2023 Wedding Cost Calculator Table with Examples

2025 Wedding Cost Calculator with Examples

The question was popped, the answer was yes, and now you’re ready to plan your dream wedding. Which means it’s probably time to set up a meet-and-greet between your vision board and your bank account.

Wedding costs can add up quickly, and if you’re just winging it, it’s easy to get carried away. Using a wedding cost calculator as you work through the planning process can help you manage your money better and create a more realistic budget.

Read on for a breakdown of the costs you can expect as you prepare for your big day.

Key Points

•   The wedding cost calculator helps estimate the total cost of a wedding based on various factors.

•   It takes into account factors such as location, guest count, venue, catering, attire, and other expenses.

•   The calculator provides an itemized breakdown of costs and allows for customization based on personal preferences.

•   A calculator can help couples create a realistic budget and make informed decisions about their wedding expenses.

•   Using the wedding cost calculator can help reduce stress and ensure financial preparedness for the big day.

How Much Will My Wedding Cost?

The cost of a wedding depends on several factors, including where you live, your wedding date, and the size of your guest list. If you go all-out with a big bridal party, designer duds, and a reception for 200-plus, your bill could be significantly more than the current median of $10,000. If you decide to go with a simple ceremony at City Hall, on the other hand, followed by a modest dinner with a few friends, your total spend will likely fall way below the typical wedding cost.

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What Does the Average Wedding Cost?

The most recent SoFi survey found that the median wedding cost is $10,000. But again, that number can vary widely.

The popular wedding website The Knot says couples who live in the South typically spend a bit less on their wedding, while those who live in bigger cities, particularly in the Northeast, can expect higher costs. Trying to match or exceed the standards set by others in your social group can also affect your bottom line.

Recommended: Is It Smart to Finance a Wedding?

What Goes into a Wedding Cost Calculator?

A wedding cost calculator uses average wedding costs to help couples break down the expenses they can expect to encounter as they plan their wedding. This budgeting tool can assist couples and their families in prioritizing how they want to spend their money. (Is a designer dress a must? Is a buffet or sit-down dinner a better choice? How many guests can you really afford?)

You also can use a wedding calculator/budget as a checklist to ensure you’ve covered all the details, so there aren’t any surprises (or unexpected wedding expenses) as you close in on the big day.

Recommended: 52-Week Savings Challenge

How to Calculate Wedding Costs

To keep things in perspective and set reasonable priorities, you may want to start by designating a certain percentage of your overall budget for each cost category. A $2,000 dress, for example, would be 10% of a $20,000 budget. A $10,000 reception (venue, catering, music, etc.) would take up 50%. That would leave you 40%, or $8,000, for the rest of your costs (the tux, flowers, photography, etc.).

Knowing the average costs for various categories can also help you fine-tune your budget and save for your wedding. Here’s a look at some of the most common wedding expenditures.

Before the Big Day

You can count on racking up some wedding bills long before you hear wedding bells. (Which is why it can be helpful to use a spending app as soon as you start planning.) Here are some costs you may incur early on in your preparations:

Save the Date Cards: If you want to let your guests know waaay ahead that your big day is coming up, sending “save-the-date” alerts can help. Postcards can cost $1 each, not including postage. (Costs per item typically go down when you order more.)

Invitations: Two major factors will affect the cost of sending out wedding invitations: An elaborate invitation or one that’s designed just for you will cost more than a standard design. And, of course, you’ll pay more for invitations and postage if you have a large guest list. (Don’t forget to put stamps on the RSVP cards included in each invite.) You could end up paying from $256 to $312 for 100 to 150 invitations, but costs can go higher for more intricate or customized designs.

Wedding Planner: How much would you be willing to pay to hand over some of the stress of planning your wedding to a professional? U.S. couples spend an average of $2,100 for their wedding planner’s services, but your price may vary depending on your planner’s expertise and level of involvement, and the size of your wedding.

Marriage Ceremony

Though it’s what the big day is all about, and the reason friends and family have gathered, it can be easy to overlook the actual wedding ceremony when budgeting. Here are some costs to keep in mind:

Marriage License: This document, which authorizes a couple to marry, can cost anywhere from $20 to $110. You can get your exact cost by calling the issuance office in the county where you plan to marry. In some states, you may be able to lower the cost by taking a marriage preparation course.

Officiant Fee: The officiant is the person who is legally authorized to perform your ceremony. It can be the minister at your church or someone who performs weddings as a full-time or side gig. Officiant fees can vary from about $100 to $1,000, with most professionals charging between $500 and $800.

Ceremony Venue: Unless you exchange vows at the same location as your reception, you’ll likely have to budget a separate amount for this venue, whether it’s your church, the beach, a private garden, or a public park. The cost will depend on the location and how long you use the space. (Even if it’s a public place, you may have to pay for a permit to hold your ceremony there, or a by-the-hour rental fee.)

Churches typically ask for a “donation,” which can be a mandatory amount or pay-what-you-wish deal. Unless you’re headed to the courthouse, be prepared to pay between $300 to $1,000-plus to use a house of worship for a ceremony venue. One recent survey by the Knot found private venues averaging $12,800, which is more than the median cost of some weddings.

Decorations: The cost of decorating for your ceremony will depend on how elaborate you want to get — and what your venue will allow. For example, flowers alone can cost an average of $2,800 for a wedding, and if you want other decor, it will add to the tab.

Ceremony Music: You’ll likely want to have some kind of live music at your ceremony — maybe a soloist, the church organist, a quartet, or a band. The cost for music can vary significantly depending on how big you go, and can range from $300 to $700, depending on whether a soloist or band and the length of time they play.

Reception

The reception is typically the largest wedding expense and can include several subcategories — from food and entertainment to decorations and, of course, the cost of renting the venue where guests will gather to celebrate.

Some all-inclusive venues charge one price for catering, decorations, and more. If you have to hire multiple vendors, though, you’ll need to keep these separate costs in mind:

Venue: Depending on the size and location of the hall, country club, restaurant, etc., you can expect to pay $2,500 to $7,500 just to rent the space for your party.

Catering: The cost of feeding your guests will depend on what you serve (appetizers or a full meal) and how it’s served (buffet or by a waitstaff). Costs can range from $70 to $150 per person at high-end venues, though taking a simpler or potluck approach can bring costs down significantly. You may have to pay extra to rent serving equipment or pay waitstaff at some venues.

Drinks: If you decide to offer an open bar with unlimited alcoholic beverages, you can expect to pay $20 to $30 per person, or more.

Entertainment: Couples often argue over whether to hire a DJ or band — and cost can be the deciding factor. A DJ might charge up to $1,000 or more, depending on their popularity, equipment, and how long they’re expected to keep the party going. A live band generally charges more, often running from $1,000 to $5,000. (You may have to pay more if you have to rent sound or lighting equipment.)

Decorations: If you decide to add decorations to the venue (with ribbons, confetti, balloons, etc.), you will likely have to pay extra — from $100 to $1,000 or more. A floral centerpiece for each table might incur a separate cost, so it’s important to be clear about what’s included in your package.

Recommended: Wedding Gift Etiquette

Wedding Cake

The cake you choose for your wedding is about much more than dessert. Cutting the cake is a fun tradition and it can be a great photo opp. Design, size, the number of tiers, and delivery can all impact the cost, but plan to spend on average $500 for a wedding cake, according to 2024 data.

Photographer/Videographer

If you’re hoping to capture the best moments of your wedding, you may want to make the photographer, and maybe videographer, one of your budget priorities. Depending on the package you choose, you can expect to pay from $1,500 to $3,000 for wedding photos, though the Knot found couples spending an average of $2,900. A videographer can cost in a similar price range.

Flowers

We covered the cost of using flowers to decorate for the ceremony and reception above. Here are some other costs to consider:

Bridal Bouquet: The bride’s flowers are in the spotlight throughout the day — in photos, during the ceremony, and even at the reception. For the bouquet of your dreams, you can expect to pay an average of $250.

Boutonnieres for the Guys: If the groom will be wearing a suit or tux, a boutonniere is almost a must, and it will run from $10 to $30. Multiply that price by the number of men in the wedding party if Dad and the other guys will get them, too.

Bridesmaids Bouquets: These smaller bouquets typically cost about $80 each.

Corsages: Corsages, which can be a nice way to recognize special family members and friends, may cost $20 to $40 each.

Petals for Flower Girl: A bundle of rose petals for the flower girl to scatter can cost $20 to $25.

Bride’s Wedding Outfit

The bride’s outfit — the dress, veil, shoes, jewelry, and more — often takes up a significant amount of the wedding budget. The bride’s wedding dress alone can cost, on average, $1,800 to $2,400, though more expensive options are definitely out there. And that’s before alterations, which can add a couple of hundred dollars.

Groom’s Wedding Outfit

The groom’s gear generally reflects the formality of the wedding, but most men still wear a tux or suit. Purchasing a new tux can cost $200 to $500 or more. And tailoring may cost extra. Renting a tux can cost $100 to $200 or more.

Wedding Party Costs

Traditionally, members of the wedding party pay for their own outfits, but there may be other expenses you decide to cover if you want to help out with the cost of being in the wedding.

For example, if you’re hiring someone to do the bride’s hair and makeup (average cost: $300), and you choose to include the bridesmaids, you can expect to pay about $150 per person. As with most wedding-day costs, however, you’ll likely encounter a wide range of prices.

Transportation

If you and your wedding party hope to travel in style on your wedding day, you want to look into renting a limo, horse-drawn carriage, party bus, or some other type of transportation. Couples spend an average of $750 for wedding day transportation for a small event, but costs will vary based on location, how many vehicles you need, and how many hours you need them.

Wedding Insurance

Once you start budgeting for your wedding, you may decide it makes sense to purchase insurance to protect your investment. Wedding insurance can cover you for several worse-case scenarios. The cost of this type of special-event coverage depends on what you decide to include in your policy. The average cost of a wedding insurance policy is $75 to $550, depending on the type of coverage and cost of the event.

Total Wedding Cost Example

Until you start making calls and getting price quotes, it will be challenging to get even a rough estimate of how much your wedding will cost in total. But the sooner you start filling in some of the blanks on your budget, the sooner you’ll be able to prioritize where you want your money to go — and get a better idea of what the final bill will be.

Here’s an example of what a couple trying to determine a budget between about $14,000 and $24,000 and a guest list of 50 might come up with.

Cost

Percent of Budget

Invitations $420 3%
Ceremony: $560 4%
Ceremony Venue $310
Officiant Fee $250
Reception: $6,020 43%
Venue with Wine Bar $3,000
Buffet Dinner $2,220
DJ with Equipment $800
Bride’s Costs: $1,820 13%
Dress $1,070
Alterations $100
Shoes $200
Jewelry $200
Hair & Makeup $250
Groom’s Tuxedo Rental with Shoes & Tie $420 3%
Cake $560 4%
Flowers: $2,100 15%
Bride’s Bouquet $300
Bridesmaids’ Bouquets (2) $200
Boutonnieres for Wedding Party (5) $100
Corsages for Family (6) $200
Flowers for Ceremony & Reception $1,300
Photos $1,540 11%
Limo Rental $560 4%

How to Save Money on Your Wedding

How can you keep your dream wedding from totaling up to a nightmare cost? Here are a few ways to lower the bottom line:

Ask Friends and Family for Help

Do you know someone who’s great at taking photos? Is your cousin an amazing singer? What about a friend who’s a talented baker and cake decorator? If you can find people you trust to take the place of pricier pros, you may be able to reduce some costs — or avoid them entirely.

Eliminate Some of the Extras

If you can do your own hair and makeup, get yourself to the wedding, and/or design and print your own invitations (or go paperless), you may be able to cut some costs without asking for help.

Downsize the Guest List

This can be a tough one, but trimming your guest list is a sure way to trim costs. Consider asking your friends to leave their kids at home, or gently telling your guests that you’re keeping the plus-ones to a minimum.

Go Off the Beaten Path

Choosing an off-peak wedding date; an unusual (and therefore more affordable) wedding venue; or a wedding dress from a department store or consignment shop can save you big bucks.

Recommended: Free Credit Score Monitoring

The Takeaway

A wedding is a cause for celebration, but the costs can quickly get out of hand, so it’s a good idea to start your planning with a realistic budget. Median costs have recently been found to be $10,000 or so, but some gatherings cost multiples of that. Once a budget is set, though, as you go through the planning process, you can use your budget tracker to stay on top of your actual costs — and stay in sync with your other financial goals. In our example above, wedding costs totaled between $14,000 and $24,000 for an event with 50 guests, depending on the extras the couple decided to opt into.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

SoFi helps you stay on top of your finances.

FAQ

What is a realistic budget for a wedding?

A realistic wedding budget will be different for every couple. A wedding might cost $10,000 or several multiples of that, depending on the size of the wedding, the location, and other factors.

Is $10,000 a reasonable wedding budget?

You may have to be pickier about splurges than a couple with more to spend, but by setting your priorities early and using a budget tracker, you can get a strong start on sticking to your $10,000 wedding goal.

How do I pay for a wedding I can’t afford?

There are a few different ways you can pay for a wedding if you don’t have enough cash in the bank. One popular option is to take out a personal loan to pay for wedding expenses. Another is to apply for a credit card with a 0% introductory interest rate, which will allow you to pay off the balance interest-free for up to 18 months. Or you might consider waiting until you’ve saved enough to pay all your costs without borrowing.


Photo credit: iStock/Arisara_Tongdonnoi

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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

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How Does a Joint Credit Card Impact Your Credit?

How Does a Joint Credit Card Impact Your Credit?

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.

Recommended: Credit Card Network vs Issuer: What’s the Difference?

How to Manage a Joint Credit Card Account

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.

Recommended: What Is a Credit Card Chargeback and How Does It Work?

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.

Recommended: Understanding Purchase Interest Charges on Credit Cards

Tips for Removing a Partner From Your Accounts

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 Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

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Can I Cash a Check at Any Bank? A Comprehensive Guide

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.

Recommended: How to Deposit Cash at an ATM

The Takeaway

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.


Photo credit: iStock/Anurak Tepkhamtai

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2025 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.


SoFi members with direct deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with 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 Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 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 Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

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.

*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.

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How to Beat Inflation

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.

•   Make adjustments to your energy consumption to lower your utility bills.

•   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.

Recommended: Is Inflation Good or Bad?

Career Moves to Combat Inflation

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.

Recommended: How the Federal Reserve Rate Impacts Your Savings

Smart Borrowing in Inflationary Times

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.


Photo credit: iStock/shutter_m

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2025 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.


SoFi members with direct deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with 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 Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 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 Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

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.

*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/.

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How Much Should You Contribute to Your HSA?

Health savings accounts (HSAs) offer a tax-advantaged way to save for healthcare expenses. You may have access to an HSA if you have a high-deductible health plan at work or purchased an HDHP as a self-employed individual.

For those who have HSAs, it can be common to wonder just how much to contribute. Maxing out your annual contribution limit can help you get the most tax benefit from an HSA. However, your personal finances may not allow you to sock that much away. Here, important insights that can help you determine the right amount for your budget.

Key Points

•   HSAs provide tax benefits for funds earmarked for medical expenses by those with high-deductible health plans.

•   Maxing contributions enhances tax benefits, though financial limits may apply.

•   Contribution limits depend on insurance coverage type and age, with catch-up options for 55+.

•   Employer contributions can enhance savings but impact personal limits; excess contributions can face penalties.

•   Unused HSA funds roll over annually, unlike FSAs, supporting long-term growth.

Understanding Health Savings Accounts (HSAs)


There are several types of medical expense accounts recognized by the IRS (Internal Revenue Service), including Health Savings Accounts. Several characteristics distinguish HSAs from other options, such as Flexible Spending Arrangements (FSAs), Health Reimbursement Arrangements (HRAs), and Archer Medical Savings Accounts (MSAs).

The differences between an HSA vs. FSA, or an HSA vs. HRA lie in who can contribute, how much you can contribute, how your contributions grow, and what happens if you don’t spend down those contributions year-over-year. Here’s a closer look at what HSAs involve.

What Is an HSA?


The IRS defines an HSA as a tax-exempt trust or custodial account you set up with a qualified HSA trustee to pay or reimburse certain medical expenses you incur. To put it more simply, an HSA is a special type of savings account for those with HDHPs and is funded with pre-tax dollars that is designed to help you pay for healthcare.

Here are the main benefits of an HSA:

•   Contributions are tax-deductible, unlike money you put in a savings account.

•   Amounts contributed to an HSA grow tax-deferred.

•   Funds roll over from year to year, so you don’t have to “use it or lose it” in terms of funds that haven’t been spent at the end of the year.

•   Most HSAs include a debit card, similar to what you get with a checking account, that you can use to conveniently pay for healthcare expenses.

•   Withdrawals for qualified medical expenses are tax-free.

Once you turn 65, you can withdraw money from your HSA for any reason, healthcare-related or otherwise. You’ll pay ordinary income tax on withdrawals that are not for medical expenses.

IRS Publication 502 outlines which medical and dental expenses you can use HSA funds to cover. The list is extensive, though it excludes health insurance premiums.

Eligibility Requirements


There’s one simple eligibility requirement you’ll need to meet to contribute to an HSA. You must be enrolled in a high-deductible health plan.

These healthcare plans must, by law, set a minimum deductible and a maximum limit on out-of-pocket costs for covered individuals. Deductibles for HSA-eligible plans are typically much higher than standard health insurance plans, but you get the benefit of a tax-advantaged savings account built in.

Here are the most recent guidelines, according to the IRS:

•   In 2024, the minimum annual deductible for HDHP was $1,600 for self-only coverage and $3,200 for family coverage.

•   For 2025, the minimum is to $1,650 for self-only coverage and $3,300 for family coverage.

Note that just because you have an HSA through your high-deductible health plan doesn’t mean you have to make contributions. But you could be missing out on some valuable tax breaks if you don’t contribute and instead just keep the cash in a bank account.

Recommended: Beginner’s Guide to Health Insurance

HSA Contribution Limits


Both employers and employees can contribute to an HSA, similar to the way your job might offer a company-matching contribution to your 401(k).

But that doesn’t mean the sky’s the limit. The IRS sets the annual contribution limits, adjusted for inflation. Your limit is determined by whether you have individual or family coverage.

Here are the HSA contribution limits for 2024:

•   Individual coverage: $4,150 maximum contribution

•   Family coverage: $8,300 maximum contribution

•   An additional $1,000 catch-up contribution is allowed if you’re aged 55 or older.

For 2025, the limits increase to:

•   Individual coverage: $4,300 maximum contribution

•   Family coverage: $8,550.

•   An additional $1,000 catch-up contribution is allowed if you’re aged 55 or older.

Contribution limits apply to both employer and employee contributions. So, if you have individual coverage and your employer contributes $1,150 to your HSA for the year, you could only contribute up to $3,000 in 2024.

Also, note that you cannot contribute to an HSA if you:

•   Have a flexible spending account (FSA) or

•   Are enrolled in Medicare or

•   Can be claimed as a dependent on someone else’s tax return1

To clarify, you can have an HSA before and after you enroll in Medicare. You just can’t make new contributions to it once you’re enrolled in Medicare.

Factors to Consider When Determining HSA Contributions


If you have an HSA, you may have questions about where it might fit into your larger financial plan. For example, you may be asking yourself:

•   How much should I put in my HSA if I’m still young and healthy?

•   What if I have an ongoing health condition or am concerned I might develop one later in life?

•   What amount should I save if I also want to contribute to my 401(k)?

•   Will employer contributions affect how much I should contribute to HSA?

•   Would saving in an HSA make a significant difference to my tax filing?

There’s no right or wrong answer for how much to contribute to HSA savings. It’s a personal decision that’s based on a variety of factors (as noted above), such as your plan coverage, age, financial situation, and anticipated healthcare needs. For instance, a healthy single 35-year-old with minimal family history of disease and an annual salary of $75,000 may opt to put less in an HSA than a married 45-year-old parent of three children, who has a family history of heart disease, and earns $175,000.

HSA tax benefits are a strong incentive to contribute something to your account, even if it’s not the full amount you’re eligible for each year. As your income grows, you could gradually increase contributions until you’re consistently maxing out your plan.

Strategies for Maximizing HSA Contributions


If you have an HSA, it helps to know how you can make the most of it. Here are some tips for making sure every penny you contribute counts.

•   Review your plan and IRS guidelines so you know your annual contribution limit.

•   Find out if your employer makes contributions on your behalf and if so, up to what amount.

•   Review your budget and other payroll deductions to determine how much you could contribute to your HSA per pay period.

•   Max out your annual contribution limit, if possible.

•   Take advantage of investment opportunities inside your HSA, which may include individual stocks, bonds, mutual funds, and exchange-traded funds (ETFs).

•   Review your contributions and asset allocations in other tax-advantaged accounts you may have, such as a 401(k) or IRA, to make sure your holdings are well-balanced.

Here’s one more tip. If you have multiple HSAs from previous employers, consider consolidating them into a single account. That can simplify HSA management and you may be able to save on fees or unlock better investments.

HSA Contribution Scenarios


Here’s how you might handle HSA contributions through different life stages.

•   Young, healthy individuals: You might assume that if you’re young and in good health HSA contributions aren’t a must. But consider this: The earlier you begin making contributions, the longer your money has to grow through the power of compounding vs. simple interest.

•   Families with children: If you have kids, you understand the simple truth that they get sick. Sometimes they get hurt. And even if they stay healthy, they still need regular checkups with doctors and dentists. All of that costs money, and an HSA helps you plan for those expenses while enjoying a tax deduction for contributions.

•   Near retirees: As you approach retirement it’s important to think about how your healthcare needs might change. If you’ve faithfully made HSA contributions and invested them you can use those funds to offset any out-of-pocket healthcare expenses you’re responsible for that aren’t covered by Medicare. Using an HSA for retirement can help you avoid having to drain your 401(k), IRA, or other assets.

Calculating Your Ideal HSA Contribution


Online tools, such as savings account calculators, can make it easier to build your financial literacy and manage your money. The same holds true for deciding how much to put in HSA savings. For example, you can use an HSA calculator to estimate how much tax-deferred growth you could realize based on:

•   Coverage type

•   Average yearly contribution

•   Average annual medical expenses

•   Current tax bracket (federal and state)

•   Expected number of years you’ll make contributions

•   Expected rate of return

For example, if you have family coverage and contribute $8,000 a year for 30 years, earning a 5% annual return, your HSA would grow to more than $523,000 over those three decades. That assumes you spend $500 per year on medical expenses.

Playing with the numbers can give you a better idea of how much you could gain from contribution to an HSA.

Common Mistakes to Avoid with HSA Contributions


HSAs offer plenty of benefits, but only when they’re used correctly. Here are some of the most important missteps to avoid if you have access to a health savings account.

Treating an HSA like a savings account at your bank. If you have a high-yield savings account you could technically withdraw money for anything. The worst penalty you might face is an excess withdrawal fee. HSAs aren’t like that and if you’re under 65, you’ll need to stick to withdrawals for healthcare only if you want to dodge a tax penalty.

Not paying attention to employer contributions. If your employer contributes to your HSA, it’s important to know how much they put in. Otherwise, you could be at risk of making excess contributions if you go over the maximum annual limit allowed based on your coverage type. Excess contributions are subject to a 6% excise tax penalty each year they remain in your account.

Not contributing at all. Perhaps the biggest mistake with HSA contributions is not making them if you’re eligible to do so. If you have an HSA at work, it’s an employee benefit, and it makes sense to use all such privileges and perks granted to you. So you might want to go ahead and set up an HSA account and add some funds.

The Takeaway


If you have a high-deductible health plan, it can be wise to consider setting up an HSA. Even if you don’t fully max out your contributions to start, every dollar you contribute and invest can benefit from compounding interest. Over time, your HSA grows in a tax-advantaged way, and those funds come in handy when you need to pay for healthcare spending.

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.

🛈 While SoFi does not offer Health Savings Accounts (HSAs), we do offer alternative savings vehicles such as high-yield savings accounts.

FAQ


What happens to unused HSA funds at the end of the year?


Unused HSA funds are not use-it-or-lose-it. If you have funds remaining in your account at the end of the year, they roll over and remain in your HSA until you spend them. That’s a major difference vs. FSAs, which require you to spend down contributions each year or forfeit them.

Can I contribute to an HSA if I’m self-employed?


You can contribute to an HSA if you’re self-employed provided you have a high-deductible health plan. That’s the only requirement to save in one of these accounts; you’re not limited based on your tax-filing status or income. You are, however, excluded if you have an FSA, are enrolled in Medicare or can be claimed as a dependent on someone else’s tax return.

How do HSA contributions affect my taxable income?


HSA contributions reduce your taxable income for the year, similar to the way that 401(k) contributions do. That means you get an instant tax break when you make contributions, even if you don’t plan to use any of your HSA funds right away.


Photo credit: iStock/simonapilolla

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