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A movie theater can be the perfect place for a date, a family outing, or an escape from life’s worries. But for many, rising ticket costs and expensive concessions aren’t worth the price of admission.

Fortunately, you can save money at the movies with discount tickets, price clubs, loyalty programs, and other savvy cinephile tips that allow you to sit back and enjoy the show.

Going to the Movies in 2022

Going to the movies has been a beloved American pastime since the 1920s, when the average ticket cost around $0.25.

Flash forward to 2022: The average price of a movie ticket has reached around $9.17, running as high as $16 in places like NYC. Concession prices have also been on the rise, with a small popcorn costing more than $7 in some theaters.

These days, many people are trying to prioritize saving money. With the popularity of streaming services like Netflix, Hulu, and others, coupled with saving money on at-home snacks, it can be hard to justify the price of a night out at the movies.

Movie theaters may be expensive, but there’s nothing like the smell of buttery popcorn, the thrill of the lights dimming, and the communal experience of movie watching.

Recommended: How to Save Money on Food

15 Clever Ways to Save Money at the Movies

Many of us don’t want to give up on that big-screen experience of going out to the movies. If you’re the kind of person who’s focused on easy ways to save money, you’ll probably be interested in how to spend less at a movie theater.

Here are 15 cost-cutting tips to inspire you to get off the couch and into the cinema without bungling your budget.

1. Avoiding Premium Formats

While it’s understandable to want to see the latest superhero film in 3D or a summer blockbuster in an IMAX theater to feel more immersed in the experience, the additional price of a premium film format ticket can add up.

On average, a 3D film can cost $4 dollars more than a regular adult movie ticket, with an IMAX experience running an additional $6 dollars. You might want to save those extra bucks for a box of Milk Duds.

Be sure and check the movie listings. It’s easy to buy tickets to a 3D or IMAX showing without even realizing it, spending extra dollars unnecessarily.

2. Catching a Matinee

Many theaters offer discounts on matinee movies, to encourage attendance during off-peak hours. Matinee times can start anywhere from 9 am to 11 am and run from 3:30 pm to 6 pm.

Matinee ticket prices can be 30% less at some chain movie theaters and (bonus) you could have the theater all to yourself.

Recommended: How to Save Money on Streaming Services

3. Attending on Discount Days

In addition to cheaper seats at matinees, you can also save money at the movies by attending on certain days. Many movie theaters advertise price deals on certain weekdays. Some theaters have “Discount Tuesdays,” for instance, offering $5 dollar tickets all day, including for the evening showings.

Quick Money Tip:Typically, checking accounts don’t earn interest. However, some accounts will pay you a bit and help your money grow. Online banks are more likely than brick-and-mortar banks to offer you the best rates.

4. Eating Beforehand

Eating a meal or a snack before the movie may not sound like a radical way to save money, but since concessions can run more than the ticket prices, it’s a sure-fire way to cut costs. Remember, sneaking food into the theater is still against the rules.

5. Sharing the Snacks

Can’t stand the thought of a movie without popcorn? Consider sharing the concession spoils with a friend or family member. Say yes to spending the additional dollar on the extra-large popcorn, and consider bringing individual brown lunch bags to divvy up the kernels.

Recommended: 17 Ways to Save Money on Coffee Expenses

6. Buying at the Box Office

It might be convenient to buy a movie ticket in advance online, but many movie websites charge an additional fee (typically between $1 and $2) for the service. Avoid that: You can still buy your tickets early at the box office, then kill time by filling up on inexpensive candy from a drug store.

Recommended: Cash vs. Credit Card: Key Differences to Know

7. Using Price Clubs

Some wholesale price clubs sell discounted cinema tickets and gift cards for big-name movie chains. If you have a membership at Sam’s Club or Costco, you can pick up some movie savings along with your bulk toilet paper.

8. Finding Customer Loyalty Programs

Many megachain and independent movie theaters like to reward repeat customers with loyalty programs. They can offer membership cards where you can receive and use points on tickets and concessions. The more you go, the more you save.

9. Purchasing a Membership Pass

In addition to loyalty programs, some movie theaters, such the Alamo Drafthouse, offer seasonal membership deals. Depending on where you live, you could pay $16.99 to $29.99 a month for unlimited movies. (One showing per day.)

Other memberships offer discounted tickets for a year, and special deals on companion tickets and concessions.

10. Signing Up for Local Theater Newsletters

With a few clicks on the keyboard, you can sign up for online newsletters and email alerts from your favorite movie theaters. Doing so can ensure you won’t miss out on the latest ticket and concessions deals.

Recommended: Does Couponing Save You Money?

11. Finding Deals for Groups

Movie theaters want to fill their seats, so many will offer discounts on large purchases for groups of 25 or more. This could help you save up to $1 per ticket for a company outing or birthday party.

12. Finding Specialty Discounts

Almost all movie theaters offer discounts for different groups. In addition to a reduced-price child ticket, there are customarily lower prices for senior citizens, students, and military discounts for active and retired veterans.

13. Finding Summer Movie Programs

Kids need things to do in the summer, and their parents need them to do things! Some movie theaters, like Regal Cinemas, offer special $2 dollar tickets on certain summer weekdays for animated and family films. The offers can vary by region.

Recommended: Guide to Saving Money During the Summer: 10 Tips

14. Going to a Drive-In

Another summer pastime is a night at the drive-in. Since the pandemic, drive-in movie theaters have made a comeback, opening up in dense metro areas as well as in rural ones.

Drive-in tickets and concessions can be cheaper than at a traditional movie theater. And if the drive-in charges by the car, call your buddies! You can split the entry fee and save some dough.

15. Taking Advantage of Credit-Card Cashback Benefits

While you won’t see immediate savings when buying that large diet soda, using a credit card with cashback benefits at the movie theater can yield rewards down the line. Some credit cards can offer up to 5% cash-back rewards on entertainment purchases.

The Takeaway

The price of movie tickets and concessions can be a bit shocking. But if you’re willing to look for discounts, attend off-peak showings, save money by snacking at home, and try some of the other suggestions above for saving money at the movies, you can lower your costs. That way, the only shock you’ll get is from a really good plot twist.

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

What day is cheapest to go to the movies?

Weekdays can be the cheapest days to go to the movies. Some movie theaters offer reduced prices Monday through Wednesday.

What’s the best time to go to the movies?

In terms of cost, a weekday matinee generally offers cheaper movie tickets — from opening time until 3:30 pm or 6 pm, depending on the venue. Theaters also tend to be less crowded during matinee showings.

Is it illegal to bring outside snacks to the movies?

Almost all movie theaters don’t allow outside food. While not illegal, the theater could deny you entry into the venue.

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Photo credit: iStock/bombermoon

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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With rising inflation and stagnant wages, being frugal with your spending is a good idea. But you can go a step further: By learning some valuable life skills and DIY-ing more activities, you can save money.

Mastering skills like cooking, cleaning, riding a bike, and doing your own taxes mean you don’t have to pay professionals for expensive services. While it can be time-consuming, harnessing new skills can make you more independent, help you keep more of your money, and maybe even inspire a few new hobbies.

In this article, we’ll take a look at 20 basic money-saving skills that almost everyone can learn. They can be fun to dig into, build confidence, and free up funds to put towards your financial goals.

How Life Skills Are Essential to Your Financial Freedom

Life is built on financial transactions. We pay for food at the restaurant, spend money on a haircut, reach deep into our wallets at the gas station, and shell out for repairs when something in our home breaks.

While we can’t possibly learn enough life skills to replace all these transactions, it is possible to take up a few new savings skills, like cooking, painting, and sewing, so that you can hoard a little more money each month.

That little bit of money adds up — honing several life skills can be an important step toward your financial freedom. The money you save can go towards your emergency fund, paying down student loan debt faster, or gathering the down payment on a house.

20 Life Skills That Can Help You Save Money

So which life skills are worth learning? We’ve rounded up 20 of the top money-saving skills that, when mastered, can help you avoid spending your cash on basic goods and services. They’ll help put you on the path to becoming financially disciplined.

1. Cooking

Eating out now and then is perfectly fine — a well-deserved reward after a long week at the office or a celebratory dinner for a major milestone. But eating out for lunch or dinner every day can be unhealthy (those portion sizes!) and can get quite expensive. Learning the basics of cooking can keep you out of the pricey restaurants and in your own kitchen instead.

Cooking can require an investment in the proper cookware and staple ingredients, but overall is bound to be cheaper than getting food to go or at an eatery. Just think about the price difference between avocado toast whipped up in your kitchen and what you’d pay at a cute cafe. Search for recipes online, and follow tips to save money on food before you head out to the grocery.

2. Painting

Ready to pick up a paintbrush and unlock another savings skill? According to HomeAdvisor, homeowners spend more than $3,000 on average to paint the exterior of their home, and renters and homeowners alike might pay painters even more to paint the interior. The current rate typically runs from $2 to $6 per square foot.

While painting the exterior of your home can be a little more challenging, painting the interior is not complicated at all. If you are willing to take the time to learn, you can save yourself thousands of dollars every time you want to change up the inside of your living space.

3. Gardening

Yes, professional landscapers can weave a certain kind of magic. But doing your own gardening can be a tremendously satisfying and creative pursuit, not to mention that it can save you a lot of moolah. Spending time learning the basics about what zone you live in and which plants will thrive, plus wandering around nurseries and garden centers, can provide plenty of inspiration.

You can grow fresh produce for the small price of starter seeds and the occasional watering, which means less money spent at the grocery store.

What’s more, when selling your house, landscaping is an important part of curb appeal. A well-cared-for garden might attract potential buyers and help your home sell more quickly.

Recommended: How Much Should I Spend on Groceries a Month?

4. Plumbing

Plumbing emergencies like a flooded basement or a broken water heater are probably still better left to a licensed contractor, but teaching yourself to be handy with a wrench and a screwdriver might save you on smaller problems, like a leaky faucet or a running toilet.

This money-saving skill can serve you well over the years. Calling a plumber for every small problem that your house encounters over the years can add up. In fact, most plumbers charge $45 to $200 an hour and may charge a flat rate of $350 just for a service call.

Beyond plumbing, you can teach yourself basic electrical and carpentry skills so that you can tackle some easy home improvement projects for beginners.

5. Budgeting

Knowing how to make a budget — and sticking to it — is a crucial life skill. When you are able to analyze your monthly expenses against your monthly income in an easy-to-read format, you can quickly discover which spending habits you need to scale back. Many people like the 50/30/20 rule, which spells out that you should spend 50% of your after-tax income on needs, 30% should be put towards wants, and 20% should go into savings.

And you don’t even need to pay for fancy budgeting software. Many online banking platforms make it easy to see all of your transactions in one place, and you can use a simple spreadsheet to design a budget that works for you.

6. Haggling

Not every price is negotiable, but when it is, it’s important to know how to haggle with confidence. While you might immediately think of haggling at a used car lot (and that’s a great place to do it), you can also haggle over things like your monthly cell phone bill, your rent, and even credit card interest rates. Politely asking, “Is there any flexibility on the price?” may yield a surprising positive response.

Even if you’re only successful in lowering one expense, that’s money in your wallet that you wouldn’t otherwise have had.

Recommended: How to Negotiate Medical Bills

7. Sewing

You might not ever create your own clothes from scratch (though you certainly can!), but knowing how to sew can come in handy when you get a rip in your favorite shirt or a parka’s zipper starts to detach. Instead of throwing out clothes with holes or lost buttons, sew them back together. Mending the torn back pocket on your favorite jeans, for instance, and you’ll save yourself from dropping $50 or much more on a new pair.

8. Cutting Your Family’s Hair

Haircuts at chain salons are certainly not cheap, often ranging from $30 to $70+, but boutique salons are even more expensive. Learning to cut your family’s hair (or your own, if you’re brave) can cut out one monthly expense. Check out the tutorials on YouTube and other video platforms and see if you can’t hone your skills.

9. Investing

While the stock market may not be performing wonderfully right at this moment, the average stock market return over the last 10 years has been nearly 15%. And though you can certainly pay a traditional broker to manage your portfolio, it’s totally possible to do it yourself.

In fact, there are many platforms for investing to choose among, some of which enable automated investing, and fractional shares. Plus, you can build your financial know-how by reading blogs and books on investing, as well as listening to podcasts or taking an online class to sharpen your skills.

10. Changing Your Car’s Oil

According to KBB, the average oil change costs from $65 to $125 (for synthetic oil), but the actual cost of the synthetic oil and filter replacement is just $45. Being able to change your car’s oil by yourself (typically twice a year, depending on how much you drive) can mean you pocket an extra $20 to $80 every time. It’s a great life skill to learn and then stash the cash you save, year after year.

11. Cutting Firewood

If you have ample trees in your yard — or a generous neighbor has just taken down a tree and doesn’t mind sharing the spoils — you can chop the wood yourself for an outdoor firepit or your fireplace. If your home has a fireplace, you can use that wood to heat a single room while leaving the heater setting lower in the rest of your home, cutting down on your utility bill.

12. Doing Your Own Taxes

If you have a complicated tax situation, an accountant might be a good investment, especially if they can help you maximize your credits and tax deductions even if you’re a student. However, if you have a straightforward income and financial situation, it might be beneficial to skip the accountant fees and file by yourself.

Check out the IRS Free File hub to find programs that will help you do it all by yourself.

13. Bartering

The time-honored tradition of bartering, or trading goods and services, can help you lower your expenses. Let’s say there’s a spinning class you love that’s beyond your budget. Could you offer to swap your digital savvy (say, filming videos and posting on social media for the studio) in exchange for no-cost sessions? Think creatively about the skills you have and how you might use them to get some freebies. It never hurts to ask about such arrangements, and it could help.

14. Roasting Your Own Coffee

Buying a latte at a coffee shop every morning may be convenient (and relaxing), but it also gets expensive. If you spend $5 every day on a cup of coffee, that’s more than $1,800 a year. Instead, learn how to save on coffee expenses. Brew coffee at home — and better yet, learn how to grind and roast your own coffee beans for maximum savings. You’ll find that whole beans are typically less pricey than pre-ground ones at the supermarket.

15. Baking

Going to the bakery when you said you’d bring a dessert to your family’s holiday get-together may be convenient, but buying fresh cakes and cookies can get expensive. Baking can be a little more challenging than cooking, but it’s certainly a great way to save money. And it can be a wonderful creative pursuit and a new pastime. Need inspiration? Just watch any of the addictive shows on TV, like The Great British Baking Show.

16. Upcycling

Upcycling is a buzzword for reusing an item instead of buying something totally new. For example, you might use reclaimed wood or an old door to make a desk or table, turn a sweater with torn elbows into a vest, or use old towels as cleaning rags for a while before tossing them. Upcycling can help you save on common expenses, and it’s great for the environment; less goes into the trash.

17. Cleaning

Most people probably don’t like to clean, but it’s a big part of being an adult. Whether it’s scrubbing the bathroom, vacuuming the rug, or wiping down kitchen counters, these are chores that just need to be done.

It might be tempting to pay for a cleaning service, but doing so is expensive. Cleaning professionals typically charge $30 to $50 per hour — or more than $600 for a large home over 3,000 square feet.

Don’t give into that temptation to farm it out. Grab a rag (or an upcycled towel), a bottle of cleaning solution, and a monthly house maintenance checklist. You’ve got this!

18. Riding a Bike

Gas is expensive (and you probably know its impact on the environment). While you probably can’t bike everywhere you need to go, each trip on a bike you make — to work, to school, or just to a friend’s house — means you won’t be spending money on gas or bus fare.

19. Hosting

Hanging out with friends at your favorite bar is nice, but a fun night out adds up quickly when you do it every weekend. Instead, host your next friend or family gathering at your own home. Stock some wine, cold beer, and snacks, and you’re good to go. (You can be next-level and make a pitcher of a signature cocktail; it’s a fun way to build your mixology skills.)

Or switch things over to a morning meet-up with a pot of coffee and some home-made muffins. You’re likely to save big.

20. Doing It Yourself

Our final life skill ties all the rest together: Do things yourself instead of paying someone else to do them. If you don’t know how to do something, research online or find someone who does and learn. Once you’ve mastered the skill, share your knowledge with others.

Whether mowing your lawn, washing windows, or doing yoga or Pilates at home, you can really open up room in your budget when you DIY.

Banking With SoFi

Honing these valuable money-saving skills is a great way to establish financial freedom, and having a quality bank account will elevate your efforts. A SoFi bank account can do just that: It allows you to spend and save in one convenient place. When you open one with direct deposit, you’ll earn a terrific APY and pay no fees, both of which can help your money grow faster.

See how SoFi can help you bank smarter with our combination of convenience, high interest rates, and no fees.

FAQ

Is saving money a life skill?

Saving money is an important life skill. By learning to do various tasks yourself around the house and in your daily life, you can avoid paying for a lot of expensive goods and services. Also, being a smart consumer and comparison-shopping will help you save money. This is especially important when making a big purchase; look around for the best price, coupons, and other discounts.

How do I find the time to develop these life skills?

Most of these life skills can fit into your regular day. If you normally spend a couple of hours going out to dinner, you can instead spend that time finding a recipe and trying to cook it at home. You may also find that some of these tasks (cooking, gardening) become hobbies in which you happily invest time.

What is the most valuable life skill?

Learning to do things yourself, from cooking to filing taxes to changing your car’s oil, can be the most valuable life skill. This can give you confidence, know-how, and self-reliance, plus it requires you to be curious and willing to educate yourself, all of which are important traits.

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Photo credit: iStock/blackCAT

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.

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.

SOBK0722038

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After getting approved for a student loan, there is one more step that must be completed before your funds are disbursed: the loan certification process. This step is designed to protect you as a borrower.

Keep reading to find out more about student loan certification, how long it takes, and the process for federal and private student loans.

What Is Student Loan Certification?

Student loan certification is a mandatory step before loan funds can be sent to your school. Your school will verify enrollment details, such as your expected graduation date, your year in the program, and the loan amount.

For private student loans, a Private Education Loan Applicant Self-Certification form is required. This highlights borrower-protection language, informs you of your ability to submit a FAFSA (Free Application for Federal Student Aid), and explains how a private loan might affect your other financial aid awards. The self-certification step also provides your lender with your enrollment details and financial aid received.

Recommended: FAFSA Guide

Why Do Lenders Need Student Loan Certification?

Student loan lenders must secure a certification before disbursement because it’s required by law, under the Higher Education Act of 1965 and the Truth in Lending Act.

Certification ensures that the lender and your school have done their due diligence to inform you about federal financial aid options, confirm that you meet academic enrollment requirements for the loan, and disclose the difference between your school’s cost of attendance (COA) and the financial assistance you’ve received for that period.

Recommended: The Ultimate Student Loan Terminology Cheat Sheet

Do Federal and Private Student Loan Lenders Need the Same Certification?

No, the loan certification process is different for federal vs. private student loans.

For federal aid, your school is responsible for determining the type of student aid you’re eligible for, including federal student loans. If your school finds that you’re eligible for federal loans, it will record its certification of your eligibility into the Common Origination and Disbursement system. This system tracks your loan data throughout your academic career.

The loan certification process for private lenders has a different intent. Your lender can request a completed Self-Certification form from you, which includes a section for your institution to fill out. Alternatively, your lender can communicate directly with your school for its certification sign-off.

Here’s a helpful refresher on how student loans work.

What Is the Process of Student Loan Certification?

After a lender approves your loan application and you accept the loan and its terms, the student loan certification process is automatically initiated. As a student borrower, you may not need to do anything. However, make sure to follow the process, via any emails or notifications from your lender or school, to make sure everything runs smoothly and no additional information is needed from you.

1. Lender Sends Loan Details to the School

The lender forwards your loan information to your school for certification. This includes details you’ve submitted during your application, like your personal information, enrollment information, and the loan amount requested.

2. School Reviews Loan Details

During this step, your school will certify that your enrollment details are correct, the estimated COA for the enrollment period, and how much aid you are receiving during the period.

Private student loan amounts can’t exceed a student’s COA, minus existing financial aid. If your loan details are correct and the amount is within the unfunded COA gap, the school can certify your loan with no changes.

Alternatively, the school can certify your loan with changes, either to reduce the loan amount or correct your enrollment information, if needed. It can also deny the loan certification, which might happen if it can’t verify that you’re enrolled or you already have sufficient financial aid to cover your COA.

Recommended: How To Apply for Student Loans

3. Your Lender Provides a Final Loan Disclosure

Your lender will notify you when your student loan certification is complete. At this time, it will provide you and your student loan cosigner, if applicable, with the final loan disclosure.

If your loan amount was lowered by your school, this is where you’ll see the new amount outlined in the updated disclosure agreement.

4. “Right-to-Cancel” Waiting Period

After the borrower has signed the final loan disclosure, lenders are not allowed to disburse funds right away. Federal law requires a waiting period of three business days after the lender sends you the final disclosure.

This is another layer of borrower protection that gives you time to cancel the loan, if desired, with no penalty.

5. Lender Disburses Loan Funds

After the waiting period expires, the lender can send certified student loan disbursements directly to your school, on the date requested by your institution.

How long school certification takes for a loan varies by school. Generally, it can take up to five weeks for schools to complete student loan certification, but sometimes it’s longer.

Additionally, loan certification is often done in the weeks before the start of classes. Enrollment status can change at the last minute, as when a student drops out or reduces their course load. The timing helps schools process certifications based on the most current information.

Is There Anything Student Borrowers Can Do to Hurry Along the Certification Process?

It’s true that the loan certification process can be lengthy. But there’s not much that can be done to hasten it. The best that student borrowers can do is to stay on top of emails and account notifications from their lender, informing them of status updates and next steps.

What Happens if a School Doesn’t Certify That You Are a Student?

If your school doesn’t certify your enrollment status, your lender can’t legally disburse the loan funds to your school. At best, this results in payment delays as you sort things out with your financial aid office. At worst, it halts disbursement entirely, if your school can’t certify that you are, in fact, an enrolled student.

What to Do if It Is the School’s Error

If you believe a mistake has been made on your student loan certification, contact your financial aid department immediately. Find out what the school needs from you to certify your enrollment and loan.

Additionally, ask what will happen to your enrolled courses while you figure out a resolution. The last thing you want is to get dropped from your classes.

What to Do if It Is the Student’s Error

Student loan certification might be in limbo because of an oversight on your part. This can come up, for example, if you forget to enroll in classes.

If you’re in this situation, reach out to your school’s admissions and records department, or your degree program’s department, for guidance about what you need to do. Make sure to note that you are waiting on private student loan certification needed for disbursement.

The Takeaway

The loan certification process can feel like another hurdle to overcome in financing your education. However, it’s a step that’s meant to protect student borrowers and keep you aware of your rights. The process and intent of certification are different for private student loans and federal student loans. If you do not get certified, don’t panic. Discuss the issue with your school to find out if the error is yours or the school’s, and take immediate steps to resolve it.

If you’ve exhausted your aid options and need additional funds to pay for school, consider a SoFi private student loan. Eligible borrowers can borrow up to their school’s cost of attendance, and there are no fees at all. Checking your interest rate online takes just minutes.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

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When the going gets tough, the tough get giving. Or that’s what the latest data on philanthropy reveals. Despite the recent pandemic and intense inflation, Americans are donating more to charities. In 2021, the amount ticked up a sizable 4% over the past year, to a hefty $484.85 billion in funds.

If you’re among the ranks of those who want to contribute funds to support a cause you believe in or help those less fortunate, it can be hard to know where to give. Is a charity legitimate? How much of your funds will really be put to work? This is an important question to answer when deciding where to allocate funds (and possibly get a nice tax deduction, too).

What constitutes a good organization to donate to may vary depending on how much you’re donating; if you want to give money, time or other donations; and which causes are close to your heart. As a rule of thumb, though, it’s smart to research any organization you plan to support.

In order to help you do that, here’s a guide to some of the top-rated charities according to CharityWatch, an independent watchdog organization founded in 1993. CharityWatch specializes in reviewing and ranking charities based on their financial reporting, including their:

•   Audited financial statements

•   Tax forms

•   Annual reports

•   State filings

Methodology: Ranking the Best Charities to Support

The list that follows is culled from CharityWatch’s list of top charities, selected from those charities with an A or A+ ranking.

CharityWatch ranks charities based on the following calculations:

•   Program Percentage: The percent of total expenses the charity spends on charitable programming (as opposed to expenses such as fundraising, management, and operations).

•   Cost to Raise $100: How much it costs a charity to bring in $100 in cash donations from the public. Ideally, this is a low figure to do the most good with the money received.

CharityWatch then assigns charities a letter grade, ranging from A+ to F. CharityWatch’s full methodology for ranking top charities to donate to can be found online.

Of the hundreds of charities the organization has ranked, typically only a few dozen are straight-A or higher. (Worth noting: CharityWatch updates rankings regularly, which is why we’ve linked to their rankings for each of the following organizations. Each charity’s website is then linked on each of CharityWatch’s rating pages. By clicking the links, you can get the latest intel on a given organization.)

If you’re looking for inspiration about where to give, read on.

Quick Money Tip:Typically, checking accounts don’t earn interest. However, some accounts will pay you a bit and help your money grow. An online bank account is more likely than brick-and-mortar to offer you the best rates.

Which Charities to Support This Year

Whether you want your donations to help children, animals, educational causes, or almost anything else, here is a list to give you a headstart. It highlights (alphabetically) some of the top-rated charities according to CharityWatch.

1. Action Against Hunger-USA

Program Percentage: 90%

Cost to Raise $100: $3

Action Against Hunger-USA ‘s mission statement is to prevent, detect, and treat under-nutrition. The organization aims to tackle the underlying causes of hunger, and they also help regions experiencing conflict or natural disasters meet their nutritional needs.

2. All Hands and Hearts

Program Percentage: 93%

Cost to Raise $100: $3

Concerned about the “crazy weather” you see so often on the news these days? All Hands and Hearts aims to address short- and long-term needs of communities after natural disasters. This includes helping rebuild homes, schools, and infrastructure.

3. American Kidney Fund

Program Percentage: 98%

Cost to Raise $100: $2

American Kidney Fund helps those suffering from kidney disease during every step of the process. That includes prevention, early detection, disease management, and post-transplant. The organization provides those in need with financial support and other resources they need to manage their kidney disease.

4. Asia Foundation

Program Percentage: 86%

Cost to Raise $100: $1

Asia Foundation focuses on improving lives throughout Asia, including improving environmental resilience and empowering women.

5. Breast Cancer Research Foundation

Program Percentage: 81%

Cost to Raise $100: $10

You may know the grim statistic that almost 13% of women will be diagnosed with breast cancer at some point in their lives. The Breast Cancer Research Foundation has earned an A for its efforts to prevent and cure breast cancer by funding promising research globally. It has raised $569.4 million to support clinical and translational research on the disease.

6. Catholic Relief Services

Program Percentage: 91%

Cost to Raise $100: $8

Catholic Relief Services assists the poor in the U.S. and across the globe. Its goal is to prevent and end poverty regardless of the races, religions, or nationalities of those in need.

7. Center for Community Change Action

Program Percentage: 93%

Cost to Raise $100: $2

By contributing to the Center for Community Change Action , you’ll help improve material conditions for people struggling to make ends meet in the United States. Through voter engagement and policy change, the Center works to build the power and capacity of low-income people, especially those of color.

8. Child Find of America

Program Percentage: 89%

Cost to Raise $100: $1

Child Find of America aims to both prevent child abductions and find abducted children. Part of that work involves responding to the family conflicts and crises that may lead to potential abduction or abuse.

9. Comic Relief

Program Percentage: 80%

Cost to Raise $100: $14

Who doesn’t love to laugh? And doing good via humor is doubly nice. Comic Relief uses entertainment to eliminate poverty, improve children’s lives, and help disadvantaged individuals around the world. The organization is well known for its Red Nose Day fundraiser, in which people can buy a red clown nose to raise money to help end child poverty.

10. Concerns of Police Survivors (COPS)

Program Percentage: 90%

Cost to Raise $100: $7

Concerns of Police Survivors (COPS) helps families and coworkers of law enforcement officers killed in the line of duty. The organization provides them with resources to help rebuild their lives after enduring the loss, and it also provides training to law enforcement on how to help surviving co-workers and families.

11. Conservation Fund

Program Percentage: 95%

Cost to Raise $100: $4

If you consider yourself eco-minded, take a look at the Conservation Fund . It helps protect America’s land and water resources with the help of public, private, and nonprofit partner organizations. The fund also helps educate the public about sustainability, resource management, and creating environmental goals for individuals, communities, or organizations.

12. Diabetes Action Research and Education Foundation

Program Percentage: 89%

Cost to Raise $100: $2

If diabetes has touched your life, you might want to donate to the Diabetes Action Research and Education Foundation . Its mission is to prevent and treat diabetes, which impacts one out of every 10 (or 37+ million) Americans. It helps fund new research to help cure diabetes and diabetes-related illnesses and complications.

13. DonorsChoose.org

Program Percentage: 93%

Cost to Raise $100: $4

DonorsChoose.org aims to help raise awareness about accountability issues and educational inequality in public schools. It seeks to create a world in which all American children have equal access to high-quality education by engaging the public in educational issues and reform.

14. Elizabeth Glaser Pediatric AIDS Foundation

Program Percentage: 91%

Cost to Raise $100: $9

The Elizabeth Glaser Pediatric AIDS Foundation ’s mission is to prevent pediatric HIV infections. Through education, research, advocacy, and treatment, the organization aims to help end pediatric AIDS. The organization also stresses that progress against AIDS has been unequally distributed, with marginalized groups being hit hardest.

15. Environmental Defense Action Fund

Program Percentage: 90%

Cost to Raise $100: $15

If you care about the state of our planet and its future, consider The Environmental Defense Action Fund . It seeks to educate the public about the environment and conservation. The organization also advocates for legislation and policies it believes will protect the environment.

16. Fisher House Foundation

Program Percentage: 93%

Cost to Raise $100: $3

The Fisher House Foundation creates and furnishes “Fisher Houses” for military and veteran families to stay at while a loved one is in the hospital. The organization also provides further financial assistance and scholarships to military families.

17. Friends of Animals

Program Percentage: 91%

Cost to Raise $100: $3

Are you a fan of furbabies? Perhaps Friends of Animals would be a good place for your donations. It aims to help animals experiencing cruelty or institutional exploitation. They put money towards funding and creating litigation for no-free shelters, protecting wild animals’ ability to roam freely, and more.

18. Government Accountability Project (GAP)

Program Percentage: 82%

Cost to Raise $100: $9

Are you motivated to help ensure that whistleblowers can be heard and navigate the path ahead of them? Take a look at the Government Accountability Project . It’s a non-profit organization that’s dedicated to protecting government whistleblowers at every step of the way, at federal, state, and local levels, to ensure that justice is served.

19. Guide Dog for the Blind

Program Percentage: 80%

Cost to Raise $100: $9

Here’s a charity that helps those with vision issues by giving them trusty companions. For 75 years, the Guide Dog Foundation has trained and placed guide dogs and service dogs. These animals help provide increased independence and enhanced mobility to people who are blind, have low vision, or other disabilities.

20. Hearing Health Foundation

Program Percentage: 88%

Cost to Raise $100: $4

Here’s a shocking statistic: One out of eight Americans age 12 or older has hearing loss in both ears. If you’d like your charitable donation to go towards remedying that, consider Hearing Health Foundation . It works to prevent hearing loss and tinnitus. It also hopes to develop a cure for both by supporting research and hearing health education.

21. Hispanic Federation

Program Percentage: 88%

Cost to Raise $100: $5

Hispanic Federation is a Latino nonprofit organization aiming to advocate and advance Hispanic communities and families. It provides communities with a variety of services and resources for education, health, immigration, civil engagement, economic empowerment, and more.

22. Hispanic Scholarship Fund

Program Percentage: 92%

Cost to Raise $100: $1

Looking for another angle on uplifting the Hispanic community? The Hispanic Scholarship Fund provides scholarships and student services to help Hispanic students prepare for and earn their college degree. The organization provides students with support services and other resources they need to not only make it into the college classroom, but also to succeed in college and after graduation.

23. Intrepid Fallen Heroes Fund

Program Percentage: 92%

Cost to Raise $100: $5

Intrepid Fallen Heroes Fund helps military members who have traumatic brain injuries or PTSD. The organization provides them access to treatment centers to assist them in continuing to serve or enjoying life post-service.

24. Multiple Myeloma Research Foundation

Program Percentage: 85%

Cost to Raise $100: $15

Multiple myeloma is a kind of cancer that develops in the plasma cells, a kind of white blood cell. An estimated $34,000+ new cases are diagnosed annually, and more than 12,000 Americans die from the disease in a given year. Want to be part of the search for a cure? Multiple Myeloma Research Foundation seeks to invest in research and education to find a cure for multiple myeloma. The organization also helps fund innovative new ways to treat myeloma and extend the lives of those affected by it.

25. National Alliance to End Homelessness

Program Percentage: 90%

Cost to Raise $100: $4

Many areas of America have seen an uptick in homelessness since the start of the pandemic. A donation to the National Alliance to End Homelessness could help. The organization aims to prevent and end U.S. homelessness, educating the public on the causes of homelessness and potential solutions.

26. National Council on Aging

Program Percentage: 93%

Cost to Raise $100: $18

If you want to put your dollars to work on behalf of our elders, The National Council on Aging could be a good recipient. The organization seeks to help older Americans who may be struggling financially, physically, mentally, or experiencing other issues. It also educates caregivers and advocates on how best to serve the elder community.

27. National Park Trust

Program Percentage: 87%

Cost to Raise $100: $11

Have you enjoyed the beauty of our national parks? Then perhaps you’d like to make a donation to (and get a tax deduction) via the National Park Trust . It protects and preserves park lands and trains the next generation of park stewards, aiming to increase both their numbers and diversity.

28. National Wildlife Federation

Program Percentage: 88%

Cost to Raise $100: $6

Love creatures, great and small? Perhaps you’d like to contribute to the efforts of the National Wildlife Federation . It’s the United States’ largest private, nonprofit conservation education and advocacy organization, with over six million members and supporters. It works to protect our wildlife, including endangered species, and the land they live on.

29. Pathfinder International

Program Percentage: 86%

Cost to Raise $100: $6

If sexual and reproductive rights matter to you, take a closer look at Pathfinder International . It works to ensure that everyone around the world has the right to a healthy sexual and reproductive life. During COVID-19, the organization is also helping vulnerable communities survive the crisis.

30. PetSmart Charities

Program Percentage: 95%

Cost to Raise $100: $3

Want to have your contribution help pets find their forever homes? PetSmart Charities helps pets find life-long homes. The organization hosts adoption events and centers, as well educational and training programs to help humans learn how to support pets in need.

31. Population Services International

Program Percentage: 92%

Cost to Raise $100: $1

Are you globally minded? Population Services International provides those in developing countries with products and services to plan families and lead healthier lives. The organization also creates programming to help address gender-related health issues, including violence against women and women’s access to health services.

32. Ronald McDonald House Charities (National Office)

Program Percentage: 88%

Cost to Raise $100: $9

Ronald McDonald House Charities (National Office) has 380+ locations that provide a comfortable, caring place for families to stay near children who are undergoing medical treatment far from home.

33. Scholarship America

Program Percentage: 94%

Cost to Raise $100: $2

Give the next generation a leg up on their studies. Scholarship America helps American students make it into college classrooms through scholarships and educational support. The organization also provides mentorship to students and emergency grants for students at risk of dropping out for various reasons.

34. Semper Fi & America’s Fund

Program Percentage: 91%

Cost to Raise $100: $3

If you want to make a donation to help those who’ve served our country, consider Semper Fi & America’s
Fund . It helps combat-wounded, critically ill, or catastrophically injured veterans and their families with financial, family, and wellness support programs. The program also helps veterans transition back into their communities after a serious combat-related injury.

35. Stephen Siller Tunnel to Towers Foundation

Program Percentage: 93%

Cost to Raise $100: $4

Does the phrase “Never forget” resonate for you regarding 9/11, as it does for many Americans? If so, look into contributing to the Stephen Siller Tunnel to Towers Foundation , which seeks to honor fallen firefighter Stephen Siller, who died on duty on September 11, 2001. The organization helps the families of fallen firefighters and police officers pay off mortgages, among other programs.

36. Trevor Project

Program Percentage: 84%

Cost to Raise $100: $6

For those who want to support the LGBTQ+ community, a good recipient for charitable donations could be the Trevor Project . It is the world’s largest mental health and suicide prevention organization for lesbian, gay, bisexual, transgender, queer and questioning young people. It’s goal is to create a more inclusive world.

37. Unbound

Program Percentage: 93%

Cost to Raise $100: $4

Here’s a way your contribution can uplift those in need: Unbound partners with families living in poverty to help them become self-sufficient and reach their full potential. The organization works with those experiencing poverty in 19 countries using Catholic theology to foster family and community relationship-building and self-empowerment.

38. United Methodist Committee on Relief (UMCOR)

Program Percentage: 98%

Cost to Raise $100: $3

Another faith-driven organization to note: The United Methodist Committee on Relief (UMCOR) aims to alleviate human suffering around the world caused by conflicts, war, natural disasters, and other causes of suffering. The organization has helped with refugee resettlement and other humanitarian missions.

39. Waterkeeper Alliance

Program Percentage: 91%

Cost to Raise $100: $7

Make a donation that protects our precious natural resources. Waterkeeper Alliance creates a network of global leaders to help protect peoples’ rights to clean water around the globe. The organization also has several campaigns to promote clean and safe energy, clean water, and to battle pollution caused by industrial meat farms, among other causes.

40. World Central Kitchen

Program Percentage: 98%

Cost to Raise $100: $1

If you care about fighting hunger, perhaps you want to think about donating to World Central Kitchen . Their mission is WCK to provide meals when climate, community, and humanitarian crises hit. They also work to build resilient food systems.

41. World Resources Institute

Program Percentage: 91%

Cost to Raise $100: $0

Looking for other environmentally focused charities? World Resources Institute aims to help people learn how to live in ways that better protect the environment for current and future generations. It educates the public on ways to make cities, energy, food, and businesses more environmentally friendly.

Making a Difference With Your Finances

Budgeting for charitable donations can be a good way to ensure your money helps the causes you care about. It can also benefit your finances if you receive a tax deduction for your donation. You could use that deduction to invest, reach your savings goals, contribute more to your retirement, or build up your emergency fund.

Recommended: How to Make End of Year Donations

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.

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

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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.

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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 know what it means to invest in a stock: you buy shares, thinking that they will go up in value at a later date, at which point you might choose to sell them. If there are shares you already own that you think are going to lose value, you might sell them.

But there are other ways to put money behind the movements of a stock price. Investors can also buy and sell options, which are a kind of contract that allows the investor to buy (or sell) a stock, or some other asset, at a certain price. The two basic types of options are “puts” and “calls.”

Unlike shares of stocks, put and call options have expiration dates, at which point you no longer have the right to buy or sell the shares. Options trading is a popular strategy for day traders, because you make profits not by owning the underlying shares and patiently waiting for them to go up, but acting quickly with options that expire quickly.

Much like buying and shorting stocks, an investor can use options to express their view on whether the price is likely to go up or down.

What Is a Call Option?

A call option is a contract that allows an investor to buy 100 shares of an underlying stock or other security at a prearranged price (known as the “strike price”). A call option can be appealing because it gives an investor a way of profiting from a stock’s increase in price without having to pay for the full price of 100 shares. What one pays is known as the “premium” on each share, which is typically much less than the current price of the stock.

The profit from a call option is determined by both the premium an investor pays and whether they’re able to exercise the option—this means actually buying the underlying stock and the price agreed to in the option contract.

An investor can also sell their call option: as the price of the underlying stock rises above the strike price, the value of the option to buy will rise. By selling the option itself, an investor doesn’t have to take delivery of the underlying shares and can profit from the increasing value of the option itself.

The Basics of Buying a Call Option

Consider this example: If an investor buys an option with a strike price of $50 for a stock that’s currently worth $40, the option will be “out-of-the-money” until the stock rises to $50. If the premium is $1/share—meaning they only pay $1 up front—then the investor will only be risking $100, not $4000.

If the stock is trading at $55 on or before the expiration date, it would make sense to “exercise” the option and buy the stock for $50, thus giving the investor shares with built-in profit thanks to the difference between the strike price of $50 and the value of $55. In this case the profit would be $4/ per share (or $400): a strike price of $50 gives the investor the right to buy 100 shares of a stock worth $55, with a premium of $1 per share.

On the other hand, if the stock has not risen in price enough, the investor can just let the option expire, having only lost the price of the premium, rather than being saddled with shares they can’t profit from.

Many brokerages, including discount brokerages who offer their services to day traders and individuals, offer put and call options.

What Is a Put Option?

There’s a key difference in call vs put options: If call options are a way to profit from a stock going up in price without having to own the stock itself, than put options are a way to profit from the fall of a stock’s price without having to short the stock (i.e. borrow the shares and then buy them back at a lower price). Of course, in cases where an investor sells their option, the opposite is true: they would benefit from the opposite movement of the stocks.

A put option is a contract that allows someone to sell shares at a certain price at a specified time in the future. The seller of the put option has the obligation to buy the shares from the put buyer if they choose to exercise it.

The Basics of Buying a Put Option

As an example, let’s say a stock is worth $50 today. If an investor thought the stock’s value could go down, they might buy a put option with a strike price of $40. Let’s say the premium for the option is $1, and they buy a contract that gives them the right to sell 100 shares at $40. The premium, then, is $100.

At the time the investor buys the put option, it’s “out-of-the-money.” If the price remains above $40 until it expires, the investor will not be able to exercise the option and they will lose the premium. But if the stock has dropped from, say, $50 to $35, the option is “in-the-money” and they could sell it for an increased premium to someone else. If an investor were to exercise the option, they’d profit from being able to sell shares for $40 that are worth $35, pocketing $5 per share or $500, minus the $100 premium, leaving them with $400.

Risks of Options Trading

Option trading can be a useful way to manage risks or profit from movements in stocks one doesn’t own. They can also lead to large losses, especially if an investor doesn’t understand the potential downside to the trades they’re executing.

This is especially true if an investor starts selling call options or put options, putting them in the position of collecting premiums but obligating them to either buy or sell the shares in question at the options expiration date. Investing in options on margin — i.e. with borrowed money—can also be high risk. Some brokerages have tools to screen traders from making certain types of option trades in order to maintain the risk.

The Takeaway

Option trades—call and put options—can be popular with individual or amateur traders because they offer a way to make profits from large movements in a stock without having to own the underlying shares. But by this same token, buying and selling options can also lead to paying premiums over and over with little or no actual payoff.

If you’re ready to keep learning about options and try your hand at options trading, you may consider checking out SoFi’s options trading platform. The platform’s user-friendly design allows investors to trade through the mobile app or web platform. Plus, there are a number of educational resources available to support you as you continue to learn about options trading.

Pay low fees when you start options trading with SoFi.

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Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire amount invested in a short period of time. Before an investor begins trading options they should familiarize themselves with the Characteristics and Risks of Standardized Options . Tax considerations with options transactions are unique, investors should consult with their tax advisor to understand the impact to their taxes.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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