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A student checking account is a bank account that is specially designed for students in their teens and early 20s. This type of account typically offers the same tools as a regular checking account, such as a debit card and checks, but may have no or lower fees and minimal balance requirements to make banking more accessible for young adults. Some student bank accounts may also offer extra perks such as sign-on bonuses and financial education tools tailored to students.

But student bank accounts also come with some limitations, such as low or no interest on deposits and certain eligibility requirements, so it’s important to weigh the pros and cons before choosing this type of account. Here are key things to know about student checking accounts, including their requirements and fees, and how they compare to traditional checking accounts.

What Are Student Checking Accounts?

A student checking account is a type of bank account tailored specifically for students, typically those in high school or college. These accounts function similarly to traditional checking accounts but come with benefits tailored to young adults who may be new to banking.

Like a standard checking account, a student checking account allows you to easily deposit, withdraw, and transfer funds. These accounts typically offer a debit card, checks, mobile banking, and ATM access to facilitate shopping and bill payments. Some checking accounts may also pay a small amount of interest (especially if your account is with an online bank).

Unlike traditional checking accounts, however, student bank accounts are generally limited to students and usually require proof of enrollment in school. They also tend to charge lower and fewer fees compared to traditional accounts, along with lower balance requirements. Some student accounts offer additional benefits, such as rewards programs and overdraft forgiveness.

Student Checking Account Features

Here’s a closer look at the features that a typical student checking account may offer:

•   Low (or no) minimum balance requirements: Typically, students are not required to maintain a high balance to avoid monthly fees or keep the account open.

•   No-cost ATM access: Many banks provide access to a large network of ATMs at no cost, making it easy to access funds whether you’re on campus or home for the summer.

•   Overdraft protection: You may have the option to link your checking account to a savings account or receive alerts to prevent overdrafts. Some student accounts also forgive overdrafts, which means you won’t be hit with a fee if you accidentally overdraft your account.

•   Mobile and online banking: Once you set up your account, you can typically check your balance, make payments, and transfer funds on the go via an app or online platform.

•   Debit card access: Debit cards are linked to your checking account and allow you to make purchases (both online and in store), as well as withdraw cash at ATMs.

•   Direct deposit: A student checking account will typically allow you to have your paychecks or financial aid directly deposited into the account, which can give you faster access to your funds.

•   Rewards: Some student checking accounts offer cash back on purchases made with your debit card, which can help you save money on everyday expenses. Others may offer you a cash reward when you sign up.

•   Financial education resources: A student account often comes with tools to help students budget, save, and track expenses.

Recommended: Savings Account Calculator

Who’s Eligible to Open a Student Checking Account?

Student checking account eligibility requirements can vary among financial institutions. In general, these accounts are limited to certain age groups, which can be anywhere from age 13-25. If you’re below the age at which you can open a bank account, which is age 18 in most states, you will likely need to open a joint student account with a parent, a guardian, or another adult.

To open a student bank account, you must typically be a current student. This generally means full-time enrollment, and you’ll likely need to provide proof of enrollment or your official school email address to be approved for a student account.

When you graduate school and/or age out of a student checking account, the financial institution may automatically convert your student account into a standard checking account.

Recommended: How to Deposit a Check

Pros and Cons of Student Checking Accounts

Student checking accounts come with numerous benefits, but also a few downsides. Here’s a look at how the pros and cons stack up.

Advantages of Student Checking Accounts

•   Waived or discounted monthly fees: Banks will often waive or reduce monthly maintenance fees for student checking accounts.

•   Low or no initial deposit: You may be able to open a student checking account with a small, or no, initial deposit.

•   Reduced minimum balance requirements. You may avoid being charged a fee or having your account closed even if you don’t have a certain amount of money in your account.

•   Lower (or no) penalties for overdrafts: A student account will often charge lower penalties for overdrafts than traditional accounts. Some student accounts may not charge any overdraft fees.

•   Special perks: Some accounts come with exclusive benefits such as cash back rewards, student sign-up bonuses, and educational resources tailored to students.

Disadvantages of a Student Bank Account

•   Limited availability: Only students can apply, and eligibility ends after you graduate or when you turn a certain age.

•   May need to visit a branch: While some banks allow you to apply for a student account online, others may require you to go to a branch and apply in person.

•   Low or no interest on deposits. As with a traditional checking account, student checking accounts generally pay little to no interest on any money sitting in the account.

•   You may need a cosigner: Some banks only allow students (especially those under age 18) to open a joint account with a parent or a guardian. This means you may need an adult to cosign your student account when you open it.

•   Potential conversion fees: Once you are no longer a student, or turn a certain age (such as 25), the account may be converted into a regular checking account and start charging monthly fees.

How to Choose Between Different Student Checking Accounts

Choosing the right student checking account involves understanding your needs and finding the right match. Here are some considerations:

•   Can you open the account on your own, or will you need a joint account holder due to your age?

•   What are the requirements in terms of your school enrollment status?

•   What are the monthly fees, if any?

•   Will your money on deposit earn any interest? If so, how much?

•   What is the minimum initial deposit required when opening the account?

•   Must you maintain a certain balance in the checking account to avoid fees?

•   What happens if you overdraft your account?

•   Is there a sign-up bonus or any rewards (such as cash back for using your debit card)?

•   What kinds of financial education programs are available in conjunction with the student checking account?

•   Does the bank have branches and/or ATMs in convenient locations?

•   Will your account automatically become a standard checking account when you finish your education or age out of the student checking account?

How to Open a Student Bank Account

Once you’ve figured out which bank is your choice for a student account, you’ll typically follow these steps to open a checking account:

•   Find out if you can sign up online or need to apply in person at a branch and whether you’ll need an adult cosigner.

•   Provide your personal information (such as your home address, phone number, and Social Security number) and school information (e.g., school name, address, and phone number).

•   Provide your driver’s license, student ID, or another official photo ID.

•   Supply proof of enrollment in a school (if required). This might be a school report card, transcript, or acceptance letter, your student ID, or your official school email address.

•   Have your cosigner provide their information (if required).

•   Make an initial deposit (if required). Some banks require an initial deposit, typically no more than $25, while others may allow you to open your account without any cash initially.

Once your application is reviewed and approved, you may be able to start using your account right away. However, it can take up to 10 days or longer for your debit card and paper checks to arrive in the mail. Once that happens, you’re all set to start fully using your student banking account — congrats!

The Takeaway

A student checking account can be a great tool for a young person learning how to manage their finances. With potential features such as low or no fees, mobile banking, and overdraft forgiveness, these accounts can provide the flexibility and convenience students need. However, it’s important to shop around and compare different options, understand the terms, and prepare for the transition to a regular checking account after graduation.

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

FAQ

Do student checking accounts charge monthly fees?

Many student checking accounts do not charge monthly fees. Banks will often waive or reduce maintenance fees as a benefit to students, helping them manage their finances without extra costs. Some banks will also waive or discount other fees, such as overdraft and ATM fees, for students. However, it’s important to read the account terms carefully to understand any potential charges before you open a student checking account.

Can I open a student checking account if I’m an international student?

International students are often eligible to open a student checking account in the U.S. Requirements vary by bank, but you may need to provide both a foreign and U.S. address, two forms of ID (such as a passport, U.S. student ID, and/or foreign driver’s license), and a foreign tax identification number (FTIN). It’s a good idea to check with specific banks to determine their policies for international students.

What happens to a student checking account after you graduate?

After your scheduled graduation date, your student checking account will likely convert into a standard checking account, which may charge monthly maintenance fees and have different account terms. Some banks offer a grace period of a few months post-graduation before making the transition. To avoid unexpected fees, it’s important to check with your bank about post-graduation policies and consider switching to an account that offers benefits more suitable for your financial situation.

photo credit: iStock/Iryna Melnyk

This content is for educational and informational purposes only. The products, services, or features discussed may not currently be available via the SoFi platform. Any references to third-party products, services, or companies do not constitute an endorsement, recommendation, or solicitation by SoFi. Readers should independently evaluate their options and consider their individual financial needs and circumstances before making any decisions. ©2026 SoFi Technologies, Inc. All rights reserved.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2026 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

SOBNK-Q326-168

Sports card investing typically involves buying and selling sports cards in the hope that the cards you collect will increase in value over time. If you collect sports cards as a hobby, you might be interested in exploring how your collection could fold into your overall investment strategy, if at all, and considering its potential to generate returns over time.

Are sports cards a good investment? They may be for investors who understand how the market for sports cards works and how to identify investment opportunities. Like any other investment, however, there are risks to be aware of, especially when it comes to alternative investments like sports cards. Here’s a closer look at how investing in sports cards works.

History of Investing in Sports Cards

Sports cards have a lengthy history, dating back to the 19th century. The earliest known baseball card was issued in 1865 by the Brooklyn Atlantics, who were dominant in the New York City sports scene at the time, according to Library of Congress records. The team’s “carte de visit,” or visiting card, was handed out to fans as souvenirs.

More athletic organizations followed suit, issuing sets of trading cards featuring lithographic portraits and later, photographic prints of individual players. These early sports card sets were often included in packs of candy or tobacco and were used as a marketing tactic by companies to get consumers to buy their products.

Interest in sports card trading grew throughout the early 20th century, and collectors began to realize how valuable these cards could be. Baseball cards were joined by football cards, and later, basketball cards.

By the 1980s, the market for sports cards investing and trading was beginning to take off. Investing in sports cards and other sports memorabilia has become a way to diversify and potentially generate returns over time, outside of traditional stocks and bonds, though cannot guarantee profit nor fully protect in a down market.

As an alternative investment, sports cards offer the potential to combine your investment strategy with your passions if you’re a true sports enthusiast. But it’s important to know that alternative investments can be high risk, illiquid, and whether or not sports card investing provides returns can depend on a number of factors. (SoFi offers funds with alternative investments, but it does not offer sports card investing.)

The Sports Card Market

Sports card investments are seeing a resurgence in recent years, and as of 2026, the sports trading card market is estimated at $14.5 billion, and expected to grow to almost $25 billion by 2033. Some of the most sought-after cards in the market trade for millions of dollars, including a T206 Honus Wagner baseball card which sold for $6.606 million at auction in 2021, and a card featuring basketball players Michael Jordan and Kobe Bryant, which sold for $12.9 million in 2025.

The sports card investment market extends to not only baseball or football cards, but a variety of other trading cards including:

•   Character cards

•   Image cards

•   Autograph cards

•   Pokémon cards

•   Magic: The Gathering cards

•   Yu-Gi-Oh! cards

•   Cardfight! Vanguard cards

Some of these specialty cards rival the performance of the most in-demand sports cards. One of the rarest and most valuable Pokémon cards, for instance, was valued at $5.275 million at auction. In early 2026, a Pikachu card sold for $16.5 million.

How to Invest in Sports Cards

Investing in sports cards typically involves simply buying them. You can buy packs of cards, or even boxes, and then open those packs to see what’s in them — essentially, hoping that you’ll find a rare or valuable card. You can also go out on the market and try to track down specific cards that have value, or that you believe have value. Perhaps they’re selling for under market rate, or you believe they’ll be worth more in the future than you’d pay for them now? In that case, you can make an investment and hope it pays off.

In effect, though, buying cards is really the main way to invest in sports cards. You could also look into buying fractional shares of certain high-value cards on some investment platforms, too.

Key Factors That Influence Card Value

A crucial factor when investing in sports cards is knowing what’s valuable and what’s not. There’s one simple rule of thumb to remember: Sports cards are worth what someone is willing to pay for them.

Sports card valuations are determined by a variety of factors, including their age and rarity. Developing a trained eye can help with your decision-making when trading investment sports cards.

Player Performance and Popularity

Player performance and popularity can make a difference in how much a sports card commands at an auction or in the trading market. A card featuring a high-profile player with an impressive list of career achievements is likely to have a higher valuation than the card of an average player.

Savvy collectors consider not just current but future popularity when deciding which cards to invest in. For example, they might buy up rookie cards for a number one draft pick if expectations are high that the player will have a stellar career.

Scarcity also factors in. Limited edition or autographed cards may hold more value and appeal for collectors if there are fewer of them in the trading market.

Card Condition and Grading

The card’s condition also factors in when determining what a sports card investment is worth. Cards that are in mint condition, for instance, generally have a higher value than a card that has some minor wear and tear.

It’s possible for sports card investors to have their cards professionally graded. Grading is the process of having a professional evaluate your cards to determine what they’re worth and rating them on a scale of 1 to 10. The higher the grade, the better the condition the card is in and the more it’s likely to be worth.

A perfect “10 card” would have:

•   Four perfectly-sharp corners

•   A correctly-centered image that is in sharp focus

•   No damage or wear to its original coating

•   No staining

•   No writing or stray in/pencil marks

Professional grading services know exactly what to look for, including how to spot fake cards which is one of the biggest risks associated with alt investments in sports cards.

Risks and Challenges in the Sports Card Market

Is collecting sports cards a good investment? Most investments carry some degree of risk and sports are no different.

If you’re interested in how to get into sports card investing it’s important to understand these risk factors:

•   Counterfeiting/fraud. Sports cards are a target for counterfeiting, which could put you at risk of making a bad investment if you can’t tell the difference between a fake and the real thing.

•   Inaccurate grading. You may rely on a pro grading service to tell you what your sports cards are worth, but it’s possible they’re valuation is off track. If the grader’s assessment is incorrect your cards could end up over or undervalued.

•   Volatility and unpredictability. The sports card trading market can be unpredictable and card valuations don’t always hold steady. If a player has a poor season, for instance, or gets traded to an underwhelming team, that could affect the value of your collectible cards and lead to a lower than expected rate of return.

Lastly, there’s the risk of simply getting it wrong. You might believe that a particular player’s card values are going to take off so you sink a chunk of money into buying them. Only, their career doesn’t go as planned or the market takes an unexpected turn and now you’re out the money that you’ve invested.

Recommended: Alternative Investment Definition

The Takeaway

You have different options for how to invest in sports cards, including buying cards at auction, trading through online marketplaces, or opting for digital versions with non-fungible tokens (NFTs). Regardless of your investing preferences, think about how much risk you’re comfortable taking on and what percentage of your portfolio you want to dedicate to sports card investments for the short and long term.

Invest in what matters most to you with SoFi Active Invest. In a self-directed account provided by SoFi Securities, you can trade stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, options, and more — all while paying $0 commission on every trade. Other fees may apply. Whether you want to trade after-hours or manage your portfolio using real-time stock insights and analyst ratings, you can invest your way in SoFi's easy-to-use mobile app.

FAQ

How important is card grading in sports card investing?

One of the first things you’ll hear about when researching how to start investing in sports cards is grading. Grading is what sets the standard for how much a sports card or another type of trading card is worth. There are numerous companies that offer grading services and it’s important to research them carefully to find a reputable grader to work with.

What sports typically have the most valuable cards?

Some of the most valuable sports card investments have historically been baseball cards, which makes sense since those were the first kind of trading cards to hit the market. Basketball and football cards can also be highly valuable if they belong to in-demand players. And surprisingly, rare Pokémon and other gaming cards can also command impressive prices.

What is the difference between a vintage and modern sports card?

Sports card collectors don’t always agree about what constitutes a vintage vs. modern card. For many collectors, the cutoff is 1980; cards produced before that year are vintage while cards produced after are modern. If you have a mixed collection of cards from different years, a grader can help you figure out which ones are vintage and which ones are not.

Photo credit: iStock/smodj

SOIN-Q326-038

Online banking offers a convenient way to manage your money. Plus, online banks typically offer attractive perks such as competitive rates on savings and no-fee checking accounts. Still, many consumers worry that online banks aren’t as secure, dependable, or customer-friendly as the big traditional players. Are they right to be concerned?

While all types of banks have pros and cons, many fears about online banks are actually based on misinformation. Below, we debunk five common myths about online banks and uncover some important truths about online vs. traditional banks.

Myth 1: Online Banking Isn’t Safe

Security is often the biggest concern about online banking, and in a world in which we’re constantly hearing of data breaches, that’s a valid consideration. But both online banks and traditional banks store your data digitally and are susceptible to data breaches.

That said, both online banks and traditional brick-and-mortar banks go to great lengths to protect your personal and banking information, including using encryption software (which blocks your accounts to unauthorized parties) and mult-factoring authentication (which requires you to enter unique personal information to access your account). Many online and traditional banks also offer 24/7 account monitoring, instant card freezes, and real-time alerts so you’re aware of any unusual account activity as soon as it happens.

There are also steps you can take on your own to keep your accounts safe (regardless of where you bank). These include choosing a unique user ID and password, not using public wifi when you access your accounts, and avoiding phishing attempts to get your banking information.

Myth 2: You Can’t Get Help From a Human

Many consumers like being able to walk into a physical location and speak to a real human when they need assistance. And that’s simply something online banks can’t offer. By nature, there are no brick-and-mortar locations because all customer service is virtual. But that doesn’t mean mobile banking doesn’t come with good customer service.

Some online banks offer phone-based customer service during specific business hours so you can speak with a human customer service representative in real time when there’s an issue or you simply want someone to walk you through setting up bill pay or making an online transfer. In addition, many offer 24/7 customer service via live online chat (with a human, not a bot, on the other end), as well as help via email. A lack of physical locations doesn’t necessarily equate with a lack of good customer service.

Recommended: How to Deposit a Check

Myth 3: It’s Hard to Access Money From an Online Bank

It’s true that you can’t visit a bank branch and withdraw money at a teller window with online banking. But online banks typically partner with wide ATM networks to offer customers a convenient way to withdraw cash at no cost from their accounts.

You can also access money in an online account by transferring it to an account at a different bank or using the bank’s bill pay function. If you have an online checking account, you can use your debit card for purchases and may be able to order checks. Some online banks also offer a peer-to-peer (P2P) payment service, so you can send money to friends and family directly from your bank account.

Myth 4: Online Banks Aren’t Insured

Like traditional banks, online banks are typically insured by the Federal Deposit Insurance Corporation (FDIC). This means your deposits are protected up to $250,000 (per depositor, per insured bank, per account ownership category) if the bank were to go out of business. Co-owners of joint accounts are each insured up to $250,000 for the total they have in joint accounts at an insured bank.

If you opt for an online credit union instead of an online bank, your money won’t be insured by the FDIC, but it will still be protected. Credit unions are covered by the National Credit Union Association (NCUA), which offers similar insurance.

Before opening an account at an online (or brick-and-mortar) bank, it’s always a good idea to make sure it’s insured. You can do this by using the FDIC’s BankFind tool or the NCUA’s Credit Union Locator tool.

Myth 5: The Big National Banks Offer Better Rates

You might assume that big banks offer the best deals due to their size and scale. But it’s more likely to be the opposite: Online banks typically beat out the major national banks when it comes to annual percentage yields (APYs) on savings accounts, with some offering 10 times the national average.

How do they do it? Online-only banks generally have lower overhead costs and can pass that savings to their customers in the form of higher-than-average yields. Many of these banks also offer better rates as a way to compete with the bigger players for customers.

In addition to better rates, online banks also tend to charge fewer and lower bank fees compared to the big traditional banks. Many online accounts don’t charge monthly service fees, for example, and some don’t charge overdraft fees, either.

Understanding Digital Banking Features and Limitations

Online banks may offer several advantages over traditional banks, including higher APYs on checking and savings accounts and lower (or no) fees. They also tend to outshine traditional banks when it comes to technical innovation, offering state-of-the art banking platforms and apps.

That said, digital banking does have its limitations. Here are some downsides to consider:

•   No branches: Since they lack physical locations, online banks aren’t able to provide customers a way to interact face to face with a teller or another bank representative. They also can’t offer services that require a physical location, such as getting a cashier’s check or renting a safe deposit box.

•   Cash that’s potentially harder to deposit: It’s not always as straightforward to deposit cash into an online bank account. You may need to deposit cash at a participating retailer for a small fee rather than at an ATM, for example, or use another option, such as depositing your cash into a traditional bank account and transferring it to your online bank account.

•   Fewer financial services: Unlike large traditional banks, online banks sometimes aren’t a one-stop shop. Some only specialize in a few types of accounts. While others offer a range of products and services, including credit cards and loans, they generally don’t have as many products and services as the biggest brick-and-mortar banks provide.

Recommended: Pros and Cons of Online Banking

The Takeaway

Online banks work very similarly to traditional banks. They just lack physical locations for conducting in-person services. They typically offer the same kinds of checking and savings accounts that you may find at brick-and-mortar banks. And since online banks don’t need to maintain and staff physical locations, they can often offer higher interest rates on both checking and savings. While some people may be concerned about the safety and security of online banks, it’s important to know that online banks have robust protections in place just like traditional banks.

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

FAQ

Is online banking safer than traditional banking?

Online banking and traditional banking are considered equally safe. Both online and traditional banks generally use robust security measures such as encryption, multifactor authentication, and fraud monitoring to protect customer accounts. In addition, both types of banks are usually insured by the Federal Deposit Insurance Corporation (FDIC), which means your funds will be covered (up to the insured limits) even if the bank were to go out of business.

Can I do everything online that I can do in a physical bank?

You can do nearly everything online that you can do in a physical bank, including opening an account, making transfers, paying bills, depositing checks, and managing your account. Many banks also offer one-on-one customer service via phone or online chat. However, certain services, such as obtaining cashier’s checks, notary services, or large cash withdrawals generally require visiting a physical bank.

How does online banking affect my privacy?

Information that is stored digitally (by an online or a traditional bank) could potentially have an impact on your privacy, as online information is susceptible to cyberattacks. However, reputable banks use strong encryption and cybersecurity practices to protect customer data. There are also steps you can take on your own to protect your accounts, including choosing a unique user ID and password, not using public wifi when accessing your accounts, and logging out of your account after every session.

Photo credits: iStock/AleksandarNakic

This content is for educational and informational purposes only. The products, services, or features discussed may not currently be available via the SoFi platform. Any references to third-party products, services, or companies do not constitute an endorsement, recommendation, or solicitation by SoFi. Readers should independently evaluate their options and consider their individual financial needs and circumstances before making any decisions. ©2026 SoFi Technologies, Inc. All rights reserved.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2026 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

SOBNK-Q326-169

Investing in alcohol stocks may be appealing to some investors, as alcohol is not only a consumer staple with steady demand, it’s often considered a recession-proof industry. That doesn’t necessarily translate into stock performance, of course, but it can be one reason that investors find alcohol stocks appealing.

Nonetheless, investing in alcohol stocks can have its drawbacks. Some investors may be turned off by the industry itself. And there are risks that can affect the alcohol industry, too, such as supply chain issues, or even political and societal changes. Don’t forget that during the Prohibition Era in the United States (1920 to 1933), it was illegal to manufacture, transport, or sell alcohol for consumption.

Overview of the Alcohol Industry

The alcohol industry is large, worth about $2 trillion as of 2026. Comparatively, the global pharmaceutical industry is worth about $634 billion as of 2026.

A Broad Sector

The industry itself consists of different types of companies and sub-industries. For instance, there are myriad types of alcoholic beverages, the companies that produce them, and the companies that distribute them.

Alcoholic beverages include beer, wine, ciders, spirits (hard liquor), hard seltzers, and more. Ready-to-drink (RTD) products are proving to be a growth area, with pre-made canned cocktails that combine different beverages and flavors with wines or spirits or ciders gaining market share.

The popularity of certain beverages tends to vary by region. Beer might be more popular among consumers in a place like Wisconsin, with its history of brewing, while wine may be more popular among drinkers in Northern California, owing to its focus on wine production.

Alcohol-Related Investments

The industry as a whole also depends on a network of alcohol-adjacent companies that might appeal to investors. In addition to brewers and alcohol producers, there are companies that distribute beverages or products. There are retail stores that sell them. And there are countless companies in between, too, that do marketing, product development, or other types of work for alcohol companies.

For investors interested in alcohol stocks, that means there’s plenty of opportunity to invest in the industry.

Consumer Staple or Luxury Goods?

Alcohol stocks, although a type of sin stock or vice stock, are generally considered a consumer staple. Because demand is generally steady for alcohol products, even in a recession, alcohol stocks have some of the qualities of other non-cyclical consumer goods like bread or shampoo.

However, premium and luxury alcohol segments tend to be highly sensitive to discretionary spending. During economic downturns, consumers may trade down to less expensive alternatives, which can negatively impact the financial performance of premium alcohol brands.

Types of Alcohol Stocks

There are many different types of stocks in the alcohol industry. Those include large, multinational corporations, small craft breweries or distilleries, alcohol marketing and distribution companies, equipment manufacturers, and more.

Large Multinational Corporations

The biggest corporations involved in the alcohol industry can encompass a variety of functions. Some, for instance, may produce alcoholic beverages and distribute them as well. But the main thing to know about companies in this category is that they tend to be publicly held stocks with larger market capitalizations – large- or mega-cap stocks – with branches all over the world.

Craft Breweries and Distilleries

Craft breweries and distilleries consist of stocks that are generally smaller, though many craft brewers have been absorbed into larger companies. But generally, these would likely be small-cap stocks in the alcohol production industry.

Alcohol Distribution Companies

Stocks of alcohol distribution companies would involve companies that move alcoholic beverages from one place to another — generally, from a company producing the beverages to the retailer or wholesaler selling them to businesses or the public.

In other words, these are companies involved in the alcohol supply chain, and can include packaging, shipping, and delivery companies.

Factors Influencing Alcohol Stocks

Since alcohol is a regulated substance, and that regulation differs from country to country (and from state to state), there can be a number of factors that influence alcohol stocks’ valuation from a legal perspective.

For instance, in some states, you can buy a six-pack of beer at a convenience store. In other states, that’s against the law; you’d need to buy beer at a designated alcohol retailer, like a liquor store or beer distributor. With that in mind, those rules and regulations can change, too, and that means that political or regulatory changes could potentially have an effect on alcohol stocks.

Economic Impacts

There are also economic factors to take into consideration. As noted, alcohol has sometimes been called a recession-proof industry, since consumption tends to be steady over time. But significant events, like a public health crisis, may dramatically increase or decrease consumption.

In addition, companies involved in the alcohol sector can and do feel the effects of the overall economy. So, if there’s an economic downturn of some kind, there’s a chance that these stocks could see their valuations affected as well.

Consumer Trends

Changing consumer tastes are also something that affects the alcohol industry. That includes the types of drinks that people are buying. Ciders and alcoholic seltzers have become popular in recent years, as an example, in addition to pre-made cocktails and other RTD products.

Demographics can also introduce new factors into the alcohol stocks market. For example, younger Americans (Gen Zers) are drinking less than previous generations — which is something that alcohol companies will need to take into consideration, unless the trend reverts.

Pros of Investing in Alcohol Stocks

For thinking about investing in stocks in the industry, there may be some potential upsides to adding alcohol stocks to your portfolio. Those might include the potential recession-resistant nature of these stocks, in addition to brand loyalty, and potential growth in emerging markets.

Steady Consumption

Like many consumer staples the consumption of alcohol tends to be steady, as mentioned above. In addition, there is some truth to the notion that consumers like to drink when times are good and also when times are tough. But it’s not necessarily true that these stocks will be safe havens during economic downturns.

Alcohol stocks may perform better than stocks in other categories during a recession, but there is no guarantee that will happen. This sector is subject to its own risk factors, including ingredient costs, consumer trends, political issues, and more.

Brand Loyalty and Pricing Power

Some consumers exhibit high levels of loyalty to certain brands of liquor, beer, and wine. In fact, research shows that alcohol is one category of consumer goods in which consumers tend to be highly loyal to certain brands.

That can be a good thing for investors to keep in mind, as brand loyalty may translate to sales – though that’s not always the case, nor does it guarantee stock performance.

Potential for Growth in Emerging Markets

There’s also the potential that alcohol companies could find traction, and revenue, in emerging markets. For instance, in recent years, it’s expected that countries like India, China, Brazil, and Mexico may see demand for alcohol beverages increase, which could lead to more sales for alcohol companies and possible market growth.

However, it’s important to bear in mind the inherent risks in any emerging market, which can include political or economic upheaval that may roil markets or impact local consumption of consumer goods.

Cons and Risks

While there are potential benefits to investing in alcohol stocks, there are drawbacks, too. Here are points to consider.

Regulatory and Legal Challenges

There are many local, state, and federal regulations that govern the production and sale of alcohol. Those rules differ from place to place, and can take a variety of forms: some dictate how and where alcohol can be sold, for instance, and in some places, there are certain times of the day or week where alcohol sales are prohibited.

In some cases, an entire town may be legally “dry,” meaning that alcohol cannot be sold there (but may be available in a neighboring vicinity).

Depending on the type of alcohol investments being considered, understanding the implications of local laws is important.

Changing Consumer Preferences

Also as discussed, consumer tastes wax and wane, and if some start moving away from drinking alcohol for one reason or another, there could be an effect on the industry at large, and investors. That doesn’t mean that alcohol companies can’t pivot, of course, but keeping up with current consumer demands can and will eat up resources, too, potentially affecting investors.

Competition and Market Saturation

There are myriad alcohol companies out there, big and small. No matter where you are, for example, you’re probably not too far from a bar, a store that sells beer, or some other way to get your hands on a drink.

In other words: the alcohol market is mature, broad, and highly competitive. While organic growth may potentially slower saturated markets, companies often seek expansion through consolidation, acquisitions, and innovation in new categories.

Top Alcohol Stocks on the Market

While there are many alcohol stocks on the market, here are some of the biggest alcoholic beverage companies on the markets, by market cap:

•   Kweichow Moutai: A Chinese beverage maker with a market cap of $242.6 billion, and trades under the ticker “600519.SS” on the Shanghai Stock Exchange.

•   Anheuser-Busch Inbev: The maker of popular brands such as Budweiser, Corona Extra, and Michelob, and trades under the “BUD” ticker. Its market cap is $152.7 billion.

•   Diageo: Makes spirits such as Captain Morgan, Johnnie Walker, and Smirnoff and trades under “DEO.” Its market cap is $51 billion.

•   Heineken: Makes Heineken, Amstel, and more, and has a market cap of $46.7 billion. It trades under the “HEINY” ticker.

•   Constellation Brands: Trades under the “STZ” ticker, and has a market cap of $22.5 billion. It owns brands such as Modelo, Corona, Pacifico, and many others.

Data as of August 19, 2026 from CompaniesMarketCap.

How to Invest in Alcohol Stocks

As far as actually investing in alcohol stocks goes, it’s not much different than investing in any other type of stock. There are a few ways to add alcohol stocks to your portfolio.

Direct Stock Purchase

You can buy alcohol stocks directly and add them to your portfolio, for starters. That means using an existing brokerage account, or opening a new one through a brokerage, choosing the specific alcohol stocks you want to buy, and purchasing some shares (read more about the difference between shares vs. stocks).

ETFs and Mutual Funds Focused on Alcohol

Investors can also add alcohol stocks to their portfolios by purchasing certain ETFs (exchange-traded funds) or mutual funds.

These types of funds can focus or specialize in specific industries, such as the alcohol sector. Investing in mutual funds or ETFs may also be a way to hedge risk when investing in the sector, as funds tend to have a degree of built-in diversification. (Though diversification doesn’t fully protect investments in a declining market or guarantee profits). Not that alcohol stocks are high-risk investments necessarily, but for more cautious investors, funds may be worth checking out.

Analyzing Alcohol Stocks

Doing your homework before buying stocks is important if you’re hoping to maximize your returns, or at least not lose your initial investment. While there’s no guarantee that you won’t, you can do some basic research and due diligence on the stocks that you’re thinking of investing in.

That may include doing some fundamental research, such as checking out the financial metrics and earnings reports of specific companies. It can also involve looking at the overarching trends and risks affecting the industry, too.

Ethical Considerations

There may also be ethical concerns that investors need to contend with as well when thinking about investing in alcohol stocks. Alcohol is a dangerous substance — it’s addictive, associated with diseases and negative health effects, and more. There’s a reason that it’s regulated.

As such, some investors may not be comfortable with adding alcohol companies to their portfolios.

The Takeaway

Investing in alcohol stocks may be a way to diversify your portfolio, but investors should be aware that there are some unique risks (and potential benefits) to investing in the sector. There may also be ethical considerations investors want to think about as well, though that’ll depend on their individual preferences.

Invest in what matters most to you with SoFi Active Invest. In a self-directed account provided by SoFi Securities, you can trade stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, options, and more — all while paying $0 commission on every trade. Other fees may apply. Whether you want to trade after-hours or manage your portfolio using real-time stock insights and analyst ratings, you can invest your way in SoFi's easy-to-use mobile app.

FAQ

How do economic downturns typically affect alcohol stocks?

Economic downturns often impact all equities, including alcohol stocks. Consumers often continue to purchase alcohol no matter the prevailing economic conditions, which means alcohol producers may face less demand volatility than purely discretionary sectors. However, they are not immune to market downturns, cost-of-capital issues, or shifts in consumer spending toward lower-margin products.

What are the main subsectors within the alcohol industry for investors?

Investors may consider investing in companies that produce the main types of alcoholic beverages, such as beer, wine, or spirits.

How do changing consumer preferences impact alcohol stock performance?

Consumers’ preferences can and do change, and that may affect alcohol stock performance in that sales may dip or increase. Further, if companies need to pivot into different products, that may eat up additional resources, affecting stock performance as well.

Photo credit: iStock/mihailomilovanovic

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Cannabis ETFs are funds that concentrate their holdings in the cannabis or marijuana industry. Investing in a single weed ETF could allow you to gain exposure to dozens of cannabis-related companies, without having to buy individual stocks. If you’re interested in cannabis investments, cannabis ETFs may add diversification to your portfolio, since exchange-traded funds or ETFs can offer exposure to a collection of investments in a single basket.

Learn more about ETFs as investments, and the specifics of investing in the marijuana industry.

What Are Cannabis ETFs?

Cannabis ETFs are exchange-traded funds that invest in companies that are connected to the cannabis industry. A marijuana ETF works the same way as any other type of ETF, in terms of how it’s traded, as they can be bought and sold on the stock market. As for how they work, ETFs pool money from multiple investors and trade on an exchange. All that sets a cannabis ETF apart from other ETFs is what it invests in; in this case, the cannabis industry.

There are only a handful of cannabis ETFs that trade in the U.S. which suggests that there may be room in the market for newcomers. The world’s first marijuana ETF, Global X Marijuana Life Sciences Index (HMMJ) was launched in Canada in 2017. The first U.S.-focused cannabis ETF landed in 2020, with the introduction of AdvisorShares’ Pure US Cannabis ETF (MSOS).

Marijuana legalization efforts have spurred interest in cannabis investments. At the time of writing, 24 states and the District of Columbia have legalized marijuana for recreational use. Sixteen states have legalized cannabis for medical use. Under federal law, marijuana remains illegal.

Recommended: Stock Market History

Understanding the Cannabis Industry

The cannabis industry is multilayered and diverse. Cannabis products are typically categorized according to their purpose and use.

Medical Cannabis

Medical marijuana is used to treat pain and symptoms of illness. It’s derived from the Cannabis sativa plant, which contains chemicals and active compounds. These chemicals, which include delta-9 tetrahydrocannabinol (THC) and cannabidiol (CBD), produce reactions in the brain and body that may help to ease pain or create psychoactive effects.

Doctors may prescribe medical marijuana for a variety of conditions, including:

•   Glaucoma

•   Crohn’s disease

•   Epilepsy/seizures

•   Multiple sclerosis

•   HIV/AIDS

•   Alzheimer’s disease

•   Amyotrophic lateral sclerosis (ALS)6

It can also be used as a form of pain management for people suffering from other chronic or terminal conditions.

Recreational Cannabis

Recreational or adult-use cannabis is cultivated for non-medical purposes. In terms of its composition, the underlying chemicals are the same but the strength of each one can vary. With recreational marijuana, there may be higher amounts of THC present. THC is the chemical that produces a “high” when using marijuana.

There’s also a difference in how recreational vs. medical marijuana is sold. Both can be sold at dispensaries but you may need a state-issued cannabis card to purchase the medical version. With recreational marijuana, you may just need a state-issued ID card proving that you’re old enough to make the purchase. Note that the laws regulating how, when, to whom, and even if any type of cannabis is sold varies from state to state.

Hemp and CBD Products

Hemp is any part of the Cannabis sativa plant that has a THC concentration of no more than 0.3%. CBD is derived from hemp products and is the second most active ingredient in marijuana.

The legality of hemp and CBD products varies from state to state. Legality typically ties into the concentration of THC present. Again, some states are more stringent than others.

Types of Companies in Cannabis ETFs

Cannabis ETFs vary in the underlying investments they hold. Some marijuana ETFs invest in a range of companies across different segments of the industry. Others choose to target a specific niche.

Typically, cannabis investing extends to companies that:

•   Grow, distribute, or sell marijuana (medical or recreational)

•   Conduct research into the chemical composition of marijuana and its range of uses

•   Have an ancillary connection to the industry or have substantial exposure to marijuana stocks

•   Marijuana ETFs may have many underlying holdings or few; reading the ETF’s prospectus can give you a better idea of how investments are concentrated.

For example, Cambria Cannabis ETF (TOKE) offers broad exposure that includes cannabis growers, cannabis retailers, and cigarette manufacturers. Amplify Alternative Harvest ETF (MJ), meanwhile, is largely focused on cannabis pharmaceutical companies.

Advantages of Investing in Cannabis ETFs

Since this is a relatively new asset class, there are some risks, but if your ETF picks perform well you could realize solid returns with marijuana investments.

Cannabis is a growing industry and investors have the opportunity to get in on the ground floor of new companies as they emerge. As legalization efforts expand, there may be more demand for growers, distributors, sellers, and pharmaceutical companies.

In terms of how much of your portfolio to invest in cannabis ETFs, it depends on your risk tolerance and diversification needs. You may start with a smaller allocation and increase it over time as you get comfortable with the cannabis ETF market and its risks. Keep in mind, however, that diversification can’t ensure profits or fully protect investments in a declining market.

Risks Associated with Cannabis ETFs

All investments have some risk, but cannabis ETFs tend to be more volatile. The market’s relative newness makes it more susceptible to pricing and trading fluctuations. Beyond that, there are legal and regulatory considerations to keep in mind.

Here are some things to weigh before investing in a marijuana ETF.

Regulatory and Legal Risks

Cannabis ETFs may be subject to greater scrutiny from the Securities and Exchange Commission (SEC) due to the nature of the underlying investments and the overall legality of marijuana. Weed ETFs must adhere to regulatory guidelines regarding the use of a custodian to hold assets, which can sometimes spell trouble if a fund is unable to find a willing custodian.

Aside from that, the legality of marijuana, hemp, and CBD products is not uniform across all 50 states and the various territories held by the U.S. For that reason, it’s important to do your due diligence to understand what you’re really investing in when you buy a cannabis ETF.

If a fund holds investments in cannabis companies that are operating illegally, that could put the entire ETF in jeopardy. Aside from that risk, certain jobs, including government jobs, may revoke your security clearance if you invest in marijuana stocks or ETFs.

Popular Cannabis ETFs in the Market

There are a handful of cannabis ETFs available for trade in the U.S., and those include:

•   AdvisorShares Pure US Cannabis ETF (MSOS)

•   Amplify Alternative Harvest ETF (MJ)

•   Cambria Cannabis ETF (TOKE)

•   Roundhill Cannabis ETF (WEED)

•   AdvisorShares MSOS Daily Leveraged ETF (MSOX)

Some of these ETFs have more than a dozen holdings while others have less than ten. They also vary with regard to dividends, returns, and expense ratios.

Factors to Consider When Choosing a Cannabis ETF

Choosing a cannabis ETF typically starts with researching and evaluating what type of cannabis companies you’d like exposure to. Once you narrow that down, you can then compare specific metrics for different funds, including:

•   Expense ratio. An expense ratio represents how much you’ll pay to own the fund annually. Typically, the lower this number is, the better.

•   Holdings. Holdings are what an ETF invests in. You’ll want to look at what a cannabis ETF owns and how much of the fund’s money is concentrated in each investment.

•   Trading volume and liquidity. Trading volume and liquidity can give you an idea of how in-demand a marijuana ETF is and how easy (or difficult) it will be to sell it when you’re ready to unload it.

It’s also helpful to consider the minimum investment required, if any, and the share price of the fund. If you have a limited budget for cannabis investing you’ll have to decide whether you want to spread your money across multiple funds or concentrate all of it in a single fund.

Recommended: How to Analyze a Stock

How to Invest in Cannabis ETFs

The simplest way to invest in cannabis ETFs is through a brokerage. If you don’t have a brokerage account, you can open one and start investing online. Before you do, take time to review the brokerage’s investment options to make sure you’ll have access to marijuana ETFs. Then consider the minimum account deposit required, if any, and the fees you’ll pay to trade.

Once your account is open and funded, you can begin buying cannabis ETF shares. If you skipped the previous step and haven’t researched any funds yet, you’ll want to backtrack and do that before you get started with trading.

Recommended: Shares vs. Stocks: What’s the Difference?

Tax Implications

ETFs held in a brokerage account are subject to capital gains tax if you sell them at a profit. There are two capital gains tax rates:

•   Short-term capital gains apply when you hold an investment for less than one year. The rate is equivalent to your ordinary income tax rate.

•   Long-term capital gains apply when you hold an investment for longer than one year. Capital gains tax rates range from 0% to 20%, with some exceptions.

If you’re trading cannabis ETFs it’s to your advantage to consider how selling them at a profit might affect your tax situation. You might consider holding them in a Roth IRA vs. a traditional brokerage account, which allows for tax-free distributions in retirement. Note, however, that you may incur a tax liability in some circumstances.

Investing in cannabis stocks or ETFs can be complicated because of the potential legal and tax considerations involved. You may consider consulting with a legal and tax professional who can advise you on your specific circumstances.

The Takeaway

Cannabis ETFs may help diversify your investment portfolio but it’s important to know the pros and cons. Specifically, there may be some legal and ethical concerns related to cannabis ETFs that investors should be aware of. It is also a relatively new industry, too, which means it may grow in the years ahead, but could be more volatile than other investments, exposing investors to a higher risk of loss.

And if you’re brand new to the market, learn how to invest in stock and build a portfolio from the ground up. You can explore different types of stocks, including marijuana stocks, to decide which investments align with your needs and goals.

Invest in what matters most to you with SoFi Active Invest. In a self-directed account provided by SoFi Securities, you can trade stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, options, and more — all while paying $0 commission on every trade. Other fees may apply. Whether you want to trade after-hours or manage your portfolio using real-time stock insights and analyst ratings, you can invest your way in SoFi's easy-to-use mobile app.

FAQ

What sectors of the cannabis industry do these ETFs typically cover?

Cannabis ETFs can cover all sectors of the industry, including growers and distributors, pharmaceutical companies and researchers, and related businesses, such as tobacco manufacturers. Marijuana ETFs may offer exposure to companies that deal in recreational marijuana, medical marijuana, and/or hemp and CBD products.

How do regulatory changes affect cannabis ETFs?

Regulatory changes can affect demand for cannabis ETFs if legal changes make marijuana more accessible. On the other hand, regulators could add hurdles to marijuana investing by implementing changes that require cannabis ETFs to meet more stringent guidelines.

Are cannabis ETFs more volatile than traditional ETFs?

Cannabis ETFs may be more volatile than traditional ETFs since the industry is so new and there are still plenty of questions about legality and regulatory requirements. Knowing that going in can help you decide how much of your portfolio to commit to marijuana ETFs if you’re seeking to add possible diversification while still managing your risk exposure.

Photo credit: iStock/panida wijitpanya

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