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Because check writing is a less popular form of payment these days, it’s easy to get confused about how the whole process works. When someone writes a paper check, there may be a carbon copy attached to the back of each check. These are known as duplicate checks.

But what exactly are duplicate checks? How do you use them, and when do you need them? Keep reading for more insight.

What Are Duplicate Checks?

So exactly what are duplicate checks? If you have ordered these, when you get a checkbook from your bank, you’ll see that attached to the back of each check is a thinner piece of paper known as a duplicate check.

When you write on a check to fill it out, your writing copies over to the duplicate check. In this way, the duplicate that is created can act as a record of the payment made, how much was spent, the day the check was written, and to whom the check was given.

The same information found on the duplicate check should appear in the consumer’s online account, but it can be helpful to have duplicate checks on hand to quickly reference.

How Do Duplicate Checks Work?

What is a duplicate check and how does one work? A duplicate check is attached to the bank of a normal check in the form of a thin piece of paper. This acts as a carbon copy of the original check (also known as the single check). All duplicate checks have the same check number printed on them as the original. The pressure from the check writer’s pen transfers what is written on the original check to the duplicate check.

Once you are done writing a check, you only pull the original check out of your checkbook and leave the duplicate check in the checkbook so you can reference it when and if you need to. (The original check goes to the person or business you are paying, so they can deposit it, cash it, or sign it over to someone else.) All of the information included in the payee, amount, date, and memo sections transfer over. The one area of the original check that doesn’t copy over is usually the signature. This is to protect you, the account holder, from identity theft in the event someone steals your checkbook. Basically, a duplicate check mirrors the information and can help you verify the check you just wrote. You can see all the details right there, on the carbon copy.

Are Duplicate Checks Legal?

Yes, duplicate checks are legal and simply serve as a record of a check that the account holder already wrote. Where legal issues arise is if someone were to steal a checkbook and try to use a duplicate check to gather the information they need to commit theft or bank fraud.

Where Can I Get Duplicate Checks?

If you have a checkbook, you may already have duplicate checks on hand. If not, you can order this style of checkbook from the bank or credit union where you have a checking account. It can also be possible to order checks from select reputable online check printers who may charge less than a bank does for checks.

Single vs Duplicate Checks: What’s the Difference?

Single checks look exactly the same as duplicate checks (although the signature doesn’t transfer over to the duplicate check). The same check number is even on both checks. The main difference between single checks and duplicate checks is the thickness of the paper and that the duplicate check acts as a carbon copy of the single check.

Sometimes, a person may refer to single checks as the kind of checks that don’t have the duplicate behind them. In this case, a single check would be a “regular” check that arrived in a checkbook with no copies involved.

Pros of Duplicate Checks

Once the principle of a duplicate check is understood, you may wonder if these are right for you. Here are a few advantages of using duplicate checks.

Safer than Carrying Cash

While someone can easily steal cash out of a wallet, checks are not as simple to steal. This is especially true if you take steps to manage your checkbook well and keep it in a secure place.

Ease of Use

You don’t have to do anything to create the duplicate check thanks to the carbon copy function. No writing the check number, date, payee, and amount in your check register (unless, of course, you want to do so).

Convenience

The whole point of a duplicate check is to make staying organized and tracking former check payments easier. While most check information is available through online bank accounts, having a paper copy can act as a helpful backup.

Checks Can Be Canceled If Stolen

If you have reason to suspect a check was stolen, you can stop payment on the check before it is cashed. Again, that’s a big advantage over cash; once bills are stolen, they are gone.

Cons of Duplicate Checks

Of course, there are also some disadvantages associated with duplicate checks worth keeping in mind.

Security and Privacy Risk

Because duplicate checks have important information on them about your bank and your spending habits, it’s important not to lose a check and minimize the possibility of your checkbook getting stolen.

Cost More Than Regular Checks

Some banks or check providers charge more for duplicate checks than they do single checks.

Will Not Work Where Places Automatically Print Checks

Duplicate checks may not be easily available from all vendors. Not all check providers can create duplicate checks.

Checks Becoming More Increasingly Uncommon

Checks (including travelers checks) are becoming a less popular form of payment as people shift to online payments, electronic checks, and other options. In many cases, it may not be worth the fuss or ordering and managing a checkbook for the occasional payment.

Alternatives to Duplicate Checks

If you want to keep good records of checks you have written but don’t want to hold onto duplicate checks, you have a few options for how to proceed.

•   Log in to an online bank account. Most banks and credit unions give customers an online bank account where you can access information about recent transactions including the information one would find on a duplicate check. A warning: This is not a reliable way to keep track of every check ever written as banks eventually stop sharing old transactions. But it is possible to download these statements and save them electronically.

•   Make a digital copy. You can take a picture of or scan each check you write and store them digitally.

•   Use a check register. To keep all information about written checks in one place, it’s possible to use a check register. These registers can be on paper or can be digital; they capture the check number, payee, when a check was written and for how much. This process can make it easy to balance, say, your high-yield checking account by copying down check-payment information and subtracting the amounts from your balance.

The Takeaway

What is a duplicate check? In short, a duplicate check is a carbon copy of a single check. Though it can’t be used to make a payment, a duplicate check makes record-keeping easier. When you write a single check, the attached duplicate check creates an automatic copy of the check that you can easily reference. While checks are in many cases losing favor, a duplicate check system can be a bonus for those who do like writing checks, as it can make keeping tabs on your account that much easier.

Speaking of easy: Banking with SoFi can make your financial life so much simpler and more rewarding. Sign up for our high yield bank account with direct deposit, and you’ll earn a stellar APY and pay no account fees.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall. Enjoy up to 4.60% APY on SoFi Checking and Savings.

FAQ

What is a single check?

A single check is the original check that the account holder writes on and gives to someone they want to make a payment to. What are duplicate checks? They are a thinner piece of paper that may be attached to the back of a single check and can act as a carbon copy of it.

What is the difference between a single and duplicate check?

For the most part, single checks and duplicate checks look the same. The main difference is that a duplicate check is a thinner piece of paper and that the signature doesn’t usually copy over from the single check to the duplicate check.

Can you cash a duplicate check?

No, it’s not possible to cash a duplicate check. Only single checks can be cashed. The duplicate check simply serves as a record of the single check.

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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.

SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
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.

Photo credit: iStock/FG Trade
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Unless you’re already a millionaire, you might be interested in finding ways to make more money and increase your net worth so you can join the ranks of the rich. You may be tempted to participate in a get-rich-quick scheme to achieve your goals.

But hold on a minute: Get-rich-quick schemes attract people with the lure of easy money, but more often than not, they can create more financial problems instead of solving them.

Understanding these scams can help you avoid them — and avoid getting scammed by fraudsters.

What Is a Get-Rich-Quick Scheme?

Generally speaking, a get-rich-quick scheme is any plan or strategy that promises large amounts of money for little to no investment. The term “get rich quick” has a less than desirable connotation, since these ventures often fail to live up to their claims.

It’s not uncommon to see get rich-quick-schemes advertised or promoted using language that’s designed to pique consumers’ interest. For example, you might come across a social media influencer that promises to help you “make money while you sleep” or “make money instantly without paying anything”.

That type of wording is often a red flag, and it may be a sign that a get-rich-quick scheme is actually a thinly veiled scam.

Get-rich-quick schemers can also take a more subtle approach and make promises that seem legitimate when taken at face value. Student loan forgiveness scams that claim to be able to help you wipe out student debt in exchange for a fee are a great example of this (you’ll learn more examples of these traps in a minute).

How Do Get-Rich-Quick Schemes Work?

Get-rich-quick schemes work by drawing people in and using some type of financial incentive as bait. Potential victims may be told that they’ll be able to make a large amount of money very quickly if they just pay a fee or make an initial investment. Or they’ll be told that they can get their debts eliminated for much less than what they owe.

In other cases, a get-rich-quick scheme is a major money scam that’s designed to get people to part with their hard-earned money in exchange for a product or service that will supposedly help them make more money. The purpose of this type of scheme is to get people to purchase something; the individual who’s hawking it can then make money themselves. Put simply, you are unlikely to benefit financially.

So, using social media influencers as an example again, an influencer might promote a book or a course that teaches a “proven” system for how to make money online. They encourage their followers to buy the book or course and suggest that if they do so, they’ll be able to grow their income and get rich.

What their followers may not realize is that the influencer is getting paid for that promotion. Their posts may be sponsored by the book author or course creator. Or perhaps they’re earning affiliate commissions for referring people to the products. If the influencer convinces enough people to buy whatever it is they’re selling, they might get rich quick while their followers may not.

Technically, influencers and bloggers are required to disclose paid relationships to their audience. But disclosure alone doesn’t convey any guarantee that the product they’re promoting will work the way they say it will. So people buy in, expecting results that they may or may not see.

Are Get-Rich-Quick Schemes Illegal?

Get-rich-quick schemes themselves are not outlawed, though there are numerous regulations that attempt to protect consumers from scammers. As mentioned, influencers are required to disclose relationships they have with the brands that they promote. The Truth in Advertising Act exists to prevent companies or individuals from making false or misleading claims when advertising products and services. Advertisers must also be able to back up the claims they make with scientific evidence, when appropriate.

Whether a get-rich-quick scheme falls within legal boundaries or is illegal can largely depend on the nature of the scheme. Multi-level marketing (MLM) is a great example. What is an MLM? In simple terms, it’s a business structure in which people earn commissions by selling products or services to friends and family members. Mary Kay and Avon are two well-known examples of multi-level marketing operations that are legit.

MLMs are not illegal, but pyramid schemes are. What’s known as a pyramid scheme can resemble an MLM, but the difference is that all the money is made by bringing new people into the program. The person who recruited a new participant earns money by charging them an entry or registration fee or perhaps an introductory product package of some sort. The higher up you are in the pyramid, the more money you can make.

A Ponzi scheme is another type of illegal get rich quick scheme. In a Ponzi scheme, the person or persons at the top promise investors they can double or triple their money. They take the investors’ money and keep it for themselves, paying out nominal amounts to people who invested earlier in the scheme. The scheme can keep going — and continue making the people at the top rich — as long as new investors keep joining. Bernie Madoff, the convicted financial fraudster, was notorious for running one of the largest Ponzi schemes in history.

Examples of Get-Rich-Quick Schemes

Get-rich-quick schemes can take many different forms, and it isn’t always easy to recognize them for what they are. Some of the most common examples of legal (and illegal) get-rich-quick schemes include:

•   MLMs and pyramid schemes disguised as MLMs

•   Work-at-home scams that promise you’ll earn major money

•   Investment scams that promise high returns for very little money

•   Side hustle and online business scams

•   Debt relief and credit repair scams

•   Lottery scams

•   Fake job listing scams

•   Scams related to student loan forgiveness or government benefits

•   Home improvement scams

•   Mystery shopping scams

•   Giveaway or free prize scams

And of course, there’s the ever-enduring Nigerian prince scheme. This scam and its many variations promise you a large inheritance, finder’s fee, or compensation in exchange for accepting a deposit into your bank account. Scammers, who claim to be royalty (perhaps hoping that will impress their target and sound legitimate) ask that once you receive the deposit, you send part of the money back to them and keep the rest.

In reality, the scammer is trying to trick you into handing over your bank information, so they can try to use your account number and routing number to cheat you. Or else they ask you to wire them a small amount to cover processing fees before they can send the money along to you. It’s an ongoing get-rich-quick scheme that unfortunately continues to collect victims.

Are Get-Rich-Quick Schemes Reliable?

A get-rich-quick scheme can make lots of promises, but more often than not, they fall short when it comes to the delivery. What you can usually count on with a get-rich-quick scheme is that you’ll lose money if you participate. That’s because that’s how these schemes are designed to operate.

Getting money for nothing sounds attractive, and so it’s easy to fall victim to influencer schemes when you see the lavish lives they lead on social media. But there’s a significant difference between rich vs. wealthy and again, there’s no guarantee that any get rich quick scheme will produce the results you want.

Even if you don’t lose money outright, you may only get a small return on investment. Or it can take much longer to see results. For example, say you’re interested in becoming a blogger so you can quit your full-time job. You see a popular writing course advertised by lots of different bloggers who claim to be making six figures a year.

You buy the course, believing that in exchange for your payment of just $497 you’ll soon be on your way to making $10,000 or more each month from home. Except you complete the course and don’t see instant results. In fact, it takes you more than three years to build up your business to the point where you’re making steady income.

You might eventually get rich, but there’s no “quick” about it. That’s why get-rich-quick schemes are so problematic. They rely on people looking for a shortcut to easy money, despite that building one’s income and net worth can in reality take years.

Recommended: Are You Bad with Money? Here’s How to Get Better

Tips to Spot a Get-Rich-Quick Scheme

Identifying a get-rich-quick scam isn’t always easy since some scammers can be so convincing and seem so sincere. And in some cases, schemes for quick riches are based on legitimate ways to make or invest money. If you’re worried about getting hit by a get-rich-quick schemer, here are some of the ways to spot a scam in action.

Upfront Payment

A request for upfront payment is often a dead giveaway that a scam is afoot. Email phishing scams like the Nigerian prince scheme are a great example. There are some common credit card scams that fall into this category as well. These scams make false claims about being able to raise your credit scores overnight or wipe out credit card debt instantly, as long as you pay their fee first.

Misleading Headlines With False Claims

Scammers often use clickbait-y headlines to grab consumers’ attention. They can make claims that are grandiose or outright false to get you to click and check out their product or service. You may not realize how misleading those claims are until you’ve bought into the scheme.

Secret Tips and Information

Another tactic scammers may use to get your attention is to tell you they have insider information that they’re willing to share with you to help you get rich. Of course, you’ll only be able to access those secret tips once you’ve purchased something or paid them a fee. It’s particularly important to be wary of those so-called secrets when it comes to investing, since insider trading is illegal.

‘100% Success Rate Guaranteed!’

Scammers may also use language that suggests that everyone who’s ever used their product or service has seen success or that success is guaranteed. That could fall under the heading of misleading information in violation of the Truth in Advertising Act. And even if it’s technically true that the success rate is 100%, the results may not be the same for everyone.

If It Sounds Too Good to Be True

Here’s perhaps the easier rule for spotting a get rich quick scam: if something seems too good to be true, it probably is, as the saying goes. Attempting to fact-check or verify claims that someone is making about a product or service can help to weed out scammers. If you can’t verify any of the claims they’re making, that’s a sign to be wary of their statements.

Going to Trusted Sources, Not Influencers or Celebrities

Influencers and celebrities can make a lot of money promoting products or services that are designed to help you get rich. But again, they may be getting paid for that promotion, so they can’t be considered a reliable source.

Researching get-rich-quick offers through trusted sources is important for separating fact from fiction. For example, the Federal Trade Commission (FTC) can be a great resource for reading up on the latest scams targeting consumers.

Unwilling to Share Their Business Model

Transparency is key to rooting out get-rich-quick scammers. Let’s say someone claims to be able to help you make $10,000 by starting your own business from home but is unwilling to tell you how they do it. That’s a sign that you might not want to take them at their word.

‘You Do Not Need Any Experience!’

Wouldn’t it be nice if you could make a fortune with no prior experience or knowledge? That’s the hope upon which some get-rich-quick fraudsters capitalize. While there are legitimate ways to make money that don’t necessarily require years of experience, scammers can use that to persuade people to buy into a product or service that leaves you holding the bag. Or they can twist their wording to make it seem like you can make money even without experience, when really, there’s a steep learning curve involved.

Recommended: Guide to Financially Downsizing Your Life and Saving Money

Alternatives to Get-Rich-Quick Schemes

Getting rich overnight probably isn’t the cards for most people, unless they happen to win the lottery or a wealthy relative passes away and leaves them a huge inheritance. If you want to get rich (or become wealthy), you’ll most likely need to put in some effort and give it some time.

Here are some legitimate wealth-building alternatives to get-rich-quick schemes:

•   Starting and growing a business

•   Using side hustles to supplement your income

•   Asking for a raise or promotion at work

•   Moving to a higher-paying job with a different company

•   Reducing spending and paying down debt

•   Investing money consistently

•   Working with a financial advisor or wealth manager

Admittedly, these ideas may seem a lot more boring and difficult than get-rich-quick schemes. But they’re all proven ways to increase financial stability and raise your net worth.

Getting financial advice from trusted professionals can help you make the most of the money you’re earning, saving, and investing. But is wealth management worth it? It can be, if it helps you to achieve your financial goals. And it’s likely a better alternative to trusting in the get-rich-quick schemes that abound today.

Banking With SoFi

Trying to get rich may be a lofty and elusive goal, but you can certainly take steps to improve your financial situation. Keeping your money in the right bank account can be a great place to start.

When you open a SoFi bank account, you can get checking and savings in one convenient place. You can manage your money online or via the SoFi mobile app and earn a competitive APY on balances. And you can get paid up to two days early with a qualifying direct deposit.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall. Enjoy up to 4.60% APY on SoFi Checking and Savings.

FAQ

Can get-rich-quick schemes be good?

More often than not, get-rich-quick schemes require you to pay money for an investment or product that claims to help you grow your wealth immediately. Typically, though, the results you get can be very different from what you expect. In other words, they are unlikely to be good.

How many businesses are considered get-rich-quick schemes?

There are no definitive statistics on how many businesses are considered to be get-rich-quick schemes. Multi-level marketing companies and direct sales companies often get labeled as get-rich-quick operations, even when those businesses are legitimate. This makes hard numbers difficult to find.

What can I do if I have fallen for a get-rich-quick scheme?

If you’ve fallen for a scam, try to minimize or limit your losses by not funneling any more money into the scheme. If you believe the scheme is illegal, you can report it to the Federal Trade Commission. You could also file a police report and report the scheme to your state attorney general’s office. If a scammer tricked you into handing over your banking or financial information, alert your bank to monitor your account for potentially fraudulent transactions. You may also need to update your login details for financial websites.

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Photo credit: iStock/alfexe

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.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
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.

SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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.

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Who doesn’t like a little something extra? While there are some benefits your employer is required to provide you, they may also give you additional perks in the form of what are known as “fringe benefits.”

Here’s a look at some examples of fringe benefits, how they work, and whether they’re taxable.

What Are Fringe Benefits?

Typically, employers compensate their employees with a traditional paycheck and some additional benefits that they must provide, such as workers’ compensation coverage or unemployment.

But in an effort to keep workers happy, loyal, and motivated — attract new talent — many organizations also offer fringe benefits such as health insurance, childcare assistance, and employee stock options. These extras are above and beyond a regular paycheck and are often included in a hiring package.


💡 Quick Tip: We love a good spreadsheet, but not everyone feels the same. An online budget planner can give you the same insight into your budgeting and spending at a glance, without the extra effort.

Common Fringe Benefits

Here’s a look at some common fringe benefits:

•  Accident and health benefits: Provides help with health-related costs not covered by your traditional insurance plan.

•  Athletic facilities: Provides access to on- and off-site athletic and gym facilities.

•  Dependent care assistance: Helps you pay for some care-related expenses for qualifying dependents, including children, a disabled spouse or legally dependent parents.

•  Adoption assistance: Provides payment and reimbursement for expenses related to adopting a child.

•  Employee stock options: Gives employees the chance to buy a certain amount of company stock at a specified price and by a certain time.

•  Group-term life insurance coverage: Allows employers to provide their employees with up to $50,000 in tax-free insurance. Coverage is traditionally 1-2x salary, where the first $50,000 is received tax-free, then any additional coverage is taxed.

•  Health savings accounts (HSAs): Provides tax-advantaged savings accounts for employees enrolled in high-deductible health plans. These accounts may receive contributions by the employer or simply be funded on a pre-tax basis by the employee to help them pay for dental and health care costs.

•  Transportation and commuting benefits: Helps employees get to and from work, such as through the use of a company vehicle. Employees may also be able to have qualified transportation costs taken from their pre-tax pay, which reduces their taxable income.

•  Tuition reduction: Allows employers to chip in for the cost of tuition to educate an employee and sometimes their spouse or children.

•  Meals: Provides employees with free on-site food and snacks.

For a more complete list of fringe benefits, check out IRS Publication 15-B .

Are Fringe Benefits Taxable?

Generally speaking, most fringe benefits are subject to employment taxes. The taxes are taken out of your paycheck and reported on your annual tax return. (If you’re a contractor, you’ll typically report fringe benefits on a Form 1099-MISC. If you’re a non-employee, fringe benefits are not subject to employment tax.)

That said, the IRS does consider some fringe benefits nontaxable. This means they’re not subject to federal income tax withholding, Social Security, Medicare, or federal unemployment tax, nor must they be reported on your tax return. Often, in order for a fringe benefit to avoid being taxed, certain qualifications must be met.

Here are some extra perks that are considered nontaxable (the full list is available on the IRS’ site:

•   Retirement planning services

•   Adoption assistance

•   Meals and snacks (If certain conditions are met)

•   Health insurance (up to a certain dollar amount)

•   Group-term life insurance (up to a certain amount of coverage)

•   Commuting or transportation benefits

•   Dependent care assistance (up to a certain amount)

•   Awards given for achievements

Tax-Advantaged Fringe Benefits

Some fringe benefits allow employees to direct a certain amount of funds pretax toward qualified accounts and expenses, which can lower their taxable income.

These tax-advantaged benefits are (somewhat oddly) known as “cafeteria plans,” because they allow employees to select the benefits they want. You must be permitted to choose from at least one taxable benefit, like cash, and one qualified benefit. Examples of qualified benefits include:

•  401(k) plans

•  Accident and health benefits, excluding Archer medical savings accounts and long-term care insurance.

•  Adoption assistance

•  Dependent care assistance

•  Group-term life insurance coverage

•  HSAs (distributions from HSAs can be used to purchase long-term care coverage.)

There are, predictably, a few more nuanced rules about cafeteria plans and employee tax treatment. While most regular employees receive normal tax treatment, other employees or contractors may not be treated as such for cafeteria plans.

If you have tax-related questions about fringe benefits, it might be a good idea to consult your attorney or preferred tax specialist.


💡 Quick Tip: Income, expenses, and life circumstances can change. Consider reviewing your budget a few times a year and making any adjustments if needed.

Planning Around Fringe Benefits

Employers typically offer fringe benefits to make the work environment better for the people who currently work there and more desirable for prospective employees.

Some benefits may hold a lot of appeal. For example, 401(k)s are a powerful tool for saving for your retirement. But others may be less appealing. For instance, you may decide you don’t want to use FSAs, which often restrict how much you can contribute and when you have to spend the funds.

It’s common to choose which fringe benefits you want when you’re starting a new job and filling out your initial paperwork. However, many companies will allow you to go back and make changes if you decide later that some choices aren’t right for you.

The Takeaway

Fringe benefits can run the gamut from use of the company car to adoption assistance to employee stock options (to name just a few examples). These extra perks are in addition to your paycheck and can be a powerful way to keep workers happy and loyal while also attracting new talent.

Generally speaking, most fringe benefits are taxable, though some — like retirement planning assistance, athletic facilities, and on-site meals and snacks — are not. Some fringe benefits will even allow you to direct a portion of funds pretax toward qualified accounts and expenses, which can help lower your taxable income.

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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.

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