Growing Wealth Archives | Page 22 of 194

Jun

2024

What Is the Difference Between Money Market Accounts vs CDs?

Money Market Account vs Certificate of Deposit

By Jacqueline DeMarco | Growing Wealth, Investing, money | Comments Off

Both certificates of deposit (CDs) and money market accounts (MMAs) are types of savings accounts that tend to earn higher interest rates than traditional savings accounts. But there are some key differences between them.

An MMA allows you to withdraw money as needed (and even comes with checks or a debit card), though you may be limited to a certain number of transactions per month. With a CD, on the other hand, your money is locked up for a set period of time. In exchange for leaving your money untouched, however, CDs generally pay higher rates than MMAs.

Whether you should choose a CD or MMA will depend on your financial needs and goals. To help you make the right choice, here’s a closer look at how these two savings options compare.

Main Differences Between Money Market Accounts and CDs

Here’s a quick snapshot of the differences between money market accounts and CDs.

	Money Market Accounts	CDs
Interest rates	Variable; typically lower	Fixed; typically higher
Liquidity	Highly liquid	Lacks liquidity (early withdrawal incurs a penalty, in most instances)
Minimum balance requirements	Higher than regular savings accounts	Varies by CD
Debit card/checks	Yes	No

Money Market Accounts

A money market account (MMA) is a type of savings account offered by banks and credit unions that provides some of the conveniences of a checking account. Like a typical savings account, you earn interest on your deposits, often at a higher rate than what you could earn in a traditional savings account. In addition, these accounts typically come with checks and/or a debit card, making it easier to access your funds.

Money market accounts may come with withdrawal limits (such as six or nine per month), however, so they aren’t designed to be used as a replacement for a checking account. MMAs also often require you to keep a certain minimum balance in order to avoid fees or earn the advertised annual percentage yield (APY).

The money you deposit in an MMA is insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC), if held at an FDIC-insured bank, or by the National Credit Union Administration (NCUA), if held at an insured credit union. That means you can’t lose your money (up to certain limits) even if the bank were to go bankrupt or shut its doors.

Pros of Money Market Accounts

Here’s a look at some advantages of opening a money market account.

• Higher interest rate: Typically, money market accounts have higher interest rates than traditional savings accounts.

• Security: Because of the FDIC and NCUA insurance, the funds in a money market account are typically insured against loss.

• Funds are liquid: You can withdraw your money when you need to (though you may be limited to a certain number of transactions per month).

• Ease of access: It’s possible to access the funds in a money market account by withdrawing cash at an ATM, doing an electronic transfer, using a debit card, and/or writing checks.

Cons of Money Market Accounts

MMAs also have some disadvantages. Here are some to keep in mind.

• Better rates may be available elsewhere: You may be able to find a high-yield savings account at an online bank that offers a higher APY than an MMA at a traditional bank (with potentially fewer restrictions and/or fees).

• Minimum balance requirements: Banks often require a minimum deposit to open an MMA, as well as a minimum amount you must keep in the account in order to earn the top APY and/or or avoid a monthly maintenance fee.

• Variable interest rate: APYs on MMAs are based on market interest rates at a given time. It’s difficult to predict how the market will perform and if this interest rate will rise or fall.

• Limited growth potential: If you’re looking for long-term growth, you can potentially make more by investing your money in the market.

Certificates of Deposits (CDs)

A certificate of deposit (CD) is a type of savings account that offers fixed interest rate that is generally higher than a traditional savings account. A CD also comes with a fixed-term length and a fixed maturity date. This means you need to leave the funds in a CD untouched for a set term, which can range anywhere from a few months to several years. Generally, the longer the CD’s term, the higher the APY, but this is not always the case.

CDs don’t charge monthly fees, but will typically have an early withdrawal penalty, and you usually can’t add any additional funds after the initial deposit.

CDs are offered by banks and credit unions: at credit unions, they are often referred to as share certificates. Like regular savings accounts, CDs are typically insured by the FDIC or NCUA, so you get your money back (up to $250,000) in the unlikely event that the bank or credit union were to go out of business.

Pros of CDs

Here’s a look at some of the advantages that come with depositing money into a CD.

• Potentially higher rates: CDs tend to offer higher APYs than regular savings accounts and money market accounts.

• Guaranteed rate of return: Because CDs typically have fixed rates for fixed terms, you know up front how much interest you will earn.

• Security: Like other types of savings accounts, CDs are insured by either the FDIC or NCUA.

• Convenience: It’s fairly easy to open a CD, since most banks and credit unions offer them.

Cons of CDs

There are also some disadvantages of CDs that you’ll want to bear in mind.

• Relatively low returns: While CDs tend to earn more than a regular savings account, investing in stocks and bonds can be a better option if you’re looking to maximize your returns over the long term (though, unlike CDs, returns are not guaranteed).

• Rates won’t go up: Because CDs come with fixed interest rates, the APY won’t go up even if market rates rise during the term of your CD (unless you open a bump-up CD).

• No liquidity: Unlike other types of savings accounts, you can’t withdraw funds as needed. To benefit from a CD, you must wait until the CD term ends before you access your cash.

• Withdrawal penalties: If you end up needing the money before the CD matures, you will likely incur an early withdrawal penalty.

When Should I Consider a Money Market Account or CD Over the Other?

MMAs and CDs have different requirements and benefits, and which one will serve you best will depend on your needs and preferences.

Choosing a Money Market Account Over a CD

A money market account may be a better choice than a CD if:

• You want the option to add and withdraw money regularly. You can save money over time with a money market account. You can also withdraw the money at any time, though you may be subject to some restrictions.

• You’re building an emergency fund. A money market account can be a good place to stash your emergency fund. You can likely maintain the minimum balance requirement and can benefit from the extra interest. Should you need the money, however, you can get it right away.

• You’re saving for a large purchase. If you’re saving for a big ticket item like a car, a money market account will allow you to write a check from the account when you’ve reached your goal and it comes time to use those funds.

Choosing a CD Over a Money Market Account

A CD may be a better fit than a money market account if:

• You have a longer-term savings goal. If you don’t need to use the money for a year or two, you may benefit from the higher returns offered by CD.

• You want to make sure you don’t touch the money. If you’re setting aside money for a specific future expense, like a wedding or vacation, a CD helps insure you won’t impulsively spend it on something else.

• You want some growth without risk. Unlike money invested in the market, the money you put into a CD is insured (up to certain limits) and the rate of return is guaranteed.

Recommended: How to Save Money: 33 Easy Ways

The Takeaway

Both money market accounts and CDs offer safe ways to earn more interest on your savings than you could in a traditional savings account. While money market accounts offer more flexibility and liquidity than CDs, CDs tend to offer higher APYs.

If you won’t need the money for a set period of time (say, six months to three years), and can find a good rate on a CD, you might be better off going with a CD over an MMA. If you may need to tap the funds at some point (but you’re not sure when), an MMA allows you to earn a higher-than-average interest rate while keeping the money liquid, with the added benefit of offering checks or a debit card.

Before choosing any type of savings account, however, it generally pays to shop around and compare current APYs. You may find another savings vehicle, such as a high-yield savings account, that offers the returns you want with minimal requirement, restrictions, or fees.

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FAQ

Are CDs or money markets better?

If you don’t need to access your funds for a while, a CD could be a better fit. CDs tend to offer higher interest rates than money market accounts, and the interest rate is fixed which makes the return predictable. Conversely, if you might need to draw on the funds in the near-term, an MMA may be a better route.

What are the tax implications of money market accounts vs. CDs?

With both certificates of deposit (CDs) and money market accounts (MMAs), the interest you earn is considered taxable income. You will receive a Form 1099-INT from your bank at the end of the year, which you must report on your tax return.

The Interest from CDs is typically taxed in the year it is earned, even if you don’t withdraw it until the CD matures. This means you might owe taxes on interest even if you haven’t received it yet. Interest on MMAs, however, is usually credited monthly and taxed in the year it is credited.

What are other options besides money market accounts and CDs?

Money market accounts and certificates of deposit (CDs) offer a low-risk way to earn a solid interest rate on your money. But they aren’t your only option. Here are some alternatives:

• High-yield savings accounts. These accounts offer higher interest rates than traditional savings accounts and provide easy access to your funds with no fixed terms.

• Treasury Securities. U.S. Treasury bills, notes, and bonds are government-backed securities that can offer competitive returns. They vary in term length and interest rate and are considered very safe investments.

• Bond Funds. These mutual funds invest in a diversified portfolio of bonds, offering potentially higher returns than money market accounts and CDs, though they come with higher risk.

Photo credit: iStock/Vanessa Nunes

SoFi members with direct deposit activity can earn 4.50% 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 4.50% 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 4.50% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

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

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 8/27/2024. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.

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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.

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

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Jun

2024

What Is the Average Salary by Age in Florida in 2024?

By Melissa Brock | Growing Wealth, Life & Career, Money & Life, relay | Comments Off

If you’re a Florida resident, you may wonder how your salary stacks up against your peers in other states. Or you might wonder about the type of salary you might earn if you move to the Sunshine State.

The U.S. Census Bureau American Community Survey reveals that of all Florida’s workers, those aged 45 to 64 see the highest median household income, at $82,587. The overall median household income in Florida is $69,303.

But what is the average salary in Florida across the board? A typical worker here collects an average annual salary of $48,966 in 2024, or $4,080 per month.

We’ll examine the average salary in Florida in a few different ways: by age, city, and county. We’ll also share examples of the highest-paying jobs in Florida to give you a better understanding of Floridians’ take-home pay.

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Average Salary in Florida by Age in 2024

What is the average salary in Florida by age? The most recent data shows the following annual average income by age among Floridians:

• Under 25 years: $42,617 annually

• 25 to 44 years: $77,487 annually

• 45 to 64 years: $82,587 annually

• 65 years and over: $52,625 annually

As you can see, a gap exists between the salaries of under-25 residents (which can include high school and college-aged students) and those aged 25 to 44. Average salaries peak for workers aged 45 to 64, and decline among those aged 65 years and older.

Floridians’ salaries reflect a national trend in peak earning years. Earnings typically reach their highest point when workers are in their late 40s to late 50s. Women’s peak earning years occur between ages 35 and 54, and men’s peak earning years hit between 45 and 64.

According to data from the Social Security Administration, the average salary in the U.S. is $63,795. And just like in Florida, a few factors contribute to earnings: location, industry, education level, and demand, to name a few.

Average Salary in Florida by City in 2024

It’s important to note that while we’re listing the average salary in Florida by city in the next section (and by county in the section after that), it’s just an average — the number of incomes divided by the number of workers. You may earn above or below the average salaries listed.

Per ZipRecruiter, some average salaries in Florida by city include the following:

• Island Walk: $85,574

• Juno Beach: $78,624

• Ocean Breeze Park: $78,184

• Meadow Oaks: $77,940

• Harbor Bluffs: $77,661

• Port St. Lucie: $60,862

• Boynton Beach: $57,346

• Sunrise: $57,086

• Orlando: $56,808

• Miramar: $56,673

Standards of living — and the salary you need to earn to maintain them — vary by city. For example, a low-end middle-class income in Miami, Fort Lauderdale, and West Palm Beach is $43,000, while a high-end middle-class income is $128,000. No matter where you live in the state, a budget planner app can help you make the most of every dollar you earn.

Average Salary in Florida by County in 2024

The average salary in Florida by county can depend on a wide range of factors, including that area’s need for skilled workers. For example, living in a large metropolitan area with a variety of jobs can draw residents and change the trajectory of a county’s average salary.

The median household income in select counties in different parts of Florida includes:

• Palm Beach County: $70,979

• Collier County: $62,660

• Seminole County: $60,623

• Hamilton County: $56,945

• St. Johns County: $56,425

• Glades County: $52,466

• Citrus County: $46,763

• Hendry County: $48,891

• Madison County: $39,023

• Holmes County: $34,379

From September 2022 to September 2023, employment increased in all of Florida’s 26 counties, according to the Bureau of Labor Statistics. In Miami-Dade County, employment increased particularly in the areas of healthcare and social assistance.

Examples of the Highest-Paying Jobs in Florida

Some of the largest industries in Florida include advanced manufacturing, aerospace and defense, clean energy, information technology, life sciences, and logistics and distribution.

You might be curious about snagging one of the highest-paying jobs in Florida. Here’s a list of the average salary of some of the highest-paying jobs in Florida:

• Finance services director: $211,022

• Staff psychiatrist: $205,364

• Associate medical director: $195,656

• Physician: $193,805

• Clinic physician director: $189,373

• Physician extender: $186,136

• President/chief executive officer: $185,121

• Family practice physician: $184,438

• Pain management physician: $184,207

• Vice president of sales: $184,032

Many types of high-paying jobs require advanced degrees, and as you can see from the list above, some job titles, including that of a physician, require a significant amount of education.

Therefore, you may also want to consider the most in-demand jobs in Florida, which include the following:

• Mental health counselor: $30,112 to $142,147 annually

• Occupational therapist: $40,215 to $136,890 annually

• Management analyst: $41,118 to $104,843 annually

• HR manager: $48,124 to $102,655 annually

• Financial analyst: $48,631 to $97,214 annually

If none of the above fit your credentials or interests, many options abound, including jobs for introverts and for those just starting their careers.

Wherever you are in your professional journey, it’s a good idea to have some short- and long-term financial goals in mind. Tools like a money tracker can keep tabs on where your money goes and also provide valuable insights on your finances.

Recommended: What Is a Good Entry-Level Salary?

The Takeaway

Planning to relocate to the Sunshine State? The average annual salary is $48,966, which is lower than the national average. Still, Florida offers no shortage of opportunities for job seekers, no matter your field or interest area. If you want to lock yourself into a certain salary, research job opportunities in your field, check out the educational requirements, and consider interviewing individuals in the area you’re interested in to learn more about their path and trajectory.

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.

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FAQ

What is a good average salary in Florida?

In Florida, a good average salary might start at $69,000 for a single individual (without kids). On the other hand, a couple might require up to $94,500 to make ends meet and allow money for fun as well. However, every individual is different, and budgeting techniques can help you carve out money for fun and relaxation no matter your income.

What is the average gross salary in Florida?

The average annual salary is $48,966 in Florida in 2024. This number includes all counties and cities in Florida. However, many factors determine your earning potential, including your location, the cost of living, the job market, industry in an area, and the surrounding competition.

What is the average income per person in Florida?

The Florida average annual salary in 2024 is $48,966. However, this number takes into account all individuals in the Sunshine State, including all ages and all career types. You may earn above or below that amount, depending on your field, location, and other factors.

What is a livable wage in Florida?

A good average salary in Florida of $69,000 breaks down to a monthly salary of $5,750 and a biweekly salary of $2,653.85. It also translates to a weekly salary of $1,326.92, and an hourly wage of $33.17.

Photo credit: iStock/franckreporter

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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.

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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May

2024

All You Need to Know About Variable-Rate Certificates of Deposit (CD)

By Laurel Tincher | Budgeting & Goals, Growing Wealth, Investing, money | Comments Off

A variable-rate certificate of deposit (CD) is a financial product that locks up your money for a set period of time (or term) and has a fluctuating interest rate. This varying rate of return is what sets it apart from traditional CDs, which pay a fixed rate, meaning you know exactly how much money your money will earn.

When interest rates are high, a variable-rate CD can help pump up your returns, but the opposite holds true, too. Depending on your financial goals, style, and comfort level, a variable-rate CD may or may not be a good option for you.

What Is a Variable-Rate Certificate of Deposit?

A variable-rate certificate of deposit, or CD, is a financial product that you can purchase from a banking institution, broker, or credit union. All types of CDs are a savings account that have fixed investing terms. That means they hold your money for a certain amount of time, be it six months or several years.

You pick a term that suits you best. During that time, your money earns interest, but you are not supposed to withdraw any funds early or you are likely to be assessed a penalty fee. (No-penalty CDs are sometimes available but usually with lower interest rates.) When the term ends, your CD is said to have matured, and you may withdraw the funds plus interest or roll them over into a new CD. Usually the total amount of interest is also received at the end of the investment term.

More specifically:

• Traditional CDs pay a consistent rate of interest that you are informed of at the start of the term.

• With variable-rate CDs, however, the interest rate fluctuates throughout the term.

This means, you, the investor can potentially earn more on your deposit when interest rates go up. Or you could earn less if interest rates go down. Several market factors influence interest rates. These include the prime rate, treasury bills, a market index, and the consumer price index (CPI).

One last note: CDs are insured. Certificates of deposit are time deposits protected by the Federal Deposit Insurance Corporation (FDIC). If the bank holding the CD were to fail, you’d be insured up to $250,000 per depositor, per account ownership category (such as single, joint, or a trust account), per insured institution.

Special Considerations of a Variable-Rate CD

Here are a few key things to consider when looking into investing in variable-rate CDs. This type of CD is generally most profitable if purchased when interest rates are low, because it’s more likely that the interest rate will increase during the investment term. For this reason, there is a higher demand for these CDs when interest rates are low.

There are four main factors that influence interest rates. These are:

• Consumer Price Index (CPI): The federal government uses the Consumer Price Index to calculate changes in the amount that consumers pay for certain products and services. Whatever the current CPI is can affect how interest rates fluctuate.

• Market Index Levels: Another factor that affects interest rates is the performance of investment portfolios, such as major market indices. Some indices that are often analyzed include the S&P 500, the Dow Jones Industrial Average, and the Nasdaq Composite Index.

• Prime Rate: The prime rate is the interest rate that banks charge customers who have the highest credit ratings. These customers are the least likely to default on loans, so they get the best interest rates.

• Treasury Bill Yields: The U.S. Treasury sells Treasury bonds in order to raise money, and they also pay interest on those bonds. The interest rate associated with Treasury bonds depends on the amount and time period of the bond.

It’s worth noting that, during times of high inflation, CDs may not be your best option. If inflation surges, even a variable-rate CD may not be able to keep pace. At the end of your term, you may find that your investment has lost ground versus inflation.

Another factor to consider before you lock in on a variable-rate CD is the fee for early withdrawals. Some variable-rate CDs have higher fees than others. If there’s a good chance you may end up withdrawing funds early, before a CD’s maturity date, you should check those penalties and make sure they aren’t too steep.

💡 Quick Tip: Want to save more, spend smarter? Let your bank manage the basics. It’s surprisingly easy, and secure, when you open an online bank account.

Pros of a Variable-Rate CD

All CDs are known to be very safe investments since they are federally insured up to $250,000, as noted above. In addition to that security, there are several benefits to investing in variable-rate CDs.

High Yield on Investments

Variable-rate CDs are secure, insured accounts that can provide a higher rate of return than other types of savings accounts. For instance, when you buy a fixed-rate CD, you might miss out on the opportunity to earn a higher interest rate if the market ticks upward. Variable-rate CDs, however, can respond to market conditions. If you buy a variable-rate CD when interest rates are low, you can potentially earn more as rates increase.

Profitable When Interest Rates Are Low

When interest rates are low, demand for variable-rate CDs increases, as does the profit potential. That’s because it is more likely that interest rates will increase after you purchase one. The interest rate can tick upwards and earn you more money on your money.

Lower Withdrawal Fee

Generally, variable-rate CDs come with lower penalties on early withdrawals than other types of CDs.

Recommended: How Can I Buy a Bond?

Cons of a Variable-Rate CD

While there are several reasons variable-rate CDs make good investments, they do come with a few downsides to consider before you invest.

Low Interest Rates

Although a variable-rate CD provides the opportunity to snag higher interest rates, it also creates a significant risk of earning a lower rate if market rates go down. If you buy a variable-rate CD when interest rates are low with the hopes that they will increase, there is no guarantee that this will happen. This means they will continue to earn a low interest rate for some or all of the duration of the CD term. In this case, you may have lost out on the possibility of earning a higher return elsewhere.

Paying Extra for “Bump-Up” Feature

Although interest rates can increase or decrease with most variable-rate CDs, there are some that have a “bump-up” feature. This allows for a one-time rate boost (or possibly a few rate hikes) during the CD’s term, but you may well have to pay extra for this “bump-up.” This is because the initial interest rate is typically lower than it would be on a fixed-rate CD.

Inflation Can Outpace Your Rate and Wipe Away Profit

There is a chance that inflation will increase during the term of a variable-rate CD, as noted above. If this happens, inflation could end up being higher than the interest rate you’re earning. That could effectively cancel out your earnings.

Variable-Rate CD: Real World Example

All this talk of varying interest rates can be hard to get a handle on without a concrete example. So consider the following:

• A CD that has a three-year term and a guaranteed repayment of the principal deposit.

• The starting rate is 4.00%.

• During the term of the investment, the rate drops from 4.00% down to 2.00%.

• To determine the amount of interest you’d receive, you’d take the difference between the initial rate and the final rate, which is 2.00%.

• So at the end of the term, the investor would receive their initial deposit plus 2.00% interest. That’s half what it was when you started.

Obviously, you, the CD account owner, would be happier if the reverse were true, which it could be!

What Happens if I Redeem a CD Before It Matures?

Most CDs have fees for early withdrawal; these typically involve losing interest that’s been earned and occasionally a bit of the principal. (Generally speaking, you don’t receive earned interest until a CD matures.)

However, some variable-rate CDs do offer early withdrawals with no penalties for fees. These CDs usually have a lower interest rate, so you are paying for this flexibility.

Recommended: How Can I Invest in CDs?

The Takeaway

CDs provide a safe place for your money to grow for a specific period of time. Most of them have fixed interest rates, but variable-rate ones are also often available. These can come with some risks. Time things right, and you could earn a healthy return on your investment. But if rates don’t head in a positive direction, you may not even be able to keep up with inflation.

CDs aren’t the only game in town for earning interest. Also consider the kind of interest you can earn from checking and savings accounts.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.50% APY on SoFi Checking and Savings.

FAQ

Are variable-rate CDs issued by the government?

Variable-rate CDs are not issued by the government, but the FDIC, an independent agency of the federal government, insures them up to $250,000 per depositor, per account ownership category, per insured institution.

What determines the rate on a variable-rate CD?

Several factors can affect the interest rate of variable-rate CDs. These include the prime rate, market indices, treasury bills, and the consumer price index.

Do CDs have fixed interest rates?

Many CDs have fixed interest rates, but variable-rate CDs have interest rates that fluctuate throughout their term. It’s up to you which type you invest in.

Photo credit: iStock/Vladimir Sukhachev

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi members with direct deposit activity can earn 4.50% 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 4.50% 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 4.50% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

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

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 8/27/2024. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.

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

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

*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.

SOBK-Q224-1902288-V1

May

2024

Guide to Fractional Art Investing

By MP Dunleavey | Growing Wealth, invest, Investing | Comments Off

Fractional art investing allows individual investors to purchase shares of higher-priced artworks, and (assuming the art appreciates) to realize a profit when the work is sold.

The cost of owning and maintaining individual works of art can be prohibitive for many people, especially retail investors. Fractional art investing has evolved as an accessible alternative to owning physical art, which can entail significant expense, management, and maintenance issues.

Investing in art is considered a form of alternative investing, which means that art, and fractional art investments, don’t typically move in sync with conventional asset classes like stocks and bonds. While art assets may offer growth opportunities, and the potential for portfolio diversification, they also come with certain risks.

What Is Fractional Art Investing?

As an increasing number of investors have begun to explore alternative asset classes, collectible art has emerged as a potential growth area.

Just as savvy stock market investors seek out top companies to invest in, many art investors likewise want to put their money into so-called blue-chip art: well-known works by established artists that may be more likely to appreciate in value. In addition, established but less well-known artists — like so-called growth stocks — are also attracting interest, based on their potential to gain value.

Given that it’s expensive to purchase and own works of art, fractional art investing — like investing in fractional shares of stock — allows investors to own shares of existing works, spread some of the investing risk across a range of pieces, and get a proportional share of any gains when the art is sold (although there are no guarantees that the art will appreciate).

Because art isn’t considered one of the traditional asset classes — including stocks, bonds, and cash — it can also offer investors diversification.

Art Market Growth

The global art market suffered during the pandemic but has since recovered to pre-pandemic levels, with sales of about $65 billion in 2023, according to the Art Basel-UBS Art Market Report 2024. (There has been a similar surge of interest in other valuable types of collectibles.)

Nonetheless, 2023 saw a 4% dip in overall sales from the previous year, owing to the high interest-rate climate, inflation, and geo-political issues. But transaction volume did increase by 4% from 2022 to 2023.

In addition, there is growing interest in fractional shares as an easier way to invest in art. According to ArtTactic, an art market research company, more than $625 million in fractional art shares were sold between 2017 and 2022. Because of the relatively lower price point, and the focus on returns (not owning art, per se), fractional art investing is attracting younger buyers, who may not be as affluent, but who are contributing to the liquidity of the art market.

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Fractional Art Explained

Fractional art investors don’t hold onto the art; they may never see it. Rather, a company that specializes in offering fractional art investments buys and maintains the actual pieces (say, a painting by Pablo Picasso or a sculpture by Fernando Botero), and then issues shares of each work to investors.

Art can be securitized in a couple of different ways, and as technology evolves more options are likely to emerge. In some cases the art is treated like a company, registered with the SEC, and the shares are sold to investors. In other cases a few works might comprise a fund that investors can buy shares of, similar to a mutual fund (which holds many companies). In some cases shares are managed using smart contracts on a blockchain.

Whereas the purchase price of a painting might be in the millions, investors could buy shares of a painting for, say, $50 per share. Prices vary widely, depending on the platform, and there may be high investment minimums (e.g. $3,000 and higher)

Share prices also include a fee for the maintenance and storage of the art, which can be relatively high, even when divided proportionally among shareholders. Similar to investing fees, even small amounts can add up over time.

How to Invest in Fractional Art: 3 Steps

Fractional art investing platforms may offer some liquidity in the form of on-platform trading. But generally it’s difficult to trade fractional shares of art. At the moment, fractional ownership is more of a long game, with lock-up periods that can last as long as a few years or a decade. Here’s how to start:

Step 1: Join a Platform

The first step is to find a platform that supports fractional art shares, and become familiar with its offerings.

Once you feel comfortable that a certain platform has the type of art you’d be interested in, get to know its terms (the investment minimum, cost per share, the fees involved, length of commitment) and sign up.

Step 2: Purchase Shares of Art

Decide which artwork or works you want to invest in. Be sure to understand the terms, and how long your money will remain invested.

It’s important to know that there’s no guarantee that the piece(s) you pick will appreciate in value.

Step 3: Wait or Trade

Depending on the platform, you may be able to trade your shares on an on-platform secondary market of sorts. In some cases, investors could potentially see dividend distributions before the end of their investing term. Otherwise, all you need to do is wait for your investment to be sold and take it from there.

Remember, the value of art can fluctuate considerably over time, so there’s no certainty that you’ll see your hoped-for return.

Pros and Cons of Fractional Art Investing

Fractional art ownership has emerged as a legitimate investing strategy, but because art is an alternative investment, there are a number of risks that investors must keep in mind, so it’s important to consider the pros and cons of investing in art.

Pros

Investing in fractional shares of art can be an affordable way to participate in the art market.

Art is considered an alternative investment, so investing in fractional shares also offers the potential for diversification.

Some pieces of art have been known to appreciate, especially if they’re by well-established artists. But in some cases works by less well-known and/or contemporary artists may appreciate as well.

Cons

Investing in art, whether through owning an artwork outright or through fractional shares, can be risky. The value of a piece of art is difficult to establish, and tends to fluctuate based on trends and tastes, not intrinsic or fundamental value.

As a result, an investment that looks promising now may not turn out to be profitable in the long term.

In addition, investing in fractional shares requires most investors to hold their investment for a period of years before the underlying work is sold. This means your capital is locked up, and may or may not see a return.

Fractional Art vs. Buying Art Yourself

Unless you have the resources to purchase, insure, and maintain a work of art yourself, buying fractional shares may be the best way to go. Owning physical art is a commitment, and can be quite expensive, putting aside the purchase price itself.

It’s true that art investing can be risky, but fractional shares may require less capital, which lessens the risk factor (although the risk of loss is always possible).

The Takeaway

The cost of owning individual works of art is out of reach for many investors. Fractional art investing is emerging as an accessible, and sometimes profitable option. Investors get to “own” part of a masterpiece, or an emerging artist’s work, without the headache of storing and maintaining it.

That said, investing in art is a type of alternative investment. While non-traditional assets may offer growth opportunities and the potential for portfolio diversification, they can also come with certain risks, such as market volatility, a lack of transparency, and little to no regulation in some cases.

Ready to expand your portfolio's growth potential? Alternative investments, traditionally available to high-net-worth individuals, are accessible to everyday investors on SoFi's easy-to-use platform. Investments in commodities, real estate, venture capital, and more are now within reach. Alternative investments can be high risk, so it's important to consider your portfolio goals and risk tolerance to determine if they're right for you.

Invest in alts to take your portfolio beyond stocks and bonds.

FAQ

Is fractional art a good investment?

Buying fractional shares of art can be a good investment, but it’s difficult to predict. The art market is notoriously volatile, and knowing whether a piece of art will gain value depends on trends over time. Like any type of alternative investment, the art market isn’t transparent or heavily regulated.

How does fractional art work?

As it sounds, investors can purchase a percentage of a given work of art, typically via a platform that specializes in fractional art investing. Buying fractional shares may be inexpensive, but there can be fees and investment minimums to consider as well.

In addition, your investment is often held for a period of years, until the work is sold. At that time, if there is a gain, it would be shared (minus fees) proportionally with investors.

Is Investing in art profitable?

There’s no way to predict for certain whether investing in art (or commodities or real estate or any type of investment) will be profitable. It depends on the investment you choose and what happens in the market by the time it’s sold.

Photo credit: iStock/South_agency

SoFi Invest®

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SOIN-Q224-1858359-V1

May

2024

Is Investing in Art a Good Idea?

By MP Dunleavey | Growing Wealth, invest, Investing | Comments Off

Investing in art can be a good idea, but there are a number of options and factors to take into account, such as: the type of art investment you might choose (i.e. art funds vs. individual works of art), the art market climate, your familiarity with artists and trends in the art world, and more.

Generally speaking, art is considered an alternative investment. The art market does not move in sync with traditional stock and bond markets, and therefore owning art in some capacity can provide portfolio diversification. But like any alternative asset, investing in art also comes with risks.

The art market is highly illiquid, art itself is not well regulated, collectors’ tastes are fickle — and thus what determines the value of certain works of art can be harder to predict than, say, shares of stock. So while investing in art could be a smart move, it requires careful research and a deep understanding of this asset class.

How Big Is the Art Market?

Most people are familiar with the high-priced sales of some pieces of art. Works by well-known and historically revered artists can sell for millions — as can contemporary works by artists who are increasingly popular. But despite a few big headliners, the art market is fairly small.

According to a 2023 industry report, global art sales increased by a modest 3%, to $67.8 billion in 2022. Sales were more robust in the United States in 2022, with 8% growth to $30.2 billion year over year. The U.S. is the world’s largest art market, with the U.K. and China being second and third largest.

💡 Quick Tip: Because alternative investments tend to perform differently than conventional ones, even under the same market conditions, alts may help diversity your portfolio, mitigate volatility, and provide a hedge against inflation.

Is Art a Good Investment?

Whether art is a good investment to a large degree depends partly on the work of art. For example, just as there are blue-chip stocks, there are blue-chip artworks that typically command higher prices and offer the potential for steady appreciation (although given the volatility of the art market, there are no guarantees).

But investing wisely in art also depends on the investor, and the vehicles they choose. For example, investing in individual art — similar to investing in individual stocks — requires a deep familiarity with that product and its market, as well as understanding the risks involved.

While you can invest in individual works of art, the value of any piece of art depends on its rarity, whether the artist is in demand, the historical and cultural significance of the work, as well as trends and market conditions.

However, these days investors can also choose to invest in art through art-related funds (similar to mutual funds), and fractional shares of art, which is analogous to investing in fractional shares of stock.

It’s also important for would-be investors to understand the role of collectors.

Art Collectors vs. Art Investors

The difference between art collectors and art investors is important to grasp. Most types of asset classes attract investors alone (with some exceptions, e.g. collectibles). Typically you don’t hear about people collecting stocks or mutual funds, for example.

In the case of the art market, however, collectors can play a role in art market trends as well as valuations. While investors, particularly high net-worth investors, may also influence sales, many collectors are long-time participants in the art market with years of familiarity with the ins and outs of many sectors, artists, dealers, galleries, domestic and international art fairs, and more.

Collectors may be steeped in a certain era or style (e.g. medieval religious statuary or Impressionist paintings), and committed to owning works long-term — for decades, or even generations.

By contrast, art investors may aim to acquire works that will gain value in a relatively short period (i.e. within a few years). This is where different types of art investment vehicles can come into play.

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What Makes a Good Art Investment?

Investing in art requires a certain mindset, and doing your due diligence to size up what constitutes the best opportunities for you, depending on your goals. It’s also important to understand some of the newer investment vehicles.

Individual Works

Investing in individual works requires knowledge of the artist, their current status (e.g. are they in demand or have they fallen out of favor?), the relevance or importance of a given work, and a sense of whether it’s overvalued or undervalued.

The risks of choosing individual works include the possibility of buying a fraudulent piece, the cost of owning and maintaining the work (including storage and insurance), and the uncertainty of knowing whether any given work will hold its value.

Buying individual works can also come with added charges, similar to investment fees (e.g. commissions and other costs). And given the fragility of most art, there is also the risk of physical damage or total loss.

Fractional Shares of Art

Owing to the high cost of purchasing and owning blue-chip works of art, it’s possible to buy fractional shares of art. This option is relatively new, but fractional shares of art are available on a growing number of platforms.

There are various systems for buying fractional art shares. One common way it can work: Investors purchase fractional shares of a work by a specific artist. The platform handles the maintenance and storage of the art, which is held for a period of time and then sold, ideally for a profit. If the sale is profitable, investors get a percentage of the gain, net of fees, commensurate with the percentage of the work they own.

The risk of buying fractional shares of art is that, as with any investment, there are no guarantees of a return. In addition, this is a financial strategy — fractional owners never have the pleasure of actually possessing the work.

Art Funds

Similar to traditional mutual funds and ETFs, an art fund is a type of pooled investment fund. But unlike conventional funds, art funds tend to be a long-term proposition. Art funds are structured typically as closed-end funds, but with a twist: investors typically contribute their capital over a period of three to five years, often with no returns for another specified time period (terms vary).

These funds are highly illiquid, and (in addition to the unpredictability of the art market itself) there are substantial risks to locking up your capital for what could be years, for an unspecified return upon redemption.

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Risk Tolerance

Individual investors interested in exploring this type of alternative investment need to consider many factors, especially their stomach for risk. While all investments come with some degree of risk, the spectrum is wide when it comes to art, and there are many unknowns.

Perhaps the biggest factor is the capriciousness of the art world as a whole. For a couple of years, digital art, especially non-fungible tokens (NFTs), spiked in popularity and many people sold digital art at a profit — only to see demand plunge, taking prices along with it.

It’s a cautionary tale. Yet there is always the potential for a rebound, if digital art regains its appeal, or “antique” NFTs become a thing.

Investing in art also includes risk factors specific to owning fragile physical items, as well as the risk of total loss of capital if the investment you choose falls out of favor, or turns out to be a fake — or if a given fund manager makes a bad call.

Pros and Cons of Investing in Art

Taking all of the above into consideration, it’s important to weigh the advantages and disadvantages of investing in art.

Advantages

Art offers the potential for substantial returns.

There are many new opportunities for investing in art; would-be investors can consider art funds, fractional shares of art, and more.

Investing in art may offer portfolio diversification.

Some countries may offer tax breaks on art sales.

If you enjoy art and the art world, this type of investing can offer the potential for fun, travel, and aesthetic gratification.

Disadvantages

The art world is volatile and there is no way to know for sure what a given artist or work may be worth now or in years to come.

It’s difficult to authenticate works of art, and the risk of forgery is high.

Investing in art-related funds, stocks, or fractional shares are still relatively new types of instruments, and terms (fees, redemptions, illiquidity) may not be favorable.

Many types of physical artworks can be damaged or destroyed.

The current tax treatment of art gains in the United States is higher than long-term capital gains rates.

Pros	Cons
Potential for gains	Risk of losing money owing to art market volatility
New ways to invest in art; i.e. art funds, fractional shares	Like some alternative investments, art is not heavily regulated by the SEC
May provide portfolio diversification	Highly illiquid and opaque
Some countries offer tax breaks on art sales	Art gains subject to higher taxes than long-term capital gains
Owning art is aesthetically gratifying	Risk of damage and loss

Returns on Art Investments Over Time

Just as the art world is expanding to offer new options to investors, it’s also adopting certain investment world conventions, such as art indices. Now investors can consider the data provided by an index such as the Sotheby Mei Moses Index, which was modeled on the Case-Shiller Index for home prices.

That said, individual artworks are not securities — they are non-fungible and highly illiquid — and as such evaluating the “performance” of specific works or even certain sectors over time is difficult. Even taking into account the evolution of fractional art shares and art funds as investment vehicles, the lack of transparency around pricing (as well as regulation) can make it difficult for investors to make a satisfactory risk-reward assessment.

Unfortunately, this lack of transparency is part of the risk when investing in alternative assets.

The Takeaway

Investing in art offers some advantages, not least of which is the enjoyment of researching and purchasing individual works that fulfill a personal taste or passion. In addition, art is an alternative investment, meaning that it doesn’t move in tandem with traditional markets. As such, it can offer portfolio diversification.

But like many alternative assets, art can be highly volatile and illiquid. As a whole, although art investment opportunities have expanded into art funds and owning fractional shares of artworks, art as an investment is not transparent or well regulated. That said, for the right investor, this asset class may provide unique opportunities.

Invest in alts to take your portfolio beyond stocks and bonds.

FAQ

What is the best art to invest in?

The best art to invest in is art you know well and has a value you feel confident in. That might be an individual piece by a certain artist, or it might be fractional shares in well-known or even famous works. Whatever route you choose, treat it like any other investment: do the necessary research, and understand the potential risks and rewards.

Will the art you choose increase in value?

As with any type of investment there are no guarantees. Some works of art appreciate steadily over time, some enjoy a sudden rise in value if market trends are favorable, while other art you might invest in could rapidly lose value. This is why it’s essential for any investor interested in art to fully understand how these alternative assets might fit into your portfolio, or not.

Photo credit: iStock/South_agency

SoFi Invest®

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.

An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. This and other important information are contained in the Fund’s prospectus. For a current prospectus, please click the Prospectus link on the Fund’s respective page. The prospectus should be read carefully prior to investing.
Alternative investments, including funds that invest in alternative investments, are risky and may not be suitable for all investors. Alternative investments often employ leveraging and other speculative practices that increase an investor's risk of loss to include complete loss of investment, often charge high fees, and can be highly illiquid and volatile. Alternative investments may lack diversification, involve complex tax structures and have delays in reporting important tax information. Registered and unregistered alternative investments are not subject to the same regulatory requirements as mutual funds.
Please note that Interval Funds are illiquid instruments, hence the ability to trade on your timeline may be restricted. Investors should review the fee schedule for Interval Funds via the prospectus.

Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.

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

Exchange Traded Funds (ETFs): Investors should carefully consider the information contained in the prospectus, which contains the Fund’s investment objectives, risks, charges, expenses, and other relevant information. You may obtain a prospectus from the Fund company’s website or by email customer service at https://sofi.app.link/investchat. Please read the prospectus carefully prior to investing.
Shares of ETFs must be bought and sold at market price, which can vary significantly from the Fund’s net asset value (NAV). Investment returns are subject to market volatility and shares may be worth more or less their original value when redeemed. The diversification of an ETF will not protect against loss. An ETF may not achieve its stated investment objective. Rebalancing and other activities within the fund may be subject to tax consequences.

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

Disclaimer: The projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results.
Fund Fees
If you invest in Exchange Traded Funds (ETFs) through SoFi Invest (either by buying them yourself or via investing in SoFi Invest’s automated investments, formerly SoFi Wealth), these funds will have their own management fees. These fees are not paid directly by you, but rather by the fund itself. these fees do reduce the fund’s returns. Check out each fund’s prospectus for details. SoFi Invest does not receive sales commissions, 12b-1 fees, or other fees from ETFs for investing such funds on behalf of advisory clients, though if SoFi Invest creates its own funds, it could earn management fees there.
SoFi Invest may waive all, or part of any of these fees, permanently or for a period of time, at its sole discretion for any reason. Fees are subject to change at any time. The current fee schedule will always be available in your Account Documents section of SoFi Invest.

SOIN-Q224-1856685-V1

Money Market Account vs Certificate of Deposit

Main Differences Between Money Market Accounts and CDs

Money Market Accounts

Pros of Money Market Accounts

Cons of Money Market Accounts

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Open a SoFi Checking and Savings Account with direct deposit and get up to a $300 cash bonus. Plus, get up to 4.50% APY on your cash!

Certificates of Deposits (CDs)

Pros of CDs

Cons of CDs

When Should I Consider a Money Market Account or CD Over the Other?

Choosing a Money Market Account Over a CD

Choosing a CD Over a Money Market Account

The Takeaway

FAQ

Are CDs or money markets better?

What are the tax implications of money market accounts vs. CDs?

What are other options besides money market accounts and CDs?

What Is the Average Salary by Age in Florida in 2024?

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Average Salary in Florida by Age in 2024

Average Salary in Florida by City in 2024

Average Salary in Florida by County in 2024

Examples of the Highest-Paying Jobs in Florida

The Takeaway

FAQ

What is a good average salary in Florida?

What is the average gross salary in Florida?

What is the average income per person in Florida?

What is a livable wage in Florida?

All You Need to Know About Variable-Rate Certificates of Deposit (CD)

What Is a Variable-Rate Certificate of Deposit?

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Special Considerations of a Variable-Rate CD

Pros of a Variable-Rate CD

High Yield on Investments

Profitable When Interest Rates Are Low

Lower Withdrawal Fee

Cons of a Variable-Rate CD

Low Interest Rates

Paying Extra for “Bump-Up” Feature

Inflation Can Outpace Your Rate and Wipe Away Profit

Variable-Rate CD: Real World Example

What Happens if I Redeem a CD Before It Matures?

The Takeaway

FAQ

Are variable-rate CDs issued by the government?

What determines the rate on a variable-rate CD?

Do CDs have fixed interest rates?

Guide to Fractional Art Investing

What Is Fractional Art Investing?

Art Market Growth

Alternative investments, now for the rest of us.

Start trading funds that include commodities, private credit, real estate, venture capital, and more.

Fractional Art Explained

How to Invest in Fractional Art: 3 Steps

Step 1: Join a Platform

Step 2: Purchase Shares of Art

Step 3: Wait or Trade

Pros and Cons of Fractional Art Investing

Pros

Cons

Fractional Art vs. Buying Art Yourself

The Takeaway

FAQ

Is fractional art a good investment?

How does fractional art work?

Is Investing in art profitable?

Is Investing in Art a Good Idea?

How Big Is the Art Market?

Is Art a Good Investment?

Art Collectors vs. Art Investors

Alternative investments, now for the rest of us.

Start trading funds that include commodities, private credit, real estate, venture capital, and more.

What Makes a Good Art Investment?

Individual Works

Fractional Shares of Art

Art Funds

Alternative investments,
now for the rest of us.

Alternative investments,
now for the rest of us.

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