fit for those who want a hands-off, low-maintenance retirement or long-term investment option.

A target date fund might also be good for someone who has a fairly simple long-term strategy, and just needs a stable portfolio option to fit into their plan.

In a similar vein, target funds can be right for investors who are less experienced in managing their own investment portfolios and prefer a ready-made product.

Not Good For…

Target date funds are likely not a good fit for experienced investors who enjoy being hands on, and who are confident in their ability to manage their investments for the long term.

Target date funds are also not right for investors who are skilled at making short-term trades, and who are interested in sophisticated investment options like day-trading, derivatives, cryptocurrencies, and more.

Investors who like having control over their portfolios and having the ability to make choices based on market opportunities might find target funds too limited.

The Takeaway

Target date funds can be an excellent option for investors who aren’t geared toward day-to-day portfolio management, but who need a solid long-term investment portfolio for retirement — or another long-term goal like saving for college. Target funds offer a predetermined mix of investments, and this portfolio doesn’t require rebalancing because that’s done automatically by the glide path function of the fund itself.

The glide path is basically an asset allocation and rebalancing feature that can be algorithmic, or can be monitored by an investment team — either way it frees up investors who don’t want to make those decisions. Instead, the fund chugs along over the years, maintaining a diversified portfolio of assets until the investor retires and is ready to withdraw the funds.

Target funds are offered by most investment companies, and although they often go by different names, you can generally tell a target date fund because it includes the target date, e.g. 2040, 2050, 2065, etc.

If you’re ready to start investing for your future, you might consider opening a brokerage account with SoFi Invest® in order to set up your own portfolio and learn the basics of buying and selling stocks, bonds, exchange-traded funds (ETFs), crypto and more. Note that SoFi members have access to complimentary financial advice from professionals.

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