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A share draft account or share draft is a checking account that’s held at a credit union. That’s a simple share draft account definition.

Share draft accounts are similar to checking accounts offered by banks, in terms of how you can use them. There are, however, a few differences that set them apart.

Whether a share draft account or a checking account is right for you can depend on your preferences for managing your money. If you’re thinking of opening a share draft at your local credit, it helps to know how they work. Learn more here, including:

•   What is a share draft account?

•   How do these accounts work?

•   What are the pros and cons of a share draft account?

•   How do share draft accounts differ from typical checking accounts?

What Is a Share Draft Account?

“Share draft account” is how credit unions refer to checking accounts. This terminology reflects in part how credit unions work.

When you join a credit union, you become a member of it. You, along with the other members, have an ownership share in the credit union. That’s a key distinction between a credit union vs. bank. Share draft is used to describe checking accounts belonging to credit union members.

You’ll also see the word “share” used with other types of accounts offered at credit unions. For example, a share account is the credit union equivalent of a bank savings account. These accounts can earn interest so you can grow your money over time.

Share certificates, meanwhile, are the credit union version of certificate of deposit (CD) accounts. You deposit money into a share certificate, which then earns interest until the certificate matures. At maturity, you can withdraw the initial deposit and interest earned or roll it into a new share certificate.

How Do Share Draft Accounts Work?

Share draft accounts work by allowing you to deposit money that you can then spend or withdraw later. Each time you deposit money, you’re essentially buying shares in the credit union that holds your account.

Generally, with a share draft account you can:

•   Pay bills online

•   Withdraw cash at ATMs (though there may be ATM withdrawal limits)

•   Make purchases online or in person using a linked debit card

•   Manage accounts via online and mobile banking

•   Add funds through direct deposit and/or remote deposit capture

•   Write checks

•   Link your debit card to mobile wallet apps

•   Send money to friends and family through Zelle or another mobile payment app

•   Send and receive ACH transfers or wire transfers

There may be various fees associated with these accounts, including monthly maintenance fees or overdraft fees. You may also pay ATM fees, depending on where you withdraw cash. Some share draft accounts pay dividends to credit union members as they’re declared quarterly, biannually, or annually.

Opening a share draft account is a bit different from opening a bank account. You first need to qualify for membership in a credit union.

The qualification requirements can vary by credit union. In terms of how much money to open an account, initial deposit requirements are usually on the lower side. It might be, say, $5 to $25 in many cases.

Credit unions can impose daily, weekly, and monthly limits on debit card transactions and ATM withdrawals. There may also be limits on check-writing. Customer service availability can depend on the credit union.

Recommended: What Is Monetary Policy?

Pros of Share Draft Accounts

There’s a lot to like about share draft accounts and credit unions in general. Here are some of the main advantages of share draft accounts:

•   Initial deposit requirements are often low

•   Minimum balance requirements may be low or nonexistent

•   Some share draft accounts can earn dividends

•   Banking fees may be lower

•   Benefits and features tend to be similar to bank checking accounts

•   Credit unions can offer numerous ways to access share draft accounts, including online and mobile banking, ATMs, and branches.

There’s one more advantage to opening a share draft account. If you’re a member of a shared branch credit union, you can access your money through a wider network of branches. Shared branch banking means that even if your accounts are held at Credit Union A, you could access them at Credit Union B, which is convenient if you’re traveling.

Cons of Share Draft Accounts

Share draft accounts may not be right for everyone. Before opening one, here are a few potential drawbacks to keep in mind:

•   Membership in a credit union is required to open a share draft account

•   Branch access may be limited if your credit union isn’t part of a shared branch network

•   There may be limits on withdrawals or debit card transactions

•   Dividend rates may be low.

Qualifying for membership in a credit union might be the biggest hurdle to joining one for some people. Credit unions can base membership on things like military affiliation, where you work or attend school, religious affiliation, or employment. The good news is that there are some credit unions that have less stringent requirements and offer membership to a wider range of people. It can be worthwhile to shop around.

How Does a Share Draft Differ From a Traditional Bank Account?

Share draft accounts are similar to checking accounts offered at traditional banks, but they aren’t identical. Here are some of the most important differences between share draft vs.checking accounts.

Fees

Banks are known for charging plenty of fees for checking accounts. Fees are a big part of how banks make a profit. Credit unions, on the other hand, are not-for-profit financial institutions. That means they generally charge their members fewer fees and they can pay higher interest rates on deposit accounts than traditional banks.

Deposit Insurance

Deposits at banks and credit unions can both be insured against institutional failure. Whether your coverage comes through the FDIC vs. NCUA depends on where you keep your accounts. Credit unions are likely insured by NCUA, or the National Credit Union Administration.

The Federal Deposit Insurance Corporation insures deposits at member banks up to $250,000 per depositor, per account ownership type, per financial institution. You may qualify for more deposit insurance if you have accounts in different ownership categories that meet FDIC requirements. This insurance reassures you that your checking account is safe.

The National Credit Union Administration insures deposits at member credit unions up to $250,000 per depositor. Member deposits held in jointly-owned accounts are insured up to $250,000 as well.

Features and Benefits

Credit unions and banks can offer a different range of features and benefits for draft accounts and checking accounts, respectively. There can be a significant difference between what is a premium checking account at a bank and what constitutes a premium share draft account at a credit union, for example. Comparing what’s included with share draft and checking accounts can help you decide which one is better for your needs.

Banking With SoFi

Deciding to open a checking account or a share draft account can help you get a better handle on your money. Both share draft accounts and checking accounts make it easy to deposit funds, pay bills, withdraw cash, or make purchases as needed.

If you’d like to manage money online, you might consider banking with SoFi, where you can get checking and savings in one convenient place. And when you open a bank account online at SoFi with direct deposit, you’ll earn a competitive APY and skip the usual 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 the difference between regular share and share draft?

A share account is a savings account held at a credit union. Share accounts can earn interest in the form of dividends. Share draft accounts, however, are similar to a checking account and allow you to make draft withdrawals by writing checks, making purchases with a debit card, or withdrawing cash at ATMs.

What is the difference between a share draft and a checking account?

The difference between a share draft and a checking account is where they’re held. Share draft accounts are offered at credit unions; checking accounts are offered at banks. Share draft accounts can be NCUA-insured while checking accounts at banks have FDIC deposit insurance coverage.

Is a checking account better than a share draft?

A checking account may be preferable to a share draft account if you’d rather keep your money at a bank rather than a credit union. On the other hand, you might lean toward a share draft if you’d rather take advantage of perks that only a credit union may offer. Looking at your money management habits and preferences can help you decide whether a checking account or share draft is the better fit.

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Photo credit: iStock/SDI Productions

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.

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Some days off are meant for purely relaxing. Others are meant for checking things off our to-do lists that we can’t get done during the course of the work week.

If you’re looking for productive things to do on your day off—including ideas that may improve your money mindset and financial fitness—we have 21 good ways to get started.

How Staying Productive Can Improve Your Money Mindset

If you have a lazy day off, it might wind up costing you. The temptation to spend when bored is real. When you have nothing to do, you may turn to online shopping, dining out, or other pricey leisure activities to fill your time.

There is of course a time and place for spending on leisure, but there’s a big question to ask yourself before spending that money. Specifically, are you plunking down that cash because you will get something out of the experience or purchase or are you simply doing so because you’re bored?

Staying productive on days off can be a form of financial self-care. It can help you avoid unnecessary spending which, in turn, can make other leisure time feel even more enjoyable.

Productive Things to Do on Your Day Off

Not sure what to do on a day off? Consider checking one or more of these productive activities off your to-do list. Any of them can help you feel more organized and in control of your finances…and perhaps even your life!

1. Planning a Vacation

Instead of going out and spending money, stay home and plan an upcoming vacation. Money will be spent on that vacation, and a little planning can go a long way to make sure the vacation goes well and that investment pays off. You might even open a travel fund account and begin saving.

2. Checking Your Credit Card Statements

Need a friendly reminder not to overspend? Review recent credit card statements to get an idea of how budgeting is going and to make sure all charges are accurate. If you’re carrying a balance, you might hatch a plan to pay it off.

3. Taking Quality Time for Yourself

We can all decide what quality alone time means to us. That may mean pursuing a hobby like painting, reading a good book, or going for a long run. There are plenty of relaxing activities to enjoy that don’t cost any money and recharge you for the work days ahead.

4. Reviewing Your Career Goals

While it may not sound fun to sit down and think about work outside of working hours, there’s a lot of value to be found in peaceful reflection. Spending time reviewing career goals when there are no Monday-to-Friday stressors or distractions can make it easier to find clarity.

5. Starting a Side Hustle

Speaking of work, a fun and fulfilling way to make career progress and some extra cash during downtime are some benefits of starting a side hustle. Think about some fun options that you would enjoy which might also allow you to try out new skills and career options.

6. Catching Up on Important Errands

Running errands isn’t always fun, but not having them hanging over our heads sure feels good. If you have a day off, spending a couple of hours in the morning to tackle them can leave the rest of the day wonderfully free. Plus, you’ll get that “I’ve got this!” boost from knowing you’re in control of those to-do’s.

7. Exercising

Earning some extra endorphins is a great way to stay healthy and feel happier on a day off. Sweat it out, and then enjoy the extra energy and mood boost that comes from a good workout.

8. Mapping Short-, Medium-, and Long-Term Money Goals

Social media’s effect on finances may have some upsides, but on a day off, why not stop scrolling and start setting money goals. Similar to setting career goals, a day off is the perfect time to think critically about any short-, medium-, and long-term money goals to set. How to get started? Review your current financial situation, reassess your budget, and make a plan for working towards your financial goals such as buying a house, paying for a child’s college education, or paying off debt.

9. Getting a Haircut

A fresh haircut can put a bit of pep in anyone’s step. A definite self-esteem booster for most of us.

10. Volunteering

Giving back to our community is a great way to spend free time. There are so many different causes worth giving back to, from food banks, to animal shelters, to beach cleanups. Volunteering can even help borrowers pay down their student loan debt.

11. Updating Your Online Resume

If you’re looking for a new job, the weekend is a great time to update online resumes on social media platforms or job searching websites. There are loads of templates online that can help you spiff up your resume, too.

12. Reading a New Book

With so many distractions on busy days, it’s hard to find the time to read. Make reading a new book (or an old favorite) a priority on your next day off. There’s nothing like the escape of a good story, whether it’s historical fiction, a murder mystery, or whatever else catches your attention.

13. Taking an Online Class

Whether you want to learn a new work or personal skill, there’s an online class out there that can help you productively use your time off. From learning how to code to cook, almost any topic is available these days, whenever and wherever you may be.

Recommended: Can You Take Online Classes While Working?

14. Spending Time With Loved Ones

Productivity can mean a lot of different things. For example, spending time with loved ones can be extremely beneficial as it helps us build a support system and provides personal gratification.

15. Unsubscribing From Unwanted Emails

Have half an hour to kill before meeting up with friends? Chip away at unsubscribing from all unwanted emails. The lack of digital clutter can be super freeing, even if you don’t achieve “inbox zero” just yet.

16. Updating Your To-Do List

Want to get things done on a day off, but don’t know where to start? Sit down with a pen and some paper (or a doc on your phone or laptop) and write an updated to-do list. Of course, it’s not necessary to tackle the entire list in one day, but do schedule when to check the most urgent items off the list.

17. Checking How You’re Doing With Your Budget

Budgets only work if you check in to make sure they’re sticking with it. A good habit is to eyeball your budget weekly to make sure it’s still on track. If not, see what spending changes need to occur the rest of the month. There are all kinds of apps to help with this; your financial institution may have a great one to use. Don’t have a budget yet? Get started by creating a line-item budget.

Recommended: Guide to Cash Cushions

18. Planning for Next Week

Get organized for the week ahead so it feels less stressful and intimidating. Do meal prep, clean up the house, organize your bills, and make sure all work clothes are washed and ready to wear.

19. Finding Networking Opportunities

Nowadays networking can all be done from home online. Hop on websites like LinkedIn and see who’s worth connecting with professionally. Send some connection requests or messages to get the ball rolling and build your career.

20. Adjusting Your Tax-Withholding if It’s Not Right

Sick of owing taxes each year? Check your tax withholdings to make sure the correct amount is being deducted from your paychecks. Adjust it accordingly if needed. That quick move could save you some money headaches when tax season rolls around.

21. Cleaning Your House

A good cleaning session can help make a home more comfortable, efficient, and enjoyable to live in. Imagine your place freshly vacuumed or the bathroom scrubbed as motivation.

The Practical And Financial Benefits of Being Productive

While it may feel counterintuitive, being productive on a day off can have many benefits. Not only can being productive help you feel better and cut down on unnecessary stressors, it can also help you save money. How? To start, being productive helps us feel less bored, meaning we are less likely to fill our time with shopping or other expensive activities. Being productive also helps us stay organized and gives us the time we need to set financial goals and manage our budgets.

Banking With SoFI

As you can see from this list, there’s no shortage of productive things to do on your day off. Whether you choose to spend your free hours taking an online class, reviewing your budget, or outside running, you can relieve stress and get organized. Feeling in control and more relaxed are terrific benefits worth pursuing and enjoying.

If setting financial goals is at the top of your weekend to-do list, it may be time to find a banking product that can better suit your needs. When you open an online bank account with direct deposit, SoFi can help your money grow faster. SoFi Checking and Savings puts tools at your fingertips to help you set savings goals, and with direct deposit you’ll earn a competitive APY and pay zero account fees. Your money can keep working hard for you even when you’re relaxing.

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 considered wasting time on your day off?

When deciding what things to do on a day off, only you can decide what’s a waste of time or not. For one person, organizing their receipts is a waste of time; for another, it’s productive. The same holds true for reading a book. The key is to find a way to balance productivity and relaxation as you define them.

How can I productively treat myself on my day off?

If you’re wondering, “What should I do on my day off?” and want to come up with something that is a productive treat, you might consider a hike, reading a new book, or taking an online class. All have positive benefits in terms of self-care and fun but don’t cost much.

Is traveling considered productive?

Traveling and gaining new experiences and insights beyond your local community can indeed be a great way to be productive. Travel can help us learn, grow, relax, and return home with a new, refreshed perspective.

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Photo credit: iStock/MesquitaFMS

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.

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.

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Opinions about America’s financial institutions may vary, but regardless of your viewpoint, it’s important to understand how these organizations are governed. At both federal and state levels, laws are set and enforced to protect consumers against unfair and unscrupulous treatment in the banking and finance sectors. In addition, guidelines are in place to combat fraud and monopolistic behavior, helping to ensure the smooth running of the free-market economy.

Granted, catastrophic historic events — such as the 2008 global financial crisis — occur despite the oversight of robust financial regulatory agencies. Because of this, laws and regulations are constantly being examined and updated to finesse the banking and finance legal framework.

Read on to understand more about finance watchdogs, their roles, and how regulations work to protect the public and the economy from fraud and illicit practices. It’s wise as well as reassuring to know more about the guardrails that are in place.

What Is Financial Regulation?

Financial regulation is a set of laws, rules, and policies set by governing institutions. These are designed to keep your money safer. Specifically, they aim to maintain confidence and stability in the financial system by eliminating fraud and monopolistic behavior.

In the United States, governing bodies try to balance the need for oversight with a free-market economy, which can be a challenging endeavor.

Why Financial Regulations Are Important

Without regulations, consumers have no protections. They might be subject to fraud, sold bad mortgages, and charged high interest rates and fees on credit cards. Large companies could create monopolies or duopolies, which allow them to control prices.

Laws and policies prevent companies from gaining too much market control and stifling competition, which threatens the free market economy. Regulations also prevent financial institutions from taking risks that put consumer funds in jeopardy.

Here’s a brief history lesson that shows how lack of regulation can negatively impact daily life: The 2008 financial crisis was precipitated by deregulation and the repeal of the Glass-Steagall Act of 1933. This allowed financial institutions to engage in risky hedge fund trading. To fund their investments, the banks created interest-only loans for subprime borrowers, which contributed to more home purchases (including to buyers who would not have otherwise qualified) and quickly rising prices. This created a housing bubble, and millions of people were left bankrupt and couldn’t sell their homes when home prices then plummeted.

But too much regulation can also be a threat to an economy. In a free-market economy, prices are largely determined by supply and demand. Competition among suppliers tends to keep prices at bay as they each try to grab market share.

If regulations become too onerous and costly, companies may use up capital to comply with federal rules. That means they aren’t using those funds to create innovative products. In some cases, specific industries or groups manage to influence regulators and persuade them to introduce or eliminate laws that benefit them and not their competitors.

Types of Financial Regulations

Different agencies focus on the safety and soundness of products and services, transparency and disclosure, standards, competition, and rates and prices for different entities. Here’s a closer look at some of the most important regulations to be aware of:

•   Stock Exchange Regulations Laws and rules for stock exchanges ensure that the pricing, execution, and settlement of trades is fair and efficient.

•   Listed Company Regulations Listed companies (public companies) are required to prepare quarterly financial statements and submit them to the Securities and Exchange Commission (SEC) and to their shareholders. Investors use this information to inform their trades.

•   Asset Management Regulation Financial advisors and asset managers must follow strict rules set by financial services regulatory bodies so that clients are treated fairly and not defrauded. Any company that provides investment advice is considered an investment advisor, and the SEC oversees investment advisors with more $110 million in assets under management (AUM).

•   Financial Services Regulation Banking and financial institutions must follow specific guidelines to ensure a functioning banking system. These rules are enforced by The Federal Reserve Board (the Fed) and the Federal Deposit Insurance Corporation (FDIC).

Recommended: What Is a Fiduciary Financial Advisor?

Types of Financial Institutions

There are a wide variety of financial institutions in America, some of which you may be familiar with. Here’s the rundown:

•   Central banks, like the U.S. Federal Reserve, watch over the country’s monetary policy.

•   Retail banks are probably what most people are familiar with. These are banks where the general public can have checking and savings accounts, loans, and other financial services.

•   Commercial banks are similar to retail banks (above) but they serve the business community. Large banks may act as both commercial and retail banks.

•   Credit unions are similar to banks but they are nonprofits, and members are part owners of them. They offer the same kind of services as banks but may tailor themselves to specific communities.

•   Community development financial institutions (CDFIs) are financial institutions that work to build financial knowledge, services, and wealth in communities that are less advantaged.

•   Savings and loan associations are organizations that use savings to create housing loans.

•   Brokerages manage securities trading (say, stocks and exchange-traded funds, or ETFs), which are regulated though not insured.

•   Insurance companies help both businesses and individuals protect themselves from property loss and may provide services such as loans.

•   Investment companies function by issuing securities to both businesses and individuals who seek to raise capital.

•   Mortgage companies offer home loans and may also manage commercial real estate.

What Is a Financial Regulator?

A financial regulator is an organized governmental or formal body that has the jurisdiction to oversee other entities, such as stock markets, banks, and asset managers. Their mandate is to ensure fairness, protect the public and institutions from fraud, and to facilitate a well-functioning financial sector.

Examples of financial regulators are the Fed, the Securities and Exchange Commission (the SEC), and the Financial Industry Regulatory Authority (FINRA).

How Are Financial Institutions Regulated?

Banks and financial institutions are regulated by the Fed, the Office of the Comptroller of the Currency (OCC) and the FDIC, while asset management companies and stock exchanges answer to the SEC and FINRA. (Also worth noting: Individual stock brokers, investment bankers, and other professionals likely need FINRA securities licenses.) State agencies may enforce regulations on financial institutions, notably insurance providers.

Each of these organizations requires documentation from financial institutions and companies that show compliance with laws. For example, listed companies have to submit quarterly financial statements to the SEC. If they fail to do so, they may be charged with “Failing to Comply” and may lose the ability to trade their shares on the stock market and be forced to pay penalties.

Recommended: FINRA vs. SEC: How are they Different?

The Most Common Financial Regulatory Bodies

The following is a list of the more recognized regulatory agencies and a brief description of what each one does.

The Federal Reserve Board (FRB)

The Fed is the central bank of the United States. As such, it ensures the U.S. economy functions effectively. The Fed is in charge of monetary policy and has the power to increase or decrease interest rates or to instruct banks on the quantity of reserves they must maintain. The Fed also monitors financial systems and their impacts, facilitates efficient settlement of U.S dollar transactions, and upholds laws that protect consumers.

The Federal Deposit Insurance Corporation (FDIC)

The FDIC was created by Congress to support the U.S. financial system. The FDIC insures deposits and monitors financial institutions and their compliance with consumer protection laws. The FDIC also manages bank failures.

The Consumer Financial Protection Bureau (CFPB)

The is a relatively new agency that implements and enforces Federal consumer financial law. CFPB regulations protect consumers by making sure financial products and services are “fair, transparent, and competitive.”

The National Credit Union Association (NCUA)

The NCUA was created by Congress in 1970 . The association insures consumer accounts with credit unions with up to $250,000 of federal share insurance. Enforcement tools of the association include letters of understanding and agreement, administrative orders, and consent orders.

The Securities Exchange Commission (SEC)

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The SEC strives to maintain the public’s trust in the capital markets by insisting on fair practices. Various acts have been passed over time including the Securities Act of 1933, the Sarbanes-Oxley Act of 2002, and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

The Commodity Futures Trading Commission (CFTC)

The CFTC was created in 1974 to oversee commodity trading in the agricultural sector. Commodity trading has been subject to government regulation since the 1920s. The CFTC supervises and monitors commodity traders and market activity. The commission investigates and prosecutes wrongdoers and educates customers about their rights and how to avoid fraud.

Recommended: What Are the Difference Between FDIC and NCUA Insurance?

How Financial Regulators Help Banking in the Way We Know Today

The banking and financial systems operate well under current regulation, but what about digital banking? Digital banking is a recent innovation, and existing banking laws and regulations generally apply to digital start-ups and fintechs. However, there are some regulatory frameworks specifically for digital banking.

An example of protection for digital banking consumers is Electronic Know Your Customer (e-KYC), which is used for digital onboarding and checks that a customer is who they say they are to avoid fraud and money laundering. E-signature is a way for customers to validate transactions remotely.

Another instance is the Electronic Fund Transfer Act (Regulation E) which aims to make applicable electronic transactions compliant with regulations as well as have “readily understandable” consumer disclosures.

Recommended: Online Banking vs Traditional Banking: What’s Your Best Option?

The Takeaway

Financial services regulatory bodies like the Fed, the FDIC, and the SEC oversee the banking and finance sectors in the United States. State agencies also play a role. Though many consumers are not aware of the details, these regulatory bodies have jurisdiction over stock markets, commercial and retail banks, investment banks, and asset managers. Their mandate is to ensure fairness for consumers, ensure entities comply with fraud protection rules, and to protect the financial sector and free-market economy.

Which is all good, of course. But if you are looking for a great bank for your personal accounts, see what SoFi Checking and Savings offers. When you open a bank account with direct deposit, you’ll earn a competitive APY, pay no account fees, and have access to the Allpoint network of 55,000+ fee-free ATMs.

See how smart and convenient banking can be with SoFi.

FAQ

Who regulates financial institutions in the United States?

In the United States, financial institutions are regulated by the Fed, the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), the SEC, FINRA, the CFPB, the NCUA, and the CFTC. State agencies also enforce regulations on financial institutions, especially insurance providers.

What are regulators in finance?

Finance and banking regulators are state- and government-appointed bodies that protect the safety and fair treatment of consumers. They also ensure smooth operations of the finance and banking sectors, the backbone of the economy.

Who regulates investment banks?

U.S investment banks are regulated by the SEC. For regulatory purposes, investment banks were declared separate for commercial banks following the passing of the Glass Steagall Act of 1933.

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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® 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.

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Bridesmaids can spend from $1,200 to $1,800 for the honor of participating in a friend’s wedding. Groomsmen tend to spend considerably less: around $450. If those numbers seem high, consider the combined costs of a dress or tux, “bach” party, gifts, and travel and accommodations.

Just one wedding can take a bite out of your budget, not to mention the familiar scenario of attending several weddings in one year. We’ll help you understand the expenses that go into being a part of the big day so you can prepare and budget well in advance.

How Much Does It Cost To Be a Bridesmaid?

The average bridesmaid can spend $1,200 to $1,800 to be a part of the bridal party. Of course, prices vary based on location, number of events, dress code, even the age of the happy couple (with 20-somethings being more budget conscious).

Before you agree to participate as a bridesmaid or maid of honor, it’s important to consider what costs you may be responsible for. And remember, there’s no point feeling guilty about spending money.

Recommended: Tips to Improve Your Money Mindset

The Dress

Etiquette dictates that bridesmaids cover the cost of their dress, shoes, and any accessories the bride wants you to wear. The cost of a bridesmaid dress ranges from around $150 on the lower end to $350+.

You’ll likely also be responsible for any alterations, which run from $30 for a simple hem to $140 for bodice and sleeve adjustments. While there are ways you can save — such as renting a dress — that decision is often not up to the bridesmaid.

Hair and Makeup

Traditionally, if the bride requests everyone in the party have their hair and makeup done in a certain style, she should cover the cost. If a bridesmaid wishes to have her hair and makeup done and the bride doesn’t offer, the bridesmaid should cover the cost. On average, professionally styled hair for bridesmaids costs about $75; tack on another $50 for makeup.

Bachelorette Party

Wedding website The Knot reports that people are spending more on “bach” parties. Half of the parties last two days or more, and a quarter involve plane travel. It’s no wonder that 50% of attendees spend $300 or more (standard for events in major cities), and 40% spend $1,000 or more. (If you think that’s out there, wait till you’re invited to the gender reveal party.)

When the bride opts for a one-night-only event, however, the median cost drops to $150.

Wedding Travel and Accommodations

The wedding party can expect to spend over half their budget on travel and hotels. The exact cost of travel will vary greatly depending on distance and length of stay — with members of the bridal party possibly needing to arrive early or stay late.

When the wedding is local, travel costs can be close to nothing. If so, count your blessings, because the average travel cost to a domestic wedding is $640; $1,595 for international destinations.

Recommended: Guide to Saving Money on Hotels for Your Next Vacation

Gifts

Members of the wedding party traditionally give both engagement and wedding gifts. If there is a bridal shower, bridesmaids usually give a gift at that celebration as well.

All those presents can quickly add up. A bridal shower gift ranges between $25 and $75, and the average wedding gift is about $100. All in, wedding party guests typically give gifts totalling $344. A group gift may allow you to spend less while giving something nicer than you could afford on your own.

What Does the Maid of Honor Pay For?

The maid of honor is there to assist with any tasks she can take off the bride’s to-do list. Financially, she can expect to pay about the same as the bridesmaids.

The exception is if the maid of honor is hosting the bridal shower. In that case, she may be expected to cover the costs. A simple shower hosted in someone’s home can cost as little as $10 per head, while an event held at a higher-end restaurant may cost up to $150 per head. The final check for a bridal shower can be anywhere from $500 to $2,500.

Recommended: How to Save for Your Dream Wedding

What Do Groomsmen Pay for?

The average cost of being a groomsman is around $450. Here are some of the costs groomsmen can anticipate.

Formalwear or Tuxedo Rental

Generally, groomsmen need to buy a new suit or rent a tuxedo for the event. On average, the combined cost of renting a tux and accessories (like cufflinks, a tie, and shoes) comes to about $200.

Bachelor Party

Groomsmen normally take part in planning the bachelor party and most likely cover their own costs and the groom’s. A typical bachelor party runs $50 to $200 per person. For destination parties, factor in airfare, accommodations, and additional meals and activities.

Wedding Gift

Members of the wedding party don’t need to spend more on a gift than other guests do. The average wedding gift is around $100.

The Takeaway

It’s not unusual for a bridesmaid to spend $1,200–$1,800, including the dress, alterations, hair and makeup, bachelorette party, and gifts. By comparison, groomsmen get off easy, paying about $450 for a rental tux, bachelor party, and wedding gift. Typically, attire and accessories account for 27% of a bridesmaid’s budget, travel and accommodations 60%, and gifts 13%. But the numbers will vary based on location and other factors.

If you haven’t saved up the money for a friend’s wedding in advance, there are better options than throwing it all on a credit card. Personal loans are designed to help cover life’s big events. SoFi Personal Loans offer a low fixed interest rate and no fees required. The application process is fast and can be completed entirely online.

SoFi’s Personal Loan was named NerdWallet’s 2022 winner for Best Online Personal Loan overall.

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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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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Paid and unpaid internships can provide students with relevant work experience in their field of choice. While both opportunities offer knowledge and training, only one rewards you with a paycheck.

Although paid internships are more common, it doesn’t mean everyone can land one. This means if you want the experience and don’t want to pass up a chance to beef up your resume, you may have to work for free. Spending several months at an unpaid internship can be difficult, especially if you’re already carrying debt, dealing with high living expenses, or need to work a paying job.

Whether interns should be paid or not is an ongoing debate with a lot to consider before committing to one. Here, learn about the pros and cons of an unpaid internship to see if it’s worth the investment.

What Is an Unpaid Internship?

An unpaid internship is a temporary work arrangement offered to graduate, college, or high school students so they can gain training and knowledge by working in their area of interest. Interns are able to perform duties related to their chosen career, observe professionals in a workplace setting, and receive direct guidance from mentors.

These non-compensated arrangements differ from an apprenticeship, which is designed to provide hands-on training in a specific trade or industry. Apprenticeships are paid and wage increases occur as new skills are acquired.

Are Unpaid Internships Legal?

Yes, according to the The Fair Labor Standards Act (FLSA) which states “for-profit” employers must pay employees for their work. However, interns and students may not be “employees,” in which case the law doesn’t require payment for their work. If an internship qualifies as paid, companies must pay their interns at least minimum wage for their services plus any overtime.

How Do Unpaid Internships Work?

Unpaid internships typically require you to work for a specific period of time during the school year or, during the summer. The program may ask you to work on site, but with the increase in employees working from home, remote internships have become more of a possibility.

Before you start your internship, you’ll likely discuss what you’ll be doing and when you’ll be able to work with your supervisor. Since you’re not being compensated, you’ll probably have more flexibility with scheduling.

It’s important to remember an unpaid internship isn’t volunteer work and should be more beneficial to you than the business or organization. After all, the reason you’re there is to receive training and education you simply can’t get by sitting in a classroom.

Pros of Taking Unpaid Internships

Building your professional resume can be priceless and let’s face it, your calling card once you hit the job market. Besides offering exposure to what it will be like working in your specialty, you’ll build potentially lifelong connections with people who may be able to open doors for you down the road.

There are many ways an unpaid internship can help prepare you for future career success. Here are some significant advantages:

Getting Valuable Experience

As an intern, you’ll get actual hands-on training that attracts future employers. According to the National Association of Colleges and Employers (NACE), applicants with industry internship experience have a leg up when it comes to employers’ hiring decisions.

Working as an intern allows you to develop crucial skills you’ll need in a professional setting, such as how to communicate effectively and collaborate with others. These abilities can make you even more of a stand out to prospective employers.

Valuable experience gained from an internship isn’t exclusive to undergrads. Already have your degree? You can still build upon your knowledge with an unpaid post graduate internship. These secondary education opportunities allow you to keep actively learning while you’re pursuing full-time employment or, if you want some down time after graduation.

Networking Equals Potential Opportunity

Making connections is one of the most important things you can do to grow your career. In fact, an estimated 80% of all positions are filled through networking. Many jobs aren’t publicly advertised so if you’ve left a positive impression, you may be the first person your past internship boss calls when a job opens up. Even if your internship doesn’t culminate in employment, building a solid network and maintaining relationships can pay off if you need a future job reference, letter of recommendation, mentoring, or career advice.

Companies Offering College Credit

Many companies will offer unpaid internships for college credits as compensation for your work. Knowing you’re receiving credits towards your degree, which can be a form of currency in its own right, may help justify the decision to take an unpaid internship.

Working in a Relevant Field

Internships give a preview of what it may be like working in your area of expertise, placing you in an environment where you’re exposed to the latest technology, industry norms, and business culture. With some concrete training spent working in your field, you may be more likely to be hired compared to someone with zero internship experience or those who have interned in an unrelated field.

Helps With Making Future Career Decisions

During an unpaid internship, you may come to the realization your selected career isn’t all you imagined. In this case, you could save yourself from wasting valuable time in the future and start exploring other career options. On the other hand, your internship could crystallize how much you love what you’re doing, validating you’ve made the right choice.

You may also decide to continue on with your education as something to do after college instead of entering the job market right away. This could be an ideal time to fit in an unpaid internship before pursuing a graduate degree.

Cons of Taking Unpaid Internships

The main cons of unpaid internships center around the obvious: no financial compensation for your efforts. Unpaid internships can also create barriers for disadvantaged or low-income students, possibly eliminating some extremely qualified candidates from gaining training and having a shot at making a serious contribution to a company.

Consider these downsides when thinking about applying for unpaid internship:

No Money for Your Hard Work

Strapped with tuition and other college-related costs, many students simply can’t work without pay. Participating in an unpaid internship can require commuting or even relocation during the summer months, increasing your need to have money in a savings account or earning it at another job.

Often Not Receiving Company Benefits

As an unpaid intern and temporary worker, you’re not entitled to the same benefits of a paid employee, such as paid vacation days, medical insurance, or the ability to contribute to a 401(k). Performing duties similar to a permanent employee’s and not gleaning any of the perks may also lead to feeling resentful, unappreciated, or lonely, especially if you’re the only one working while employees get to leave early for a three-day holiday weekend.

Possible Inequalities in the Workplace

Student interns who aren’t paid may find themselves doing more menial tasks and feel looked down upon by other employees. Staffers may be dismissive, impatient, condescending, or exclude you from conversations because you’re the intern. You may also find you’re the butt of jokes or having to deal with microaggressions, which are intentional or unintentional verbal or nonverbal slights towards culturally marginalized or stigmatized groups.

One major criticism of unpaid internships concerns the perpetuation of socioeconomic and racial inequities. Individuals who come from more affluent families and don’t need the money are better situated to take an unpaid internship, putting more privileged and often white individuals, at a greater advantage. The National Association of Colleges and Employers 2021 study found 73.9% of white students had an unpaid internship compared to 10.2% Hispanic or Latinx, 8% of Black and 2.0% of Asian students.

Potential Lower Future Income

Showing you’re willing to work for free may give employers the idea you might accept a lesser amount compared to someone who had a paid internship. Making this assumption on their part could lead to a lower salary offer.

Recent research by the Strada Education Network found having a paid internship as an undergraduate is linked with a predicted increase in annual wages of $3,096 just one year after graduation. Unpaid internships, practicums and cooperative learning aren’t associated with higher earnings post-graduation, the study reports.

Are Unpaid Internships Worth It?

Of course, it’s an individual choice based on a student’s particular circumstances, but unpaid internships can be worthwhile. Even if you’re not being compensated, these situations can provide training you can only get by working with professionals and mentors. Taking an unpaid internship can take the pressure off some of the expectations, duties, and necessary time commitment you’re more likely to have as a paid intern.

The Takeaway

An unpaid internship can pay off in significant ways such as offering college credits, meeting and networking with people in your field, and providing solid work experience to bolster your resume. Unpaid internships can also help you decide whether or not you’re on the right career path. But, interning without compensation can pose some major challenges for those who can’t afford to work for free. Before applying, think through the pros and cons to help you determine whether it’s your best route.

Whether you’re still in school or post-grad, managing your finances efficiently can make life a lot easier. Opening an online SoFi Checking and Savings account allows you to pay bills, send money, and deposit checks all in one place using your computer or mobile device. You can withdraw money from your SoFi account without an ATM fee by using any of the 55,000 Allpoint network ATMs.

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

Are unpaid internships exploitation?

A criticism of unpaid internship programs is that they take advantage of a student’s free labor without providing any practical experience or educational benefits. While you may be asked to move some boxes or go on a coffee run, an unpaid internship that is not exploitative should mostly involve tasks that expand your skill set and teach you about your future career.

Is there a better workflow if interns are paid?

Interns help boost a company or organization’s workflow regardless, but paid interns may boost workflow more, since being financially compensated is associated with feeling satisfied and valued, which in turn is connected to productivity.

What percentages of companies offer unpaid internships?

Research shows nearly 40% of internships in the U.S. are unpaid, with the large majority of those positions found in the nonprofit, social service and government sectors. Paid internships constitute 60.8% of internships, and almost all of these paid positions are with private and for-profit companies.

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

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.

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.

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