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A certificate of deposit (CD) can be a useful tool for saving money for an upcoming goal. The downside is that you need to wait until the CD matures in order to access your money. If you withdraw some or all of your funds early, you typically get hit with a hefty penalty fee.

If you’re in a pinch and need cash quickly, however, you may be able to get a CD loan. Also known as a CD-secured loan, this is a type of personal loan that uses the value of a CD account as collateral. CD loans are offered by some banks and credit unions. Typically, the lender needs to be the same institution that holds your CD.

Here’s a closer look at how CD loans work and how they stack up against unsecured personal loans.

What Is a CD Loan?

A CD loan is a type of personal loan that is secured by the money you have in a CD. Since the collateral lowers the risk for the lender, these loans can be easier to qualify for and have lower interest rates than unsecured loans. However, if you don’t repay the loan, the bank can take the money out of your CD to cover their losses.

Of course, to get a CD loan, you need to have a CD, which is a type of savings account that pays a fixed interest rate over a set amount of time, or term. You must leave the money untouched for the CD term, which can range from three months to five years. If you withdraw your funds before the end of the CD’s term, you usually have to pay an early withdrawal penalty. CDs generally pay a higher annual percentage yield (APY) than regular savings accounts. And the longer the CD’s term, usually the higher the APY. Similar to other types of savings accounts, CDs come with FDIC protection, up to the applicable limits.

How Do CD-Secured Loans Work?

If you take out a CD loan, the lender will charge interest. So you’ll be earning interest on the CD but paying interest on the CD-secured loan. In some cases, a bank or credit union will set the minimum annual percentage rate (APR) on their CD loans at 2% over the CD rate. So if your CD pays 3%, your CD loan rate would start at 5%. Your actual rate would depend on your credit and the term of the loan, among other factors.

How much you can borrow with a CD-secured loan depends on the lender. Often, you are able to borrow up to 100% of the value of your CD principal. The term of the loan can generally be as long as the term of the CD.

While you can typically access money in a CD if absolutely necessary and pay a penalty, that may no longer be the case if you get a CD loan. Typically, the funds being used as collateral are sealed even in the event of an emergency.

Who Might CD Loans Be Right For?

The idea of paying interest on a loan backed by an interest-bearing CD may seem counterintuitive. However, there can be some logical reasons for taking out a CD-secured loan. One is that you may be able to build your credit by taking out a CD loan and then making a series of on-time payments on the loan. More common ways to do that include getting a secured credit card or becoming an authorized user on another person’s credit card. But if those options aren’t available, and you have a CD, you might use a CD loan for that purpose.

Another reason you might opt for a CD loan is that you need access to your funds for an emergency before it matures. However, you’ll want to first check what your CD’s early withdrawal penalty is. It might be cheaper and easier to simply break open a CD early and pay the penalty. However, if the penalty would be more than what you’d pay in a CD loan’s fees and interest, you might consider a CD loan.

Before taking out a CD loan, it makes sense to weigh the pros and cons.

CD Loan Pros

•   Lower interest rates CD-secured loans often have lower interest rates compared to credit cards and unsecured personal loans, making them an attractive option for borrowers seeking lower borrowing costs.

•   Building credit CD loans offer an opportunity to establish or improve your credit history if you currently have limited or no credit.

•   Retaining CD benefits Despite using the CD as collateral, you can still earn interest on the deposited amount.

•   Fast access to funds If you apply for a CD loan with the bank or credit union that holds your CD, you can often get approved quickly and receive funds within a day or two.

•   Good for those with bad credit Borrowers with poor credit often qualify for CD-secured loans.

CD Loan Cons

While CD loans have their benefits, there are also some drawbacks to keep in mind.

•   Frozen funds The funds in the CD are tied up as collateral, limiting access to the money until the loan is repaid.

•   Potential loss of CD If you default on the loan, the lender can seize the CD, resulting in the loss of the deposited funds.

•   Limited loan amount CD loans are typically limited to a percentage of the CD’s value, which might not meet your full borrowing needs.

•   Fees Your bank may charge fees, such as an origination fee, for issuing you a CD loan.

•   Hard to find CD loans aren’t as common as other types of personal loan, so your bank or credit union may not offer them.

CD Loan vs Personal Loan

While CD-secured loans and unsecured personal loans have some similarities, they also have some significant differences.

With both types of loans, you get a lump sum of money up front and can then use those funds for virtually any type of expense. Both also typically offer fixed interest rates and a set repayment term so payments are easy to predict and budget for.

Unlike a personal loan, however, a CD-secured loan can be hard to find. Also with a CD loan, you need to put your savings on the line to secure the loan. With an unsecured personal loan, you don’t need to provide any funds or personal assets as collateral, making them accessible to borrowers without a CD or other assets.

CD loans also tend to have lower interest rates than unsecured personal loans due to the collateral, while personal loans tend to offer more flexibility in loan amount and repayment terms.

Recommended: Typical Personal Loan Requirements Needed for Approval

The Takeaway

CD loans can be a viable option for someone who has a certificate of deposit and needs access to funds while keeping their deposited amount intact. The lower interest rates and potential credit-building opportunities make CD loans attractive for some borrowers.

However, these loans aren’t widely available and the cost of the loan could potentially exceed the CD’s early withdrawal fee. Also, you could lose the money in your CD if you have difficulty making payments. It’s crucial to weigh the pros and cons, consider your personal financial goals and needs, and compare loan options before deciding on the best borrowing solution.

If you’re interested in exploring personal loans, SoFi could help. SoFi’s unsecured personal loans offer competitive, fixed rates and a variety of terms. Checking your rate won’t affect your credit score, and it takes just one minute.

See if a personal loan from SoFi is right for you.

FAQ

Where can I get a CD loan?

CD loans are typically offered by banks and credit unions. It’s best to start by contacting your current financial institution to inquire about their CD loan options. They can provide you with specific details about their loan terms, interest rates, and application process. Typically, you need to take out a CD loan from the same institution that holds your CD.

What are CD loan interest rates?

CD loan interest rates vary depending on the lender, current market conditions, and your qualifications as a borrower. Rates tend to be lower than those of unsecured personal loans, since the loan is backed by the funds in the CD.

Some banks and credit unions will set the minimum annual percentage rate (APR) on their CD loans at 2% over the CD rate. So if your CD pays 3%, your CD loan rate would start at 5%. Your actual rate would depend on your credit and the term of the loan, among other factors.

Do you get money back from a CD loan?

When you take out a CD loan, you do receive money from the lender. However, it’s important to note that the funds received are borrowed money that you are obligated to repay, typically with interest. The funds from the loan are separate from the funds you have deposited in a certificate of deposit. The CD itself remains intact and continues to earn interest, but it is held as collateral until the loan is repaid. Once the loan is fully repaid, you regain full access to your CD and any interest it has earned during the loan term.

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Photo credit: iStock/PeopleImages

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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.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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Swiping and tapping a credit card can certainly make life easier, from buying a cup of coffee on the go to ordering (after much research) a new couch online. But knowing the right time to pay your bill can require a bit of time and thought. Sometimes, the due date is not so clear. And you may wonder whether to pay on that date or before.

With this guide, you’ll learn how to find your due date plus the ins and outs of paying your bill. You’ll also get some smart insights and tips on managing your credit card responsibly.

When to Make a Credit Card Payment

There are many different kinds of credit cards available. Once you have one or more in your wallet, you can enjoy the ease of paying with plastic and possibly earning some credit card rewards.

But how do you find your credit card due date? Unlike other sorts of bills, credit cards aren’t always due on a regular date like the first of the month. The exact due date will vary depending on your credit card billing cycle, and may fall on a seemingly random date.

To find your credit card due date (because paying on-time is part of using a credit card wisely), you can check your billing statement. The due date, along with the minimum payment due, will likely appear close to the top of your written statement.

You can also find due date and payment information in your online account, if you’ve created one; these digital portals also often make it simple to make online payments.

If you don’t have access to either a paper or digital billing statement, you can call the customer service number on the back of your card and ask a representative when your payment is due. Most cards also allow you to make payments over the phone, either through an automated system or with a live customer service agent.

How to Pay Your Credit Card on Time — and Why it’s Important

To pay your card on time, you’ll pay at least the minimum amount listed by the credit card payment due date. Generally, the cutoff time is 5pm on the day the payment is due, but you may want to reach out to the issuer directly to get exact details.

That said, it may be a better idea to avoid cutting it so close, if you can help it. You can make your credit card payments before the due date typically, both online and by phone. Doing so can help ensure the payment has time to post to your account before the cutoff.

Paying your credit card on time will help you avoid paying late fees, for one thing — which, when added to interest payments, can make your credit card debt spiral.

But on-time payments can also help build your credit history since they’re reported to the major credit bureaus, and your payment history (including timeliness) accounts for around 35% of your FICO® score.

The Grace Period

It’s helpful to understand that practically all credit cards offer a grace period: the time between your statement closing date and the due date in which the purchases you’ve made during that billing cycle do not accrue interest. (Not accruing interest can be a very good thing; the current average interest rate on new credit card offers hit 20.51% as of the middle of 2023.)

By law, if offered the grace period must be at least 21 days. This means you get a three-week window to pay your card off in full without being responsible for any finance charges. (This may not be true in the case of balance transfers or cash advances, and interest may accrue immediately.)

But it’s possible to use a credit card on a regular basis without paying interest. All you have to do is pay it off on time and in full each and every month.

Recommended: Guide to Lowering Your Credit Card Interest Rate

Paying Your Credit Cards on Time

Even if you only have one or two credit cards, chances are you have a lot on your plate in any given month.

Between making rent, shelling out your car payment, and actually keeping the job that lets you pay for all this stuff, keeping tabs on your credit card due dates may feel like just another task in a long list of chores. (It’s true: Adulting is hard.)

What Happens If I Pay Late?

Life happens, and sometimes many people pay their credit card late, whether due to an oversight or lack of funds. Typically, when you miss a payment deadline on your credit card bill, here’s what can happen:

•   You may be assessed a late payment fee. These usually range from about $15 to $35 per instance.

•   Your credit card issuer could raise your interest rate to what is known as a penalty rate. In most cases, the issuer must give you 45 days notice. The penalty rate is something you are likely to want to avoid, as it can be around 27% to 30%.

•   Your late payment can be reported to the big three credit reporting bureaus and show up on your credit history. A pattern of late payments could translate into your having to pay more to borrow in the future or even being denied credit.

Can I Change My Credit Card Bill’s Due Date?

Some credit card issuers will allow you to change your statement due date. Check with your issuer to see if they offer this; be aware that there may be a cap on how many times a year you can do so.

Changing your credit card bill’s due date can be a helpful move. You might be able to shift it to better sync up with your payday or at least move the date so it’s not, say, right at the same time as when rent is due.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score?

Benefits of Paying Your Credit Card Early

Here’s another angle on paying your credit card: Instead of thinking about the damage that can be done by paying it late, look at the benefits of paying your bill early. The pros include:

•   Paying your credit card bill early may help establish and secure your credit score.

•   It helps free up your line of credit. It’s wise to keep your card’s balance at 30% of your limit at the very most. It’s a financially healthy move to make, and it could free up your available line of credit for an upcoming large purchase.

•   Paying your bill early lowers the amount of interest you will accrue. That means you owe less.

•   The sooner you pay off bills, the sooner you get out of debt, which is a desirable thing for most people.

•   By paying a bill early, you know it’s taken care of and you don’t have to worry about forgetting to send funds to your card issuer.

Tips for Managing Your Credit Card Bill

If you’re new to having a credit card or find yourself facing challenges managing your credit card usage, consider these helpful strategies:

•   Prioritize paying your bill when (or before) it’s due. That will be a positive step in your use of credit and minimize the interest and charges that can accrue.

•   Review your credit card bill every month. Not only will this help you get a handle on your spending, you can identify any incorrect charges or ones that might indicate fraudulent activity.

•   Try to pay more than just the minimum every month. Also educate yourself about what that minimum is. It’s not a helpful recommendation; it’s the lowest possible limit you can pay on the bill.

•   Work to keep your credit utilization ratio low; no more than 30% at most can be a good guideline.

•   If you are feeling as if your credit card debt is too high and/or you feel you need help eliminating it, it may be a smart financial move to take out a personal loan to pay off a credit card fully. Depending upon the term length you choose, you may end up saving money if the interest rate you’re offered is lower than the one offered by the credit card.

Or you could consult with a no- or low-cost credit counselor on solutions to your situation.

The Takeaway

Credit cards have many benefits, but it can be important to stay on top of your payments so your debt doesn’t accrue and your credit score is maintained. Understanding when your credit card payment is due, by looking at your statement or contacting your card issuer, is a smart move. It can also be wise to request your due date be moved, if possible, to better sync up with your cash-flow needs.

Looking for a new credit card? Consider a rewards card that can make your money work for you. With the SoFi Credit Card, you earn cash-back rewards on all eligible purchases. You can then use those rewards for travel or to invest, save, or pay down eligible SoFi debt.

With the SoFi Credit Card, you can earn cash-back rewards, apply them toward your balance, redeem points into stock in a SoFi Active Invest account, and more!* 

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Members earn 2 rewards points for every dollar spent on purchases. No rewards points will be earned with respect to reversed transactions, returned purchases, or other similar transactions. When you elect to redeem rewards points into your SoFi Checking or Savings account, SoFi Money® account, SoFi Active Invest account, SoFi Credit Card account, or SoFi Personal, Private Student, or Student Loan Refinance, your rewards points will redeem at a rate of 1 cent per every point. For more details, please visit the Rewards page. Brokerage and Active investing products offered through SoFi Securities LLC, Member FINRA/SIPC. SoFi Securities LLC is an affiliate of SoFi Bank, N.A.

The SoFi Credit Card 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.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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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The most widely used credit scoring model is the FICO® score. Your FICO score is a three-digit number somewhere between 300 and 850 that tells lenders how much risk you represent as a borrower. Your score is important because it can determine what financial products and services, as well as interest rates, you can qualify for. If you have a low (or no) score, however, you may be able to improve or build it using the UltraFICO® Score.

What is UltraFICO? This is a relatively new scoring model that includes banking activity not normally factored into your credit score. By incorporating information from your savings and checking accounts, you may be able to increase your FICO credit score and, in turn, your chances of getting approved for credit, as well as qualifying for better rates.

However, UltraFICO isn’t a cure-all. It’s only used by one of the credit bureaus (Experian), and isn’t offered by all lenders. Plus, it won’t result in a huge boost in your score. Here’s what you need to know about UltraFICO.

How Does UltraFICO Work?

UltraFICO is a tool that allows you to voluntarily include banking activity not normally considered by the credit bureaus in your credit score calculation.

To understand how UltaFICO works, it helps to understand how your FICO credit score is calculated. While FICO keeps their exact methodology under wraps, your score is primarily based on the following criteria:

•   Debt payment history (35% of your score) This looks at whether you make your debt payments on time. Late payments can negatively impact your score. So can accounts in collections or a bankruptcy.

•   Credit utilization (30%) Also known as amounts owed, this is how much of your available revolving credit you’re currently using. Utilizing less of your available credit at any one given time is generally better than using more. Ideally, you want to aim to use 30% or less of your available credit.

•   Length of credit history (15%) Having a longer history with creditors is better than being new to credit.

•   New credit (10%) Applying for new credit cards or loans (and initiating a hard credit pull) can temporarily lower your score. For this reason, it’s a good idea to research credit card offerings and eligibility requirements before applying for one.

•   Credit mix (10%) Having a mix of different types of credit (such as a credit card and an installment loan like a mortgage) can positively influence your score.

The UltraFICO scoring model expands the information included in your credit score by considering such factors as:

•   Length of time you’ve had your bank accounts open (checking, savings and money market)

•   Your activity in those bank accounts

•   Proof that you have cash in those accounts (ideally, at least $400)

•   Whether your overdraft often

•   If you have direct deposit of your paycheck

How Do You Get an UltraFICO Score?

If you apply for new debt, such as a credit card or personal loan, and are denied because your score is low or you don’t have enough credit history to generate a FICO Score, you can ask the lender to pull your UltraFICO score. You might also ask a lender to pull your UltraFICO score if you are offered a credit card or loan with a high interest rate in the hopes of getting a better offer.

In some cases, a lender might invite you to participate in the UltraFICO scoring process after you submit an application for a credit card or loan. This is most likely to happen if your score is on the edge of acceptance or there simply isn’t enough information in your credit report to generate a FICO score.

If a lender offers UltraFICO, you will be directed to a secure site to answer questions about your banking relationships. By doing this, you’re allowing the credit bureau to look at your checking, savings, and money market accounts in order to try to get the boost you need to qualify for credit.

Who Will UltraFICO Benefit?

On their website, FICO states that the UltraFICO score will broaden access to credit for young or immigrant applicants who are just starting to build their credit profile, as well as those who are those who are trying to reestablish their credit after financial distress. They also say that the new scoring model will be able to help borrowers who are near score cut-offs, giving them access to credit they wouldn’t otherwise qualify for.

While UltraFICO isn’t likely to dramatically change the outcome of your credit card or loan application, it might be enough to bump you into the next higher range which may make a difference if you were on the borderline of acceptance.

You’ll want to keep in mind, however, that UltraFICO is only available through some lenders. In addition, only Experian offers UltraFICO. Your credit reports with the other two consumer credit bureaus — Equifax and Transunion — won’t be affected by this service.

The Takeaway

Your credit score can make or break your ability to get a credit card, mortgage, or any type of personal loan. It can also determine the interest rate you’re offered, which can make a big difference in the total cost of a loan.

The new scoring model UltraFICO could help your FICO score improve if you have consistently maintained positive bank account balances. However, it’s not offered by all lenders and creditors, so it isn’t always an option. Fortunately, there are other ways to build or improve your credit profile. These include consistently paying your bills on time, tapping only a portion of your available credit lines, and using a mix of different types of credit.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

SoFi’s Personal Loan was named NerdWallet’s 2024 winner for Best Personal Loan overall.

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SoFi Loan Products
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.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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

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If you’re trying to keep track of your spending and your finances in general, a budget binder could be an important tool.

What is a budget binder? Basically, it’s a big three-ring notebook that helps you corral bills, receipts, and statements all in one place. It can also help you track your income, spending, and savings as you work to budget your funds.

A budget binder is usually a low-cost, low-effort project. You may have the supplies needed already on hand. Once it’s set up and you begin using this system, it can help you stay on top of your flow of funds and how you are tracking on your financial goals.

Ready to learn the how-tos? Read on.

Benefits of Creating a Budget Binder

If you’ve got receipts bursting out of your wallet, bills stored hither and thither (maybe some paper, some online), and you’re just keeping mental tabs on your spending, your financial life might benefit from a little more organization.

One key benefit of a budget binder is that it can help you keep all the important documents regarding your spending, debt, and savings in one place.

While there are plenty of higher tech financial organization tools (such as spreadsheets and budgeting apps), if you’re more of a visual person, you may prefer to use an old-school, pen-and-paper way to stay on track with your money.

Another benefit of the binder system is that it’s completely customizable. You get to choose what you do and don’t want to include in your binder, and can set up the system in a way that works best for your situation and financial goals.

A budget binder can also help you:

•   Create and stick to a budget

•   Keep track of paychecks

•   Track monthly spending

•   Stick to your savings goals

•   Avoid missing payment due dates for bills and loans

•   Save time searching for financial documents

•   Help ensure that a spouse or partner has the same understanding about joint finances.


💡 Quick Tip: Don’t think too hard about your money. Automate your budgeting, saving, and spending with SoFi’s seamless and secure online banking app.

What You’ll Need to Make a Budget Binder

You can buy premade budget binders, but It doesn’t take a lot of time or effort to create your own. A DIY binder can be as simple or fancy as you like. Some items you may need include:

•   A three-ring binder (at least 2”)

•   A three-hole punch

•   Paper

•   Paper clips

•   Binder dividers

•   Three-hole binder pockets or folders with pockets.

You may also want to create or print out some budgeting worksheets that can help you set up and keep up your money management system.

You can find tons of free printable budget sheets by searching for “free budget printables.” Here are some you may find useful:

•   Budget worksheet (this is where you can record monthly income and expenses and see where you are netting out each month; you can print these out these sheets for a budget in Excel and elsewhere)

•   Payments due calendar (to help you keep track of bill due dates)

•   Income tracker (to record when and how much you get paid, including any income from side hustles)

•   Expense tracker (to log each time money leaves your wallet or bank account)

•   Debt tracker (to note who you owe, how much you owe, minimum payment amount, and due date)

•   Savings tracker (to record the money you’ve set aside for future expenses and goals)

•   Net worth tracker (to show your assets, such as how much you have in retirement and investment accounts, minus your liabilities)

•   Financial goals (to record what you want to achieve and steps you need to take to get there).

How to Set up a Budget Binder

You can customize your budget binder to include whatever sections, pockets, folders and money management tools you like.

Below are some sections you may want to consider including:

Monthly Budget

You may want to make the front section of your budget binder a place for monthly budget worksheets, one for each month of the year. These are sheets that have a space to log your total monthly income, as well as your monthly spending, broken down into budget categories.

These worksheets can help you see whether you’re making more than you spend or spending more than you make. The Federal Trade Commission offers a free budget template that can be useful for tracking monthly income and expenses.

You can go to Consumer.gov and download their free “Make a Budget” worksheet.

Expenses

Here you can keep track of and record everyday expenses, collect receipts, and also keep and track all your monthly bills. You may also want to keep a calendar here so you can mark due dates in one easy-to-see place.

Recommended: Budgeting for Basic Living Expenses

Debt

If you have debt, even if it’s just a car payment or mortgage payment, this is a section to keep track of your debt repayment. You may want to set up a paper for each debt and include what your interest rate is and monthly payments.

You can also use this sheet to record each payment, as well as how much is left to pay on the debt.

You can even put your papers in order of which debt you are working to pay off first, second, and so on.

Savings

Here you may want to keep a paper for each savings goal, such as saving for an emergency fund, retirement, college savings, a new car, a home, or any other item or event you are saving for.

On each sheet, you can put the name of the goal, goal amount, and when you hope to achieve that goal amount. You can then record every time you add money.


💡 Quick Tip: Want a simple way to save more each month? Grow your personal savings by opening an online savings account. SoFi offers high-interest savings accounts with no account fees. Open your savings account today!

Other Sections

Depending on your needs, you may want to include other sections (such as insurance or net worth) and also tweak things as you go. The best thing about a binder is that it’s flexible: You can add to it as you need to because every month is different.

Using Your Budget Binder

It can be a good idea to keep your budget binder in a place where you can access it easily and often.

The main difference between a budget binder that works and one that doesn’t is actually sitting down on a regular (ideally weekly) basis to add receipts and bills and log spending.

Regularly checking in with your binder also enables you to see how you are doing with your spending so far that month. This also allows you to make any tweaks so that you are able to pay all your bills and also put money away into saving for your goals.

The Takeaway

A budget binder is a place (typically a 3-ring binder) where you can store all of your most important financial information, including your monthly budget, bills, debt, and savings goals.

Having all your key money-related information and papers in one place means you don’t have to scramble to figure out when the utility bill is due or how many car payments you have left.

A budget binder can also help you get a sense of the bigger picture, including how much is coming in and going each month, and where you may need to tweak your spending in order to live within your means and also save for your goals.

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

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.

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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.

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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From the economic impacts of the Covid-19 pandemic to record-high inflation to interest rate hikes from the Federal Reserve, the last several years have been plagued with financial unrest.

That may explain why only 48% of U.S. adults say they have enough emergency savings to cover at least three months’ worth of expenses, according to a new Bankrate survey. That’s nearly unchanged from 2022, when inflation reached a 40-year high.

For many Americans, this lack of reserves is a source of stress. The Bankrate survey found that a full 57% of U.S. adults are uncomfortable with the amount of emergency savings they currently have.

HR leaders have taken note. In fact, a growing number of employers now offer ways to help employees bolster their backup savings as part of their overall financial wellness benefits. If you’re interested in being one of them, read on. What follows are six moves that can help your organization build an emergency auto savings program that works best for your employees and your company.

1. Evaluate Employee Needs

The pandemic demonstrated that a huge percentage of employees in all salary ranges weren’t financially prepared for what was to become one of the most unprecedented periods of history.

This lack of preparedness added to an already stressful situation (working remotely, worries about health, child and elderly care needs, et cetera). Even as we move beyond the pandemic, however, employees are still on edge. SoFi at Work’s Future of Workplace Financial Well-Being 2022 study found that 75% of U.S. workers are facing at least one source of major financial stress. What’s more, employees are spending over nine hours per week while at work dealing with issues related to their financial situation (that adds up to a full 12 weeks of work each year).

Adding an emergency savings plan can help employees alleviate a significant amount of financial stress and provide a solution to the lack of short-term savings. This might be especially appealing for younger members of your workforce who may have fewer resources to rely on than older employees.

To determine how effective an auto savings program will be for each segment of your staff, you might think about creating a preliminary survey of employees to see what they feel they need most from a short-term savings plan.

Consider the following questions:

•   Will you participate or do you feel there are already too many demands on your paycheck?

•   Are you more likely to join if the company offers a match or initial contribution?

•   Will you gravitate to emergency savings in lieu of long-term retirement savings?

•   Do more accessible after-tax savings in a 401(k) account that can be used for emergencies appeal to you?

•   Do you think a separate emergency auto account will help you think about saving for specific needs?

2. Check Out the Competition

A good next step is to determine what competitors are offering their existing talent and new recruits in the short-term financial wellness arena. For example, is an emergency auto savings program common among companies competing for your talent? Do most competitors offer a match or contribution to get employees, especially new hires, started?

Use the results of this data and the survey of employees to devise the most effective program for your employees (see below) and, importantly, to help convince team members and management why an emergency auto savings program is right for your company’s total rewards strategy.

3. Determine the Impact of an Emergency Savings Program on Your Total Rewards Strategy

In recent years, you’ve likely had to shift or alter some of the components of your total rewards strategy, including compensation, benefits, flexibility, performance recognition, and career development. In light of those changes, where does an emergency auto savings benefit fit into the new reality? How does it fit with your HR financial wellness goals and business strategy?

The answer is likely very positive. It’s hard to imagine a total rewards strategy that doesn’t have a place for emergency auto savings, especially in light of recent times.

That said, it’s important that you structure and implement this benefit in a way that not only fills a need but enhances your overall strategy to retain, attract, and maximize talent. Be aware that when you add an important benefit such as emergency savings, you may shift the balance in your employees’ financial well-being focus from long-term to short-term goals.

As you implement the plan, you may need to realign your employee value proposition and total rewards strategy to encompass current and immediate needs while redoubling your efforts to educate and motivate employees on long-term financial wellness goals such as saving for retirement and healthcare costs.

4. Select the Solution and Roll Out Best for Your Goals

At SoFi at Work, we’ve found that selecting the right solution is critical to the utilization and effectiveness of every benefit in your total rewards strategy. Following the McKinsey framework can work well for all types of benefit rollouts, including emergency auto savings programs. These four principles can also help ensure benefit rollouts are integrated into your business strategy.

Choose Partners Wisely

Almost every benefit entails an outside partner to help administer and execute. Automatic emergency savings is no exception. Look for credible partners that can provide expert support and advice to a wide variety of employees with varying financial needs. For emergency savings, you’ll want to find a bank, credit union, or other financial institution that offers a low-cost, easy-to-use platform, like SoFi At Work’s Emergency Vault or open a Checking and Savings account with SoFi.

Focus on What’s Feasible

Make the program feasible to launch, which will help you make meaningful progress for employees in the short term as you lay down the foundation for long-term initiatives. This is key with emergency savings rollouts because by helping to relieve some short-term financial stress, you allow employees to focus on long-term goals sooner rather than later.

Make It Sustainable

Sustainable programs are able to flex with your business over time and during uncertain business conditions. Can your emergency auto-save program survive through the next period of uncertain business conditions? To answer this, your company may need to weigh questions such as whether the engagement benefits of a match outweigh the cost of sustaining the program? Is the plan flexible enough to undergo changes in the economy, your workforce, and your business strategy over time?

Get Personal

Enable personalization where you can. This way, employees are likely to feel emergency auto savings can help meet their unique needs. Offering a range of amounts that employees can automatically withdraw is the first step toward personalization. Providing calculators and other educational tools that help employees determine how much they need to save and how much they can afford to save is another personalization tactic.

Recommended: How Much Should Your Employees Have in Emergency Savings?

5. Use Communication Effectively

Top-notch communication techniques can help you drive participation and, importantly, change savings behavior in your workforce.

When asking for participation and engagement, lead with empathy. If there’s one thing the pandemic should have taught us, it’s that one size doesn’t fit all when it comes to supporting employees, who have had many different experiences and have many different needs.

Coordinating communications about the importance of emergency savings with other financial well-being education programs can help get the word out in an immediate and holistic way.

Clarity is Key

Accompany your rollout with extremely clear communications telling employees exactly what they can expect, including:

•   How payroll deduction works

•   How much — or how little — employees can save in the account

•   Calculators, tools, and education efforts designed to help employees determine what they should/can save

•   Thorough explanation of any company match offered — how much, how often, and portability

•   Which bank, credit union, or other financial institution will run the account?

•   How much, if any, interest will be earned

•   How withdrawals can be made

•   The fact that withdrawals can be made for any reason, no questions asked, with no penalties or tax consequences

•   A reminder that if employees leave the company, they may easily transfer the account to their own savings

Meet Employees Where They Are

Make sure effective and thorough communications are available across platforms so you can keep up with your far-flung workforce. Simply posting on the company website and hoping people sign up won’t work, especially in these times when your remote workforce may be feeling more disconnected from corporate communications than ever.

In all communications, make sure you take a multi-platform, consumer-grade, mobile-native technology approach.

6. Take Ongoing Pulse Checks

To determine engagement and any ongoing tweaks that need to be made, you’ll want to establish metrics to measure success at least quarterly. Then you’ll want to benchmark those results against your competitors and national averages to add an “outside-in” perspective.

Solicit employee input on the success of the program in three ways — employee surveys, focus groups with critical talent segments, and analysis of recent departing employees and job candidates who declined an offer.

Metrics can also help you track how well the benefit is supporting business goals. For instance, a customer-service-oriented company may find a higher focus among phone reps and fewer errors when staff is less burdened with financial worries.

The Takeaway

These six concepts are designed to help you build a successful, engaging, and effective emergency auto savings plan. By reducing employee stress and increasing productivity and loyalty, you’ll help promote financial well-being in your workforce as well as enhance your company’s total rewards strategy and overall business objectives.

For more information on platforms that can help you set up an Emergency Savings Program, contact SoFi at Work.

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Photo credit: iStock/alvarez

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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.

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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