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Maybe you’ve heard people mention new money vs. old money in conversation, perhaps in a whisper. Old money and new money both refer to wealthy groups of people. The key difference between old money and new money is how a person obtained their wealth.

In short, old money represents generational wealth — money that has been passed on from generation to generation in the form of cash, investments, and property. New money refers to self-made millionaires and billionaires, those who earned their money (or lucked into it, like in the lottery).

Pop culture and literary references to new vs. old money abound. For instance, James Cameron’s Titanic (1997) includes a depiction of the “Unsinkable Molly Brown” as new money, shunned by some snooty old money types. F. Scott Fitzgerald’s The Great Gatsby puts new money (Jay Gatsby in West Egg) and old money (Tom and Daisy Buchanan in East Egg) at odds throughout the course of the novel.

What Is Old Money?

Old money refers to people who have inherited significant generational wealth; their families have been wealthy for several generations.

In the past, old money would have referred to an elite class: the aristocracy or landed gentry. In the U.S., families like the Vanderbilts and Rockefellers represented early examples of old money. Today, old money families include the Waltons (Walmart), the Disneys (The Walt Disney Company), and the Kochs (Koch Industries). Should families like the Kardashians continue to generate and pass down wealth, they could one day be considered old money as well.

Recommended: How to Build Wealth at Any Age

What Is New Money?

New money then refers to people who have recently come into wealth, typically by their own labor or ingenuity.
Common examples of new money include tech moguls and self-made billionaires like Jeff Bezos, Mark Zuckerberg, and Bill Gates. Someone who wins millions of dollars in the lottery or becomes famous from a reality TV series (like the cast of Jersey Shore) would also qualify as new money.

You may sometimes hear the French term “nouveau riche,” which means “newly rich.” This tends to describe people who recently became wealthy and spend their money in a flashy, ostentatious manner.

Recommended: Building Wealth in Your 30s

Differences Between Old and New Money

So what is the difference between old money and new money? There are quite a few distinctions, but remember that these are all generalizations. Each person who obtains wealth is unique.

Source of Wealth

The most obvious difference between new money and old money is the source of wealth. Old money has been passed down from generation to generation. Each member of old money typically feels a fierce responsibility to protect — and increase — that wealth.

Members of new money have earned that money in their lifetime, whether for building a tech empire, becoming a famous actor, making it to the big leagues as a sports player, or even making money on social media as an influencer. Some new money members might come into money through a financial windfall like winning the lottery or a major lawsuit.

Long-Standing Traditions

Inheriting generational wealth comes with a responsibility: Old money recipients usually must protect the family’s wealth to pass on to future generations. For that reason, those who come from old money may stick to their traditional investments and ways of life. Many inherit their parents’ business and then pass it on to their own children.

Those who are self-made or come into money quickly do not have long-standing traditions to fall back on. They are often the first in their community to make multimillion dollar spending decisions. This can mean a steep learning curve and the need for guidance, which could make them vulnerable to poor advice and unscrupulous hangers-on.

Spending and Investing

How old and new money generally approach wealth management is one of their starkest contrasts.

Though they do live lavishly, members of old money can be more frugal (or calculated) with purchases than you might expect. For members of old money, spending is often more about investing than shopping for pleasure.

People who are a part of new money may feel more entitled to and excited by their funds. They may spend it more lavishly (and publicly). Some might feel that they worked hard to earn their money — and they’d like to enjoy it.
They might want to show off their newly achieved status with designer watches or mega mansions.

That’s not to say that members of new money don’t invest. Famous celebrities, athletes, and businesspeople often invest in real estate or buy companies to increase their wealth. Generally speaking, new money might make riskier investment decisions for faster yields. They’re not thinking about generational wealth to protect with tried and true investment methods.

Taken to its extreme, this can have disastrous results. It’s not uncommon to hear stories of people who make a lot of money for the first time and spend it all, leading to bankruptcy and even mental health issues.

Recommended: What Is Asset Management?

Leisure

The stereotypes might be a little tired, but in general, people associate old money with traditional activities like golf, skiing, horseback riding, and polo. On the flip side, members of new money might buy courtside seats to a basketball game, a garage full of shiny new luxury cars, or even a rocketship for a joyride into outer space.

Recommended: Knowing the Difference Between ‘Rich’ and ‘Wealthy’

Social Perception

Interestingly, some of the richest people in the world come from new money. They’re today’s self-made tech giants. Yet some members of old money may consider themselves to be a higher class than the likes of Gates and Bezos.

We’re speaking in generalizations here, but old money often perceive themselves — and are perceived by outsiders — to be more educated and refined.

On the other hand, the public may view members of new money as harder workers and more innovative — clear examples of the American dream.

Old and New Money Lessons

What lessons can we learn from old and new money? Even if you are not wealthy, you can learn some valuable life and financial lessons from considering the difference.

•   It’s hard to protect generational wealth. Old money is very privileged; there’s no denying it. But most families lose their wealth in just a few generations. Old money families do work hard to maintain and grow their wealth for their future generations. They are able to avoid seeing their fortune dwindle.

•   It’s important to analyze your spending. Many people who come into wealth quickly don’t take adequate steps to protect their funds and invest it wisely. Horror stories of lottery winners losing everything should be enough to remind us that — if we come into a large amount of money suddenly — we should take the time with a finance professional to build out our money management goals. Doing so may ensure your wealth grows, rather than runs out.

•   Stereotypes aren’t everything. Reflecting on the differences between old and new money, it’s important to note that these are merely stereotypes, and not everyone fits the bill. Just as one hopes that others don’t judge us before they know us, the discussion of old vs. new money is a reminder not to form assumptions about someone until you get to know them.

Recommended: How to Achieve Financial Discipline

The Takeaway

Old money refers to families who have maintained wealth across several generations. New money, on the other hand, refers to someone who earned their wealth in their lifetime. Key traits typically differentiate old vs. new money, but at the end of the day, both refer to members of a wealthy class that most people will not ever be a part of.

No matter how much wealth you have — and whether you inherited or earned it — it’s a good idea to protect it in an FDIC-insured bank account that actively earns interest. Check out SoFi’s online bank account, which earns a competitive APY and has no monthly fees, which can help your money grow faster.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.60% APY on SoFi Checking and Savings.

FAQ

Is it preferable to be from new or old money?

It depends on whom you ask. Old money members often regard themselves as a higher class, but they also have less agency to spend their money on “fun” things, as they have to guard their wealth for future generations. While members of new money might feel freer to spend on things they want, they can be more likely to run out of money if they don’t follow good financial planning.

Does new vs. old money matter?

If you are a member of the wealthy class, the distinction might matter to you. Those with old money might feel it’s superior to new, but those with newly minted wealth may well be proud of their success in building their fortune. However, most people are not considered to be new or old money, and so this shouldn’t affect their daily lives.

How has old vs. new money changed since the terms were first coined?

Old money once referred to the landed gentry in Europe, but in today’s world, it might refer to a few families who struck it big a century or more ago in the U.S. New money is more common nowadays, with the advent of television, sports, and social media as the source of riches.

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Photo credit: iStock/South_agency

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.

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 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government 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, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% 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 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 4.60% 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 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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You’ve probably seen the phrase “ACH routing number” on your bank statement, and wondered what exactly it is anyway. It shouldn’t be as hard to figure out as Wordle, so let us explain: An ACH number is a nine-digit number sequence that banks and credit unions use to move funds electronically within their financial network.
Since ACH numbers play a vital role in banking, let’s take a closer look.

What is an ACH Routing Number?

An ACH number is an ID code that banks use. It’s an important bit of data that directs funds being sent electronically between financial institutions. You might think of it as akin to GPS coordinates that get money where it needs to go.

The acronym ACH stands for the Automated Clearing House network and enables money to move across a network of thousands of institutions, quickly and securely. ACH numbers were developed in the 1970s, when the volume of checks threatened to slow down the banking system. This was the beginning of a big shift towards electronic banking. Today, the ACH network is a major financial hub, akin to the Grand Central Station or LAX of money transfers.

Note the word “clearing” in “automated clearing house.” An ACH routing number helps clear funds for quicker transfer. How fast is an ACH transfer? It often happens the same or the next business day. That tops paper checks, which can take longer to mail, deposit, and clear.

Here are a couple of examples of how ACH numbers ease your daily life: A bank uses an ACH routing number when you authorize autopay for a loan or service provider; that’s an ACH debit. When your employer puts your pay directly into your bank, that’s an ACH credit. Both of these can be seamless, speedy transactions.

Recommended: What is ACH and How Does it Work?

How to Find Your ACH Routing Number

Let’s say you want to sign up to pay your homeowner’s insurance automatically every month, or you need to enroll in a P2P app to send the money. You may not be certain about what those required ACH digits are. To find your bank’s ACH number, you have a couple of options, which we’ll share with you here. It’s actually quite easy to find them once you know where to look.

Checkbook

Banks typically print the ACH routing number right on your check. You may be used to simply calling it your bank’s routing number. It’s the nine-digit number sequence at the bottom, next to your account number.

Bank Phone App or Bank Website

Many banks provide account details, including routing numbers, right on their phone apps and websites. Log in with your user ID and password, click on your bank account, and search for details. (But please, don’t do this at, say, a bustling coffee shop, where your connection may be public.)

Internet

Another simple way to find your ACH routing number is to use your search skills. Put “ACH number” and the name of your bank into a search engine, and you should be able to find it. Keep in mind that some large banks may have multiple regional ACH numbers; make sure you are snagging the one associated with your location.

What is an ABA Routing Number?

An ABA (American Bankers Association) routing number is the first number sequence that appears on the bottom left of your paper checks. It identifies your bank, which likely holds very many accounts, while your account number indicates your personal financial product. ABA numbers have been around for over 100 years, facilitating check processing.

Given that your ABA routing number identifies your bank, you may find that it’s the same if you have both checking and savings accounts at a single financial institution. Your account numbers will differ, but that routing number is constant.

ABA vs. ACH Routing Numbers: The Differences

So, you may ask, how are ABA and ACH routing numbers different? The truth is they are likely the very same number. Strictly speaking, the ABA number is used in processing transactions with paper checks, while ACH digits are used in electronic funds transfers. It’s a vital code as money is moved electronically (often in batches) among financial institutions. But today, by and large, ABA and ACH numbers are one and the same.

Use Cases

Let’s look at how the ABA vs ACH routing number might be used in your typical banking life. Yes, they are probably the same string of digits, but here’s how it may help to think of them:

•   To set up a payroll direct deposit or, for instance, a monthly automatic debit of your mortgage payment, you will need to provide the ACH number, because these are electronic transactions.

•   If you were making a one-time payment to, say, a doctor’s office, and they asked you the account and routing number of the check, you would look at the bottom of your paper check and read them off those digits.

History

ABA numbers have been in use since 1910, which was quite a different era. These digits allow for checks to draw funds from one account and deposit them in another. More than a half century later, in the late 1960s, a group of California banks banded together to find a speedier alternative to check payments. They launched the first ACH in the U.S. in 1972; that was a key milestone in the evolution of electronic banking.

Numerical Differences

In the past, ABA and ACH numbers were slightly different, with the first two digits varying. Today, they are typically identical. Your bank’s ABA routing number and ACH routing number are likely to be the same.

The Takeaway

An ACH (automated clearing house) number is a routing code: nine digits a bank uses to transfer funds electronically in a fast-paced web of banks. The ACH system has been used for decades and makes life easier by keeping transactions safe and speedy. While ACH numbers used to be different from ABA routing codes (the kind traditionally used on checks), today these two strings of digits are usually exactly the same. To find your ACH number, just look at your checks, your bank’s app or website, or use a search engine. It’s that easy!

Speaking of easy, allow us to tell you a bit about banking with SoFi. We make storing, spending, and managing your money super simple with our linked Checking and Savings accounts. Sign up with direct deposit, and you’ll pay no fees while earning a competitive APY.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.60% APY on SoFi Checking and Savings.

FAQ

Which routing number do I use to transfer money?

To transfer funds domestically, you’ll use the ACH routing number and your account number. International wire transfers, however, may require different codes.

What is the difference between ACH and direct deposit?

ACH is a system of moving funds electronically between banks. Direct deposit is a specific kind of transaction that uses this ACH network. It allows your employer to send your paycheck directly into your bank account.

Should I use ACH or the wire routing number?

Which routing number you use will depend on the kind of transaction you are conducting. If you are moving money around domestically, the ACH and wire routing number may be the same; check with your bank. If, however, you are wiring money to a foreign account, you will probably need to use SWIFT codes instead to complete the money transfer.

Do I use my ACH number for direct deposit?

Yes, you need to provide your employer with your ACH number as well as your bank account number to set up direct deposit.

What is ABA on a wire transfer?

When you arrange a wire transfer, the banks involved will need to use a routing number. If this is a domestic transfer of money, your ABA/ACH routing number may or may not be used; check with your bank to be sure. A different wire routing number might be required. If you are sending or receiving money internationally, a SWIFT code will be used instead. These codes help ensure the funds get to the right account.

What does ABA stand for?

ABA stands for the American Bankers Association, an industry organization.

What is the difference between the ABA and wire routing number?

These may be the same nine-digit number. The ABA code is the series of numerals on your check, next to your account number. You can check with your bank representative or with its app to see if the wire routing number is the same or if you need a different series of numbers. A wire routing number will usually be different when you are sending funds internationally; in that instance, you’ll need your bank’s SWIFT code.

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Photo credit: iStock/fizkes

SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government 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, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% 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 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 4.60% 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 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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.

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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Employers often need a voided check for an employee’s payroll direct deposit to be established. Direct deposit is America’s preferred way to get paid, according to a 2020 American Payroll Association survey. In fact, 94% of respondents would rather have direct deposit to ensure they get paid on time than a paper check.

If you agree that direct deposit is the way to go, you’ll likely need a voided check to get started. In this article, we explain what a voided check is, why you may want to use one, and alternative ways to provide your banking information.

Definition of a Voided Check

First of all, what is a voided check for direct deposit? When you write the word “VOID” on a blank check, it becomes a voided check. This type of check is not used for deposit or cashing purposes.

Instead, the voided check can be used to establish a direct deposit or bill pay. Establishing direct deposit or online bill pay eliminates the hassle of going to the bank to make payments or deposit your paycheck. It also automates your transactions to speed delivery and help you keep tabs on the money going in and out of your account.

Recommended: Can I Use Checks with an Old Address?

How to Void a Check

Fortunately, if you need a voided check, all you need to do is peel off one of the checks from your checkbook and simply write “VOID” across it.

Write the word large enough so someone can’t accidentally use the check for a deposit. However, don’t make it too large that it covers up your routing and account information at the bottom of the check.

You can also write “VOID” in several other places on the check:

•  Date line

•  Payee line

•  Signature line

•  Sum box or line

Avoid using a pencil or other tool that is easy to erase. Use blue or black ink that cannot be altered. Then make a note of the check number in your check registrar. Later, if that check number clears for some reason, you can contact your bank immediately to dispute it.

Helpful hint: If you ever make a mistake writing a check, you may want to void it and keep the check on file instead of tossing or shredding it. This way you have a record of what happened to the check.

Recommended: What Are Postdated Checks?

Reasons to Void a Check

Providing a voided check is a convenient way to share your banking information for a valid purpose. After all, copying your banking information (routing and account number) by hand leaves you vulnerable to mistakes.

Here are the top reasons to void a check:

•  Set up direct deposit with your employer for wages, salary, or expense reimbursement. Employers often let workers set up direct deposit instead of receiving a physical paycheck, and a voided check speeds the process.

•  Set up direct deposit for government benefits. Unemployment benefits and Social Security payments may be delivered by direct deposit instead of a mailed check. This way, both parties can enjoy the increased security of a digital transaction.

•  Establish automatic bill pay for loans, utility bills, or other payments. You may have the option to set up automatic payments for bills such as an auto loan or mortgage. Setting up auto-pay helps ensure you don’t miss a payment.

•  Void checks with mistakes. If you are writing a check and make a mistake, you can write “VOID” across it, so no one uses or deposits it.

Recommended: What is The Difference Between Transunion and Equifax

What to Expect After Voiding a Check

After you submit your voided check with the required paperwork for direct deposit, it may take a few days to complete the setup process. Typically, employers will establish the direct deposit within one or two paycheck cycles.

This is also true for government benefits like Social Security. Once direct deposit is established, you’ll know exactly when deposits will hit your account. With Social Security, for example, benefits are sent on the second, third, or fourth Wednesday of the month. Which Wednesday you receive payment on depends on your birthday.

With direct deposit, you can use the money in your account immediately since there’s no temporary hold on deposits.

With auto-pay, funds are withdrawn from your account based on a bill’s due date. Some businesses give you a choice of dates to submit payment.

With automated deposits and payments becoming increasingly common, it’s wise to set up an online budget planner to track money going in and out. This can help you avoid overdrafting your account.

Alternatives to a Voided Check

Aside from a voided check, you have other options to establish autopay or direct deposit. Here are some alternatives:

•  Direct deposit form. Some employers may let you use a direct deposit form without a voided check. In this case, ensure you complete your bank information correctly.

•  Preview a check. Some financial institutions let you “preview” your checks on your bank or credit union’s website before you order them online. If your financial insulation allows this, you might be able to print out the preview and write “VOID” across it.

•  Enter bank information online. Depending on how your employer sets up direct deposit, you might have the option to connect directly to your bank account through your company’s payroll website. Just enter your bank information instead of supplying a voided paper check.

•  Request a counter check at a bank branch. You may have the option to request a “counter check” at your local bank branch. You can use this specially printed check containing your bank information for your voided check. Some banks charge a fee for this service.

And of course, you can always contact your bank or credit union to order checks. Keep in mind that check writing abilities are not offered with some bank accounts. In this case, you may need to open a separate checking account.

The Takeaway

When you write “VOID” on a check, it becomes a voided check you can use to set up auto-pay or direct deposit. Voided checks are not available for deposit or cashing. Once you submit your forms and voided check, employers can usually establish direct deposit within a few days. Another option is to request a “counter check” from your bank branch and void that, though some banks may charge a fee for this service.

A money tracker tool like SoFi’s can aid your money management efforts. You can link all of your accounts, view spending breakdowns, and gain financial insights all in one place and at no cost.

Get started with SoFi today!

FAQ

What happens if you don’t have a voided check for direct deposit?

If you don’t have a voided check for direct deposit, you can visit your bank to get a counter check, set up direct deposit online, or print a copy of a preview check.

How do I get a voided check online?

When you order checks online, your bank may show a preview of the check to allow you to check its accuracy. Sometimes you can print the preview check and write “VOID” on it instead of using an actual voided check.

What is a voided check used for?

You can use a voided check to set up direct deposit with your employer or government offices like Unemployment or Social Security. You can also use voided checks to establish automatic bill pay for loans or utilities.

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Photo credit: iStock/MicroStockHub

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.

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A demand deposit account (DDA) is a type of bank account that is payable on demand. In other words, you can withdraw funds whenever you like. The most recognizable type of demand deposit account is a checking account. That’s right: You probably already have a demand deposit account and didn’t even know it.

While some personal finance sites and experts may conversationally refer to savings accounts as demand deposit accounts, there are key differences that actually keep savings accounts from qualifying.

What Is a Demand Deposit Account?

So what is a demand deposit account (and what is it not)? The Federal Reserve categorizes demand deposit accounts as those that “are payable on demand, or a deposit issued with an original maturity or required notice period of less than seven days, or a deposit representing funds for which the depository institution does not reserve the right to require at least seven days’ written notice of intended withdrawal.”

Wait, what? Bank jargon can get confusing, so let’s break it down more simply. Demand deposit accounts:

•   Don’t have a maturity period.

•   Allow you to access your funds without notice (or less than seven days’ notice).

•   Can earn interest, like a high-yield checking account.

•   Cannot limit the number of withdrawals or transfers you can make.

Because checking accounts do not mature and give you immediate access to your funds (for example, through check writing, debit cards, and ATM withdrawals), these qualify as demand deposit accounts.

Recommended: What is High Interest Checking – and How Does it Work?

What Isn’t a Demand Deposit Account?

Checking accounts are a common type of DDA, but what about other types of bank accounts, like savings accounts, money market accounts, and certificates of deposit?

Savings Deposits

Some people consider savings accounts to be DDAs, but there’s a difference to note. The Federal Reserve’s Regulation D (Reg D) previously limited savings account withdrawals to six per month. In response to COVID-19, the Federal Reserve removed this requirement.

Even though the Federal Reserve has eliminated the six withdrawal limit requirement, savings accounts still do not technically qualify as a demand deposit. Because banks have the right to require at least seven days’ written notice for withdrawals on funds in savings accounts, the government instead classifies savings accounts (and money market accounts) as savings deposits.

However, consumers can typically access their savings funds without a required waiting period, so they can often utilize their savings accounts as if they were demand deposit accounts. A bonus is that savings accounts are usually interest-bearing. Just note that many banks still impose a monthly withdrawal limit, despite Federal Reserve changes, so you may wind up getting hit with fees if you make frequent withdrawals.

Recommended: How Do You Calculate Interest on a Savings Account?

Time Deposits

CDs, which have pre-set dates of maturity, are even less like demand deposits. A CD is a time deposit (sometimes called term deposit). They have set maturity dates and are subject to early withdrawal fees, meaning the funds are less liquid than a checking or savings account. Time deposits can be transferable or nontransferable and negotiable or nonnegotiable. In addition to CDs, time deposits can include club accounts (like Christmas and vacation club accounts).

A bit more on how CDs work: The principle for these accounts is that you, the account holder, commit to having your funds on deposit with a bank for a set period of time. Break that agreement, and you may pay penalties.

How Demand Deposits Work

Demand deposit accounts are designed for on-demand access to your funds. Thus, you should be able to withdraw money to cover purchases at any time.

If your demand deposit account is a traditional checking account, you can spend your money with a debit card, checkbook, transfers, or even peer-to-peer payment apps. Each bank will have its own terms and conditions, but some accounts may pay interest, some may charge fees, and some may grant you fee-free access at certain ATMs, so you can grab your money on the go. Research various accounts carefully before selecting a bank or credit union. This involves reading the fine print, but it’s important as it can help you avoid misunderstandings and various fees.

Types of Demand Deposit Accounts

Checking accounts may be the most obvious type of demand deposit account. Some savings accounts can be accessed on demand these days, as outlined above, but many still have restrictions regarding how often you can make withdrawals.

Money market accounts occupy a kind of middle ground: Some experts classify them as demand deposit accounts, but others do not.

How to Open a Demand Deposit Account

Opening a demand deposit account is equivalent to opening a checking account. Each financial institution will have its own processes for opening an account. Typically, you will need a government-issued photo ID, proof of your current residence (a utility bill, for instance), and often an opening deposit to initiate the account. Many banks allow you to complete this process quickly and easily online.

Advantages of Demand Deposit Accounts

Demand deposit accounts offer multiple benefits to consumers:

•   Easy and immediate access to funds: Whether through check writing, an ATM, or the swipe of a debit card, a demand deposit account enables consumers to spend their money as they see fit.

•   FDIC and NCUA insurance: Demand deposit accounts at banks are typically insured by the FDIC for up to $250,000; those held at credit unions are usually insured by the NCUA for the same amount. FDIC and NCUA insurance makes demand deposits safer than cash in your wallet or under the mattress.

•   Interest: Demand deposit accounts can be interest-bearing. The national average APY for checking accounts, according to the FDIC, is currently 0.03%. You can shop around for better returns (over 1%, for instance), largely at online banks. Because these don’t have the expense of bricks-and-mortar locations, they can pass those savings onto their clients.

Disadvantages of Demand Deposit Accounts

Consumers may find some drawbacks to demand deposit accounts as well:

•   Low earnings: Demand deposit accounts are not required to pay interest. While consumers have easy access to their funds, they are trading away higher earning opportunities they might find with a high-interest savings account, time deposits, or even investments in stocks and bonds.

•   Fees: Some demand deposits accounts charge fees, including monthly maintenance fees. Others require minimum balances that some consumers might not want to keep in the account.

The Takeaway

Demand deposit accounts are a type of bank account that give you immediate access to your funds. Checking accounts are the most common type of DDA. With these, you can withdraw money at will, by check, debit card, ATM, bank transfer, or P2P platforms. Demand deposit accounts are often the foundation of an individual’s financial life, allowing them to spend and manage their money seamlessly.

Banking with SoFi can help smooth the path to smart money management. Enroll in our Checking and Savings with direct deposit, and you won’t pay any fees; you’ll have access to more than 55,000 fee-free ATMs via the Allpoint® Network; and you’ll earn an ultra competitive APY.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.60% APY on SoFi Checking and Savings.

FAQ

Is a DDA number the same as an account number?

A DDA (or demand deposit account) number is typically the same as your checking account number.

What is a personal DDA deposit?

You can fund your DDA directly with transfers from other accounts, check deposits (mobile, in-person, or ATM), or cash deposits. These are all types of personal DDA deposits.

Is a DDA account a checking account?

In most cases, a DDA account is a checking account. There is some debate about whether other types of accounts, such as a money market account, also qualify as a DDA.

What does DDA mean on a bank statement?

DDA stands for demand deposit account, which indicates that funds in the account are immediately available to the account holder.

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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 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government 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, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% 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 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 4.60% 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 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://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.

Photo credit: iStock/jacoblund
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Am I financially stable? That’s an important question to ask if you’re wondering how your money management skills measure up.

Financial stability can mean different things to different people, and there’s no single way to measure whether someone is financially secure. There are, however, certain money behaviors that can indicate when you’re on the right track.

Knowing how to recognize the signs of being financially stable can help you to fine-tune your money plan.

What Is Financial Stability?

If you search online for a definition of financial stability, the results are usually geared toward organizations or governments, not individual people. For example, the Federal Reserve defines financial stability as “building a financial system that can function in good times and bad, and can absorb all the good and bad things that happen in the U.S. economy at any moment.”

That’s an institutional way to define financial stability, but it’s possible to adapt that to fit personal finance. For instance, creating a budget and adding money to an emergency fund can help you manage money wisely during the good times. It can also allow you to be prepared for the unexpected, such as a job layoff or an emergency expense.

The best way to define financial stability is in a way that has meaning for you. For instance, you might create a personal financial mission statement that outlines your ideal money vision for yourself. For some people, that vision might involve having six months’ worth of expenses in an emergency fund. For another, it might involve meeting savings goals for retirement.

Why Does Financial Stability Matter?

Being financially stable is important because it can influence your overall financial health. When you feel financially secure, it may be easier to pay bills without stress. Or you might have developed the discipline to save money and be excited about it, versus spending everything that you make.

In a nutshell, being financially stable can help you to:

•   Have the money that you need to cover day-to-day expenses while working toward financial goals

•   Avoid costly debt

•   Manage your money without it feeling like a chore or a cause for anxiety

If you’re interested in how to become financially free, then becoming stable with your money is likely an important first step.

Signs That You’re Financially Stable

We started off with this question: Am I financially stable? Now, we’ll answer it by sharing some of the most common indicators that you’re in good financial health.

Chances are, you might be doing some of the things on this list already. And if you’re not, then these moves could help you to overcome your personal financial challenges.

1. Following a Budget

A budget is the foundation for your financial plan. When you make a budget, you’re dictating where your money goes instead of simply spending without a plan. If you don’t have a budget yet, then making one should be a top priority.

There are a number of budgeting methods you can use, including:

•   Cash envelope budgeting

•   Zero-based budgeting

•   The 50/30/20 rule

Experimenting with different budget systems can help you find one that works for you.

2. Living Below Your Means

Here’s one of the secrets to how to have financial freedom: Live below your means. This simply means spending less than you earn. Making a budget is central to living below your means because without one, you may not have a clue how much you’re spending each month.

Tracking expenses can be a great way to determine if you’re living below your means. You can write each expense down in a notebook, use a spreadsheet, or link your bank account to a budgeting app. It’s a good idea to track expenses for at least one month to get a realistic idea of what you spend, which can help you to better define your budget.

3. Saving Money Is a Consistent Habit

You may have heard the expression “pay yourself first,” and it’s a wise move. This simply means that before you spend any money on payday, you first deposit some of your earnings into savings. Paying yourself first is a sign of financial stability as it suggests that you have money reserved for emergencies and are also saving for longer-term financial goals.

Setting up direct deposit into savings or scheduling automatic transfers from your checking account each payday are easy ways to automatic savings. When the money is directed to savings automatically, there’s no opportunity for you to spend it.

4. Paying Down Debt Is a Priority

Debt can be a roadblock to reaching your financial goals and too much debt could make you financially unstable. Making an effort to pay down debt (or avoid it altogether) is a sign that you’re committed to living within your means instead of spending money unnecessarily.

If you have debt, consider the best ways to pay it off. For example, the debt snowball method involves paying off debts from smallest balance to highest. The debt avalanche, on the other hand, advocates paying off debts from highest APR to lowest in order to maximize interest savings.

When choosing a debt repayment method, consider how much of your budget you can commit to it. If you’re only able to pay the minimums to your debts, you may need to review your expenses to see where you can cut back or look into debt consolidation.

5. Bills Get Paid On Time

Paying bills late can trigger nasty late fees. What’s more, late payments can lower your credit scores.

A good credit score is a sign of financial stability because it means that you’re responsible with how you use credit. On-time payments can work in your favor while late payments can hurt your score.

If you’ve fallen behind, getting caught up on late payments as soon as possible can help you turn things around. From there, you can commit to paying on time each month. Scheduling automatic payments or setting up payment reminders is an easy way to keep track of due dates.

6. Financial Goals Are Clearly Defined

Setting financial goals can help you to make the most of your money. Financial goals can be short-term, like saving $10,000 for an emergency fund. Or they might be long-term, like saving $1 million for retirement.

Someone who’s financially stable understands the value and importance of setting goals and how to set them effectively. For example, they may follow the SMART rule for goal setting and create money goals which means they are:

•   Specific

•   Measurable

•   Actionable or achievable

•   Realistic

•   Time-bound

If you’re not setting financial goals yet, consider what you want to do with your money or what kind of lifestyle you’d like to have. If you created a personal financial mission statement that can be a good guide to deciding what kind of goals to set.

7. Regular Investing Is Part of Your Financial Routine

Investing money and saving it are two different things. When you invest money, you’re putting it into the stock market. Investing can help you grow your money faster and build a higher net worth thanks to the power of compounding interest.

There are different ways to invest. If you have a 401(k) or similar retirement plan at work, for example, you may defer 10%, 15%, or more of your income into it each year. At a minimum, it’s a good idea to contribute at least enough to get the full company match (which is akin to free money) if one is offered.

You might also open an Individual Retirement Account and a taxable investment account. With an IRA, you can save for retirement on a tax-advantaged basis. A taxable investment account, on the other hand, is useful for trading stocks, mutual funds, exchange-traded funds (ETFs), and other securities without restrictions on how much you can invest.

Recommended: A Beginner’s Guide to Investing in Your 20s

8. You Have the Right Insurance

Insurance is designed to protect you financially. There are different types of insurance a financially stable person might have, including:

•   Homeowners or renters insurance

•   Car insurance

•   Health insurance

•   Disability insurance

•   Life insurance

Having the right coverage in place can help to minimize financial losses in a worst-case scenario. If your home or apartment is damaged because of a fire, for instance, then your insurance policy could help you to rebuild or replace your belongings.

Life insurance is also important to have, especially if you have a family. Life insurance can pay out a death benefit to your loved ones if something should happen to you. That means they’re not in danger of becoming financially unstable after you’re gone.

9. FOMO Doesn’t Drive Decision-Making

FOMO, or fear of missing out, can be a threat to financial stability. It’s the modern-day equivalent of keeping up with the Joneses: What it means is that you make financial decisions out of peer pressure or societal pressure. Trying to mimic the lifestyle of social media influencers, for example, can wreck your finances if you’re going into debt buying things that you can’t afford.

Someone who’s financially stable, on the other hand, is immune to FOMO. They don’t buy things on impulse (or at least not often). And they don’t make financial decisions without considering the short- and long-term impacts.

Recommended: Guide to Practicing Financial Self-Care

10. There’s No Worrying About Money

Worries about money can keep you up at night if you’re fretting over the bills or debt. Financially stable people don’t have stress over money because they know that they’re in control of their situation. They approach money with a calm, confident attitude.

So how do you reach that zen state with your finances? Again, it all comes down to making smart money decisions like sticking to a budget, saving, and avoiding debt. The more proactive you are about making your money work for you, the faster money worries may fade away.

If You’re Struggling to Become Financially Stable

If you recognize that your financial situation isn’t as stable as you’d like it to be, it’s important to consider how you can improve it. Working your way through this list of action items is a good starting point but what if you’re overwhelmed by debt or struggle to make a budget?

In that case, you may benefit from talking to a nonprofit credit counselor or a financial advisor. A credit counselor can help you come up with a plan for budgeting, paying down debt, and getting into a savings routine. And once you begin to gain some stability, you can think about things like investing or insurance.

In addition, you can consult these government sources for more insight:

•   Making a budget

•   Sticking to a budget

•   Dealing with debt

•   How to save and invest

•   How to save for retirement

The Takeaway

Achieving financial stability can take time, but it’s possible if you’re using the right approach to managing money. Taking small steps, such as setting one or two money goals or changing bank accounts, can add up to a big difference in your situation over time.

If you’re tired of throwing money away on banking fees, for instance, you might consider opening a bank account with SoFi. You can get checking and savings in one convenient place and easily manage your accounts online or through the SoFi mobile app. When you open an account with direct deposit, SoFi doesn’t charge any fees, and you can earn a competitive APY, which can help your money grow faster. A bonus for qualifying accounts: You can get paycheck access up to two days early.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.60% APY on SoFi Checking and Savings.

FAQ

How much money is considered financially stable?

The amount of money needed to be considered financially stable is subjective and depends on a person’s individual situation. But generally, having a net worth of $1 million or more can indicate that someone is financially stable or secure and has a good grasp of money management.

What are the signs of a financially stable person?

The most common signs of a financially stable person include having little to no debt, being able to make and stick to a budget, having a healthy amount of money in savings, and having a good credit score. Financially stable people tend to see their net worth increase year over year. What’s more, money generally isn’t a source of stress or worry.

At what point are you financially stable?

Someone could be considered financially stable when money is no longer a cause for anxiety or frustration. A financially stable person isn’t necessarily measured by how much money they have. Instead, their stability is based on their overall financial situation and their approach to managing money. They are likely to have savings for emergencies, as well as short- and long-term goals.

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Photo credit: iStock/AsiaVision

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.

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 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government 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, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% 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 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 4.60% 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 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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