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Fractional reserve banking is an economic system that goes on behind the scenes at the institutions where you keep your money. It allows the bank to keep only a fraction of the money you deposit as cash for withdrawal.

The rest of the funds may be loaned out for other purposes. This allows the bank to make money and stay in business, and it can also help keep the economy humming along.

Here’s a closer look at fractional reserve banking, its history, and its pros and cons.

What Is Fractional Reserve Banking?

The system of banking used most widely around the world today is called Fractional Reserve Banking (FRB). In this system, only some of the money that exists in bank accounts is backed by physical cash that people can withdraw. Banks can then take the extra money and lend it out, which theoretically helps to expand the economy.

In simpler terms, if someone goes to the bank and deposits money into their account, the bank only holds on to a certain amount of that cash, and they lend the rest of that out to individuals and businesses. This encourages spending and investing and puts more money into the economy as a whole.

Fractional reserve banking is also one of the main ways that banks make money, as they can see earnings from the difference between any interest they pay to customers and the interest they charge borrowers for taking out loans.

💡 Quick Tip: Typically, checking accounts don’t earn interest. However, some accounts do, and online banks are more likely than brick-and-mortar banks to offer you the best rates.

The History of Fractional Reserve Banking

The origins of fractional reserve banking aren’t entirely clear, but the system is generally believed to have been created during the Middle Ages. At that time, more and more people began storing their money in banks, and the banks wanted to be able to transfer coins between customer accounts, rather than storing the exact coins that were deposited until the future time when the customer wanted to withdraw them. This evolved into deposits being treated as a sort of IOU, and the system continued to develop from there.

Requirements of Fractional Reserve Banking

In the past, the Federal Reserve (aka “the Fed”) required banks of a certain size to have a set percentage of funds tied up in reserves. Prior to March 2020, large banks (whether traditional vs. online) with more than $124.2 million in assets were required to keep 10% in reserves, but smaller banks had different requirements. Banks with assets between $16.3 million and $124.2 million were required to hold 3% in reserves, and banks with under $16.3 million in assets were not required to hold any reserves.

These reserves could be held by the bank itself or put into an account at the Federal Reserve, known as a reserve balance.

However, in March 2020, the Federal Reserve Board lowered the reserve requirement to 0% across the board and replaced it with Interest on Reserve Balances (IORB) as an incentive for banks to maintain reserves, which banks continue to do. Typically, banks have enough money in reserve to accommodate everyday business, including all withdrawals.

The Fractional Reserve Multiplier Equation

Though it’s not relevant with today’s 0% reserve requirements, the multiplier equation has been used in the past to estimate the impacts of fractional reserve banking on the economy. This equation helps figure out how much money can potentially be created in the financial system from bank lending, which sets off a chain reaction of economic activity.

For example, let’s say you deposit $1,000 in a bank and the bank keeps $100 and lends out the remaining $900 to John who needs money to pay for a home repair. John pays the contractor, who then deposits that $900 in another bank, which then keeps $90 and lends out $810, and so on. This pattern continues, effectively multiplying the original deposit.

The fractional reserve multiplier equation is:

Initial Deposit x 1/Reserve Requirement

So if a bank has $500 million in total assets and it was required to hold 10% in reserves, that would be $50 million. Using the multiplier equation, the calculation would be:

$500 million x 1/10% = $5 billion

This means that $5 billion can potentially be created in the economy through the system of fractional reserve banking. This is different from printing new money and is simply an estimate of the impacts of FRB.

Recommended: Federal Reserve Interest Rates, Explained

Pros of Fractional Reserve Banking

There are both upsides and downsides to the fractional reserve banking system. Some of the pros are:

•   Banks can use most of the money that gets deposited to grant loans and earn interest on those loans.

•   Banks also earn interest on the reserves they hold.

•   The system helps grow the economy.

Most of the time the system works well. Banks make money on interest, money gets released into the economy, and much of the time that money helps borrowers to earn money as well. The idea is that borrowers invest money into their home, business, or other activities, which in turn helps them grow their wealth. They then pay the bank back for the loan and the cycle continues.

Recommended: The Difference Between a Checking and Savings Account

Cons of Fractional Reserve Banking

However, some of the cons of fractional reserve banking are:

•   Banks don’t keep 100% of deposits on hand, which can be a problem if there is a bank run. During the Great Depression, a significant number of banks had to close because too many people were trying to take cash out and the banks didn’t have enough. (These days, the government insures deposits of up to $250,000 per depositor, per institution and account ownership type, which means you can’t lose your money — up to the insured limit — in the rare event of bank failure.)

•   If the bank creates too much money and lends it out unwisely, it can lead to economic instability, inflation, and financial crises.

•   Banks can respond to higher reserve requirements by increasing interest rates on loans and paying lower annual percentage rates (APYs) on deposits.

The Takeaway

The fractional reserve banking system is an economic system that typically requires banks to keep a certain amount of cash on hand for withdrawals. The rest of the money may be loaned out and used for other purposes, which helps the bank earn money and the economy grow.

This is going on behind the scenes when you bank. Many people are interested in finding a bank that suits their financial and personal needs, however, with features such as a competitive interest rate and rewards.

​​

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

What is fractional reserve banking in simple terms?

Fractional reserve banking is a system where banks are only required to keep a small portion of customer deposits in reserve — usually to meet withdrawal demands — and can lend out the rest. The money banks loan to individuals and businesses then gets deposited back into other banks, repeating the process, and creating more money in the economy.

How do banks create money from a $1,000 deposit?

When you deposit $1,000 in a bank, the bank may keep a fraction — say 10% or $100 — and lend out the remaining $900. That $900 might be spent and redeposited in another bank, which then keeps $90 and lends out $810, and so on. This cycle continues, essentially multiplying your original deposit. Through this process, known as the money multiplier effect, banks create money by expanding the money supply beyond the original deposit.

How much money are banks required to have on hand?

Historically, banks have been required to keep a certain percentage of customer deposits in reserve, known as the reserve requirement. This percentage is set by the Federal Reserve (aka “the Fed”) and was generally around 10%, meaning banks had to keep $100 on hand for every $1,000 in deposits. However, in March 2020, the Fed reduced the reserve requirement to 0%.

While banks don’t currently have a specific minimum requirement, they still maintain reserves for operational needs and to comply with other regulations.

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Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

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SOBNK-Q225-042

Remodeling your home to make it more accessible for a disabled family member (or simply better suited for “aging in place”) allows you to stay in your home longer and makes it easier for everyone to perform their everyday tasks. But where do you even begin?

Creating a wheelchair-friendly home generally involves removing barriers and making daily necessities more accessible. It might involve some DIY tweaks to a few rooms or could require hiring a contractor and making more extensive renovations.

While the Americans with Disabilities Act (ADA) doesn’t cover private, single-family homes, it offers helpful guidelines you may want to keep in mind as you work on making your home more accessible.

What follows is a simple (and ADA-compliant) guide to home modifications you may want to make for someone who is disabled, including costs involved and financing options.

How Much Do Handicap Home Modifications Cost?

How much you’ll spend on renovations to make your home accessible will depend on your accessibility needs, your home’s current state, and the size of your home.

According to Angi (formerly Angie’s List), the cost of making your home more accessible can range anywhere from $706 to $8,084 with $4,386 being the national average. If you opt to do significant home renovations, however, costs can run considerably more. Installing an elevator, for instance, can set you back $2,500 to $60,000.

It’s a good idea to figure out which renovations you want to do and then work with a contractor to price them out. You can then adjust the scope of the project based on your budget.

Here’s a breakdown of some of the renovation costs that may be involved in making your home more accessible.

Types of Accessible Home Renovations

What follows are some key accessibility modifications that can help give aging parents or family members who require help getting around via wheelchair, cane, or walker more independence within your living space.

1. Doorways

Widening doorways is crucial to accommodate wheelchair users. The ADA requires doorways to have a clear opening of 32” when the door is open 90 degrees for wheelchairs to pass easily.

Widening a doorway can run $700 to $2,500 if you require new doors or if you need to create larger openings. However, you may be able to provide accessibility for a lot less by installing offset or swing-clear hinges to allow the door to swing clear of the entryway,

2. Door Handles

Round door knobs can be difficult to open from a wheelchair. To make it easier for those with mobility impairments, consider installing lever door handles. These handles are easier to grip and operate, providing improved accessibility throughout your home.

3. Showers

Converting a traditional bathtub into a roll-in shower with a wide entry and grab bars can greatly enhance accessibility. The ADA recommends that your shower stall be at least 36” by 36” for wheelchair accessibility. Adding a fold-down shower seat and adjustable handheld showerhead (the ADA recommends a 60” hose) further improves safety and convenience.

The price of retrofitting an existing shower or installing a new one can run anywhere from $1,500 to $8,000.

4. Baths

Instead of a shower, you might consider a handicap-accessible bathtub. The ADA requires clear floor space in front of the bath, a seat in the bath at the head of the tub, along with grab bars and a 60” hose.

Converting a bathtub into a walk-in tub can run anywhere from $350 to $1,000

5. Ramps

If your home currently has stairs you need to climb to get inside, you’ll need to build a ramp if you want it to be wheelchair accessible. Ramps should have a gradual incline, non-slip surfaces, and handrails for stability. Per the ADA, the width of the ramp has to be a minimum of 36”.

The cost of constructing a ramp will depend on the entrance layout of your particular home, but you could expect to pay between $1,000 and $4,000.

6. Flooring

Choosing smooth and slip-resistant flooring materials throughout the house is essential for individuals with mobility aids or wheelchairs. You’ll want to remove any carpets or rugs that could pose tripping hazards or make it hard for wheelchair users to get around. If you use carpet, it should be no more than half an inch. Plusher carpets make it difficult for wheelchairs to maneuver.

Installing a bathtub into a walk-in tub can run anywhere from $1,000 to $12,000.

7. Accessible Kitchen Renovations

Modifying the kitchen can significantly improve accessibility. Lowering countertops, installing pull-out shelves, and adding accessible sinks and appliances can make meal preparation easier for individuals with disabilities.

Converting a kitchen to comply with the ADA guidelines can run $9,000–$40,000. To cut costs, you might consider creating a dedicated area for accessible cooking and meal prep, leaving the rest of the kitchen as-is.

Recommended: What Is the Average Cost to Remodel a Kitchen?

8. Toilets

Bathrooms should have enough room for a wheelchair to maneuver inside and room for a wheelchair user to move their chair next to the toilet to transfer themselves from the chair to the toilet easily. There should be grab bars mounted securely to the walls to facilitate the process and increase safety.

Depending on mobility needs, you might consider installing raised or comfort-height toilets and adding a bidet attachment. Installing a modified toilet can run $400 to $1,000.

Recommended: 10 Steps for the Perfect Bathroom Remodel

9. Sinks

Accessible sinks should have open space underneath to accommodate a wheelchair. Installing lever-style, push, or touch-operated faucets and ensuring adequate knee clearance further improves accessibility.

Installing a new sink and faucet can run $100 to $1,000.

Financing Options for Home Modifications for the Disabled

The cost involved in making home accessibility renovations can add up quickly. And, you might not necessarily have the funds you need just in your savings account. Fortunately, there are a number of funding options, including grants and loans, available. You may also be able to deduct some of the costs on your taxes.

Here’s a look at some of your options.

Specially Adapted Housing (SAH) Grants

The U.S. Department of Veterans Affairs offers Specially Adapted Housing (SAH) grants for eligible veterans with disabilities. These grants provide financial assistance to modify or build homes to meet their specific accessibility needs.

IRS Deductions for Home Accessibility Renovations

Home renovations are not generally tax deductible. However, accessibility modifications to your home can be included as medical expenses if they are medically necessary and you itemize your deductions. Keep in mind that the deduction amounts must be reasonable, and if the amount spent increases the value of your home, they cannot be claimed as a medical expense.

The Internal Revenue Service (IRS) also allows disabled people and their friends and family to save money to pay for the disabled person’s expenses in ABLE accounts. You’ll want to consult a tax profession or refer to the IRS Publication 907 to learn more about the specific requirements and limitations.

Options to Finance Accessible Home Renovations

Various financing options are available for accessible home renovations. Here are some you may want to investigate.

Personal Loans

A personal loan is typically an unsecured loan (meaning you don’t have to put an asset to secure the loan) that can be used for a wide variety of purposes, including home renovation projects. The advantage of this type of loan is that you don’t need to have built up equity in your home to qualify for financing.

Some personal loans are actually specifically designed to cover the cost of home remodeling (they are often called home improvement loans). Either type of personal loan can provide the necessary funds for home accessibility renovations. It’s a good idea to compare interest rates, terms, and repayment options to find the best personal loan option for your project.

Reverse Mortgages

If you’re aged 62 or older, you might want to consider a reverse mortgage. This type of mortgage allows seniors to borrow against the equity in their home. These funds can be used for home modifications, and repayment is typically deferred until the homeowner moves or passes away. Note: SoFi does not offer reverse mortgages at this time; however, we do offer home improvement loans.

Just keep in mind that reverse mortgages often come with relatively high fees that are rolled into the loan. Also, your equity in your home will likely decrease, leaving you with less in your estate to leave to your heirs.

Fannie Mae and the Federal Housing Administration (FHA)

Fannie Mae’s HomeStyle Renovation Mortgage and the FHA’s 203(k) Rehabilitation Mortgage Insurance Program offer financing options for purchasing or refinancing a home that needs accessibility renovations.

Fannie Mae’s HomeStyle program is available for buyers who want to get money to buy and renovate a home in one loan or to those who want to refinance their home loans and get cash for renovations. The FHA’s 203(k) renovation loan is similar to Fannie’s but has more flexible qualification requirements.

Refinancing

Refinancing an existing mortgage can provide additional funds for home accessibility modifications. By taking advantage of lower interest rates or extending the term of your loan, homeowners can free up cash for renovations. Keep in mind, though, that extending the term of your loan can increase the total cost of your mortgage.

Nonprofit Assistance

Certain nonprofit organizations provide grants or low-interest loans for home accessibility renovations. These organizations focus on supporting individuals with disabilities and improving their living conditions.

One you may want to look into is Rebuilding Together. This is a national organization dedicated to helping homeowners build, rebuild, or modify their homes. They have a history of working with families to make their homes more accessible.

Other helpful resources include:

•   The National Resource Center on Supportive Housing and Home Modification

•   Local Independent Living Center Affiliates

•   Local Easter Seals chapters

Medical Waivers

Many states have Medicaid programs that cover home modifications for disabled or elderly people. These programs are often used for people who are currently in nursing homes but may want to return to a private home. The money could help them make home modifications to ensure their safety at home. Eligibility requirements and coverage vary by state, so it’s important to research available programs in your area

Home Equity Line of Credit (HELOC)

If you own your home, you might be able to use your existing equity to get a home equity line of credit (HELOC). A HELOC is a revolving line of credit (backed by your equity in your home) that works in a similar way to a credit card. You can borrow what you need for your home accessibility renovations as you make them (up to a set credit limit) and only pay interest on what you borrow.

Home Equity Loan

Another way to put your home equity to work is with a home equity loan. Unlike a HELOC, a fixed-rate home equity loan gives you a lump sum that you begin repaying immediately with equal monthly payments over five to 30 years. This option is best for homeowners who know exactly how much they need to borrow.

The Takeaway

Creating an accessible home through thoughtful renovations provides independence and a higher quality of life for individuals with disabilities or mobility limitations. Making changes through your home, such as widening doorways or installing ramps, can significantly improve accessibility.

Financing options like grants and loans, along with possible tax deductions, can help make these renovations more affordable. It’s important to explore all available resources and consult with professionals to determine the best financing solution for your handicap home modifications.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

Does Medicare or Medicaid cover accessible home renovations?

Medicare does not cover home modifications. However, Medicare Part B does cover durable medical equipment (such as hospital beds) if it’s medically necessary for use at home.

In some states, disabled individuals who are eligible for Medicaid may benefit from Home and Community-Based Services (HCBS) programs. You will need to check with your state if it offers HCBS benefits.

How do I make my home ADA compliant?

The Americans With Disabilities Act (ADA) seeks to ensure that persons with disabilities have equal access to — and convenience in — public spaces via a range of codes and recommendations. While the ADA doesn’t cover private, single-family homes, it offers helpful guidance for making your home accessible. Following the Guide to the ADA Accessibility Standards when making modifications could also be helpful for your home’s resale.

Are ADA renovations tax deductible?

ADA renovations may be tax deductible as medical expenses, provided they are medically necessary and you itemize your deductions.

Just keep in mind that the amounts must be reasonable and any expenses incurred for aesthetic or architectural reasons cannot be deducted. Also, any amount you spend for accessibility modifications that increase the value of your home cannot be claimed as a medical-related expense.

Are there home loans that cover handicap home modifications?

Yes. The USDA’s Single Family Housing Repair Loans & Grants programs provides loans to very-low-income homeowners to repair, improve or modernize their homes or grants to elderly very-low-income homeowners to remove health and safety hazards.

The U.S. Department of Housing and Urban Development’s 203(K) Rehab Mortgage Insurance program allows you to finance (or refinance) a mortgage and include the costs of home improvements in your balance.

About the author

Julia Califano

Julia Califano is an award-winning journalist who covers banking, small business, personal loans, student loans, and other money issues for SoFi. She has over 20 years of experience writing about personal finance and lifestyle topics. Read full bio.

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SOPL-Q225-009

Fighting about money is one of the top causes of strife among couples. In fact, one recent survey found that couples have on average a whopping 58 fights about finances per year! And 44% worry that discussing money will lead to a fight.

While arguing is no fun, it’s important to address the problems at the heart of financial disagreements and start communicating. Otherwise these issues may fester and grow. Instead of judging each other’s spending habits or fighting over money, couples can learn how to start working on financial issues together as a team.

Here are some ways to help you make money discussions productive, and not a fight.

Common Causes of Couple Money Fights

While there are countless variations of money fights you might have, these are a few of the most common triggers:

Sharing Important Account Information

Some couples struggle with privacy limits and financial security, and they may disagree upon what level of access their partner should have to their financial accounts.

If one partner feels they don’t have fair access to bank accounts, passwords, and paperwork, resentment can build. Married couples in particular may find it confusing and challenging to not have a full picture of their complete financial health.

Determining Budgeting and Spending Limits

Maybe one of you likes to spend and enjoy life. And the other likes to save for a rainy day. This disconnect happens all the time. Not all couples see eye to eye on how much they should be spending and this can lead to anger and tension.

Dealing with Debt

If one partner brings debt with them to the relationship, it isn’t uncommon for the couples to disagree about who is responsible for paying off the debt.

Tackling debt can be stressful under the best circumstances, and it can lead to turmoil and fighting if a romantic partner feels the debt is an unfair burden on the relationship.

Savings and Investing

Some couples can’t agree how much money they should save and how they should be saving it.

One partner may feel investing their savings is the better path to a stronger financial future, but the other partner may find investing too risky and want to keep the money in a high-yield savings account. This can cause turmoil if both partners’ chosen path forward is the only one they are comfortable with.

Retirement Planning

When you’re balancing a lot of different expenses, deciding as a couple how much money to save for retirement and what age they may want to retire can be challenging.

But those who don’t have a plan for slowly and consistently saving for retirement can find themselves continually fighting about retirement savings. This is especially true if one partner is particularly worried about not being financially prepared for the future.

How to Stop Fighting About Money

Before your next money fight erupts, try these tips to help stop the arguing.

Changing the Way You Talk About Money

Working on your communication skills can help keep financial discussions from devolving into arguments.

When you’re discussing money, the main goal of a productive talk is to really listen to each other and try to understand the other person’s point of view, as opposed to jumping to conclusions or making accusations.

One technique that can help with this is using “I” instead of “you” in your statements. For example, one partner might say, “I get frustrated when the bills aren’t paid on time. Can I help you out with that?” rather than, “you never pay the bills on time.”

Another method is trying to avoid using the words “always” and “never” when discussing money matters. These terms can put the other person immediately on the defensive.

Setting up a Budget Together

Creating a budget as a couple is key. To help establish your saving goals and monthly spending targets, begin by figuring out what your joint net worth is. Then track your income and expenses for several months.

Once you know what you’re spending money on, you can work out a flexible budget, with short-term financial goals and long-term goals.

Planning ahead helps both partners agree on how much needs to be set aside for retirement or a down payment on a house, and how much you each can allocate to spending as you individually see fit.

Being Open and Honest

It’s tempting to omit key information when we’re trying to avoid conflict. But even if a person doesn’t fib about an expensive purchase or lending money to a family member, failing to share significant financial information can make the other partner feel like they’re being lied to and misled. This can breed distrust and cause financial stress.

Prevent these problems by being honest about financial decisions, even if you know they may upset your partner. As reluctant as you may be to bring these topics up, it can be better in the long run than hiding it from them and committing financial infidelity.

Establishing Some Boundaries

One way to avoid the need to cover up pricey purchases is to agree to a few simple rules about what spending decisions should be shared and what spending decisions are okay to make solo.

For example, one couple may decide they don’t need to alert each other about a purchase if it’s under $500. Another couple may agree to lend money to siblings when they need it. And some couples may together decide to never lend money to friends or family under any circumstances.

By setting boundaries and limits, and then adhering to them, couples may stop feeling like they have to report their every financial move.

Setting up a Joint Account

One of the main benefits of opening a bank account together is that it can provide a clear financial picture. A joint account allows couples to track spending, and it can make sticking to a budget easier, while also helping to foster openness.

On the downside, sharing every penny can sometimes lead to tension and disagreements, especially if partners have different spending habits and personalities. One solution might be to have a joint checking account, as well as two individual accounts with a set amount of money to play with every month.

Having different accounts, including one for their personal use, can give each partner some freedom to spend on themselves without having to explain or feel guilty about their expenditures.

Teaming up Against Debt

Working together on a reasonable plan to start getting out of debt can help couples alleviate a major stress on their marriage.

One strategy for debt reduction might be the avalanche method. To do it, you make a list of all your debts by order of interest rate, from the highest percentage to the lowest. Then, while continuing to make all your minimum monthly payments on existing debts, the couple might decide to put as many extra payments as possible to the highest interest rate loan.

Or, they might decide to simply eliminate the smallest debt first, or look into consolidating debts into a single loan, which could make it easier to manage.

Whatever plan you agree on, working on debt reduction can give you a shared goal to work toward together.

Scheduling a Monthly Financial Check-In

Even if one partner takes on a bigger role in managing finances, paying bills, and keeping on top of the budget, both parties need to stay up to date on what’s going on in order to achieve financial security.

Rather than only talking about your finances when you’re stressed about bills, a better strategy might be to set a specific time on your calendar each month to sit down together and review your recent spending, income, savings, bills, and investments.

If you can’t swing monthly meetings, then aim for quarterly or biannual financial sit-downs.

Getting Help From an Advisor

While spending more money may seem like an added stressor, some couples who pay for a financial advisor may find that it helps them save more down the road.

And, it might be easier to talk about an emotionally charged subject like money with an unbiased third party who can help diffuse tension and get you both to agree on a smart spending and savings strategy.

The Takeaway

Fighting over money, or finding it hard to talk openly and constructively about it, is a common source of friction between couples. Some strategies that can help include learning how to communicate about financial issues more productively, setting up monthly money check-ins, and letting each partner have some financial privacy. Determining whether to have joint bank accounts, separate ones, or a combination can be valuable, too.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

Is it normal to fight over money?

If you argue about finances, you are not alone. The American Psychological Association found that money is one of the most common sources of disagreements for couples.

How common are money problems?

Finances can be a source of stress for many people. Research has often shown that up to seven out of 10 people (or more) worry about money.

What is the main reason couples fight over money?

One of the most typical reasons couples argue about money is different values: one person may be a spender and the other a saver, or they might have varying opinions of the most important financial goals. Having regular money talks, compromising, and aligning can help overcome these differences.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

^Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.

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.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

SOBNK-Q225-025

Buying a house is a major rite of passage. While it’s fun to imagine what kind of home you’ll buy (A farmhouse? Mid-century modern?), how you’ll renovate it, and what it will be like to have your own space, buying a home also requires considerable planning and financial discipline.

After all, buying a home is often the largest financial transaction you will ever make, and it can be the biggest investment of your lifetime, too; a key source of growing your personal wealth. Here is the advice you need on:

•  How to prepare for buying a home

•  How to save money for a house, including the down payment

•  How to budget for owning a house.

What You Need to Know Before Saving for a House

Here are some important first steps toward homeownership.

Understand Your Finances

Many people have debt these days, whether student loans, a personal loan, credit card debt, a car loan, or a combination of some (or all) of these. A lot of debt could hinder your ability to save for a home and qualify for a home loan.

A number of factors come into play when you’re applying for a mortgage, including your debt-to-income ratio (DTI). Your DTI looks at how your debt relates to the money you have coming in; what percentage of your income must go to paying what you owe. Lenders use this number to assess your risk as a customer — whether you have too much debt to be able to afford your monthly mortgage payments.

Qualifying DTIs can vary depending upon elements such as credit, type of property, and others. Typically, lenders look for a DTI of 45% or, ideally, lower. They generally prefer that your DTI be closer to 36% or perhaps even lower. For this reason, as you focus on becoming a homeowner, you may want to try lowering or even eliminating your debt.

•   The snowball method involves listing all your debts, then putting extra money toward your lowest balance first while paying the minimum on the others. Once that debt is paid off, you can apply that entire payment to your next debt on top of the minimum, and then rinse and repeat.

•   The avalanche method is similar, however it focuses on the highest-interest balance first. By eliminating that high-interest debt at the start, the theory goes, you’ll pay less debt over time as the money starts to roll downhill into your other payments.

•  The snowflake method is a bit different in that the objective is to put any and all extra money (not already budgeted) toward debt as often as possible. Called micropayments, these can be anything from credit-card cash back to the money you pocket by eating at home instead of a restaurant. That holiday money from Grandma? Goes toward debt. Same with any work bonuses.

Debt consolidation loans or refinancing are two other ways that could potentially allow you to get out from under high interest payments. While they won’t eliminate your debt, with better terms, they could help reduce the number of monthly payments you’re responsible for.

Determine Your Budget

Understanding how much house you can afford is a vital step when you are contemplating buying a house. There are several factors to consider, including the home’s price, meaning how much of a down payment you can make and how much the home mortgage loan for the remaining amount will cost you. (There are other costs to consider, too; more on those below.)

You will likely find this information by doing some research online, trying out home mortgage calculators, and talking to friends and family who are homeowners.

Research Potential Mortgages

As mentioned above, understanding your potential down payment and monthly mortgage payments is an important step.

It’s also wise to acquaint yourself with the different kinds of mortgages. You may think it’s just a matter of snagging the lowest interest rate out there, but there’s more to the equation:

•  Options for low- and no-money-down loans. These are available via various programs, such as VA loans for those who are active members of the military or veterans.

•  Fixed- vs. variable-rate mortgages. One may be a better option than the other, depending on your financial needs and how long you plan to live in the home.

•  The different terms possible for mortgages are another factor. While many people may think of a mortgage as a 30-year commitment, there are also loans ranging from 10 to 40 years in length. Depending on your financial resources and cash flow, you may want something other than a 30-year mortgage.

Establish a Solid Budget

As you look for the best way to save for a house, it’s wise to have a solid budget to help you track your money and make sure it goes where you want. That might mean funneling money toward your down payment fund as well as toward paying off debt. There are different budgeting methods you might use.

One popular one is the 50/30/20 rule. In this budget, you allocate 50% of your after-tax dollars to needs, 30% to wants, and 20% to savings.

There are many tools that can help you with budgeting, including apps. You may find that your financial institution’s app includes ways to track your spending and automate your savings.

Automating your savings can be an excellent way to help save a down payment (you’ll learn more about this in a moment). This means that money is seamlessly transferred from your checking to your designated savings account. You don’t have to expend any effort; nor do you see that money bound for savings sitting in checking where you might spend it.

Save for a Down Payment

While there are (as mentioned above) a variety of ways to save for a down payment, consider the fact that it’s a myth that you must put 20% down on a house. The reality, though, is that the median down payment on a conventional loan was around 18% last year and 9% for first-time homebuyers, according to data from the National Association of Realtors®.

To come to your real-life goal for a down payment, you can start by calculating how much house you can afford.

One option you can look into for your mortgage loan is government programs that offer low or no-down-payment mortgage options:

•  Federal Housing Administration (FHA) loans are government-backed loans. For those that qualify, they may require only a 3.5% down payment with a credit score of 580 or higher. Loan limits apply by property location.

•  United States Department of Agriculture (USDA) loans offer up to 100% financing in rural areas for eligible properties and borrowers. (SoFi does not offer USDA loans, but we do offer FHA and VA loans.)

•  Veterans Administration (VA) loans , as noted above, are available for military service and eligible family members with up to 100% financing.

Even though 20% down isn’t a given these days, it might still be a good idea for a number of reasons if you can swing it. First, you avoid paying private mortgage insurance (PMI), which is used to insure the lender against loss on a loan with less than 20% down. Putting 20% down could potentially mean lower monthly payments, less interest overall, and a quicker path to home equity.

Then, you can find ways to save up for a house, which can range from setting up recurring transfers into a high-yield savings account to investing in the market (more on that below). You might also consider selling stuff you no longer need or want or starting a side hustle to bring in more cash.

Consider Additional Costs

Saving money for a house involves more than you might think. It might start with a down payment, but it can also include several other important (and not insignificant) expenses. Consider the following:

Closing Costs

In addition to your down payment, you’ll likely need to come to the table with your portion of the closing costs.

These include fees that go along with the home buying and loan approval process, such as lender fees, payments to the home inspector, appraiser, and surveyor, escrow payments, and attorney and title fees. It’s a long list, and these closing costs are typically 2% to 5% of the loan amount.

Moving Costs

Moving costs aren’t insignificant: A basic local move may cost you $480 to $2,880, and a long-distance move can ring in at $2,363 to $6,885. It can be wise to get a couple of quotes from well-reviewed moving companies as you go into house-hunting mode so you can budget appropriately.

One easy way to cut down on moving costs is to DIY the entire process, from finding free moving boxes from friends, family, and grocery stores to loading and driving your stuff across town in a friend’s truck. It’s safe to say that even the most frugal moving strategy, however, will likely incur some costs.

Repairs and Decor

It may be difficult to estimate these costs before you have an accepted offer on a home, but it is good to keep in mind how much renovations, repairs, and decorating could cost.

If you’re moving to a larger space, will you need an extra bedroom set? Are you thinking the backyard is perfect for a fire pit, or even a pool? If you are considering a fixer-upper, repairs or upgrades could be tens of thousands of dollars or more.

One bit of good news here is that you may not have to fork over the cash in order to pay for renovations. The FHA offers 203(k) rehab loans to homebuyers. Eligible improvements include structural repairs, elimination of health or safety hazards, modernization, and adding or replacing roofing. You can also add loan fees and mortgage payments during renovation up to the maximum loan amount.

In addition, considering a fixer-upper could be a more affordable way into the housing market. The property might be available for less than market value due to needed work, and any sweat equity you put into the house could equal larger returns down the road.

That said, keep in mind that not all properties are eligible for financing due to structural or other issues and the costs of home repairs can add up quickly, so it’s essential to do your research in advance.

Additional Costs

In addition, you need to account for such other costs as:

•  Property taxes

•  Private mortgage insurance (PMI)

•  Any HOA fees

•  Home maintenance costs (lawn care, HVAC checkups, pest control, and the like)

•  Utilities (heating a house can be pricier than a small apartment).

Invest in Your Future

As you take steps forward to afford a home, you can choose to invest your money in ways that can help you either get to closing day sooner or save even more than you need.

One way to think of investing for a down payment is to compare it to a retirement plan, where a common approach is to save aggressively when you’re younger, then start to transfer your investments into more stable options as you get close to retirement.

Here are some ways you could apply this philosophy to saving for a down payment:

•   If your timeline is under 3 years, consider a conservative portfolio, or maybe a high-yield savings account.

•   If you are looking at 3 to 5 years, consider a conservative or moderately conservative portfolio that could grow your money faster than a cash-based account.

•   If your closing day is 5 to 10 years or more in the future, consider a moderate or moderately aggressive investment portfolio that could yield higher returns in the long run.

While creating a plan can be a smart first step, that doesn’t mean it will go off without a hitch, especially if it’s long-term. You or your partner might change jobs, unexpected medical expenses might pop up, the heating bill could go way up due to a cold winter — life happens.

That’s why it’s important to check in on your budget periodically, see how you’re doing, rebalance your portfolio if needed, and make adjustments to your plan if you’ve gotten off-track from your goal.

The Takeaway

Saving for a house is a big commitment and involves some focus. You’ll need to budget, consider your down payment and other upcoming costs, and also find ways to help your money grow quickly but safely.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

FAQ

How much money should you save before buying a house?

When buying a house, most people focus on the down payment. Currently, most buyers put down about 13%, but mortgages are available with as little as 3% or 0% down, depending on qualifications. In addition, it’s wise to budget for closing costs, home renovation, and furnishing costs, as well as having an emergency fund in place.

What is the fastest way to save money for a house?

There are a variety of ways to quickly save money for a house including tracking and reducing your spending, minimizing debt, automating your savings, considering opening a high-yield savings account or investing in the market (depending on your timeline), and bringing in more income via a side hustle.

How do you realistically save for a house?

To afford a home, it can be wise to pay off or lower your debt, minimize your spending, increase your savings, sell stuff you no longer want or need, and bring in extra income through additional work.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

SOHL-Q225-005

Many people hit a period of financial hardship at some point in their lives. Maybe there’s a medical emergency and big bills, a job layoff, or a family member in serious need: These and other scenarios can put your money management in a precarious position.

Approximately 73% of Americans report feeling stressed about money, according to an April 2025 CNBC/SurveyMonkey poll. Financial stress can be triggered by anything from the high cost of living to excess debt to worrying about saving for one’s (and one’s family’s) future.

Here, you’ll learn more about what happens when financial hardship hits and how to take steps to improve the situation, from applying for assistance to negotiating with lenders to discovering new sources of income.

What is Financial Hardship?

Everyone probably has their own definition of “economic hardship” that’s based on their own needs and wants. And the federal government has its own criteria for what counts as a “hardship” when it comes to taking an individual retirement account (IRA) distribution, looking for tax relief, or requesting a student loan deferment.

But generally, a financial hardship is when an individual or family finds they can no longer keep up with their bills or pay for the basic things they need to get by, such as food, shelter, clothing and medical care.

Warning Signs

Sometimes financial difficulties can sneak up on a person, and catch them completely off guard. Other times, the warning signs have been there for a while, but were missed or ignored.

Identifying the root cause of financial distress can help give you a head start on working through your money issues. What follows are some red flags that may signal you are headed for financial difficulty or hardship.

Having Credit Card Balances at or Above the Credit Limit

While using credit cards may seem like a good way to get around a short-term lack of funds, the practice could lead to extra fees and negatively impact your credit. The percentage of available credit someone is using — known as a credit utilization ratio — can indicate to lenders how heavily they’re depending on credit cards to get by. And because it’s one of the major factors in determining a person’s overall credit score, financial advisors typically recommend keeping card balances at or below 30% of the limit.

Juggling Which Bills Get Paid Each Month

It may be tempting to skip a payment from time to time, hoping to catch up eventually — but there can be short- and long-term consequences for juggling bills. Insurance coverage may be lost. There may be a late fee, or a bill could be turned over to a collection agency.

Utilities can also be shut off, and a deposit might be required to restart the account. Making late payments on a credit card could lead to a higher interest rate on the account. And late payments and defaults can hurt credit scores.

Recommended: How to Organize Bills

Only Making Minimum Payments on Your Credit Cards

It may be necessary to make minimum payments if times are especially tight, and there likely won’t be any short-term harm. But even if you stop making purchases, just the interest charged will keep the account balance growing, possibly extending the amount of time it takes to pay down that debt by months or years.

Often Paying Late Fees or Overdraft Fees

A one-time mistake may serve as an annoying reminder to be more cautious with money management, but if late fees, overdraft and non-sufficient funds fees, and overdraft protection transfers become a regular thing, they can add another layer of worry to your financial burden. (Using alerts, automatic payments, and apps from your financial institution may offer a more effective method to track bills as well as deposits and withdrawals.)

💡 Quick Tip: Make money easy. Open a bank account online so you can manage bills, deposits, transfers — all from one convenient app.

Having a High Debt-to-Income Ratio

Lenders often use a person’s debt-to-income ratio — a personal finance measure that compares the amount of debt you have to your income — to determine if a borrower might have trouble making payments. If a person’s debt-to-income ratio is high, it could make it more difficult to borrow money, or to get a good interest rate on a loan.

Tapping Retirement Savings to Pay Monthly Bills

In certain cases, the IRS will allow an account holder to withdraw funds from a 401(k) or IRA to cover an immediate and heavy financial need (such as medical expenses, payment to avoid eviction or repair home damage) without paying the 10% early withdrawal penalty. But taxes will still have to be paid on those distributions. And taking that money now, instead of letting it grow through the power of compound interest, could have serious repercussions for the future.

Dealing with Financial Hardship

For those who’ve been struggling for a while, or who’ve had a sudden but substantial financial loss, it might feel as though you’ll never recover. But there are several options you might consider taking to get back on track. Some you can do for yourself, while others might require getting financial hardship help from others. And while some might be temporary, others take a longer view. Here are a few:

Reducing Monthly Spending

Creating a monthly budget can help guide your spending decisions and make the most of the money you have. This may involve prioritizing your monthly expenses, starting with the essentials and going down to the “nice to haves.” Once you’ve established which expenses are the most important, you can then look for places to cut back or things to cut out of your budget altogether. Cutbacks may not feel fun, but they can help jump-start your recovery.

For example, could you cut costs if you cooked meals yourself more often? Are you trying too hard to keep up with what friends and family are spending on clothes, vacations, and cars? Are there monthly bills that could be reduced? (For example, you might be able to save money on streaming services, internet, and phone services; manicures and other beauty treatments; or even rent, insurance, or car payments.) It may help to start by tracking expenses for a month or so to get an idea of where money is going, and then sit down and map out a more realistic path for the future.

Creating a Debt Reduction Plan

Along with a budget, it also may be useful to come up with a plan for paying down credit card balances, student loans, and other debt. It’s important to always make the minimum payment on all these bills, if possible, but a personal debt reduction plan could help with prioritizing which bill any leftover money might go toward after all the household expenses are paid each month — or the money might come from a tax refund, bonus check from work, or a gift. Knocking down debts that include high amounts of interest can eventually free up more cash to put toward short- or long-term savings goals.

💡 Quick Tip: If you’re saving for a short-term goal — whether it’s a vacation, a wedding, or the down payment on a house — consider opening a high-yield savings account. The higher APY that you’ll earn will help your money grow faster, but the funds stay liquid, so they are easy to access when you reach your goal.

Looking for Ways to Earn Extra Income

Is there a way to turn a hobby, skill, or interest into some extra funds? Maybe a favorite local business could use some part-time help. Or, if a second job is out of the question, perhaps a side hustle with flexible hours is a possibility. Writers, artists, and designers, for example, may be able to turn their talents into a side business. Babysitting the neighbor’s kids or running errands for an older person are also options. And, of course, on-demand services like Uber and DoorDash are employing drivers, delivery persons, and other workers.

Considering a Loan to Consolidate Bills

Getting a personal loan for debt consolidation won’t make money problems go away completely — but it might make managing payments a little simpler. With just one monthly payment (instead of separate bills for every credit card or loan) it can be easier to keep tabs on how much is owed and when it’s due.

Because interest rates for personal loans are typically lower than the interest rates credit card companies offer (especially if a rate went up because of late payments), the payoff process for that debt could go faster and end up costing less. (Generally, lenders offer a lower interest rate to those who have a higher credit score; borrowers who are already behind on their bills may pay a higher interest rate or have more trouble getting a loan.)

Student loan borrowers also may want to look into consolidating and refinancing with a private lender to get one manageable payment and, possibly, save money on interest with a shorter term or a lower interest rate. Refinancing may be a solution for working graduates who have high-interest, unsubsidized Direct Loans, Graduate PLUS loans, and/or private loans.

Just keep in mind: Federal loans carry some special benefits that private loans don’t offer, including public service forgiveness and economic hardship programs, so it’s important for borrowers to be clear on what they’re getting and what they might lose if they refinance.

Notifying and Negotiating

Ignoring credit card payments and other debts won’t make them disappear. Borrowers who can clearly see they’re headed for financial trouble may wish to notify their credit card company or lender and try to work out a more manageable payment arrangement. (There are debt settlement companies that will do the negotiating, but they charge a fee for their services.)

A credit card issuer may agree to a reduced, lump-sum payment or a repayment plan based on the borrower’s current income, or it may offer a hardship program with a lower interest rate, lower minimum payments, and/or reduced penalties and fees. The options available could depend on why a customer fell behind, or if they’ve had problems before.

Financial hardship assistance is sometimes offered by mortgage lenders. Because these lenders generally don’t want their borrowers to foreclose on their homes, it’s in their best interest to work with borrowers when they get in trouble. The lender may be willing to help the borrower get caught up by forgiving late payments, or they may change the interest rate of the loan or lower the payment.

If you have federal student loans and are experiencing financial hardship, you might qualify for a special repayment plan, such as pay-as-you-earn, or an income-based repayment plan.

It can also be helpful to reach out to service providers (such as water, electricity, internet) and let them know you are experiencing financial difficulties. Providers may be willing to work with you and you may be able to come to an agreement well before any shut-off actions go into effect. This can also save you from late fees, or going into collections.

Getting Financial Help

There are also a number of government programs designed specifically to help people overcome sudden financial hardships. Those who’ve lost a job may be entitled to unemployment benefits. If that job provided health insurance, you may want to look into COBRA to see if you can maintain affordable health insurance. Those who were injured at work may be entitled to workers’ compensation.

Also, some people facing financial hardship may qualify for state or federal benefits like Medicaid or Social Security Disability.

Though not free, a financial professional who specializes in planning, saving, and investing may be a worthwhile investment. They may be able to offer a fresh perspective and help create a path to financial freedom. There may also be free or low-cost debt counselors available via non-profit organizations.

Preparing for Current and Future Challenges

Once you’ve developed your personal plan for overcoming financial hardship, you can begin working on your goals of becoming more financially independent. If the cause of your hardship is temporary (you were out of work but quickly found a new job, for example), it may take just a few months to get back on your feet. If the problems are more difficult to overcome (you’ve lost income through a divorce, or you or a loved one has an ongoing medical condition that requires expensive treatment), the timeline could be much longer. Once you’ve put your plan in place, you may want to review it on a regular basis, and perhaps do some fine-tuning.

The Takeaway

Many people go through periods of financial hardship, and often for reasons that are beyond their control. But that doesn’t mean they are out of options. There are many simple and effective steps you can take. Cutting monthly expenses, consolidating debt, and getting outside assistance are moves that can help you get back on the right financial track.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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.

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

SOBNK-Q225-031