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Interest rates on savings accounts determine how quickly your money grows while it sits in the bank. If you research the average rate for savings accounts, however, you might be surprised to find that the interest rates across banks can vary significantly.

At the time of publication, the national average savings account rate is 0.39% annual percentage yield (APY). By contrast, the APY for high-yield savings accounts may be close to 3.00% to 4.00% or sometimes higher.

The gap is significant, and can mean earning just a few dollars versus hundreds over the course of a year. Rather than settling for the national average, it can be worth seeking out a savings account that pays a meaningfully higher rate.

What Is the National Average Savings Rate in 2026?

As of December 15, 2025, the APY for a U.S. savings account stood at 0.39%, according to the Federal Deposit Insurance Corporation (FDIC). For comparison, money market accounts averaged 0.58%, while the average six-month certificate of deposit (CD) paid 1.58% APY.

Those headline averages hide a dramatic divide. Large, legacy banks frequently pay very little — some branches still advertise 0.01% APY for basic savings accounts. Meanwhile, many online banks and smaller institutions may offer an APY of 3.00% or higher.

For savers, this means the “average” tells you approximately what many banks may pay, not what’s available if you’re willing to shop around.

How the National Average Savings Rate Is Calculated

The FDIC calculates the national average savings account rate by collecting interest rate data from FDIC-insured banks for savings deposit products.

To avoid skewing the data towards smaller institutions offering niche rates, the FDIC uses a weighted average based on each bank’s share of total deposits. Because many of the biggest banks offer low savings rates, the national average ends up being pulled down — even below what some large banks themselves pay.

Recommended: How to Calculate Interest in a Savings Account

How Do Average Rates at Traditional Banks Compare?

If you keep your savings at a large national bank, you may see very low interest rates on standard savings accounts. As of late 2025, many of the largest banks were still offering near-zero yields.

Here’s a look at the APYs for basic savings accounts as of December 16, 2025 at the five largest banks in the U.S.

This doesn’t mean that big banks never offer competitive products. Some provide promotional or tiered-rate accounts that offer higher yields. But for everyday savings held in standard brick-and-mortar accounts, the numbers tend to remain low.

Why Are Online Savings Account Rates Typically Higher?

Online savings account rates are typically higher because these institutions typically have lower overhead costs compared to traditional banks. Without a vast network of physical branches to maintain, online banks can avoid major expenses such as rent/mortgage, utilities, maintenance, and a large on-site staff. These savings can then be passed on to customers in the form of higher APYs and lower (or no) fees.

For customers, this difference can be substantial. While a traditional savings account might offer an APY of around 0.01%, online high-yield savings accounts often provide rates of 3.00% or more. All FDIC-insured online banks help ensure your money is safe (up to insured limits), just like traditional banks.

How Can You Find the Best Interest Rate for Your Savings?

You don’t have to accept the national average savings interest rate. Here are some of the most effective ways to earn a higher APY:

Focus on High-Yield Savings Accounts (HYSAs)

High-yield savings accounts (HYSAs) typically pay rates many times higher than the national average, allowing your money to grow faster while remaining safe and accessible. HYSAs are often provided by online banks, which can offer better rates due to lower operating expenses. Some credit unions, which operate as not-for-profit institutions, also offer competitive rates, though they may require specific membership criteria.

Compare APY, Not Just the Interest Rate

When looking for a competitive rate for a savings account, it’s important to focus on annual percentage yield (APY), not just the interest rate. The interest rate is the basic rate at which your money earns interest, but the APY offers a more accurate picture of how much your account will grow because it includes the effect of compounding, which is the process of earning interest on both your initial principal and the accumulated interest.

The frequency of compounding can vary between financial institutions (e.g., daily, monthly, quarterly, or annually), so an account with a slightly lower stated interest rate might actually yield more if it compounds more frequently.

By standardizing returns to one year with compounding included, APY allows you to compare savings accounts apples to apples and choose the best return.

Recommended: High-Yield Savings Account Calculator

What to Look for When Comparing Savings Accounts

In addition to APYs, here are several other factors to consider when choosing a savings account:

•   Minimal balance requirements: Some savings accounts require a sizable opening deposit or a minimum ongoing balance to qualify for the highest APY. You’ll want to make sure your balance meets these thresholds so you don’t miss out on the top rate.

•   Bank fees: Monthly maintenance fees can quickly eat into your interest earnings. To avoid them, you can either choose a savings account with no account fees (common with online banks and credit unions) or meet requirements set by banks that charge fees, such as maintaining a certain minimum balance or linking a checking account.

•   Accessibility: Consider how you’ll be able to access and manage your money. Ideally, you want to choose a bank that offers a wide network of free-free ATMs, plus a robust mobile app with features like mobile check deposit, automatic transfers, and account alerts.

How Will the Federal Reserve Affect Savings Rates in 2026?

Savings account interest rates are typically variable, not fixed, and tend to move in response to changes in the Federal Reserve’s benchmark federal funds rate, though the timing and magnitude can vary by bank.

When the Fed raises interest rates, savings account yields generally increase. When the Fed cuts rates, APYs usually fall. In 2025, the Fed lowered the federal funds rate three times. While competitive rates are still available, they have begun trending downward.

Banks also adjust rates based on supply and demand. If a bank needs more deposits to support lending, it may raise savings rates to attract funds. If deposits are plentiful and loan demand is weak, rates may decline. Competition among banks and broader economic conditions further impact this constantly shifting landscape.

The Takeaway

The national average savings interest rate, at approximately 0.39% APY as of late 2025, significantly understates the potential for savings growth. Rates at large traditional banks are often near-zero, but high-yield savings accounts (HYSAs) from online institutions often pay 3.00% APY or more, offering a substantial difference in earnings.

By comparing APYs, looking for accounts with low fees, and prioritizing FDIC-insured HYSAs, you can maximize the return on your savings and ensure your money works harder for you.

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 a typical interest rate for a savings account at a large national bank?

Traditional savings accounts, particularly those offered by large, brick-and-mortar banks, generally offer a low interest rate. As of late 2025, the national average annual percentage yield (APY) for a savings account is 0.39%, according to the FDIC. However, some large banks offer rates significantly below this average, sometimes as low as 0.01% APY on their standard savings products.

What is considered a high-interest savings account?

A high-interest savings account, often referred to as a high-yield savings account, is one that offers an annual percentage yield (APY) significantly above the national average. Given that the national average APY for savings accounts is around 0.39% as of late 2025, an account offering an APY of significantly higher than that number may be considered “high-interest.” Some online banks and credit unions offer high-yield accounts that may be upwards of 3.00% to 4.00% APY, making them a popular choice for savers looking to maximize their returns.

How much more interest can you earn with a high-yield savings account?

The amount of extra interest you can earn with a high-yield savings account (HYSA) is often substantial, especially when compared to the national average or the rates offered by large traditional banks. For example, if you have a $10,000 balance and earn 0.01% APY, you would earn $1 in interest over one year. If you move that same $10,000 to a top-tier HYSA offering 3.00% APY, you would earn $300 in interest over one year, a difference of $299. The larger your savings balance and the greater the rate difference, the more pronounced this gap in earnings becomes over time.

How is APY calculated?

The annual percentage yield (APY) is calculated by taking the interest rate and factoring in the effect of compounding over the course of one year. This means it shows you the total return on your savings, including both the base interest earned and the interest earned on that interest. The formula for APY is: APY = [1 + (i / n)]n − 1, where:

•   “i” is the interest rate

•   “r” is the stated annual interest rate (as a decimal)

•   “n” is the number of compounding periods per year.

Are high-yield savings accounts safe?

Yes, high-yield savings accounts (HYSAs) are generally safe, provided they are offered by institutions that are insured by the Federal Deposit Insurance Corporation (FDIC) for banks, or the National Credit Union Administration (NCUA) for credit unions.

FDIC or NCUA insurance protects your deposits up to $250,000 per depositor, per account ownership category (such as single, joint, or trust account), per insured institution, in the event the bank or credit union fails. When choosing an HYSA, always confirm the institution’s insurance status, regardless of whether it is a traditional or an online bank.

Do I have to pay taxes on the interest I earn in a savings account?

You are generally required to pay taxes on the interest you earn from a savings account. The interest is considered ordinary income by the IRS, and it is taxable at your regular federal income tax rate. If you earn $10 or more in interest in a given year, your bank will issue you a Form 1099-INT detailing the amount of interest earned. You must report this amount when filing your annual tax return.

Can a savings account interest rate change?

Yes, a savings account interest rates can change at any time. Banks often adjust rates based on market conditions, such as changes in the federal funds rate or overall economic trends. Unlike fixed-rated products like certificates of deposit (CDs), savings accounts usually have variable interest rates, so your earnings may increase or decrease over time.

Photo credit: iStock/MicroStockHub

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/.
^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.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax 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.

SSOBNK-Q425-037

The IRS says that if you file your return electronically and enroll in direct deposit, you can probably receive any refund you qualify for within three weeks. That speed can be a real upside of getting organized and filing early, especially if you have plans for the funds coming back to you (such as paying for summer vacation plane tickets).

Those who file a paper return, however, will likely have a longer wait. Read on to learn more and manage your expectations, including:

•   How long does it take to get my federal tax refund?

•   When will I get my tax refund?

•   What affects the time it takes to get a tax refund?

•   How can you check on where your tax refund is?

IRS Refund Schedule for Tax Year 2025

For those who are curious about when exactly a refund should arrive for the tax year 2025 (filed in 2026) or for tax year 2026 (filed in 2027), consider this information:

Federal Tax Refunds

In terms of when you will get your federal tax refund, here is a typical timeline of when refunds are issued after filing:

•   Up to 21 days for an e-filed return

•   4 weeks or more for amended returns and returns sent by mail

•   Longer if your return needs corrections or extra review

State Tax Refunds

When it comes to issuing refunds, each state handles things in their own way, on their own timeline, so it can be difficult to generalize.

Typically, a state tax refund can take anywhere from a few days to a few months for processing. If you filed a paper copy vs. electronically, that may lengthen the usual time for refund processing and the arrival of your funds.

Tax Return Extension

Sometimes, a taxpayer will not be able to file their return by the Tax Day deadline. Perhaps they are missing important tax documents, are experiencing a family or personal emergency, or maybe they just procrastinated. Whatever the case, there is a mechanism in place that allows for an extension.

The IRS allows people to file for a six-month tax extension for submitting their return. However, the extension request, plus any taxes owed, are still due on that April deadline (the 15th or slightly later if it falls on a weekend or holiday).

If you are due a refund, it will be delayed if you submit your tax return late. The volume of tax returns filed late can impact how soon you get your refund.

Form 4868

To request an extension, an individual should file IRS Form 4868. The form captures basic information about the taxpayer, such as name, address, Social Security number (SSN), and how much you believe you owe.

Anyone, regardless of income, can submit this form electronically as part of the IRS’ Free File program.

Recommended: What If I Miss the Tax Filing Deadline?

How Long Does the IRS Take to Process Your Taxes?

The IRS says that it issues more than nine out of 10 refunds in less than 21 days. That said, sometimes the processing of a return can take longer, even if a return was filed electronically.

If a return needs to be reviewed manually, it will likely take longer as well. Factors that can lead to a manual review include incorrect or missing information or identity theft situations. More detail is provided below.

Recommended: Steps to Prepare for Tax Season

Common Tax Refund Delays

If you’re wondering how long does it take to get a tax refund, know that there is not a single, specific timeframe for all taxpayers, and that delays can and do happen.

The IRS cautions visitors to its website not to expect their refund by a certain date. Though most taxpayers typically receive their refund within three weeks, and possibly in even less time if they e-file and choose direct deposit, there are several reasons why a payment might be delayed.

Here are some issues that could cause a holdup:

Filing a Paper Return

Under normal circumstances, the IRS says, it can take several weeks to process a paper Form 1040. Unlike returns that are filed electronically, paper returns must be manually entered into the IRS system.

•   Tax returns are opened in the order they’re received, so if your refund is taking longer than expected, the date you sent your return could be a factor as well.

•   The delivery option you choose for your refund also can affect how quickly you receive your funds. According to the IRS, the fastest way to receive your refund is to combine the direct deposit method with an electronically filed tax return. But taxpayers who prefer a paper return also may be able to speed things up a bit by choosing direct deposit for their refund instead of a paper check.

•   Note: If you e-file, direct deposit is again your fastest path to any refund that’s due (typically one to three weeks), as noted above. If you e-file but request a paper check, that will take a bit longer, often closer to one month.

Providing Incorrect or Incomplete Information

Did you or your spouse forget to sign your return, or did you type in the wrong Social Security number? Returns with missing information or errors can cause extra work for the IRS, which could hold up a refund.

What’s more, the IRS is strengthening its screening process to help fight identity theft, so even the smallest mistake — such as using a different name than what’s on your Social Security card or misreporting what is W-2 income — could slow things down. If the information you provide is wrong or something is missing, you can expect the IRS to contact you for additional documentation or to correct the error.

Claiming Certain Tax Credits

If you’re claiming the additional child tax credit (ACTC) or the earned income tax credit (EITC), the IRS won’t issue your refund before mid-February. A federal law that took effect in 2017 gives the IRS extra time to review those returns, check employers and other information, and detect any possible fraud.

Filing an Amended Return

You may have to amend your return if you find you made an error or there’s a change that affects your income, your income tax bracket, and/or your deductions — and that could delay your refund by several weeks. According to the IRS, it can take up to 20 weeks to process an amended return — even if it was filed electronically.

You can check your return and refund status daily with the IRS’s Where’s My Amended Return tracking tool .

Tax Fraud

A missing refund could be a sign that someone used your personal information to file a fraudulent tax return in your name. If you suspect you may be the victim of tax fraud, the IRS lists several recommendations for what to do next on its Taxpayer Guide to Identity Theft web page, and the agency advises potential victims to report their concerns to the Federal Trade Commission.

Existing Government Debt

If you have certain kinds of delinquent debt owed to the federal government, what is known as tax refund offset may occur. This means that an individual’s refund may be partially or completely withheld to satisfy the debt.

You will generally be notified if your refund is being reduced or withheld in this way, and you can dispute the payment with the agency that received it. And if there’s any money left after the offset, you’ll receive it by direct deposit or in a check, depending on what you requested on your tax return.

To ask questions about delinquent debt, you can contact the Treasury Department at 800-304-3107.

Your Refund Went Missing

If you e-filed with third-party tax software or the IRS’s Free File system, you likely received confirmation that your return was received and accepted. If you don’t remember getting a confirmation notice or if you’re concerned because you haven’t heard anything since then, you can check your status with the agency’s Where’s My Refund tool. Some next steps:

•   If the IRS’s Where’s My Refund tool says your refund check was mailed but 28 days or more have passed and you haven’t seen it, you can file a claim online to receive a replacement. (The Where’s My Refund site will show you how.)

•   Even if you opted for direct deposit, it still could take a few days for the money to show up in your account.

•   If you think your refund has gone missing, you may want to call your bank about tracking the deposit, then move on to contacting your tax preparer or the IRS for help.

•   The IRS won’t accept responsibility if it sent a refund but you or your tax preparer wrote the wrong account number on your return. If the IRS notices an error or if your bank rejects the deposit and returns the money to the IRS, the IRS still may end up sending you a check (instead of using a direct deposit).

•   If you entered an account or routing number that belongs to someone else and the financial institution accepted the deposit, you’ll probably have to work with a bank representative to recover the money. The IRS cannot compel the bank to return the refund.

Tracking Your Tax Refund Process

If you are eagerly awaiting your income tax refund, a wise move can be to track its status on the IRS website or through the IRS2GO app.

You can begin checking your refund’s progress as soon as 24 hours after the IRS receives your e-filed return or four weeks after mailing a paper return. And, if everything goes smoothly, you can use the Where’s My Refund tracking tool daily to watch your tax return make progress.

•   To use the Where’s My Refund tracking tool, all you need is your Social Security number, your filing status (single, married filing jointly, etc.), and the exact dollar amount of your expected refund.

•   You may not get all the information you wanted about your refund, but it’s a start. If you can’t get enough intel there, your local IRS office may be able to help.

Tax Refund Mistakes

What about the scenario in which a tax refund arrives but it’s for less than you expected? Consider a couple of possibilities:

•   Your tax return could have contained an error, leading you to think you were due more money than you actually are.

•   You might have had your refund lowered by the Treasury’s Offset Program mentioned above.

In the situation of your refund being less than anticipated, there is likely an explanation provided from the IRS as to why. If you are not satisfied, you can use the methods outlined above to contact the IRS and gain more insight.

Tips for Getting Your Tax Refund Faster

If you’re hoping to get your next refund faster, here are a few steps that might help:

Filing Electronically

As mentioned above, filing electronically vs. filing a paper return can speed up your refund. It can typically shave a week or two off of getting your money back via direct deposit and a month off the time for a refund check to be issued.

Choosing Direct Deposit

The IRS says refunds will generally be received by taxpayers sooner if they have e-filed and selected direct deposit. Even if you prefer mailing in a paper return, you can choose to have your refund deposited into your account.

Providing Accurate Information

Pay attention to every detail as you prepare your taxes. Don’t let a little mistake or an omission of data cause a long delay.

Filing Early

By filing as soon as possible during tax season, you’ll be able to position your return at the front of the line for processing. And by starting early, you’ll give yourself plenty of time to research any tax help you may need along with tips that might apply to you, your business, and your family.

Just remember the point above about returns claiming the ACTC or EITC not being processed until mid-February at the earliest.

The Takeaway

Most tax refunds are issued within one to three weeks if you file electronically and opt for direct deposit of your refund. If you file a paper return or opt for a refund check to be mailed to you, it can lengthen the timeline. In any scenario, the IRS provides tools that can help you track your refund and know where your return is in terms of processing.

If you are due a refund and need a great place to deposit it, you may want to make sure your account offers minimal or zero account fees and a competitive annual percentage rate (APR).

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

When will I get my tax refund for 2025?

Your tax refund arrival will depend on when you filed your return, how you filed it, and how you indicated you’d receive your tax refund. Typically, filing electronically with direct deposit is quickest, with the refund arriving within three weeks. If you file electronically with a paper check as the refund, that could take longer since the check has to be mailed. Paper returns can take several weeks, with those requesting refunds via paper check requiring still longer.

What is the 2025 IRS tax refund schedule?

Filing for the 2025 tax year begins around January 26, 2026, and the deadline is April 15, 2026. Tax refunds are issued at varying speeds, depending on whether you file electronically or with a paper return, and whether you request your refund be direct-deposited or sent as a check. The fastest option is to file electronically and have the refund direct-deposited. This typically takes three weeks or less.

How long does it take to get your tax refund through direct deposit?

How long it takes to get your refund through direct deposit will vary depending on whether you filed an electronic or paper return. The majority of electronic returns are processed in three weeks or less, with direct deposit happening very soon thereafter. Paper returns, however, can take several weeks or longer, with refunds taking at least that long to hit a taxpayer’s bank account.

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.
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.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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.
SOBK0224001
CN-Q425-3236452-146

Yes, it’s that time again: Tax Day is approaching. When April 15th rolls around, it’s the deadline for filing returns.

This isn’t a task you want to leave for the night before. Taxes can be complex, and it can be time-consuming to complete even a fairly simple return. Preparing in advance can be an excellent idea.

Whether you plan to file on your own or use a professional tax service, you will need to gather a number of forms and documents. This checklist will help you pull together the information and paperwork you need to make the process go that much more smoothly.

The Basics of Filing Taxes

In a nutshell, filing your taxes tracks your income, taxes already deducted during the year, any credits and deductions, and other factors that impact what you may owe.

Below, you’ll learn about what documents you need to file your income taxes. The Internal Revenue Service (IRS) collects taxes from any business or individual that receives a regular monthly income. There are currently seven different tax brackets that divide individuals according to their annual earnings.

Of course, each person’s situation is unique, with different earnings, deductions, and circumstances that may impact how much they owe (or get refunded, in some cases). You can explore an in-depth guide to the 2025 tax season for more details, but now, consider the information you’ll need to collect before you can finalize your return.

Personal Information

First on your tax prep checklist is to gather some basic information about yourself and (if applicable) your spouse and children. This includes:

•   Your Social Security or tax ID number

•   Your spouse’s Social Security or tax ID number and birthdate

•   Any identity protection PINs issued to you or family members by the IRS

•   Your bank account number and routing number for the deposit of any refund you may be due or payment you owe, it you choose to pay that way

•   Any foreign residency and reporting details, if that applies to you.

Dependents’ Information

If you have dependents, you’ll want to gather similar details about them, as above. The IRS defines a dependent as a qualifying child (who is either under age 19 or under age 24 if they’re a full-time student), or could be any age if considered to be permanently disabled. A qualifying relative can be a relative (say, a sibling or parent) who, if they have income, does not provide more than half of their own annual support. (One note: A spouse cannot be claimed as a dependent.)

In addition to dates of birth and Social Security or tax ID numbers, you will need records of child care expenses (and providers’ tax ID numbers), if applicable; details of earnings of dependents; and potentially form 8332 relating to custodial agreements for children, as needed. (You’ll learn a bit more about possible family-related tax deductions and credits below.)

Sources of Income

Next on the tax preparation checklist is to gather paperwork about your sources of income. Typically, this means W-2 and/or 1099 tax forms.

•   For full-time employees, this will often be a W-2 form.

•   For those who are self-employed (such as freelance and contract workers), 1099s will be needed. These are forms that document payment of funds from different entities.

•   If you received payments for goods and services from an app or online platform, you might receive a 1099-K form if your earnings cross a certain threshold.

•   If you received unemployment compensation (or any state or local income tax refunds), you’ll want to make sure you have a 1099-G reflecting these earnings.

•   If you’ve earned interest or dividends, or sold investments, you will want to collect your 1099 forms that track these amounts.

•   You will also need to pull together any 1099 forms that document Social Security or income from a pension, IRA, or annuity.

•   Other forms of income will need to be accounted for as well, including jury duty, pay, prizes, awards, gambling winnings, trust income, passive income (such as earnings on a rental property you own), and royalties, among others.

Types of Deductions

Now that you’ve covered what you earned on the tax document checklist, it’s important to track possible deductions, which can lower your tax burden. Essentially, when you take a deduction, you lower the amount of income that will be taxed.

Many of these deductions will involve 1098 documents. Here are some of the more common tax deductions possible:

•   Medical expenses: You may be able to deduct some medical expenses, so it’s wise to gather records of how much you paid. If your medical bills exceed 7.5% of your adjusted gross income, and you choose to itemize your deductions (rather than take the standard deduction), you may be able to deduct some of these expenses.

•   IRA contributions: You may be able to deduct your contributions to a traditional individual retirement account (IRA). However, the deduction may be limited if you or your spouse is covered by a retirement plan at work and your income exceeds a certain level.

•   Mortgage and property Taxes: You may be able to deduct your property taxes and the interest you paid on your mortgage if you itemize, so be sure to gather your paperwork related to homeownership.

•   Charitable donations: If you itemize, you may be able to deduct any money or items you donated to a charity from your taxable income.

•   Car expenses: If you’re self-employed and use your car exclusively or partially for work, you may be able to write off all or some of your car expenses.

•   Educational expenses: Student loan interest (up to $2,500) is tax deductible. If you are self-employed, you may be able to deduct education expenses, provided the education improves your business or is required by law.

•   Home office costs: If you’re self-employed, you may be able to deduct expenses related to maintaining a home office.

•   State, local, and sales taxes: If you itemize, you may be able to deduct the state and local general sales tax you paid during the year, or the state and local income tax you paid during the year.

Tax Credits

Before you wrap up your tax prep checklist, you’ll want to collect any paperwork that could help you snag tax credits. As for deductions vs. tax credits, a deduction lowers your taxable income, while a credit gives you a dollar-for-dollar deduction in your tax liability. So if you can claim a $2,500 credit, that means your taxes owed are reduced by $2,500.

Here’s a look at some credits that can help you save on your taxes.

Student Credits

You may want to look into the following:

•   American opportunity tax credit: You may be able to receive up to $2,500 as a credit for qualifying educational expenses during the first four years of higher education.

•   Lifetime learning credit: You may be able to receive up to $2,000 per year as a credit for qualifying tuition and expenses.

Family and Dependent Credits

Consider whether you are eligible for the:

•   Child tax credit: This is worth up to $2,200 per qualifying child under age 17 for tax years 2025 and 2026.

•   Child and dependent care credit: If you needed child or dependent care in order to work, you may be able to get back some of your expenses with this credit.

•   Earned income tax credit (EITC): For low- to middle-income workers, the EITC could be up to $8,046 for 2025, and up to $8,231 for 2026, depending on qualifying factors.

•   Adoption credit: If an adoption was finalized in 2025, the adoptive parents may be eligible for a federal tax credit of up to $17,280. For adoptions finalized in 2026, the adoptive parents may be eligible for a federal tax credit of up to $17,670.

Homeowner Credits

•   Home energy tax credits: For tax year 2025, you might be able to take a credit of up to 30% on the costs of clean, renewable energy systems/equipment for your home, up to a limit. Most home energy tax credits will not be available for the 2026 tax year (with a few exceptions), under the One Big Beautiful Bill.

Missed Deadline Penalties

Here’s another reason to prioritize this tax preparation checklist: If you don’t have your documents gathered and your return prepared, you might file late…or not be filing at all.

There are various penalties involved if you don’t make the filing deadline and/or you don’t pay the taxes you owe on time. Here’s how they break down:

•   If you owe taxes and don’t file on time, the penalty is 5% of taxes owed for every month your return is late. The penalty won’t exceed 25% of your unpaid taxes.

•   If you file more than 60 days after the filing due date, the minimum penalty is $525 (for 2025 tax returns filed in 2026) or 100% of your unpaid tax, whichever is less.

•   If you file your taxes (or request an extension) on time but don’t pay the taxes you owe, the late payment penalty is 0.5% of taxes owed for every month the payment is late. The penalty won’t exceed 25% of your unpaid taxes.

•   For any months in which both the late-payment and late-filing penalties apply, the late-filing penalty is reduced by 0.5% to 4.5%.

Interest also accrues on unpaid taxes, adding to the cost. Since all of this can cost you money and create considerable stress, it’s a good idea to get a head start so you have your tax prep documents together and can file on time.

The Takeaway

Filing taxes can be complicated and require gathering various forms and figures. It’s wise to start early and collect information related to your income, dependents, and possible deductions and credits.

Additionally, being prepared in advance to receive any refunds or make any potential subsequent tax payments is important. It can be wise to have a checking and savings account that earns you interest while making it simple to track your cash.

​​

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.

Photo credit: iStock/simpson33

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/.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

SOBNK-Q125-004
CN-Q425-3236452-142

Often the hub of a person’s financial life, bank accounts can be quick and simple to open with the right materials in hand, including a valid government-issued photo ID, personal information such as your Social Security number (SSN), and perhaps an opening deposit.

Here, learn the details on what you need to open a bank account and how to navigate the process itself.

Checklist of What You Need to Open a Bank Account

Here’s a list of what you are likely to need when opening a savings or checking account. Gathering these materials before you actually begin the process of starting a new account can help you save time and frustration.

A Valid Government-Issued Photo ID

You’ll need to provide a valid government-issued photo ID such as a driver’s license, non-driver state ID card, or passport. Double-checking the expiration date is a smart move.

Your Social Security Number (SSN)

Be prepared to provide your SSN as a means of identification. You’ll also need to give contact information such as your address, phone number, and email. You might be required to submit proof of residency, such as a utility bill.

If you’re opening a joint account, you’ll need the identifying and personal information listed above for all the account owners. If you are doing this in person at a bank branch, you may or may not need the other person present. It’s a good idea to check in advance so you can avoid any inconvenience.

Proof of a Physical Address

You might be required to submit proof of your physical address. This can often be a document such as a utility bill.

Your Contact Information

You’ll also need to give contact information such as your address, phone number, and email.

Funds for an Opening Deposit

In many instances, you’ll need an initial deposit when opening a bank account. The minimum opening deposit varies from bank to bank but is often between $25 and $100, according to the Consumer Financial Protection Bureau. In some cases, it can be absolutely zero. You might need to establish direct deposits going forward. If you’re transferring the minimum deposit from another bank, you will likely need the routing and account numbers for that account.

How to Open a Bank Account in 5 Simple Steps

With these materials in hand, it can be quite simple to open a bank account. Here are the typical steps involved.

Step 1: Choose the Right Bank and Account for Your Needs

First, determine if you want to open a checking, savings, or combined checking and savings account. Or you might want to open a couple of different accounts at once.

Then, you can review various options in order to choose a bank. For instance:

•   You might decide to go with an online bank because of the convenience and the higher interest rates they may offer.

•   You might prefer a traditional bank, with a nearby branch, where you can regularly meet with the team in person.

•   You might like to bank at a credit union that you can become a member of based on, say, your profession.

Shop around a bit, and compare features (such as fee-free banking) to find the best fit.

Step 2: Gather the Documents From the Checklist Above

As noted above, whether you are applying online or in person, you will need to have a few documents needed to open an account on hand, including government-issued photo ID and your SSN.

Step 3: Complete the Application Online or in Person

Whether in person or online, you will want to make sure to fill this out carefully, double-checking the information to make sure it’s accurate.

Step 4: Fund Your New Account

You may or may not need to pay a deposit to get your account up and running. (If you are opening an account online and an opening deposit is required, you can typically do an electronic funds transfer.)

Many banks look for $25 to $100 as an opening deposit, but some — especially for checking accounts — may allow you to open an account without any cash.

Step 5: Set Up Online Access and Your Debit Card

Depending on the kind of bank account you are opening, you may need to wait to get a debit card, checks, and other materials. However, you should be able to use your account right away for at least some functions, such as setting up direct deposit and making electronic payments.

Opening an Account Online vs at a Bank Branch

The requirements for opening a bank account at an online vs. traditional bank are similar if not the same, generally requiring personal information and ID documents. Worth noting: You might open a bank account in person with cash. However, with an online bank account, you would probably need to make an electronic transfer or set up direct deposit.

Also keep in mind that while you can often open a bank account online in minutes, it may take a week or two for documents and your debit card to arrive and allow full access.

The Takeaway

Opening a bank account is usually quite simple. Typically, you’ll need personal information, government-issued photo ID, and an opening deposit to open a bank account. Once your bank account or accounts are established, you can enjoy a variety of conveniences and features that can help you manage your money better.

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

How much money do I need to open a bank account?

You will often need an initial deposit to open your checking account or your savings account. For checking and savings accounts, this can often be between $25 or $100, depending on the bank and the account services you’ve signed up for. In some cases, though, a bank may let you open a checking account with no money until your first paycheck or other amount of money is deposited.

What ID do I need to open a bank account?

You will typically need a government-issued photo ID to open a bank account. Usually, this means a driver’s license, a non-driver’s ID card, or a valid passport.

Do I need a good credit score to open a bank account?

You don’t need a good credit score to open a bank account. Here’s why: Banks typically don’t check your credit score when you apply for a checking or savings account. Instead, they may review your banking history via a ChexSystems report, which tracks past overdrafts, bounced checks, or unpaid fees. If you have a negative history with ChexSystems, you might be denied an account.

How long does it take to open an account online?

If you have all the necessary materials at hand (such as your SSN and government-issued ID), it may take just minutes to open a bank account online. However, it could take a week or two for the bank to fully process your application and send your debit card and other documents.

Can I open a bank account for my child?

You can typically open a bank account for your child, either as a joint account or a custodial account (like an UGMA account). You’ll usually need your ID and the child’s birth certificate and/or SSN as part of the application process.

Photo credit: iStock/spawns
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.

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/.
^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.

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-Q425-041

How much of your paycheck should you save each month? Financial professionals often recommend putting at least 20% of your monthly take-home income into savings for future financial goals, such as buying a home and funding your retirement.

Exactly how much you should save each month, however, will depend on your income, current living expenses and financial obligations, as well as your goals. Here are some guidelines to help you decide how much of your income to stash in savings, plus tips on helping reach your goal.

How Much Should You Actually Be Saving Each Month?

There’s no one answer to “How much should I save each month?” Each person’s financial situation is different. Factors impacting how much you should save each month include income, expenses, debt, family size, and cost of living, among others. A commonly quoted bit of advice is to aim to save at least 20% of every paycheck.

The 50/30/20 Rule Is a Popular Starting Point

That 20% figure is part of the popular 50/30/20 budget rule. This technique says to put 50% of your take-home pay toward necessities (housing, utilities, minimum debt payments), 30% toward wants (travel, dining out, entertainment, and other fun purchases), and 20% toward savings and/or additional debt payments.

This budget can help you get on track for regular savings and is flexible enough to accommodate the fact that you may be dealing with debt. You might try a 50/30/20 savings calculator to help you do the math or work with a monthly budget template.

The “Pay Yourself First” Method Ensures You Always Save

Another strategy for saving is to use what’s known as the “pay yourself” method. This involves automatically transferring a sum of money into your savings account. This means the cash goes into savings before you use it to pay bills or go shopping.

In this way, you are prioritizing future goals (such as building an emergency fund, saving for a down payment, or funding a child’s education). Saving money becomes non-negotiable. You might schedule this kind of transfer from checking into savings just after your direct deposit paycheck hits. Online banking can make this a snap.

What Are Some Common Savings Goals You Should Plan For?

It can be difficult to know how much money you should save each month without having a sense of what you are saving for. Setting a few financial goals can also help motivate you to save, rather than spend all of your income.

Building an Emergency Fund for Unexpected Expenses Is Crucial

A major dental or car repair bill, the need for a new hot water heater, the unexpected loss of a job: These are fairly common occurrences that many people aren’t financially prepared for.

Experts advise that you have at least three to six months’ worth of living expenses stashed in an emergency fund for just these types of scenarios. By this measure, many Americans don’t have enough emergency savings, according to SoFi’s most recent “How People Bank Today” survey of 500 U.S. adults.

To start building an emergency fund, it’s wise to keep the money in a liquid form (a high-yield savings account can be a good option). For those who are the sole earner in a family or who have fluctuating incomes, a higher figure may be advisable. You might use an emergency fund calculator to help determine how much money to save to reach your goal. As you build your fund, this money can sit, earning interest, until a safety net of cash is needed. Then, if an emergency does occur, you can dip into the fund instead of relying on high-interest credit cards.

Saving for a Down Payment on a House Requires a Long-Term Plan

Building up cash for a down payment on a house can be part of the American dream for many. Steady savings over the long-term can be a wise move, and it typically takes discipline: This could be the largest sum you’ll ever save.

You might open up a dedicated savings account and automatically funnel funds into it. Many people aim for a 20% down payment to avoid private mortgage insurance (PMI), but there are loans available with as little as, say, 3% to 5% down. It can be wise to calculate how much you’ll need and how long you have to save that amount and then determine how much you need to sock away every month (a savings goal calculator or down payment calculator can help). Then you can budget appropriately and also deposit any windfalls into your savings.

Planning for Retirement Is One of the Most Important Financial Goals

Planning for retirement is typically another major financial undertaking. According to a recent Gallup poll, about six out of 10 Americans say they have a retirement savings plan. It’s a wise move to start planning and saving as soon as possible to allow time for your money to grow. There are various online calculators and other tools you can use to assess how much you will need for retirement, or you might choose to meet with a financial planner.

When you set out to save for retirement, you may want to take advantage of company matches offered in your workplace retirement plan by contributing the maximum amount the company matches.

After emergency savings, a down payment, and retirement, goals may start to look different from person to person. may want to save up to start a business, and yet another may be interested in college savings. Fifty-two percent of the respondents to SoFi’s survey said they are using their savings accounts to save for a specific goal.

Where Is the Best Place to Keep Your Monthly Savings?

The best account for building savings will depend on what you are saving for.

A High-Yield Savings Account Helps Your Money Grow Faster

If you are saving up for retirement, for example, you’ll likely want to use a designated retirement account, like a 401(k) or IRA, since they allow you to contribute pretax dollars (which can help lower your annual tax bill).

You may want to keep in mind, however, that the IRS (Internal Revenue Service) sets annual contribution limits to retirement funds.

For an emergency fund or other short-term savings goals (within three to five years), you may want to open a separate savings account, such as a high-yield savings account, money market account, or a checking and savings account. These savings vehicles typically offer more interest than a traditional savings account, yet allow you to easily access your money when you need it.

What Are Some Easy Ways You Can Boost Your Savings?

Below are some strategies that can help make it easier to start — and build — your monthly savings.

Automating Savings

One great way to make sure you stick to a money-saving plan is to automate savings, as referenced above. You may want to set up a recurring transfer from your checking into your savings account on the same day each month, perhaps the day after your paycheck clears. Even setting aside just a small amount of money each month now can, little by little, add up to a significant sum in the future.

Putting Spare Change to Work

There are apps that will automatically use roundups on any amount paid on a credit or debit card. They round your charge up to the next whole dollar amount and put that little bit of extra money into savings accounts or even invest it. This “pocket change” can add up over time.

Using Windfalls Wisely

If a lump sum of cash, such as a bonus or monetary gift, comes your way, you may want to consider funneling all or part of it right into savings.

Or, if you get a percentage raise on your salary, you might want to boost your automatic monthly transfer from your checking account to your savings account by the same percentage.

Reviewing Your Budget

If you feel like your budget is too tight to save anything at the end of the month, you may want to review your monthly and habitual expenses. You can do this by combing through your checking and credit card statements for the past few months. Or you may want to track your spending for a month or two. You can then come up with a list of spending categories and determine how much you are spending on average for each.

There are online tools that can help make this process easier — in fact, 23% of people use budgeting tools offered by their bank, SoFi’s survey found. And of the 20% of respondents who have used AI to help manage their finances, 31% have used automated budgeting suggestions.

Once you can see exactly where your money is going each month, you may find places where you can fairly easily cut back, such as getting rid of streaming subscriptions you rarely watch, quitting the gym and working out at home, or cooking more and getting take-out less often.

The Takeaway

The right amount to save each month will be unique to you and reflect such factors as your financial goals, how much you earn, and how much you spend each month on essential expenses.

One of the most important keys to saving is consistency. No matter how much of your income you choose to set aside each month, depositing small amounts regularly can build to a large sum over time to achieve your goals. Finding the right banking partner can also help you actualize your money aspirations.

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

How much savings should I have by age 30?

A common guideline is to have your annual salary saved for retirement by age 30, with some sources suggesting a slightly lower target like 0.5x or 1x your salary for overall savings, which would include an emergency fund.

Is saving $500 a month considered good?

There’s no single amount of money saved every month that qualifies as good. Each person’s financial situation is unique. That said, consider the rule of saving 20% of your take-home pay. With this formula, saving $500 a month would equal $6,000 a year, which is 20% of a $30,000 annual take-home pay.

What should I do if I have debt and want to save?

It can be challenging to both save and pay off debt. Strategies can include budgeting wisely, paying the minimum on your debt while building an emergency fund, and then focusing on such debt payoff alternatives as the snowball and avalanche techniques or debt consolidation. Automating savings (aka paying yourself first) is another valuable method.

How is saving for retirement different from other savings goals?

Saving for retirement differs from other savings goals (such as for an emergency fund) since it’s a very long-term endeavor, can involve large sums of money, offers tax advantages, and carries legal protections.

What if I can’t afford to save 20% of my income right now?

It may not be possible to save 20% of your income due to such factors as high cost of living or high levels of debt. What is important is to start saving consistently, even if it’s a small amount, so that your money can grow over time and help you build long-term wealth.

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.

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/.
^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.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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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