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ATMs can be a quick, easy solution when you need a fast cash infusion, but banks typically impose a limit on how much money you can withdraw in one day. If you are planning to withdraw a certain amount of cash, it can be wise to know whether you’ll actually be able to get the money you need from the nearest ATM. The typical amount is between $500 and $1,000.

Here, you’ll learn how much money you can likely withdraw from an ATM and how to get around these ATM maximum limits.

What Is an ATM Withdrawal Limit?

An ATM withdrawal limit sets a maximum amount of cash you can withdraw per day from these machines. The limits vary widely, from several hundred to several thousand dollars. Often, those with premium checking accounts may have higher limits than those with standard accounts.

The kind of ATM you’re using (in-network or out-of-network) can make a difference, too, with in-network often having higher limits.

💡 Quick Tip: Don’t think too hard about your money. Automate your budgeting, saving, and spending with SoFi’s seamless and secure mobile banking app.

Why Do Banks Have ATM Withdrawal Limits?

While ATM withdrawal limits can be frustrating, they exist for two important reasons:

•   Cash availability: Banks want to make sure there is enough money available for all ATM users. But ATMs can only hold so much cash, and banks only have so much cash on hand at any one given time. Say you go to an ATM on the Friday before a long holiday weekend to get some spending money and find that there is no cash left. This doesn’t happen often, but it’s a possibility. Capping the amount of money that can be withdrawn at an ATM helps ensure that customers can’t clean out ATMs or drain the bank’s cash reserves.

•   Security: ATM withdrawal limits also protect consumers. If someone were to get hold of your debit card and PIN number, the ATM withdrawal maximum would prevent that fraudster from immediately draining your entire checking or savings account.

How Much Can I Withdraw From an ATM per Day?

The answer depends on the specific bank’s rules around withdrawals, with some capping at $300 and others going as high as $5,000 a day. A limit of somewhere between $500 and $1,000 is common.

In some cases, a withdrawal limit depends on a specific customer’s banking history or account type. A new customer with a basic checking account may have a lower withdrawal limit than an established customer with a premium checking account. If you have a student or a second chance account, your max ATM withdrawal might be lower than if you had a standard checking account.

Whether you are withdrawing from checking vs. savings can also make a difference. In some cases, how savings accounts work is to have a higher cap on how much you can withdraw at any one time. In others, you will find that you can pull more cash from an ATM using your checking account.

One thing to be aware of: You may be limited to how many withdrawal transactions you can make per month from your savings account. Check your financial institution’s policies for specifics.

You may also find that how much you can withdraw will depend on the type of ATM you are using. For example, you may be able to withdraw more from an in-network machine than an independent one at a gas station.

Here’s a chart showing the range of withdrawal limits for some popular banks:

How to Work Around ATM Withdrawal Limits

If you need more cash than an ATM will allow you to withdraw, there are a few workarounds that can help as you manage your money.

Ask for Cash Back While Shopping

In some stores (like grocery stores), it’s possible to ask for cash back at checkout when making a purchase. While cash back may count toward your debit card’s daily purchase limit, it typically doesn’t count toward a daily ATM withdrawal limit.

The store will likely also have a cash back limit that applies on a per-purchase basis. That could mean you’ll need to make multiple purchases to withdraw the full amount of cash needed.

Withdraw From Savings

If you have both a checking account and savings account, you can withdraw money from a savings account when using an ATM. This can help avoid the daily checking account withdrawal limit.

There may, however, still be some limitations on ATM savings withdrawals, and this may vary with the kind of savings account you have.

Withdraw at the Window

If you bank at a brick-and-mortar location and the branch is open when you need more money, head inside. You can withdraw the amount you need by seeing a teller.

Contact Your Bank to Increase Your Limit

You may be able to negotiate a higher ATM withdrawal limit simply by contacting your bank’s customer service department and asking for a boost.

Recommended: ATM Cards vs Debit Cards: What’s the Difference?

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The Takeaway

ATM withdrawal limits are there for your protection as well as the bank’s, but that doesn’t mean they aren’t inconvenient at times.

If you regularly need cash, you may want to find out your bank’s daily ATM withdrawal limits and plan ahead. Or, you can work around the maximums in place and get cash from other sources. By using a bit of smart strategy, you can make sure you have the cash you need on hand.

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

FAQ

Can you withdraw $1,000 at an ATM?

The amount you can withdraw will vary based on a number of factors, including your account type (standard or premium) and the type of ATM you are using (in-network or out-of-network).

Which ATM lets you withdraw the most money?

You may find you can withdraw more cash at an in-network than out-of-network ATM.

What is the maximum amount I can withdraw from an ATM at one time?

The amount you can withdraw from an ATM may range from $300 to $5,000 a day, depending on the financial institution and your particular account. Somewhere between $500 and $1,000 is typical.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

Photo credit: iStock/RgStudio

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. 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.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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

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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A student checking account is a bank account that is specially designed for students in their teens and early 20s. This type of account typically offers the same tools as a regular checking account, like a debit card and checks, but may have lower fees and minimal balance requirements to make banking more accessible for young adults. Some student bank accounts may also offer extra perks like sign-on bonuses and financial education tools tailored to students.

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

What Are Student Checking Accounts?

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

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

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

Student Checking Account Features

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

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

•  Free ATM access: Many banks provide fee-free access to a large network of ATMs, making it easy to access funds whether you’re on campus or home for the summer.

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

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

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

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

•  Rewards programs: Many student checking accounts offer cash back on purchases made with your debit card, which can help you save money on everday expenses.

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

Recommended: Savings Account Calculator

Who’s Eligible to Open a Student Checking Account?

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

To open a student bank account, you must typically also be a current student. This generally means full-time enrollment but some banks may allow part-time students to open a student bank account. Either way, you will likely need to provide proof of enrollment to be approved for a student account.

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

Recommended: How to Deposit a Check

Pros and Cons of Student Checking Accounts

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

Advantages of Student Checking Accounts

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

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

•  Reduced minimum balance requirements. You may avoid being charged a fee or having your account closed due to not having a certain amount of money in your account.

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

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

Disadvantages of a Student Bank Account

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

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

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

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

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

How to Choose Between Different Student Checking Accounts

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

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

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

•  What are the monthly fees, if any?

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

•  How much is the minimum initial deposit when opening the account?

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

•  What happens if you overdraft your account?

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

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

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

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

How to Open a Student Bank Account

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

•  Find out if you can sign up online or if you need to apply in person at a branch, and whether or not you’ll need an adult cosigner.

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

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

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

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

•  Make an initial deposit (if required). Some banks require an initial deposit of $10 or $25; others may allow you to open your account without any cash at first.

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

The Takeaway

A student checking account can be a great tool for a young person learning how to manage their finances. With features like low fees, mobile banking, and overdraft forgiveness, these accounts can provide the flexibility and convenience students need. However, it’s important to shop around and compare different options, understand the terms, and prepare for the transition to a regular checking account after graduation.

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

FAQ

Do student checking accounts charge monthly fees?

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

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

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

What happens to a student checking account after you graduate?

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

photo credit: iStock/Iryna Melnyk
SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. 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.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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

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

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An emergency savings fund is a lump sum of cash set aside to cover any unanticipated expenses or financial emergencies that may come your way.

Besides offering peace of mind, an emergency fund can help save you from having to rely on high-interest debt options. These include credit cards or unsecured loans which can snowball. Not having rainy-day savings can also threaten to undermine your future security if you wind up tapping into retirement funds to get by.

What Is an Emergency Fund?

An emergency fund is essentially a savings fund earmarked for emergency expenses—aka unplanned expenses or financial emergencies. A major home repair, like a leaking roof, is an example of an unplanned expense that needs to be dealt with right away. Losing a job is an example of a financial emergency that can cause a lot of stress if you don’t have an emergency fund to dip into to pay for necessities and bills.

If someone doesn’t have an emergency fund and experiences financial difficulties, they may turn to high-interest debt. For instance, they may use credit cards or personal loans to cover expenses, which can lead to struggling to pay down the debt that’s left in its wake.

You may be wondering just how much to keep in an emergency fund. Financial experts often recommend having at least three to six months’ worth of basic living expenses set aside in an emergency fund. That can be a lofty goal considering that one recent study showed that about half of all Americans would struggle to come up with $400 in an emergency scenario. And in SoFi’s April 2024 Banking Survey of 500 U.S. adults, 45% of respondents said they have less than $500 set aside in an emergency fund. It’s wise not to be caught short and to prioritize saving an emergency fund.

Source: SoFi’s 2024 Banking Survey

Why Do You Need an Emergency Fund?

With all of the bills that a person typically has to pay, you may wonder, “Why should creating an emergency fund be a top priority?” Here’s why: An emergency fund can be a kind of self-funded insurance policy. Instead of paying an insurance company to back you up if something goes wrong, you’re paying yourself by setting aside these funds for the future. Building this cushion into your budget can be a vital step in better money management.

How you invest emergency funds is of course up to you, but keeping the money in a high-yield savings account typically gives you the liquidity you need while earning some interest.

Having this kind of financial safety net comes with a range of benefits. Below are some of the key perks of having an ample emergency fund.

Preventing You From Going into Debt

Yes, there may be other ways to quickly access cash to cover the cost of an emergency, such as credit cards, unsecured loans, home equity lines of credit, or pulling from other sayings, like retirement funds.

Preventing debt is one of the most important reasons to have an emergency fund.

But these options typically come with high interest fees or penalties. Though there are many reasons for having an emergency fund, preventing debt is among the most important and enticing.

Providing Peace of Mind

Here’s another reason why it is important to have an emergency fund: Living without a safety net and simply hoping to get by can cause you to stress. Thoughts about what would happen if you got hit with a large, unanticipated expense could keep you up at night.

Being prepared with an emergency fund, on the other hand, can give you a sense of confidence that you can tackle any of life’s unexpected events without experiencing financial hardship.

Providing Finances During Unemployment

Applying for unemployment benefits, if you are entitled to them, can help you afford some of your daily expenses. Unfortunately, these payments are generally not enough to cover your entire cost of living.

If you have an emergency fund, you can tap into it to cover the cost of everyday expenses — like utility bills, groceries, and insurance payments — while you’re unemployed.

Starting an emergency fund also gives you the freedom to leave a job you dislike, without having to secure a new job first. Sometimes this can be the best move if you are stuck in a toxic situation.

Making Better Financial Decisions

Having extra cash set aside in an emergency fund helps keep that money out of sight and out of mind. Having money out of your immediate reach can make you less likely to spend it on a whim, no matter how much you’d like to.

Also by having a separate emergency account, you’ll know exactly how much you have — and how much you may still need to save. This can be preferable to keeping a cash cushion in your checking account and hoping it will be enough. In fact, 77% of the SoFi survey respondents who have a savings account said they used it specifically for emergencies.

Recommended: Guide to Practicing Financial Self-Care

Emergency Fund Statistics

Curious about how much other people have in their emergency funds? Or what percentage of Americans actually have a rainy-day account? Here are some recent research numbers to know:

•   About 75% of people report having emergency savings.

•   46% have enough money to cover three months’ worth of expenses.

•   Just 19% of people in SoFi’s report said they have between $1,000 and $5,000 in emergency savings.

•   24% of people overall have no emergency savings at all.

•   37% of Americans said they couldn’t cover a $400 emergency expense, according to Empower data.

•   59% of U.S. survey respondents said they couldn’t cover a $1,000 emergency bill.

How Do You Build an Emergency Fund?

One of the basic steps of how to start a financial plan is saving for emergencies. Stashing money aside for a rainy day is a vital part of financial health.

The good news is that starting an emergency fund doesn’t have to be complicated. These tips can help you get your emergency fund off to a good start.

•   Set your savings target. The first step in building an emergency fund is deciding how much to save. The easiest way to do that is to add up your monthly expenses, then multiply that by the number of months you’d like to save (typically, at least three to six months). If the amount seems overwhelming, you can start smaller and aim to save $1,000 first, then build up your emergency fund from there.

•   Decide where to keep it. The next step is deciding where to hold your emergency savings. Opening a bank account online could be a good fit, since you can earn a competitive APY (annual percentage yield) on balances while maintaining convenient access to your money. You could also choose to open a traditional bank account and use its online banking features. Forty-eight percent of people say they use online banking daily, according to SoFi’s data.

•   Automate contributions. Once you set up an online bank account for your emergency fund, you can schedule automatic transfers from checking. This way, you can easily grow your emergency fund without having to worry about accidentally spending down that money.

One of the most frequently asked emergency fund questions is whether a savings account is really the best place to keep your savings. After all, you could put the money into a certificate of deposit (CD) account instead or invest it in the market. But there are issues with those options.

A CD is a time deposit, meaning you agree to leave your savings in the account for a set maturity period. If you need to withdraw money from a CD in an emergency before maturity, your bank may charge you an early withdrawal penalty.

So, should emergency funds be invested instead? Not so fast. Investing your emergency fund money in the stock market could help you to earn a higher rate of return compared to a savings account. But you’re also taking more risk with that money, since a downturn could reduce your investment’s value. Proceed with caution before taking this step.

How Long Does It Take to Grow an Emergency Fund?

Emergency funds don’t necessarily come together overnight. Saving after-tax dollars to equal six months’ worth of typical living expenses can take some work and time. Here’s an example to consider: If your monthly costs are $3,000, you would want to have between $9,000 and $18,000 set aside for an emergency, such as being laid-off.

•   If your goal is $9,000 and you can set aside $200 per month, that would take you 45 months, or almost four years, to accumulate the funds.

•   If you can put aside $300 a month, you’d hit your goal in 30 months, or two and a half years.

•   If you can stash $500 a month, you’d have $9,000 saved in one and a half years.

A terrific way to grow your emergency fund is to set up automatic transfers from your checking account into your rainy-day savings. That way, you won’t see the money sitting in your checking and feel as if it’s available to be spent.

Recommended: Online Emergency Fund Calculator

How Can You Grow It Faster?

You’ve just seen how gradually saving can build a cash cushion should an emergency hit. Here are some ways to save even faster:

•   Put a windfall into your emergency fund. This could be a tax refund, a bonus at work, or gift money from a relative perhaps.

•   Sell items you don’t need or use. If you have gently used clothing, electronics, jewelry, or furniture, you might sell it on a local site, such a Facebook group or Craigslist, or, if small in size, on eBay or Etsy.

•   Start a side hustle. One of the benefits of a side hustle is bringing in extra cash; it can also be a fun way to explore new directions, build your skills, and fill free time.

These techniques can help you ramp up your savings even faster and be prepared for an emergency that much sooner.

Prioritizing Your Emergency Fund When You Have Other Financial Obligations

Most of us have competing financial goals: paying down student debt or a credit card balance; accumulating enough money for a down payment on a house; saving for college for kids; and socking away money for retirement. In many cases, you’ll see variability in financial goals by age, but there are often several needs vying for your dollars at any given time.

Here’s advice on how to allocate funds:

•   Definitely start or continue saving towards your emergency fund. Even if you can only spare $25 per month right now, do it! It will get you on the road to hitting your goal and earning you compound interest. Otherwise, if an emergency were to strike, you’ll likely have to resort to credit cards or tapping any retirement savings, which probably involves a penalty.

•   Continue to pay down high-interest debt, like credit card debt. You want to get this kind of debt out of your life, given the interest rates can currently top 20%. You might explore balance transfer offers that let you pay no or very low interest for a period of time (say, 18 months) which can help you pay down your debt. Just make sure you understand the fees that are typically involved.

•   Steadily stick to your schedule for low-interest debt, which typically includes student loans and mortgages.

•   Fund your retirement savings as much as you can. As with an emergency fund, even a small amount will be worthwhile, especially with the benefit of compound interest. Make sure to contribute enough to take advantage of the company match if your employer offers that as part of a 401(k) plan; that is akin to free money.

The Takeaway

An emergency fund is an important financial goal. Once you’ve accrued at least three to six months’ worth of basic living expenses, you can feel more secure if a major unexpected expense pops up or job loss happens. It can be wise to store emergency funds in a high-yield savings account to deliver both liquidity and interest.

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

FAQ

What is the purpose of an emergency fund?

An emergency fund is a financial safety net. It’s money set aside that you can use if you are hit with a big, urgent, unexpected bill (like a medical expense or car repair) or endure a loss of income. In these situations, an emergency fund can help you avoid using your credit cards and taking on high-interest debt or hurting your credit score by paying bills late. How to invest an emergency fund is up to you, but a high-interest savings account is one good, liquid option.

Can I use an emergency fund for a non-emergency expense?

Technically, you can use an emergency fund for a non-emergency expense. After all, it’s your money. But it’s not wise to do so and defeats the whole purpose of saving this cash. If you use your emergency funds to pay for a vacation or new clothes, then if a true emergency arises, you won’t be prepared.

How difficult is it to rebuild an emergency fund?

It can be difficult to rebuild an emergency fund, just as it was to accumulate the money in the first place. But even if it takes years to achieve your goal, it is worth it. Putting away money gradually for an emergency is an important step towards being financially fit.

More from the emergency fund series:

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How to Build an Emergency Fund

Emergency Fund Calculator

Where to Keep an Emergency Fund

When to Use Your Emergency Fund

Should You Ever Invest Your Emergency Fund?

>

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Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

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SOBNK-Q325-116

As a college student, it’s not too early to start investing your money. In fact, the sooner you start, the more time your money may have to grow. That could help you meet your financial goals such as going to graduate school, buying a house, or saving for retirement.

There are different types of accounts college students can use to invest, including brokerage accounts and retirement accounts like individual retirement accounts (IRAs) and 401(k)s. But there are some important steps college students should take before they start investing. Here’s what to know about investing as a college student.

Why You Should Start Investing Early

One key reason to start investing early is the potential return on your investment. The average annual return offered by the S&P 500 — a stock market index of the 500 largest companies in the U.S. — is around 7% when adjusted for inflation.

While investing does involve risk, it may help you outpace inflation and give you an extra boost toward your long term goals.

Investing as a college student can be a good time to get started.


💡 Quick Tip: Look for an online brokerage with low trading commissions as well as no account minimum. Higher fees can cut into investment returns over time.

3 Ways to Invest While in College

There are several ways for college students to invest their money, including using tax-advantaged retirement accounts and brokerage accounts.

IRA

An IRA, whether it’s a traditional or Roth IRA, is a type of retirement account that almost anyone with an earned income can open up and start contributing to. There are rules regarding how much you can contribute to an IRA every year — up to $7,000 for those under age 50 in 2025 — and when you can take withdrawals (depending on the type of IRA you open). However, these accounts can be relatively easy ways to kick-start a college students’ investment portfolio.

Two of the most common types of IRAs are traditional IRAs and Roth IRAs. With a Roth IRA, you contribute after-tax dollars and you can withdraw the money tax-free in retirement. With a traditional IRA, you contribute pre-tax dollars (those contributions may be tax deductible), and you pay taxes on the money when you withdraw it in retirement.

IRAs do have withdrawal rules and penalties. Early withdrawals may incur taxes and penalties, with some exceptions. The rules for making withdrawals from a Roth IRA are different from those for a traditional IRA, so it’s wise to understand what they each involve.

Brokerage Account

A brokerage account allows investors to make investments by depositing funds in the account. Your financial institution may have brokerage options, or you may consider using an outside financial brokerage firm or an online brokerage. You can shop around and research different brokerage accounts to compare their minimum deposit required (if they have one), the fees they charge, the investments they offer, and the responsiveness of their customer service department.

With a brokerage account, a college student can buy and sell stocks, bonds, mutual funds, index funds, and other assets. Once an investor opens an account they can transfer money into it from a checking or savings account to fund their investments. Unlike IRAs, brokerage accounts have no contribution limits.

However, selling assets in a brokerage account can trigger capital gains taxes. Short-term capital gains (from assets you’ve held for less than a year) are charged at a higher rate than long-term capital gains (assets you’ve held a year or more).

401(k)

A 401(k) is a type of retirement account offered through an employer (though there are different types of 401(k)s, such as solo 401(k)s, that you can open yourself if you are self-employed). Like IRAs, 401(k)s have annual contribution limits — up to $23,500 for those under age 50 in 2025.

The money you put in a 401(k) account is pre-tax dollars and it reduces your taxable income. The money grows tax-deferred while it’s invested. Your contributions are typically deducted automatically from your paycheck and you have a choice of investments to pick from, depending on your employer’s plan. Your employer may offer a 401(k) match — essentially matching your contribution up to a certain amount and/or percentage.

Aside from certain specific exceptions, you can’t withdraw money from the account until you reach age 59 ½, or you’ll be subject to a 10% early withdrawal penalty.

Steps to Start Investing as a College Student

If you’re a college student who is new to investing, there are several actions that could help you get started.

Set Clear Financial Goals

Before you make your first investment as a college student, it’s important to give some serious thought and consideration to your financial goals. Do you want to try to hit a total net worth or dollar amount by a certain age, for instance? Or do you want to save up enough to buy a home or start a family?

Having clear financial goals in mind before you start investing can help guide your decision-making about what types of investments you make.

Determine How Much Money You Can Set Aside

With your goals in mind, think about how much money you realistically can set aside to invest. Even if you have a part-time job, odds are, you won’t be able to invest your entire paycheck. But if you can free up some additional money in your budget for investing, that could help you get started. Even a small amount can help.

Choose the Right Investment Account

Next, knowing how much you have to invest and with some end-goals in mind, you’ll need to decide what type of investment account will best help you build your portfolio and reach your objectives. As discussed, this might be a retirement account like an IRA, a 401(k), or a brokerage account.

Understand Types of Investments

You’ll also want to review and understand the different investments available. That can include a variety of asset types such as stocks, bonds, cash, mutual funds, exchanged-traded funds (ETFs), and more. Study up on each one to help determine which makes the most sense for your situation and your goals.

Also, consider your risk tolerance. Remember, investing involves risk, and some assets are riskier than others, so you’ll want to make sure you are comfortable with your choices.

Fund Your Investments

The final step is to go ahead and fund your investment account and make your initial investments. You may want to start small and increase your contributions over time if your financial situation allows.

Tips for Investing as a College Student

Investing as a college student may feel intimidating at first, but these tips and guidelines can help.

Consider Diversification

A good rule of thumb for all investors is to invest in different types of assets and asset classes. The basic idea behind portfolio diversification is that by diversifying the assets you have, you may offset a certain amount of investment risk. Conversely, the fewer types of assets you have, the more risk you may take on should they perform poorly.

For example, imagine you invest in only one stock and that company folds — if that happens, you’ve lost your entire investment. However, if you’ve invested in a number of different stocks in different sectors, one company failing would affect you far less. However, it’s important to note that diversification does not eliminate risks.

One way to potentially stay diversified is by investing in mutual funds or exchange-traded funds, which bundle different groups of stocks together.

Avoid Emotional Investing

The market experiences natural ups and downs. As market fluctuations occur, it’s critical to try to avoid letting your emotions impact your investing.

When the market makes a big dip, you may feel the urge to quickly sell investments. However, by doing so, you may be locking in your losses. Letting reason prevail over emotions is generally wise — that way you don’t miss out on any future potential upturn that may take place.

Think of investing as a long-term proposition. The longer you allow your investments to stay in the market, the more opportunity they may have to ride out downturns — and the greater the potential you may have to take advantage of an upswing.

Timing the Market vs Time in the Market

When the market is doing well, you may find yourself tempted to get in on the action and end up buying investments that are too expensive or selling investments too soon. This type of buying and selling is known as timing the market. You may want to avoid checking the market frequently to help keep your emotions in check.

Rather than trying to time the market, think about investing over the long term.

Balancing Investing With Academic Responsibilities

As a college student working on earning your degree, your school work comes first. That means your academic responsibilities should take precedence over your investing activity. Remember, your education is an investment, too — one that is likely vital to your future.

That said, you may want to keep an eye on your portfolio and review your investments and allocations from time to time, whether that’s monthly or quarterly, and make any changes as necessary. But don’t get so caught up in investing that you neglect your classwork.

The Takeaway

Investing as a college student is possible, and there are many ways to get started. College students can explore various types of retirement accounts, like IRAs or 401(k)s, or brokerage accounts to get started. Investing when you’re young may help you build wealth over time. But investing involves risk, so make sure to choose investment accounts and asset types that you’re comfortable with.

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

FAQ

How should I invest as a college student?

How you invest as a college student depends on your financial situation and your goals. For example, if you’re saving for a long-term goal such as retirement, you may want to open a retirement account, such as an IRA or, if you’re eligible, a 401(k). However, if your goal is more of a short-term one such as going to grad school or buying a car, you may want to open a brokerage account that gives you more flexibility for making withdrawals.

Carefully consider your objectives, the amount of money you have to invest, your risk tolerance, and the types of investments you’d like to make, whether it’s mutual funds or a mix of stocks and bonds.

How much will $100 a month be worth in 30 years?

How much $100 a month will be worth in 30 years depends on an investment’s rate of return. For example, if the annual average return is 5%, you could have about $83,673 after 30 years. With a 10% rate of return on the investment, you could end up with approximately $228,003 in 30 years.

Which investment is best for students?

The type of investment that’s best for students depends on the student’s specific financial situation, investing timeframe, financial goals, and appetite for risk. Generally speaking, low-cost assets that offer some diversification such as exchange-traded funds, mutual funds, and index funds may be investment options for students to explore. Do your research on the different investment options to help determine which may be best for you.