Guide to Applying for a Credit Card With No Security Deposit

Guide to Applying for a Credit Card With No Security Deposit

Getting a credit card with no deposit can be easy if you have an established credit history with a good or excellent credit score. But if you’re just establishing your credit history or are trying to build your credit score, it can be much more challenging to apply for a credit card with no deposit.

For some, a secured credit card (one requiring a security deposit) might seem like the only option, but there are other paths to building your credit history. In this guide, we’ll cover how to find and apply for credit cards with no deposit — and what steps you can take to get closer to approval if you’re getting denied.

What Is a Credit Card Security Deposit?

Because of their established credit history and decent credit scores, many borrowers can open credit cards with no money down (or any other kind of collateral). This is called an unsecured credit card. However, if you don’t have any credit history or have a low credit score, you might find that credit card issuers will only offer you a secured credit card — meaning it requires a security deposit.

A credit card security deposit is refundable and often equal to the value of the credit limit on the card. Typically, the deposit amount ranges from $50 to $300.

While going this route can’t help you with unexpected expenses (as with a debit card, you are technically only able to spend money you already have), it can be a good way to build credit. However, you’ll want to ask the card issuer if they report to the credit bureaus, just to ensure they do.

Eventually, you may be able to graduate to an unsecured card if you consistently make on-time payments — one of the cardinal credit card rules.

Applying for a Credit Card With No Security Deposit

Applying for a secured credit card requiring a deposit might not be appealing to every potential borrower, especially because you need the money for the deposit upfront. These cards also typically have higher interest rates and fees. Fortunately, you have other options when shopping for a credit card.

Checking Your Approval for a Card

There’s no such thing as guaranteed credit card approval with no deposit. However, if you’re receiving emails or snail mail with credit card offers saying you’re preapproved, you might find success when you apply. You’ll still have to go through the formal application process and could ultimately get rejected, but getting a preapproved offer is a good start towards getting a credit card.

You can also proactively check your approval for a credit card online. Take a look at your credit score and then search online for offers for credit cards with no deposit that include your credit score in their target range.

Becoming an Authorized User

If you aren’t having success getting approved for a credit card on your own, ask a parent, family member, or trusted friend about being an authorized user on their credit card. As an authorized user, you’ll receive a credit card with your name on it and can use it like a traditional credit card, but you will not be the primary account holder.

The primary account holder is the one responsible for making on-time payments and monitoring credit usage. As an authorized user, you won’t have control over things like credit limit, and the primary cardholder can even set spending limits on your card.

However, if the primary cardholder uses the credit card responsibly — making regular, on-time payments and keeping credit utilization low — you will likely see a positive impact on your own credit score. Eventually, your score might improve enough for you to try applying for your own card again.

If someone makes you an authorized user on their card, however, it’s important to pay them what you owe each month. Never rack up credit card charges beyond what you’ve discussed with the cardholder. If you abuse your card privileges, it will affect your credit score and the score of the account holder — and the friend or family member will be solely liable for paying off your debts.

Getting a Student Credit Card or a Subprime Card

If the thought of affecting someone else’s credit score as an authorized user makes you uncomfortable, you aren’t out of options. You might be eligible to apply for a student card or a subprime card.

•   Student credit card: Most student cards do not require a security deposit and are designed for students who have no credit history. Some cards might even offer cash back rewards and no annual fees. However, as the name implies, you must be able to prove you are a student as part of the application process.

•   Subprime credit card: A subprime card is an unsecured card (i.e., no-deposit card) designed for borrowers with bad credit (generally a score below 580 in the FICO® score model). While subprime credit cards provide a way for bad-credit borrowers to get a credit card with no deposit, they often come with their own drawbacks. Typically, subprime cards charge an application fee; some might have annual or even monthly fees. Credit limits tend to be low.

Transitioning to an Unsecured Card

If you have no luck with a student or subprime card and can’t become an authorized user, you may need to consider applying for a secured credit with a deposit after all. Although it might not be ideal, it can be a good first step toward building your credit history.

If you make regular on-time payments, the credit card issuer might eventually transition you to an unsecured card. Alternatively, you can be proactive: After building your credit history and score over several months with a secured credit card, you can apply for a credit card with no deposit through another issuer. You might find that you’re more successful this time around.

Recommended: When Are Credit Card Payments Due

What to Know About the Effects of Your Credit Score

An unsecured credit card can potentially affect your credit score if the credit card issuer reports to the credit bureaus. Before opening a credit card with a security deposit, ask the issuer if they report to the bureaus.

If they do, regular on-time payment could build your score over time. On the flipside, late or missed payments could adversely affect your score.

Getting a No-Deposit Credit Card: What You Should Know

So, should you get a no-deposit credit card? In general, these unsecured cards offer greater flexibility at the start because you aren’t required to pay a security deposit.

However, opening a credit card of any type is a big decision — and not one to be taken lightly. It’s important to consider the potential effects of opening a credit card and to be aware of how much a credit card costs. For example, if you max out a credit card with a high interest rate, you might find yourself drowning in the fast-growing debt it creates.

Before opening a no-deposit credit card (or any credit card), think about the implications it can have on your finances. You might consider alternate ways of establishing credit, like credit-builder loans or even small personal loans.

However, these options don’t offer some of the same perks and protections that a credit card does, such as credit card chargebacks. If a credit card feels like the right step for you, begin your research process online.

Recommended: What is a Charge Card

The Takeaway

Credit cards without a security deposit, called unsecured credit cards, can be appealing because there is no money down at the start of the loan. However, borrowers without a credit history or who are struggling with bad credit may find it challenging to get approved for a no-deposit credit card. If applying for a secured credit card (i.e., one with a security deposit) is not ideal for your financial situation, you can ask to become an authorized user on someone else’s card or apply for a student or subprime credit card.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

Do all credit cards require a deposit?

Only secured credit cards require a security deposit. Those with no credit history or bad credit scores might only be eligible for secured credit cards. If you have a good credit score, you can apply for a credit card without a deposit.

Can I get a credit card if I have no credit history?

It is possible to get a credit card with no credit history. A secured credit card requires a security deposit but makes it easier for borrowers with no credit history to get approved. Students can also consider student credit cards, which are often issued to student borrowers without any credit history.

What credit score is required for approval?

While having a good to excellent credit score (typically 670+) is ideal for getting the best credit cards with the lowest rates, some credit card issuers do offer cards for borrowers with fair or even poor credit (meaning scores between 580 and 669). These cards might have higher fees and fewer perks and may require a security deposit.


Photo credit: iStock/Prostock-Studio

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.

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 .

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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15 Things to Stop Buying When Trying to Save Money

Short of getting a raise, the only way to save more money is to spend less. While that may sound like a bitter pill to swallow, tightening your budget could be a lot easier than you think.

Thanks to the constant allure of consumerism, many of us mindlessly overspend on small recurring expenses that can seriously add up over time. We often don’t realize how much we waste on things we don’t need or, in truth, really care all that much about.

By becoming more intentional in your spending, and cutting out unnecessary costs, you could potentially save hundreds per month with much sacrifice. That’s money you can then put towards things that are important to you, like going on a great vacation, buying a car, or putting a downpayment on a home.

While everyone’s spending habits are different, we’ve got 15 ideas for how to spend less and save more starting today.

Key Points

•   Cutting out unnecessary purchases can significantly boost savings, such as opting for fewer streaming services.

•   Unused gym memberships are a common area where money can be saved by switching to free workout alternatives.

•   Premium cable packages often include unwatched channels; consider cheaper alternatives or cutting the cord.

•   Daily coffee purchases add up; brewing at home can reduce monthly expenses significantly.

•   Opting for generic brands over name brands can offer similar quality for a fraction of the cost.

Tips For Saving Money

One of the best ways to save money is to take a close look at where your money is currently going each month. You can track your spending by scanning your credit card statements and receipts over the last few months. But a simpler way is to use a budgeting app that syncs with your accounts and keeps track of what you spend in different categories in real time.

Once you have a bird’s eye view of your cash flow, you may realize that you’re spending more than you thought (or want to) in certain categories. You may also find some easy places to cut back — such as getting rid of a monthly subscription you rarely use or switching to a cheaper cell phone plan.

If you want to get started saving right away, we’ve got some simple suggestions for things you can stop buying right now. Eliminating even small recurring expenses can add up dramatically by the end of a year.

💡 Quick Tip: Help your money earn more money! Opening a bank account online often gets you higher-than-average rates.

15 Things to Stop Buying If You Are Trying to Save Money

To start saving money right away, stop buying these 15 things.

1. Multiple Streaming Services

With the proliferation of streaming services now available, it can be easy to sign up for more platforms than you can possibly watch. Consider picking one or two services that you actually watch consistently and getting rid of the rest. Or, stagger your streaming services so that you have each one for a few months out of the year. That can give you access to all the shows you want but keeps the price down.

2. Unused Gym Membership

A gym membership can be worth the cost if you’re actively using it. But if you rarely see the inside of your gym these days, it might make sense to cancel your membership and find lower-cost fitness alternatives, such as running/walking outside, lifting weights at home, or following free workout videos on YouTube.

Recommended: 27 Fun Things to Do for Free

3. Premium Cable

Premium cable subscriptions come with a high monthly price tag and often include tons of channels you never watch. To save money fast, think about cutting back to basic cable or negotiating for a cheaper rate with your provider. Or, cut the cord entirely and just use a few streaming services. If you still want live TV channels, consider options like Sling TV or YouTube TV.

4. The Daily Coffee

You may really enjoy your morning (or afternoon) takeaway coffee, but if you add up how much you’re actually shelling out on coffee drinks each month — and year — you might decide that there are better uses for this money. Consider buying a quality coffee maker or French press and (if you don’t have one) a portable coffee mug, so you can make your delicious brew to go at home.

5. Name Brand Items

Generic brands typically have the same ingredients and offer comparable quality to name brands but for a fraction of the price. Whether you’re shopping in the supermarket or a drug store, opt for the generic option whenever it’s offered. This small change can lead to significant savings without compromising your needs or lifestyle.

Recommended: How Much Should I Spend on Groceries a Month?

6. Extended Warranties

These days, you can get extended warranties on practically everything — appliances, cars, electronics, and even homes. While having that extra protection may sound like a good idea, it typically comes at a hefty cost. And, the odds of you using an extended warranty is low. Companies have done the math and generally offer warranties that end before the usual problems crop up — otherwise they would lose money. A better bet: Skip the extended warranty and put that money into your emergency fund.

7. Greeting Cards

Surprising but true: A greeting card can set you back as much as $10. Rather than a canned card from a greeting company, most people would likely rather you share your own words and thoughts. Consider stocking up on a box of pretty cards that are blank inside. You can then personalize and customize each one for any occasion, whether it’s a birthday, baby shower, or wedding.

8. Bottled Water

While keeping bottled water on hand is convenient, the cost can add up, especially if you have a family. A simple way to spend less at the grocery store each week is to give each person in your household their own reusable water bottle to fill with tap or filtered water. You can then take bottled water (and if you really want to save, all store-bought drinks) off your shopping list. This will not only save money but also reduce plastic waste.

9. Impulse Purchases

Those little purchases you make here and there without thinking can add up. Consider setting a 24 hour (or longer) waiting period for any item you have a sudden urge to buy but really don’t need. You may find that the urge passes. Or, try a “no-spend” week or month where you pause all unnecessary spending for a set time period. This can not only save cash but shed light on things you’re buying but can easily do without.

10. Pre-Cut Fruits And Vegetables

Pre-washed and cut produce (and bagged salads) are certainly convenient, but generally cost a lot more than whole fruits and veggies. This is an easy thing to stop buying — prepping produce at home doesn’t take that much time and you may find that your fruits and veggies actually taste fresher.

11. Books

Instead of paying for books, consider getting a (free) library card. This will give you access to countless print, digital, and audiobooks, both at your local library and through partnerships they might have with other libraries and streaming services. This is one of the easiest ways to cut back on spending.

12. Disposable Products

Buying disposable items — like paper plates, plastic cups, napkins, and paper towels — adds up and all of it an unnecessary expense. Consider using real dishware, cloth napkins, and washable cleaning cloths. Your weekly grocery bill (and bags) will get instantly lighter. Avoiding disposable items is also kinder to the environment.

13. Takeout/Delivery

It’s fine to get takeout every once in a while, but if you’re looking to save cash quickly, consider writing off all takeout/delivery for a month (or maybe two). Instead, plan and shop for your meals and do some meal-prepping on the weekend. That way, cooking won’t feel like a chore at the end of a long work day. You’ll end up saving money on food while still eating well.

14. Bank Fees

If your bank charges you monthly maintenance or minimum balance fees, consider switching to a bank that offers free checking and savings accounts. To avoid getting hit with hefty overdraft fees, keep tabs on your balance to ensure you can cover your checks and debits. To avoid ATM fees, plan ahead and stop at an in-network machine before you go out.

💡 Quick Tip: Bank fees eat away at your hard-earned money. To protect your cash, open a checking account with no account fees online — and earn up to 0.50% APY, too.

15. Fancy Cleaning Supplies

Nowadays stores carry a different cleaning product for every spot in your home. There’s tile cleaner, sink cleaner, floor cleaner, window cleaner, you name it. Rather than purchase a dozen different specialized cleaning products, you can simply make your own all-purpose cleaner: Mix one cup of distilled water, one cup of white vinegar, the juice of half a lemon and about 15 drops of essential oil and put it in a spray bottle.

Get up to $300 when you bank with SoFi.

Open a SoFi Checking and Savings Account with direct deposit and get up to a $300 cash bonus. Plus, get up to 4.60% APY on your cash!


The Takeaway

Everyday items that drain your budget include expensive daily coffee, unnecessary subscription services, takeout/delivery, brand name products, and daily impulse shopping. Once you stop spending money on these things, you should start to see extra money in your checking account that you can now transfer to your savings account — cha-ching!

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.


Photo credit: iStock/pixdeluxe

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 recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“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, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

As an alternative to direct deposit, 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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Getting a Bank Account After Being Blacklisted

Bank Account Application Denied? What It Means to Be ‘Blacklisted’ and What to Do

It may seem as if having a bank account is a given in life, but actually, it’s not: Some people get rejected and have to work hard (really hard) to attain that privilege. There’s a situation called being blacklisted by banks, and it’s a tough one to overcome.

Granted, for many, having enough money for a deposit and valid ID gives you all you need to open a bank account.

But if you’ve had problems with a bank account before and your screening report reveals those issues, you could be denied. But all is not lost: Take a deep breath and read on.

Key Points

•   Being blacklisted by banks often results from negative banking histories reported by ChexSystems, affecting account opening.

•   ChexSystems operates like credit bureaus but focuses on banking behaviors, not credit management.

•   A low ChexSystems score can lead to account application rejections, but the score threshold varies by bank.

•   Disputing inaccuracies in a ChexSystems report or settling outstanding debts can help restore banking privileges.

•   Alternative banking options include “second chance” accounts and banks that do not use ChexSystems, offering paths to reestablish banking services.

What Does It Mean to Be on the ChexSystems Blacklist?

Unless you’ve had trouble opening a bank account, it’s possible you’ve never even heard of ChexSystems. Think of ChexSystems as being akin to the credit reporting agencies that determine your all-important FICO credit score. Except instead of keeping track of how well you manage debt the way Equifax, Experian, and TransUnion do, ChexSystems records how well you manage your banking life.

Do you have a history of bouncing checks, overdrawing your account, failing to pay bank fees, suspicious activity, or have had your account closed by a financial institution? If so, it’s likely ChexSystems knows about and is keeping track of those negative activities. Approximately 80% of banks use these agencies’ screening reports when deciding whether to approve a consumer’s application to open a checking or savings account.

Along with your report, banks also may use your ChexSystems Consumer Score to assess your potential risk as a new or returning customer. A score can range from 100 to 899 — and a higher score signifies lower risk.

There’s no official point or score at which consumers are automatically “blacklisted” by ChexSystems or the banks that use its services. Each financial institution determines independently how much risk is acceptable when deciding to open a new account for a client. But if your score is in the lower range, you should be aware that your application could be refused. The reason why: You don’t appear to be someone who will use your bank accounts responsibly.

If you’re planning to open an account and you’re wondering what your current ChexSystems Consumer Score is, you can request it at the ChexSystems website. You’re able to get one free report per year.

Get up to $300 when you bank with SoFi.

Open a SoFi Checking and Savings Account with direct deposit and get up to a $300 cash bonus. Plus, get up to 4.60% APY on your cash!


What to Do If You Are Blacklisted

So let’s say you’ve applied for a bank account and got rejected. That can be an upsetting feeling. After all, bank accounts — especially checking accounts — are the hub of most people’s financial lives. Paychecks are deposited there, and bills and other debts are paid out of that same account. You may wonder how you will ever get a bank account after being blacklisted.

We have good news: If a financial institution denies your request to open an account, there are a few things you may be able to do to improve your standing. Here are four steps to take.

1. Request a Consumer Disclosure Report

The bank or credit union that declined to open an account for you should inform you which reporting agency (ChexSystems or another) generated the report it used when considering your application. You can then contact that agency by phone, mail, or online to request a free copy of the report. You’ll then take a look at exactly what’s on your record.

2. Report Any Discrepancies

Once you receive a copy of your file, you should be able to see which banks or credit unions provided negative information about you to the reporting agency. If the report doesn’t match up to your experiences, there may have been an error, or the problem could be connected to identity theft. Either way, it’s a good idea to check your own records for any discrepancies and prepare to address what you may uncover.

3. Dispute Any Errors Found

Consumer reporting agencies must comply with the federal Fair Credit Reporting Act. That means they are required to ensure the information they provide is as accurate as possible. What’s more, by law, they can’t include certain types of negative information that’s more than seven years old. (ChexSystems typically keeps negative information on a report for five years.)

If you feel your banking report has errors, is incomplete, or that some negative information is out of date, your next move may be to file a dispute. The Consumer Financial Protection Bureau (CFPB) provides sample letters for contacting both the financial institution that supplied the incorrect data and the agency that included it in its report. Or, you can file your dispute on the ChexSystems website.

Under the Fair Credit Reporting Act, ChexSystems must verify the negative information within 30 days or delete it from your ChexSystems report.

You also may want to get an updated credit report from one or all three of the major credit bureaus to see if there are similar problems there. You can request those reports for free at annualcreditreport.com. If you find anything amiss, you can dispute those credit report errors.

To be clear, your ChexSystems score is not the same as the FICO credit score lenders look at when you apply for a credit card or loan. And the banking reports ChexSystems provide do not include the same information as credit reports. But if there’s inaccurate information in a report about your checking account activity, there may be similar issues with your credit reports — especially if you’ve been the victim of identity theft. If you can catch discrepancies early, you may be able to head off future questions about your creditworthiness.

4. Pay Off Outstanding Debts and Fees

Of course, there is the possibility that the black marks on your report are valid. Maybe you bailed on an account that was overdrawn or had another negative situation. If information on your report was accurate, you still may be able to improve your chances of opening an account. You will probably want to show that you are trying to rectify past problems.

Check with the bank that declined your recent application for an account. A banker there may have some suggestions. It could help, for example, if you can pay off any old fees you still owe to ChexSystems’ member institutions. Once those past bad debts are taken care of, you can ask the bank or credit union that provided the negative information to update that item on your ChexSystems report.

You still may have to wait five years for the negative information to be completely removed from your report. But ultimately, it’s up to each individual bank — not ChexSystems — to decide if a customer’s application will be approved or denied. If the bank sees you’re making an effort to right old wrongs, it may reconsider your application. That’s why connecting with a banker to explain what steps you’re taking can be a move in the right direction.

How to Avoid Being Blacklisted by ChexSystems

Obviously, the best way to avoid getting a low ChexSystems Consumer Score or a negative report is to avoid the activities that could make you a riskier bank customer. If you want to be a good checking and savings account customer, avoid such things as:

•   Bouncing checks or running up too many overdraft fees

•   Having an account closed involuntarily

•   Committing ATM or debit card abuse

•   Being suspected of fraud or illegal activity

•   Opening and closing multiple accounts in a short period of time

But there are other steps you can take to further secure your finances and your financial reputation. Consider these options as well to boost your standing as a banking customer. They can help you avoid being blacklisted.

Monitor Your Financial Health

If there’s information on a ChexSystems report that you weren’t aware of, you may have been the victim of identity theft. Reviewing your accounts regularly could help you clear up problems faster. Even if you don’t have this kind of fraudulent activity on your record, it’s still a good idea to stay on top of your financial profile. Here are some key steps.

•   It’s a good idea to periodically request and scrutinize your free ChexSystems report.

•   You’ll also want to get free copies of your three major credit reports from annualcreditreport.com at least annually. Again, your goal is to make sure that everything is up-to-date and accurate and that there isn’t any fraud or identity theft occurring.

•   It’s also a good idea to regularly check your bank account and credit card statements to make sure there aren’t any transactions you aren’t aware of. Many financial institutions offer online tools and mobile apps that can make tracking your accounts easy and convenient.

•   You may want to set up a low balance alert for your checking account. That way, you’ll get a text or email when your balance reaches a certain threshold, and you’ll know to stop using the account until you make a deposit. That can help avoid overdrawing your account and bouncing checks and/or triggering fees. You also might consider setting up bank alerts for unusual activity, overdrafts, and new log-ins.

Find an Alternative to a Traditional Banking Account

If you’ve been rejected and are worried that you might be unable to open a bank account, don’t give up hope. If your ChexSystems report seems to be blocking you from getting an account, you may have other options.

•   Some banks and credit unions offer what are called “second chance” checking accounts. These typically offer fewer features and higher fees than regular bank accounts to customers who have been blocked by a ChexSystems report or score.

•   There are also some banks and credit unions that don’t use ChexSystems when making decisions on account applications. You might be able to enjoy the same benefits as other account holders, with low or no fees, if you choose to do business with one of those financial institutions. A little online research should show you which banks don’t depend upon ChexSystems.

By investing a bit of time and energy, you should be able to find an account that suits your needs even if you have been blacklisted.

The Takeaway

If a bank denied your application for a new checking or savings account, it could be that you were blacklisted due to negative information on your ChexSystems report.

You still have options, though. If the information on your report is wrong or more than seven years old, you can dispute the negative information and have your report corrected. And if it turns out the negative information is true, you can take steps to remedy the situation and possibly open an account elsewhere. The convenience of a bank account may well be within reach.

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.

FAQ

Can I open a bank account if I’m blacklisted?

You may have a few options if you’ve been blocked from opening an account. You could try to fix your old problems, and ask the bank to reconsider. You could sign up for a “second chance” account that’s geared to people with a negative banking history. Or, you could look for a bank that doesn’t base its decisions about customer accounts on ChexSystems reports.

How long are you blacklisted from banks?

Every bank has its own policies when it comes to deciding a customer’s account eligibility. But if you have negative items on a ChexSystems report that could cause a bank to decline your account application, you can expect that information to stay on your report for up to five years.

What does it mean when your bank account is blacklisted?

If someone tells you that you have a blacklisted bank account, it generally means you have enough negative information on your ChexSystems report — or a low enough ChexSystems score — that the bank sees you as a risk. They therefore decline to offer you an account.


Photo credit: iStock/PeopleImages

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 recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“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, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

As an alternative to direct deposit, 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.

Our account fee policy is subject to change at any time.
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.

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

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3 Reasons Why Your Bank Account is Frozen

3 Reasons Why You Have a Frozen Bank Account

Bank accounts can be frozen for such reasons as your financial institution suspecting fraud or illegal activity. Your funds can also be made inaccessible if your bank is adhering to a court order about unpaid debts you owe. In addition, the government can freeze your account if you have unpaid student loans or taxes.

Regardless of the reason, having a bank account locked can be an upsetting situation that makes your basic financial life difficult. You might be left scrambling to pay bills and cover daily expenses.

Read on to take a closer look at this situation, including why bank accounts are frozen and what you can do if you find yourself facing this scenario and want your money unlocked.

Key Points

•   Bank accounts may be frozen due to suspected fraud, such as unusual large transactions or activities in unfamiliar locations.

•   Unpaid debts like taxes, student loans, or child support can lead to account freezes without a court judgment.

•   Illegal activities, including money laundering or funding terrorism, might result in a bank freezing an account.

•   The duration of an account freeze varies, depending on the resolution of the issue that caused the freeze.

•   To unfreeze an account, contacting the bank promptly and providing necessary documentation or resolving debt issues is essential.

What Is a Frozen Bank Account?

When a bank account is frozen it means the bank will no longer let you perform certain transactions. You can still access your account information and monitor your account. You will still be able to make deposits, including manual or direct deposit of your paycheck.

However, you won’t be able to make any withdrawals from the account or transfer money from the account to a different account.

Typically, any previously authorized payments or transfers will not go through either. That means that any bills you have set up on autopay likely won’t get paid.

💡 Quick Tip: Tired of paying pointless bank fees? When you open a bank account online you often avoid excess charges.

Why A Bank Would Freeze Your Account

Banks have the authority to freeze, or even close, a bank account for a range of reasons. These reasons generally fall into the following three categories.

1. Suspected Fraud

A bank’s reputation relies heavily on its ability to keep money safe, so account security is typically taken very seriously.

Banks are familiar with how you tend to spend your money, so an unusually large purchase or cash withdrawal can indicate fraud and trigger an account freeze.

Banks are also familiar with where you typically spend your money. A transaction that occurs in a different city or especially a different country can be a red flag that could trigger an account freeze.

It can be a good idea to inform your bank about travel plans both nationally and internationally to help prevent any account freezes during a trip.

If your bank flags suspicious behavior you’re certain you weren’t responsible for, it could be due to identity theft.

2. Unpaid Debts

Missing a single bill payment isn’t generally something that would disrupt access to your bank account, but a longstanding overdue bill might.

Collection agencies that purchase unpaid debts can secure court judgments for those debts, giving them the power to freeze (or “attach”) the bank accounts of debtors until they paid the money they are owed.

Most creditors can not have your account frozen unless they have a judgment against you. However, not all. Government agencies that collect federal and state taxes, child support, and student loans do not need to have a court judgment to attach your account.

Recommended: Debt Buyers vs. Debt Collectors

Any of the following types of outstanding debt could be the cause of a frozen account.

•   Unpaid Taxes

•   Student Loans

•   Mortgages

•   Car Loans

•   Personal Loans

•   Civil Lawsuits

•   Divorce Settlements

•   Child Support.

3. Illegal Activity

A bank account that is used to conduct criminal activity, or shared with someone who might be, can lead to the account being frozen.

Banks also work directly with law enforcement agencies and will freeze accounts of individuals that have been convicted of a crime or are under investigation.

Some specific activities that could lead to an account freeze include:

Writing Bad Checks. A single bounced check isn’t cause for alarm, but knowingly writing multiple checks from a bank account that doesn’t hold the funds to support them is illegal. If a bank observes too many bad check transactions, they may be inclined to freeze the account and alert the police.

Money Laundering. This is the process of generating money through illegal activity, and attempting to make it appear legal via multiple financial transactions. All banks and financial institutions are required to comply with federal anti-money laundering regulations and report any suspected activity directly to the authorities.

Terrorist Financing. Funding or organizing funds for terrorist groups and organizations is an illegal activity that can also result in an account freeze. Banks comply with federal laws that help prevent terrorism by freezing and reporting any accounts that exhibit suspicious activity related to terrorists.

Get up to $300 when you bank with SoFi.

Open a SoFi Checking and Savings Account with direct deposit and get up to a $300 cash bonus. Plus, get up to 4.60% APY on your cash!


How Long Can A Bank Account Be Frozen?

Banks don’t typically follow any set rules regarding how long an account can be frozen. The length of time generally depends on how long it takes for the account holder to notice the freeze, contact the bank, and can resolve the issue that caused the freeze.

How Does a Frozen Bank Account Affect You?

Having a frozen bank account essentially means not having access to your money, and it can be especially difficult if it is your primary bank account.

Frozen funds means not being able to make purchases with a debit card, or withdrawals from an ATM. It can also mean that any auto-payments linked to that account will likely not be fulfilled, and any scheduled transfers won’t be completed.

Because these payments can bounce, you could also incur a non-sufficient funds charge, which may be deducted from your account.

If you don’t have enough in the account to cover it, you could end up with a negative balance, putting you into an overdraft. In this case, you could end up having to pay additional bank fees and interest to cover the shortfall.

Recommended: How to Avoid Overdraft Fees

Those with frozen accounts often must resort to using credit cards and can end up accumulating debt in order to cover their expenses while they sort out the issue with their bank.

If the bank suspects you’ve been using the account illegally for any reason, it could close your account completely. It can also report your account activity to authorities.

Recommended: Bank Fees You Should Never Pay

How Do You Unfreeze a Bank Account?

It can be a good idea to contact your bank as soon as you notice a freeze on your account. When discussing the issue, it can help to have a clear account of your most recent locations and transactions, and be prepared to share any information and supplemental documentation that can help clear up the issue.

If you can show that there’s no reason for the freeze, the bank will likely release the suspension and grant you full access to the account again.

If your account is frozen over unpaid debts, it can be a good idea to get the creditor’s contact information from your bank and then reach out to them directly. Once you have a better idea of what’s going on with your account, you may be able to work out a payment arrangement.

The Takeaway

When a bank freezes your account, it can mean there is something wrong with your account or that someone has a judgment against you to collect on an unpaid debt.

The government can also request an account freeze for any unpaid taxes or student loans.

Once the bank account is frozen, you cannot make withdrawals but can only put money in your account until the freeze is lifted.

If your account is suddenly inaccessible, it can be a good idea to contact your bank immediately to find a resolution.

Consider Opening a SoFi Checking and Savings®

If you’re on the hunt for a new type of bank account, see what SoFi offers.

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.

Photo credit: iStock/happyphoton


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 recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“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, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

As an alternative to direct deposit, 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.

This article is not intended to be legal advice. Please consult an attorney for advice.

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

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stack of hundred dollar bills

5 Ways to Send Money Online to Family and Friends

Situations can crop up all the time where you want to send money to someone you know. Perhaps your coworker brought you back a cold brew (nice) or you need to pay your roommate for your share of the utility bill. Fortunately, there are plenty of ways to move cash from your account to theirs, from using mobile payment apps to traditional money transfer services like Western Union.

Which method you choose to transfer funds will depend on to whom you are sending the money, where the recipient is located, how much money you need to send, and how fast the money needs to get there.

Read on to learn all about several safe, quick, and easy ways to send someone money.

Key Points

•   Various methods are available for sending money online, including mobile payment apps and traditional services like Western Union.

•   The choice of method depends on the recipient’s location, the amount, and urgency.

•   Money transfer services may allow sending to a bank account or for pickup at a physical location.

•   Bank-to-bank transfers are common for domestic transactions, often without fees.

•   Personal checks, though less common, are still used for payments and require recipient details for mailing.

1. Money Transfer Services

Money transfer companies have been around for decades, and some — like Western Union and MoneyGram — still have locations all around the world where you can send money to a person so they can go and pick it up. In some cases, you may be able to send money directly into a person’s bank account or mobile wallet.

•   What you need: The recipient’s full name, phone number, address, bank name and account details for electronic transfers to them. For a recipient who will pick up the money in person, you may just need the person’s full name and address.

•   Fees: The fees for money transfer services can vary based on how you’re paying (with a credit or debit card, or directly from your bank account), where you’re sending the money, and how much you’re sending.

•   Timing: Depending on the delivery and payment methods, the money may arrive within a few minutes or in a few days.

•   Reach: Unlike many other money transfer options, these services typically offer both domestic and international transfers. Western Union, for example, specializes in the ability to send or receive cash quickly overseas.

Worth noting about these services: Since they allow you to send money via money orders and other methods, they can be a good way to transfer funds to or from someone without a bank account.

💡 Quick Tip: Help your money earn more money! Opening a bank account online often gets you higher-than-average rates.

2. Bank-to-Bank Transfers

Knowing how to transfer money from one bank to another can be valuable when you want to move funds.

•   What you need: You will likely need the routing number and account number where you are sending funds to, and you may have to verify your identity before completing the transfer.

•   Fees: Many banks allow you to click on their transfer feature and send money to a bank account at another bank, often with no fees involved.

•   Timing: It usually takes just a day or two to move the funds.

•   Reach: These are typically done domestically. If you want to send funds internationally, you may need to complete an international wire transfer.

3. Send a Check Via Your Bank

Although they may not be as popular as they once were, checks are still a reliable way to send money to someone.

•   What you need: You will need the name of the person receiving the check (the payee) and possibly their mailing address if you are sending a check.

•   Fees: Checks are typically included at no charge when you open a bank account. If you don’t have any checks handy, you can order checks from your bank or retailers. This can be done online, and check prices can range from five cents to more than 20 cents per check.

•   Timing: Once deposited, the money should move into the recipient’s bank account and be available in a couple of days or possibly up to a week, depending on such factors as when it is deposited and how.

•   Reach: In the US, it should be no problem to deposit a check (even if it’s from an international account). However, if you are planning to mail a check to someone in a foreign country, you may want to check with them to make sure they can deposit it at their bank without any issues.

4. Wire Transfers

Wire transfers offer another way to send money to someone. They can be a good option for sending a large amount of money that is needed extremely quickly, for both domestic and international transactions.

•   What you need: In terms of how to wire money, you can call, visit, or go online with your bank or a wire transfer company. For a domestic transfer, you will need the recipient’s name, address, and bank account and routing number.

For international transfers, you will also need the bank’s SWIFT code plus possibly the International Payments System Routing Code.

•   Fees: Domestic wire transfers may be free for some banking customers, but the median charges tend to be $25 for outgoing wire transfers and $15 for incoming wire transfers (meaning your recipient may be assessed a fee for receiving funds this way).

Internationally, the figures are a median of $15 for incoming international wire transfers and $45 for outgoing international wire transfers.

•   Timing: Typically, domestic wire transfers can be completed in one day (perhaps even within hours or sooner), and international ones can take up to a few days.

•   Reach: Bank policies vary; some may offer only domestic wire transfers, others also do international transfers, and some offer neither service.

5. Third Party Person-to-Person (P2P) Apps

A growing number of P2P services (also known as person-to-person or peer-to-peer services) allow customers to use an app or website to send money from a bank account, a credit card, or a debit card to someone else.

You are probably familiar with these apps. If you went out with friends for dinner but didn’t have money on you, your pal might pay for the whole meal. You could then pay your friend without cash by using Zelle or another app to send them what you owe. These services can possibly provide an answer to the questions, “How to send money instantly to a friend or family member?”

The set-up, services, and transaction times can vary somewhat from one app to the next. Generally, however, they’re easy to use and are typically free, although there may be fees involved (say, to expedite the transfer of funds to a bank account, or when paying using a linked credit card).

Some, though not all, providers may require both the sender and receiver to set up an account within the same transfer service.

Here are some popular P2P providers to consider:

Zelle

You can make a money transfer using the Zelle app or, if your financial institution partners with Zelle (and many do), you can use your mobile banking app or your bank’s website.

•   Zelle works with traditional and online banks, as well as credit unions.

•   Money moves directly from your bank account to your recipient’s bank account. So, if you’re both already registered with Zelle, the company says it takes just minutes to complete a transfer. That’s one path to instantly send money to a person or retailer.

•   Zelle doesn’t charge any fees to send or receive money. However, you may want to check with your financial institution to be sure it doesn’t add a fee for the service.

•   You can’t cancel or reverse a payment made in error.

PayPal

PayPal is the grandaddy of money transferring apps. It remains popular because it’s so ubiquitous, tends to be easy to use, and offers a variety of payment methods.

•   It’s free to register for an account, and when you send money to another PayPal account holder, the money can be transferred to that person’s bank account as soon as the next day.

•   Sending money to someone in the US through a PayPal account balance or linked bank account is free, but there may be extra costs if you use a credit or a debit card, or if the money is going overseas.

Cash App

Cash App is another P2P money transfer app that’s used in the US and the United Kingdom.

•   Both parties involved in a transaction must download the app and log in.

•   There are no extra charges to send funds, although your bank might assess a fee if you move money internationally, and you’ll be assessed a fee if you use a credit card to fund your transaction.

•   There are limits to how much you can send at first: $250 during the first seven days after you sign up, but after a month, you can send up to $1,000 at a time.

Venmo

Venmo is a subsidiary of PayPal, and the process and costs for sending money to someone work in much the same way.

•   There’s also a social aspect to Venmo that has made it popular. You can add friends, share posts, and use emojis. Or you can change your settings to keep things a bit more private.

•   Transfers between Venmo accounts are instantaneous.

•   If you realize you made a mistake, the transfer cannot be undone.

Recommended: How to Transfer Money from Your Credit Card to Your Bank Account

Facebook

Facebook allows users to send and receive money free of charge through both the Messenger app and Meta Pay (previously known as Facebook Pay).

•   Both the person sending and the person receiving the money need to live in the U.S. and link a debit card or PayPal account to Facebook or Messenger.

•   Meta Pay works similarly to Messenger, but unlike Messenger, it allows users to send and receive money across its platforms (Facebook, Messenger, Instagram, and WhatsApp).

•   Meta Pay also enables users to purchase things, such as games and items for sale on Facebook Marketplace and Instagram, and to link a major credit card, in addition to a debit card or PayPal account.

•   As with other services listed here, you can’t cancel a payment after you send it.

Apple Cash

Apple Cash is a digital card that is built into the wallet of iPhones. It allows you to spend in stores and online and in apps with Apple Pay.

•   You can load the card with cash and use it where Apple Pay (the technology behind it) is accepted.

•   You can send and receive Apple Cash from friends and family with iPhones through Messages or your Apple Wallet.

•   You can use Siri to send money using spoken instructions.

•   Within a seven-day period, you can send or receive a maximum of $10,000.

•   Children with iPhones can send and receive cash this way.

•   There’s no fee to send, receive, or request funds with Apple Cash.

•   You may be able to cancel an Apple Cash transaction if the recipient hasn’t yet accepted the payment.

Google Pay

Google Pay is another service you can use to send money. You’ll need either the Google Pay or Google Wallet app, plus at least one form of payment, such as a debit card or a credit card. Not all cards are compatible yet with Google Pay so do a bit of research to see if yours are.

•   You can use Google Pay in stores and online.

•   Within a seven-day period, you can send up to $5,000 if you’re verified (or $500 if your identity hasn’t been verified).

•   It’s a free service to pay for goods and services.

•   Google Wallet is currently available in dozens of locations globally.

•   It may be possible to cancel some Google Pay transactions.

Get up to $300 when you bank with SoFi.

Open a SoFi Checking and Savings Account with direct deposit and get up to a $300 cash bonus. Plus, get up to 4.60% APY on your cash!


Is It Safe to Transfer Money Online?

You may wonder, “Are mobile payment apps safe?” Overall yes, but remember: Any time your personal information is online, the possibility exists that someone could access it and use it to steal your money.

So even though banks and other major money transfer networks are taking state-of-the-art steps to prevent hacking and cybertheft, no financial site or mobile app is entirely without risk. Bank account fraud and similar crimes can happen when scammers get a hold of your financial details.

Fortunately, there are some simple steps you can take to help safeguard your money:

Only Do Business with a Secure Network

If you’re making a transfer using a website, it’s a good idea to make sure the URL starts with (https://) and there’s a little padlock in front of the web address in the search bar. This shows that the site is secure and the data you enter will be encrypted.

If you don’t see these signs of a secure transaction, there is a chance that your personal and banking details could be visible to others during the transaction. This can in turn lead to fraud and identity theft.

Make Sure Your Device Is Protected

Even if you believe you’re dealing with a secure site, it’s wise to make sure you have the most up-to-date antivirus and antimalware programs enabled on your devices and run regular scans.

Yes, this may seem like a hassle, but the trouble caused by malware can be devastating. Malware can be downloaded onto your device, say, when you plug in to charge your phone at an airport or other public venue or when you click on a fraudulent link. It can then pull highly personal data off your phone and lead to you having to report identity theft.

Don’t Download Any App You Haven’t Vetted

Before you download a financial app, make sure that it’s the one intended. There are plenty of lookalike, sound-alike apps out there.

Then, make sure that you feel confident in the security protocols it has in place. Most financial apps list their security measures somewhere on their description in the app store (it might be under the privacy policy). You’ll also find reviews there.

Use a Strong Password

Here’s another important security protocol for financial apps or any app that involves your personal information. It’s a good idea to make your password as long and complicated as possible. Consider using a mix of numbers, upper- and lowercase letters, and throw in a symbol or two. Don’t use the obvious “password123” option, nor your birthdate, which could easily be available on social media sites.

Also, it’s best not to use the same password for every account you have. Use a well-reviewed password manager if you could use some help handling your passwords.

Vet People and Companies Before You Send Them Money

Do your research before hitting “send.” On some payment apps, you can friend people before you send any funds. This can help you make sure that you are sending money to the person you intend to vs. someone else with a very similar name or handle.

Also, because it’s so easy to transfer money to someone, it’s also easy to get scammed. And often there’s no going back on a transfer once the money is in the other person’s account. So be wary when using these apps to make purchases online.

Double-check All Your Info

Making sure you have the right name, address, account information, and other details for the person you’re sending money to. That can help keep your money from going to the wrong place. It’s easy to make a typo on mobile devices (and actually anytime you’re typing), especially when multitasking or transferring funds while on the go.

If you’re sending a large sum, you may want to send a small test amount first to confirm you have everything correct.

Keep a Record of the Transaction

Consider holding onto the proof of transfer until your recipient confirms that he or she has access to the money. The transfer might take a few minutes or a few days.

Typically, with wire transfers, you have hard copies from a brick-and-mortar bank or downloaded receipts via your banking app or website that you can keep on hand. With checks, the canceled check (or an image of it) can serve as proof that funds were accessed.

Recommended: Guide to ACH Routing Numbers

The Takeaway

Transferring funds to another person has become increasingly quick and easy as technology and financial services have evolved, with such alternatives as a payment app, a wire transfer, a bank transfer, or money transfer service. Depending on the particulars of your transaction, whether you’re repaying a friend for the sushi they got you or making a purchase, there’s likely an affordable and reliable option or two.

Having the right banking partner can help make money transfers as well as all your other everyday financial transactions fast, simple, and safe.

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.

FAQ

Can someone send me money if I don’t have a bank account?

If you don’t have a bank account, you can still receive money via services like Western Union (which can give you cash), and Cash App, PayPal, and Venmo (which can likely give you prepaid debit cards).

Can you send money by text?

Apple Cash and Google Pay (and possibly other services) make it possible to send money by text.

What is the fastest way to send money electronically?

If you want to start sending money instantly online, services like Zelle and Google Pay can be very quick ways to transfer money electronically. The money can be delivered within minutes. Wire transfers are also regarded as a fast way to move large sums or make international transfers.

How can I send money to someone instantly with routing and account numbers?

You can likely use your financial institution’s transfer feature as a way to transfer money to another account if you have the routing and account numbers. However, you will usually also need the recipient’s name and address, as well as their bank’s name.

How can I send money to someone instantly without a bank account?

If you don’t have a bank account, you can use a money transfer service (such as Western Union or Moneygram) and pay in cash. The funds will be then forwarded as you direct them. Services like Venmo and Cash App may be another good way to move money; you can link them to a prepaid debit card or a credit card.


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 recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“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, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

As an alternative to direct deposit, 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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