A mortgage loan officer, also called a mortgage loan originator, helps borrowers determine if they qualify for a home loan, and, if so, aids homebuyers in finding the right type of mortgage and best interest rate and terms for them.
Throughout the home-buying process, your mortgage loan officer will review your information, collect necessary documentation, and track important milestones leading up to closing.
Mortgage loan officers typically work for a specific bank, credit union, or mortgage company.
In this piece, we’ll discuss what a mortgage loan officer is and does, how to find a mortgage loan originator, the differences between a mortgage broker and a loan officer, and the qualifications of a mortgage loan officer.
Key Points
• Mortgage loan officers assist homebuyers with loan qualification and the application process.
• Officers review applications, set loan terms, and ensure all deadlines are met.
• If working for a specific lender, officers offer a limited range of loan options.
• Brokers, for a fee, help find the best deals from various lenders.
• Qualifications including education, licensing, and registration, may depend on where the officer is working.
What Is a Mortgage Loan Officer?
The mortgage loan process can be nerve-wracking, even if it’s not your first go-around.
A mortgage loan officer serves as a guide to home loans. This individual, sometimes licensed and certified, helps potential homebuyers determine if they qualify for a loan and, if so, which type of home loan is right for them.
A mortgage loan officer is a type of mortgage loan originator (MLO), a regulatory term. An MLO may also refer to a company that does mortgage originations, like a mortgage broker.
What Does a Mortgage Loan Officer Do?
A mortgage loan officer has two main responsibilities:
1. Accept and review mortgage loan applications from prospective homebuyers
2. Work with borrowers to determine loan terms, including interest rates
Of course, mortgage loan officers’ day-to-day duties include much more than these two tasks. In a given week, they might meet with potential borrowers to review their options and explain basic loan definitions, work with underwriters to process loan applications, coordinate with home appraisers to ensure a house is worth what a borrower is offering, and monitor important deadlines for various clients to ensure everything is moving along correctly ahead of closing.
Mortgage loan originators charge a fee for their services. Homebuyers can typically expect to pay this fee as part of their closing costs.
Do you need a mortgage loan officer for a home purchase or refinance? Here are some tips for finding a mortgage lender and loan officer, whether you’re an experienced or first-time homebuyer.
Reading Reviews
Reading about other borrowers’ experiences with particular loan officers and lenders can help weed out the ones you should avoid. Sites like the Better Business Bureau are good resources for customer reviews.
Asking Family and Friends
Online reviews aren’t your only source for feedback. You can talk with friends and family who have recently purchased a home to see if they would recommend their loan officer. If you belong to special groups on social media, like a neighborhood group, you can survey a larger group for recommendations for a mortgage loan originator near you.
Talking with Your Real Estate Agent
Real estate agents work closely with a wide range of loan officers. Your agent may be able to recommend a mortgage loan officer with a good reputation.
Shopping Around
Whether you’re interested in a local bank or an online lender, you have multiple options available. Researching multiple lenders online can help give you an idea of the right mortgage loan originator for you.
Interviewing Multiple Mortgage Loan Officers
When you have narrowed down your list, it’s a good idea to interview a few mortgage loan officers. If you let them know that you’re considering multiple options, they may even feel incentivized to offer you a better deal.
Checking Their License
In some cases, mortgage loan officers must receive formal education, register with the government, pass a licensing test, and take continuing education classes to maintain their license.
Mortgage loan officers at covered financial institutions (those that are highly regulated) are not required to be licensed; they only need to be registered.
A loan officer typically works for a specific bank or lender and can thus only offer you loan options from that institution. At bigger banks, you may only be able to access their loan options through their own mortgage loan officers. Working directly with a loan officer may yield discounts on closing costs or access to better rates.
A mortgage broker, on the other hand, does not directly lend you money. Instead, for a fee, brokers shop around to find you the best deal given your financial situation (credit score, down payment, income, etc.).
Because brokers aren’t tied to a specific lender, they might be able to find you a better deal. But brokers do not have access to every lender, so you still might be missing out on the best deal available.
The fees charged by mortgage brokers may be higher than those charged by direct lenders. If you’re deciding whether to work with a broker or direct lender, ask about all the fees associated with loan generation.
What Are the Qualifications to Become a Mortgage Loan Originator?
MLOs may follow multiple career paths, each of which may require different levels of education and licensure.
Education
At a minimum, MLOs need to be at least 18 years old with a GED. Many officers at least obtain a bachelor’s degree, often in business, finance, or mathematics.
License vs. Registration
If you wish to work independently, for a broker, or for a nonbank, you must obtain licensure. A license is also a value proposition to potential homebuyers: It tells them that you have passed a difficult test and commit to continuing education.
If you work for a “covered financial institution,” you will not be required to obtain a license. You’ll simply need to register every year. The financial institution that employs you will likely coordinate this.
To earn your MLO license, you will need to:
• Complete 20 hours of courses, as required by the NMLS.
• Take and pass a state license test.
• Pass the SAFE MLO test. (SAFE stands for the Secure and Fair Enforcement Act, which established guidelines for MLOs after the subprime mortgage debacle, which contributed to the global financial crisis in 2008.)
• Keep up with NMLS requirements, including registration and continuing education.
Characteristics
Beyond the registration or license, a good mortgage loan officer will typically need the following qualities:
• Good with numbers
• Interpersonal skills
• Strong decision-making and organization
• An eye for detail
The Takeaway
A mortgage loan officer helps potential homebuyers find a fitting mortgage, apply for the loan, and meet deadlines. You can interview several mortgage loan originators to see what they offer.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
SoFi Mortgages: simple, smart, and so affordable.
FAQ
What are the job responsibilities of a mortgage loan officer?
A mortgage loan officer reviews mortgage loan applications and determines which loans and rates to offer potential homebuyers. The officer works with underwriting on loan approval, then helps the homebuyer through the process until closing.
What is the difference between a loan officer and mortgage broker?
A loan officer, aka mortgage loan originator, typically works for a lender and has access to the best deals of that particular lender. A mortgage broker helps homebuyers shop for the best deal, though they don’t have access to every possible loan.
How do you find a mortgage lender?
To find a mortgage lender, it’s a good idea to read online reviews, ask friends and family for recommendations, talk to your real estate agent about a referral, and shop around online.
Photo credit: iStock/Paperkites
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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Hierarchies are everywhere, including in the mortgage world. Many people have a subordinate mortgage in the form of a home equity line of credit (HELOC) or home equity loan.
A subordinate mortgage is secured by your property but sits in second position, if you have a primary mortgage. In the event that an owner defaults and the property moves to foreclosure, the primary mortgage would be paid from the proceeds of the foreclosure sale before the subordinate mortgage. Note: SoFi does not offer piggy-back loans, which are a type of subordinate mortgage. It does, however, offer a HELOC and a home equity loan.
Here’s what you need to know about subordination and why it matters.
• A subordinate mortgage is secured by property and ranks below a primary mortgage in priority for repayment upon default.
• Mortgage subordination ensures order of payment in foreclosure, with primary mortgages paid first.
• Subordinate mortgages include home equity lines of credit and home equity loans, which are riskier for lenders.
• Subordination clauses in mortgage agreements confirm the priority of the primary mortgage over subsequent liens.
• Refinancing a primary mortgage may require a subordination agreement from the second mortgage lender to maintain order.
What Is Mortgage Subordination?
Mortgage subordination is the process of ranking debts tied to your home in the order that they need to be paid in the event of a foreclosure. Whichever mortgage lien is recorded first usually has higher priority than those that are recorded later, but depending on state law, property tax liens, homeowners association (HOA) “super liens,” and mechanic’s liens may have priority over previously recorded liens.
In the event of a foreclosure, a second mortgage is only paid if there are funds left over after paying the primary mortgage.
Lenders that make second mortgages — also called junior mortgages, second liens, or junior liens — typically allow borrowers to tap only a portion of their home equity to help ensure that they will get paid in the event of a foreclosure.
And a subordinate mortgage represents a higher risk to the lender, so borrowers will likely see higher rates than they would be offered on a primary home mortgage loan.
First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.
A mortgage subordination clause is typically included in the legal documents of the primary mortgage holder.
The subordination mortgage clause states that all other loans made using the property as collateral are subordinate to the primary mortgage, now and in the future.
What Is a Subordinate Lien?
A lien is a claim against your property. Generally, there are voluntary mortgage liens, such as mortgages you take out, and involuntary liens, like judgment, tax, HOA, and mechanic’s liens.
A subordinate lien is a claim against your property that usually can only be paid after the primary lien has been paid.
How Does a Mortgage Become Subordinate?
When a mortgage is subordinate to another, it simply means that the lender of the subordinate mortgage will get paid only after the senior lienholder is paid.
Again, mortgages are typically ranked in the order they are originated and recorded in county land records. The primary mortgage is first, and a second mortgage is subordinate because it came after.
If a property is refinanced, the situation changes.
Subordinate Mortgages and Refinancing
If a homeowner has two mortgage loans and wants to refinance the first mortgage, most refinancing lenders will ask the second mortgage lender to sign a subordination agreement to stay in second position after the refinance.
If the second lienholder balks at subordinating that loan, you may have enough equity to apply for a cash-out refinance and use the extra money to pay off the second mortgage. Or you could pay off the second mortgage with cash on hand.
This mortgage calculator can help you run the numbers to see if refinancing is right for you.
Loan modification is a mortgage relief program in which the terms of the loan are changed so that the homeowner can better meet the monthly payment requirement.
Homeowners who anticipate a permanent change in finances, or are exiting mortgage forbearance but don’t qualify for refinancing, can ask for mortgage modification.
If you have a HELOC or home equity loan and you’re struggling to make the payments, the lender may be willing to modify the credit line or loan: lowering the rate, extending your repayment term, or reducing your principal balance.
The Takeaway
Though lenders are more concerned about subordinate mortgages than you may be, you may want to know how second mortgages and other liens may affect refinancing your primary mortgage.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
SoFi Mortgages: simple, smart, and so affordable.
FAQ
What type of mortgage is subordinate?
If a homeowner has a first mortgage, home equity lines of credit and home equity loans are examples of subordinate loans. They will be paid second in the event of a foreclosure or cash sale.
Is a subordinate mortgage a second mortgage?
Yes. A second mortgage is a subordinate mortgage because it came after the primary mortgage.
What is subordinate financing?
Subordinate financing is a junior loan secured by an asset that can be sold if the loan is unpaid for a specified amount of time. Interest rates and terms can be more favorable than those of unsecured loans but not as favorable as those for a first mortgage.
How long does it take to subordinate a loan?
On primary loans, subordination is included in the contract. On a subsequent refinance when there is a junior (or subordinate) mortgage, the amount of time it will take to reach a subordination agreement will depend on the lenders involved, but it can often be done in 25 business days.
Photo credit: iStock/wutwhanfoto
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
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.
²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945. All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.
A joint credit card can impact each cardholder’s credit positively or negatively, depending on how the account is managed.
Opening a joint credit card with someone you trust — meaning a spouse, partner, trusted friend, or family member — can seem like a good idea, but it’s important to be aware that you’re both 100% financially responsible for paying off the balance on the card. Plus, you both share privileges of making changes to the account, earning rewards, and using the card much the way you would as a primary cardholder of a solo account.
Learn more about joint credit cards and their pros and cons.
Key Points
• Joint credit card accounts involve shared responsibility and privileges.
• Usage determines if each cardholder’s credit is positively or negatively impacted.
• If credit is managed responsibly, a joint card can build credit.
• Sharing a credit card can cause personal conflicts over financial issues.
• Trust and financial reliability of the co-account holders are crucial before opening a joint account.
What Are Joint Credit Cards?
Just as the name suggests, a joint credit card is one that permits two users to share a single credit line. In turn, as primary cardholders, each individual is able to make purchases on the card, as well as update and manage account information. Plus, they’re each 100% responsible for paying off the card balance.
When applying for such a card, both individuals’ credit scores, and credit histories are reviewed. So if you both have strong credit scores, it could boost your odds of getting approved for a credit card with higher credit limits and favorable rates, terms, and perks.
But what might happen when one of you has a lower credit score? In that case, it could potentially hurt the odds of your getting approved for a credit card. Or it might lead to your being offered less favorable rates, terms, and lower credit limits. However, it could benefit the person with the lower score, as they’re piggybacking off the co-applicant’s higher credit score.
How Do Joint Accounts Work for Credit Cards?
As mentioned, both people will need to apply for a credit card. This means that the credit card issuer will review your respective credit scores and profiles. You both are equally responsible for paying off the balance on the card, and you each also have full rights to manage and make changes to the account. Plus, you can each make credit card charges, swiping or tapping at will.
A common misconception is that if you share a joint credit card account, your credit histories and scores will be merged. Not at all: Credit scores will always be looked at on an individual basis. In other words, the credit card payments on joint accounts will be reported to the credit bureaus, and this will be reflected on each user’s credit history.
How you manage a joint credit card account is largely up to you and the co-owner on the account. While you both have full privileges to the account and can make changes, do you want to touch base before making any changes? Do you want to establish a monthly spending limit? It can be wise to agree to how you will use the account and what guardrails you may want in place before applying.
As for payments, you have decisions to make about who pays the bill. For instance:
• You might decide it’s best to have one co-owner make payments and have the other person pay them back.
• You could alternate making payments. That is, one account holder pays the January bill; the other takes care of February, and so forth.
• Another payment guideline could be that you tally who bought what during each billing cycle and have each person be responsible for their fair share.
Impact of a Joint Credit Card on Your Credit Score
Joint accounts can affect your credit score. Here are a few scenarios to consider:
• As all credit card payments on a joint account are reported to the credit bureaus, if you stay on top of payments, a joint account can help establish your credit. They can also help build your credit history.
• On the flip side, if you fall behind on payments or the account goes to collections, that can negatively impact your credit scores. Debt gone to collections will stay on your respective credit reports for seven years.
• Another way joint credit cards can impact your credit is credit utilization. If you run up a high balance and are using close to your credit limit, then it could depress your score. But if you keep a low credit usage ratio, then it could help establish or build credit from scratch.
• Opening any credit card can affect your credit card history, which is another factor that plays into your credit score as tracked by the three credit bureaus.
Open too many credit cards in a short time period, and that may not be a positive thing; it looks as if you are trying to quickly access a lot of credit. But if you open a joint account and stay in good standing, it can lengthen each of your credit histories, which can be good.
Joint Credit Card vs Authorized User vs Cosigner
You might’ve heard the terms “authorized user” and “cosigner” tossed around when considering credit cards. While they both imply a level of joint usage on a credit card, they actually mean very different things.
• An authorized user is a person you add to your account. They can use the card to make purchases. However, you remain the account holder and are fully responsible for paying off the card. And as the account holder, you are the only person authorized to manage and make changes to the account.
Your credit card payments are also reported on the authorized user’s credit file. So if you stay on-time with your debt payoff, this could establish or build your authorized user’s credit score.
• A cosigner is someone who agrees to share financial responsibility on a credit card account. If you have a low credit score or are building credit from scratch, a lender will take into consideration the cosigner’s credit. A cosigner’s strong credit could help you get approved for a credit card you might otherwise not be granted. Furthermore, should you fall behind on payments, the cosigner is financially responsible for your paying off the balance.
Benefits of Joint Credit Card Accounts
Here’s a look at some of the advantages of having a joint credit card account:
• Can help you land better credit card offers. If you both have strong credit scores, then it could potentially improve the chances of getting credit cards with higher credit limits and better terms and rates.
Should one of you have a lower credit score, it might help that person get approved for a better credit card.
• Shared financial responsibility. If both co-owners of the credit card account are responsible and do their share to pay off the balance, it can help you stay on top of payments.
• Streamlines bills. Instead of having two separate credit cards, putting both people’s transactions on a single account could simplify payments. You have one fewer bill to manage.
• Can help build credit history. If one applicant is starting from scratch in terms of building a credit history, a joint account can help them establish themselves if payments are made on time and the credit utilization is kept low.
Disadvantages of Joint Credit Card Accounts
Now, consider the potential downsides of a joint account:
• Shared financial responsibility. This is one of those “could be a pro, could be a con” factors. Why’s that? Well, if one person is doing most of the spending, you’re both on the hook for making payments. This could potentially get complicated if one person isn’t pulling their weight, financially speaking.
• Potential personal complications. Should your relationship change or you end up fighting over transactions and other financial matters, a joint credit card could wind up being a difficult thing. Also, having a shared account could lead to each of you scrutinizing one another’s spending habits, for better or for worse.
• Confusion over who pays for what and when. Even if you set up some basic guidelines, you might find yourself in a quandary as to who pays for what. Or maybe one of you overspends and it becomes challenging to pay off the balance or even the minimum payment due. A joint credit card could become a source of stress or arguing in this way if you can’t develop a good, fair system for responsible usage and timely payments.
Factors to Consider Before You Open a Joint Account
Before making a decision on whether to open a joint credit card account, you’ll need to decide on how doing so can benefit both parties. It can be wise to work through the following points:
• Can a joint credit card help boost the odds of getting a credit card with better rates, terms, and more attractive perks? How can it help build both people’s credit histories?
• Another important consideration is the payment arrangement. Who is responsible for making the payments? Or will you set it on autopay and link it to one person’s account? Who will be responsible for going through each billing statement and figuring out which transaction belongs to which user?
• If you’re sharing a joint account with someone, it might be a good idea to have a savings account that serves as a cash cushion. You could each contribute a small amount every week, so it’s there in case money gets tight and you need help covering a credit card bill.
Do You Trust the Joint Account Holder?
As a joint credit card can impact your credit and financial situation, you likely need to truly trust the other party involved. If you’re relying on the other person to make payments on your behalf, can you count on them to do so? Also, it’s important that both parties are in a financially sound place where they can cover their share of the bill.
You also want to feel reassured that the co-account holder isn’t the type to splurge and put an extravagant purchase on the card. For instance, if you usually put, say, $250 a month on your credit card, you will likely want to know how much the other person usually rings up, as well as if they ever go buying sprees.
Are There Other Options to Consider?
Understanding exactly how a joint credit card works, what your respective responsibilities are, and how it impacts your finances and credit is important.
If a joint credit card doesn’t seem like the right fit, you can look into alternatives. These include keeping separate credit cards and possibly, if one person is building their credit from scratch, using a secured credit card.
Or the individual with a stronger credit history could add the other as an authorized user on their credit card account, as described above.
Unlike an authorized user, where you can simply remove someone from your account, you usually can’t remove one co-owner on a joint credit card. Typically, you need to close the account entirely.
Either person has the power to close the account. However, both parties will be responsible for making payments until the balance goes to zero. So, you’ll likely want to have a discussion before doing so. When would be a good time to close the account, and how will you go about handling paying off the remaining balance? Communication is key to making sure that closing the account doesn’t become a difficult situation.
The Takeaway
Opening a joint credit card can impact your credit, both positively and negatively. Typically, both applicants’ credit histories will be reviewed when seeking one of these cards, and each party, if given this kind of access to credit, will have full use of the account and full responsibility for the balance. If handled well, this can help establish and build your credit. If handled poorly, it can negatively impact your credit.
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.
🛈 SoFi does not currently offer joint credit cards, but it does offer authorized users on its credit cards.
FAQ
How do shared finances affect my credit rating?
Sharing your bank accounts and budgets doesn’t inherently impact your credit rating. But when you open a joint credit card account, it can impact your credit histories, credit history length, and credit usage. With both parties responsible for the balance, it’s wise to think carefully about this kind of account. Another option is to be an authorized user on someone’s account who makes on-time payments and keeps their credit usage low.
Do both users on a joint credit card have the same credit score?
While both users on a joint credit card can be affected by the payment history and credit usage on the joint account, credit histories are always on an individual basis.
In other words, there’s no such thing as a shared credit account, and many factors go into someone’s credit score. So having a joint credit card doesn’t merge your scores or mean you’ll have the exact same score.
Is it advisable to open a joint account with my friend?
While you can open a joint credit card account with a friend, whether it’s a good idea depends on your financial habits and the level of trust between you two. Can they be trusted not to overspend and to do their part in paying off any credit card balance? A lot of discussion will need to take place before making this decision.
Photo credit: iStock/Jelena Danilovic
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 content is provided for informational and educational purposes only and should not be construed as financial advice.
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 Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®
While checks are not as popular as they once were, there may still be times when you have one of those rectangular pieces of paper in hand and want to have cash instead. Perhaps your great aunt Sally sent you a birthday gift or you received a refund for an overpayment from a service provider via check. The question is, where can you cash it?
Unfortunately, you can’t cash a check at any bank. You’ll likely need to go to a branch of a bank where you have an account or to the bank that the check was drawn on. There are also other places where you can cash a check, including retailers and stand-alone check cashing services. Learn the full story so you can complete this process as efficiently as possible.
Key Points
• Cashing a check at any bank depends on factors like bank policies, check type, and account status.
• When cashing a check at a bank where you don’t have an account, you may have the most success at the bank that is preprinted on the check.
• Fees may apply when cashing checks at banks where you don’t hold an account.
• Any bank may refuse to cash a check if it’s more than a few months old, you don’t have a proper ID, it looks tampered with, or the payer has insufficient funds.
• Alternatives to cashing a check at a bank include retailers, grocery stores, employers, and check cashing services.
The Basics of Check Cashing
Cashing a check generally refers to taking a check to a bank or check-cashing service and receiving the full amount of money written on it in physical cash, allowing you to spend it right away. This differs from depositing a check into your checking account, then drawing upon the funds later.
One of the most common ways to cash a check is to visit a branch of a bank where you have an account. There, you can endorse the check (or sign it on the back) and present it to a teller, along with ID and/or your debit or ATM card. Once the banker has conducted the steps they need to complete, you will receive your cash.
However, there are other options for cashing a check. You might be able to cash a check at a bank where you are not an account holder, at a retailer, or at a check cashing service (though fees may be involved).
Cashing Checks at Your Own Bank
As noted above, one of the most convenient ways to cash a check is to go to a branch of your bank where you have an account, provided they have brick-and-mortar locations. There, a teller can help you exchange your check for the amount of money written on it with a few simple steps, such as endorsing it and showing your ID.
If you bank at an online bank, you might instead deposit the check into your account using mobile deposit. Once the check clears (which typically takes one to two days), you could then withdraw the funds from an ATM in your bank’s network.
Cashing Checks at Other Banks
While banks aren’t under any obligation to cash checks for people who do not hold accounts at their institution, they may do so as a courtesy.
You’ll generally have your best chance of success by going to the bank of the person or company that wrote you the check (the institution that is pre-printed on the check). This bank may be willing to cash the check even though you are a noncustomer, provided you can show a valid ID. However, they may charge a fee, which can range between $5 and $10 or 1% to 2% of the check amount. Some banks will waive the fee if the check is under $50.
Factors Affecting Check Cashing at Different Banks
Whether or not any bank will cash a check depends on a number of factors. Here are key things to keep in mind when trying to cash a check at a bank.
• Account status: If you don’t have an account with the bank where you are trying to cash a check, your request may not be honored. You’ll have a better chance of getting the check cashed if you visit the check-writer’s bank.
• Check amount: Not all bank branches keep enough cash on hand to be able to cash a large check without advance notice. If you are seeking to cash a large check, it’s wise to call the branch ahead of time and find out if the cash is available or if you need to make an appointment.
• Date of the check: Checks are typically considered good (or able to be cashed) for anywhere from 60 to 180 days, depending on the bank. After that, you have what is known as a stale or stale-dated check, and banks may not cash it.
• Type of check: A cashier’s check (which is guaranteed by the issuing bank) can generally be cashed at any bank, though some banks charge a fee to noncustomers. It’s generally harder to cash a personal check at a bank where neither you, nor the payer, have an account.
Alternatives to Cashing Checks at Banks
If visiting a bank isn’t an option or isn’t convenient, or you’re looking to cash a check without a bank account, you still have options. Here are some to consider.
• Large retailers: You can cash certain types checks (including government and payroll checks) at Walmart and some other big-box retailers, typically for a fee. At Walmart, for example, you’ll pay $4 to cash a check up to $1,000; $8 for checks up to the $5,000.
• Grocery store chains: Some grocery stores, including Publix and Kroger, also cash checks. There may be a fee — often between $4 and $7.50 — involved, as well as a limit on the amount that can be cashed. Depending on the store, they may or may not cash personal checks.
• Your employer: Some employers will cash checks. Ask yours about their policies, limits, and any fees that might be assessed.
• Check cashing services: These are storefronts where you can cash a check and leave with the face value, typically minus a fee (which may be a flat fee or anywhere from 1% to 10% of the check amount).
• Signing the check over to someone else: As a work-around, you might sign the check over to another person (a trusted individual, such as a family member) and ask them to cash it for you. Before attempting this, it’s a good idea for the recipient to contact their bank and ask about their policies. Not all banks accept third-party checks.
Common Challenges When Cashing Checks
Unfortunately, not all instances of cashing a check will run smoothly. Here’s a look at some common reasons why a bank won’t cash your check.
• You’re not a customer: A bank is not legally required to cash a check if neither you, nor the writer of the check, don’t have an account with that bank.
• The payer has insufficient funds: Even if the check was written by someone with an account at that bank, the bank still may not cash the check if there is not enough money in the payer’s account to cover the check’s amount.
• You don’t have a valid ID: To guard against bank fraud, a bank may refuse to cash a check if you are unable to provide proper proof of identity. Be sure to bring a valid (not expired) government-issued identification, such as a driver’s license or passport.
• The check is too large: Smaller branches of national banks and credit unions may not have sufficient cash on hand to cash a large check. For example, if a bank only keeps $50,000 on hand per day, it may not be able to part with a significant portion of that in a single transaction.
• The check is made out to a business name: If the check is written to a business name and you are cashing it with personal ID, the financial institution may not cash the check.
• The check is too old: Some checks state that they will become void after a certain period of time. Once that window has passed, a bank typically won’t cash the check. Legally, a bank can refuse to cash any check that is older than six months.
Fees Associated with Check Cashing
If you are considering how much it might cost you to cash a check, here’s some useful intel about the fees you might be assessed:
Location
Check-Cashing Fee
Bank where you have an account
Typically free
Check-issuer’s bank
$5-$10 or 1%-2% of check amount
Large retailer
$1-$8
Grocery store
$4-$7.50
Check cashing store
1-10% of check amount
Legal Considerations for Check Cashing
Many people may not give check cashing much thought since it’s such a basic transaction, but there are legal considerations at work. These can protect all parties involved and help prevent check fraud.
• The person cashing a check must be the “payee” (the person to whom the check is made out), unless it’s been signed over, and that individual will usually have to present valid government-issued ID.
• If a check looks as if it’s been tampered with in any way, such as writing that is scribbled over or cross-outs that aren’t initialed, this can also trigger a closer look and possibly delay or invalidate the check cashing.
• When cashing or depositing a check over $10,000, banks are required to file a Currency Transaction Reports with the Financial Crimes Enforcement Network, which is part of the U.S. Department of the Treasury. This is a measure designed to prevent financial crimes such as money laundering. It’s routine and, as long as the check is legitimate, nothing to worry about.
Checks can be cashed at many banks, including but not limited to one where you have an account. Other locations where you can cash a check include retailers, grocery stores, your employer, and check-cashing businesses. In some cases, there may be limits and fees involved, and it’s usually important that the check is made out to you, that you have proper identification, and that the check is not deemed stale.
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 3.80% APY on SoFi Checking and Savings.
🛈 SoFi accepts mobile check deposits 24/7 through the SoFi app, but does not offer check cashing services at this time.
FAQ
Can I cash a check if I don’t have a bank account?
Yes, you can typically cash a check if you don’t have a bank account, but fees and limits may be involved. Possible locations where you can cash a check include Walmart and some other big-box retailers, grocery-store chains, your employer, and check-cashing businesses with physical locations.
What identification do I need to cash a check at a bank?
To cash a check at a bank, you usually need to present current government-issued photo ID. Examples include a passport or your driver’s license.
Is it possible to cash a post-dated check?
Yes, you may be able to cash a post-dated check (one written for a future date). A signed check is payable on demand unless the check-writer submitted a formal post-dating notice with the bank.
SoFi members with Eligible Direct Deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Eligible 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 (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below).
Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning 3.80% APY, we encourage you to check your APY Details page the day after your Eligible Direct Deposit arrives. If your APY is not showing as 3.80%, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning 3.80% APY from the date you contact SoFi for the rest of the current 30-day Evaluation Period. You will also be eligible for 3.80% APY on future Eligible Direct Deposits, as long as SoFi Bank can validate them.
Deposits that are not from an employer, payroll, or benefits provider 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 Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi members with Eligible Direct Deposit are eligible for other SoFi Plus benefits.
As an alternative to Direct Deposit, SoFi members with Qualifying Deposits can earn 3.80% 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 members with Qualifying Deposits are not eligible for other SoFi Plus benefits.
SoFi Bank shall, in its sole discretion, assess each account holder’s Eligible 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 an Eligible Direct Deposit or receipt of $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% 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 Eligible 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 Eligible 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 Eligible 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 Eligible Direct Deposit or Qualifying Deposits until SoFi Bank recognizes Eligible Direct Deposit activity or receives $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Eligible Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Eligible Direct Deposit.
Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.
Members without either Eligible Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, or who do not enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days, will earn 1.00% 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 1/24/25. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.
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 content is provided for informational and educational purposes only and should not be construed as financial advice.
We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at sofi.com/legal/banking-fees/.
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.
A small, steady amount of inflation is considered good for the economy. But when prices rise faster than wages, the value of your money goes down. This can have a negative impact on quality of life, especially for those with middle and lower incomes. It can also complicate saving for emergencies and investing for retirement. Fortunately, there are steps you can take to fight the effect of rising prices on your household finances. Read on to learn what inflation is and how to stay ahead of it.
Key Points
• Inflation refers to a general rise in the price of goods and services over time.
• Inflation erodes your money’s purchasing power, meaning you can buy less with your money than you could previously.
• High-yield savings accounts and diversified investments, including TIPS and I-Bonds, can help protect your finances against inflation.
• Cutting back on nonessential spending, lowering monthly bills, and paying down high-interest debt are other ways to fight inflation.
• Career moves such as negotiating a raise, changing jobs, or starting a side hustle can offset inflation’s impact on your income.
• As a response to inflation, the Federal Reserve generally raises interest rates to slow borrowing and spending and cool the economy.
Understanding Inflation
Here are key things to know about your money’s purchasing power and how it changes over time.
Inflation Definition and Causes
Inflation refers to the rising cost of goods and services over time. If the price of one or two items spike, however, that’s not inflation True inflation occurs when costs generally increase across the board, making the things consumers normally spend money on more expensive. Some inflation is the sign of a healthy economy. In fact, the Federal Reserve (a.k.a., “the Fed”) likes to see an annual inflation rate of around 2%. But sometimes inflation runs much higher, as it did in the years following the Covid-19 pandemic, which can lead to financial strain.
While inflation has multiple causes, it often stems from a mismatch between demand for goods and services and the supply of those goods and services. Events that raise production costs or disrupt the production of goods in the economy (such as a pandemic, war, or natural disaster), can also lead to an increase in prices. Inflation can also be influenced by monetary policies, such as the Fed deciding to adjust benchmark interest rates or print more money.
How Inflation Affects Your Purchasing Power
When the cost of things you normally buy goes up, your purchasing power (the amount you can get in return for every dollar you spend) goes down. In other words, your money doesn’t stretch as far as it used to.
At the same time, investments and savings accounts that don’t offer returns above the inflation rate may actually lose value in real terms. For instance, if you put $500 in a savings account paying an annual percentage yield (APY) of 0.01%, you’ll have $500.05 at the end of a year. Even at the Fed’s target 2% inflation rate, $500.05 will buy you less than $500 did a year ago, so your purchasing power has declined. Fortunately, many online savings accounts offer APYs that beat inflation, so your money grows rather than shrinks over time.
Strategies for Protecting Your Money
Inflation is a fact of life — even when inflation is low, prices tend to creep over time. So how can we fight inflation? Here are a few strategies to consider.
Earn More on Your Savings
Savings accounts offer liquidity (meaning you can easily access your funds when you need them), making them a good place to stash any cash you may need in the next few months or years. On the downside, traditional savings accounts typically don’t keep up inflation. To ensure your funds don’t lose value over time, you’ll want to look for a savings account with APY that’s close to or beats the current rate of inflation, such as a high-yield savings account.
Other Options to Consider to Outpace Inflation
Having a diversified portfolio (including stocks, bonds, and short-term investments) can help protect you from periods of hyperinflation. Some options to consider:
• I-Bonds: Series I Savings Bonds are U.S. government-backed securities that adjust their interest rate with inflation. They offer a fixed rate plus an inflation-adjusted rate, making them a low-risk way to protect your money’s value over time. Just keep in mind that this isn’t a short-term saving strategy — you need to leave your money deposited in the bond for at least five years to avoid forfeiting some interest.
• Real estate: This area can be another strong inflation hedge, as property values and rental income tend to increase with inflation (though this will depend on local market conditions). Investing in real estate investment trusts (REITs) can offer exposure to real estate without the need to own physical properties.
• Inflation-protected securities: With Treasury Inflation-Protected Securities (TIPS), the principal, called the par value, goes up with inflation, providing some stability in times of rising prices. When a TIPS matures, you get either the increased (inflation-adjusted) price or the original principal, whichever is greater. These can be a safer investment compared to traditional bonds, which may lose value when inflation rises.
Adjusting Your Budget and Spending Habits
To make up for the higher costs of goods and services, you may want to check in on your budget and look for places where you can cut back on spending. It’s generally easiest to do this with nonessential expenses, like dining out and entertaining. But you may also be able to find ways to trim the cost of essentials. Some ideas:
• Shop for generics at the grocery store and use coupons whenever possible.
• If you rent, ask your landlord if you can trade services — such as cutting the grass or shoveling the sidewalk during the winter — for a rate reduction.
• Reduce your driving and use an app to find the cheapest gas prices near you.
• Buy non-perishable items in bulk — this allows you to lock in current prices before they rise further.
Increasing your income can help offset inflation’s impact on your finances. While this may be easier said than done, you might have more options than you think. Here are some career moves to consider during inflationary times:
• Negotiate for a raise: If it’s been a while since your last raise, now may be a good time to ask for one, citing either the high inflation rate or the added value you bring to the company — or both.
• Find a new job: In some cases, changing jobs may provide a quicker path to a higher salary than waiting for a raise.
• Invest in skill development: Acquiring new skills or certifications can make you more valuable to employers, increasing your potential for higher wages.
• Explore side hustles: Freelancing, consulting, or starting a small business on the side can provide additional income streams to help combat rising costs.
Government Programs and Policies
The government can (and typically does) take a number of actions to combat inflation and help American consumers deal with rising costs. Here are some of the tools they have in their arsenal:
• Raising the federal funds rate: One of the most common ways the Fed will fight inflation is by raising the federal funds rate, which is a benchmark interest rate that influences other interest rates. Raising the federal funds rate generally makes borrowing for businesses and consumers more expensive. This slows down spending, which can cool off the economy and lower inflation.
• Tax adjustments: The government may also adjust tax brackets and standard deductions to prevent “bracket creep,” where inflation pushes taxpayers into higher tax brackets.
• Stimulus programs: In times of economic difficulty, stimulus checks or other government support measures may be provided to help individuals manage higher living costs.
As mentioned above, the Fed will often raise interest rates during times of high inflation. While this can help tamp down rising prices, it also makes borrowing money more expensive.
For many people, the biggest impact of these rate increases is on credit cards, which have a variable interest rate. When rates are high, you want to be careful not to carry a balance from month to month. If you already have credit card debt, it’s a good idea to focus on paying it down.
If you’re in the market for a new mortgage during a time of high inflation, you might benefit by choosing a variable rate loan. That way, if rates begin to fall, your mortgage’s rate will likely also go down. On the other hand, if inflation (and rates) appear to be on the rise, you may be better off with a fixed-rate mortgage to lock in current rates.
Long-Term Planning for Inflation
When saving and investing for future goals, such as retirement, it’s important to factor in inflation. Rising prices can affect your long-term financial plan in two main ways:
• The real return on your investments: You’ll need to consider not just the interest rate you expect to receive but also the real rate of return, which is determined by figuring in the effects of inflation. Your financial advisor can help you calculate your expected real rate of return on your investments.
• Future costs: When calculating how much money you’ll need to comfortably retire, it’s important to estimate future living expenses with inflation in mind. This may mean adjusting your target retirement savings to account for an increased cost of living. There are online calculators that can help you model out what inflation-adjusted numbers would look like.
The Takeaway
Inflation is an inevitable part of economic life. Ideally, the Fed tries to limit the inflation rate to 2% annually, but sometimes a shift in supply and demand and other factors can lead to a spike in the inflation rate.
Government programs and policies can offer support when inflation gets too high. There are also steps you can take on your own to make your finances more inflation-resistant. These include spending less, boosting your annual income, avoiding high-interest debt, and choosing investments and savings accounts that protect the value of your cash so it grows (rather than shrinks) over time.
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 3.80% APY on SoFi Checking and Savings.
FAQ
What types of investments typically perform well during inflation?
During inflation, certain investments tend to perform better because they can keep pace with or outgrow rising prices. Stocks, especially in sectors like consumer goods and energy, may see gains as companies pass higher costs onto customers. Real estate often appreciates, and rental income may rise with inflation. Lower-risk investment options include: Treasury Inflation-Protected Securities (TIPS), which adjust with inflation and help safeguard your purchasing power, and I Bonds, which have a variable interest rate that adjusts for inflation.
How can I adjust my budget to cope with inflation?
To cope with inflation, it’s a good idea to review your budget and identify areas where you may be able to cut back on spending, such as dining out, entertainment, and gym memberships. This can free up funds to cover the rising cost of essential monthly expenses, like groceries, rent, utilities, and gas. Other smart moves to beat inflation include: paying down debt (especially high-interest credit cards), boosting your income, and adjusting your emergency savings fund to account for a higher cost of living.
Does increasing my savings rate help combat inflation?
Yes, increasing your savings rate can help combat inflation. If you put your money in a savings account that pays more than the current rate of inflation, it will offset the loss of purchasing power and ensure your savings grow despite inflationary pressures. Increasing your savings also helps you build a larger financial cushion to cover rising costs.
SoFi members with Eligible Direct Deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Eligible 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 (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below).
Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning 3.80% APY, we encourage you to check your APY Details page the day after your Eligible Direct Deposit arrives. If your APY is not showing as 3.80%, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning 3.80% APY from the date you contact SoFi for the rest of the current 30-day Evaluation Period. You will also be eligible for 3.80% APY on future Eligible Direct Deposits, as long as SoFi Bank can validate them.
Deposits that are not from an employer, payroll, or benefits provider 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 Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi members with Eligible Direct Deposit are eligible for other SoFi Plus benefits.
As an alternative to Direct Deposit, SoFi members with Qualifying Deposits can earn 3.80% 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 members with Qualifying Deposits are not eligible for other SoFi Plus benefits.
SoFi Bank shall, in its sole discretion, assess each account holder’s Eligible 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 an Eligible Direct Deposit or receipt of $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% 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 Eligible 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 Eligible 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 Eligible 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 Eligible Direct Deposit or Qualifying Deposits until SoFi Bank recognizes Eligible Direct Deposit activity or receives $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Eligible Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Eligible Direct Deposit.
Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.
Members without either Eligible Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, or who do not enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days, will earn 1.00% 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 1/24/25. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.
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.
We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at sofi.com/legal/banking-fees/.
