SoFi

In addition to spoiling their grandkids with toys and ice cream, many grandparents also want to help them secure a solid financial future. That can mean setting up a custodial account, considering tax-advantaged savings options, and exploring other ways to start building a child’s wealth.

Below, you’ll learn about the different ways to save money for your grandkids, plus the pros and cons of each.

Why Open an Account for Grandchildren?

Sure, your grandkids might prefer a new video game or a Lego set now, but you’ll do them a favor tomorrow by opening a savings account for them. Here are a couple of good reasons to open a savings account for your grandchildren.

Teaching Financial Literacy Early

Money management skills are crucial, but personal finance education is practically nonexistent at school. It’s not typical for schools to teach kids how to balance a checkbook, how to invest in stocks, how to save for a down payment on a house, or how to file taxes.

Thus, it’s up to parents, and grandparents, to equip the next generation with financial literacy. Opening an account for your grandchildren can help them learn about concepts such as interest, budgeting, and investing.

Getting a Head Start for College and Life

While teaching children how to manage money can give them a head start on the path to financial wellness, so, too, can providing them with a nest egg that can grow over time through various savings and investing accounts. Consider these options:

•   When you open a savings account for grandchildren early on, they could wind up having a sizable chunk of cash to put toward their first car or even a house down payment as young adults.

•   A 529 college savings plan could help them avoid taking on too much debt from student loans.

•   Retirement accounts, such as a Roth IRA, can help them achieve their retirement goals, even if those are more than half a century away. Remember, the earlier someone starts investing, the more they stand to earn in the long run.

Types of Accounts to Consider

Grandparents have many options when it comes to opening an account for their grandchildren.

Savings, CDs, and Bonds

Many banks and credit unions offer savings accounts designed for kids. Do a quick online search for “best savings accounts for grandchildren” or check if your own bank offers such an account.

Having money in savings at an early age will let your grandkids benefit from compounding interest, especially if you find a high-yield savings account for kids.

You can also consider opening a certificate of deposit (CD) or purchasing savings bonds for your grandchildren. CDs are savings accounts that typically provide a higher interest rate than a standard savings account in exchange for keeping your money in the account for a fixed period of time. Savings bonds, issued by the U.S. Department of Treasury, are a very low-risk, longer-term investment that provides interest in return for lending the government money.

With both of these options, the money is less liquid, but if the CD or bond matures when your grandchild is older, they’ll have a reliable source of funds they can use in the future.

Custodial Accounts (UGMA/UTMA)

Beyond savings accounts for grandchildren, you can consider helping your grandkids start investing with a custodial account through the Uniform Gifts to Minors Act (UGMA) or the Uniform Transfers to Minors Act (UTMA). Once they’re between the ages of 18 and 25 (the exact age varies by state), they take control of the account.

These accounts are taxable (meaning taxes need to be paid on interest earned) and have no contribution limits. They’re an easy way to purchase stocks, mutual funds, and other securities for your grandchild, and you can even transfer your own securities into the custodial account.

529 College Savings Plans

The cost of college tuition continues to increase, meaning it’s never too early to start saving. There are several benefits of a 529 college savings plan. While the contributions to this qualified tuition plan aren’t tax-deductible, your grandchild’s distributions from the account are tax-free at the federal level as long as the money is used for qualifying expenses.

A 529 college savings may have “college” in the name, but your grandchild can also use it for other higher education programs, such as a trade or vocational school. You can also roll over 529 funds into a Roth IRA if your grandkids don’t use all (or any) of the funds.

Contributions to a grandchild’s 529 account are not deductible on your federal income tax return. However, many states offer either a deduction or credit for this kind of contribution.

Another consideration: Contributions to 529s are subject to annual gift tax exclusion limits, which are $19,000 for individuals and $38,000 for married couples in 2025 and 2026. If you were to put more than that into a 529 for a grandchild, you would need to file a gift tax return (though this does not mean you’ll owe any gift tax).

IRAs for Minors

Similar to custodial investment accounts, you can open custodial retirement accounts for your grandchildren, including a traditional IRA and a Roth IRA. While your grandkid won’t benefit from this account for decades, starting them early on the path to retirement savings means they could have considerably more money to work with when they reach retirement age.

However, it’s important to note that opening an IRA requires the child to have earned income in a given year. For teens, this can make sense. For a newborn, it’s unlikely to be a viable option.

When making contributions to an IRA for a grandchild, note that the amount you deposit is subject to the annual federal gift tax exclusion limit.

Choosing the Right Account

Not sure how to choose the right savings account for your grandchildren? Here are some things to consider.

Comparing Interest Rates and Fees

If you’re opening a savings account, compare interest rates. You’ll want an account with a high yield so that the money compounds more quickly over time. For example, the average interest rate for standard savings accounts as of September 2026 is 0.37%, while the figure for high-yield savings accounts (often from online-only banks) can be several times that number.

For custodial accounts, you’ll want options with low or no fees. It can be wise to shop around and see what options you have at different banks and brokerage firms.

Recommended: How Old Do You Have to Be to Open a Bank Account?

Accessibility and Withdrawal Rules

Certain accounts allow your grandchildren to access funds sooner, while others (such as IRAs) have strict rules about when they can withdraw funds and what the funds can be used for (as is the case with 529 plans). Think about the specific timeline and use case you envision for your grandchildren. Sometimes, opening more than one type of account makes sense, depending on how many goals you want to enable for your grandkids.

Tax Implications and Benefits

Some accounts have tax-deductible contributions, while others have tax-free withdrawals. For example, withdrawals from a 529 account are not usually taxable, provided they’re used for qualified educational expenses. With a Roth IRA, withdrawals made after your grandchild is older than 59 ½ (as hard as that may be to imagine) are not taxable. With a traditional IRA, taxes are paid when the money is withdrawn, usually in retirement.

Speaking with a financial advisor can help you understand the tax implications of each type of account you’re considering and what your grandchild might pay.

Setting Up and Contributing to the Account

Ready to open a savings account for your grandchildren? Here’s how it works:

Opening and Funding the Account

Follow the bank’s or investment firm’s guidelines for opening the account. You will likely need some specific information from the grandchild’s parents to open the account. You’ll also need to deposit money into the account to start the nest egg. Custodial accounts may even let you transfer your own assets into the account.

Automatic Transfers and Recurring Contributions

You may be able to set up recurring transfers into the account. Perhaps you want a recurring transfer every holiday season or on your grandchild’s birthday. Work with the financial institution to set up these contributions and perhaps find out how other loved ones might be able to contribute as well.

Monitoring and Managing the Account

After opening an account, it’s important to monitor it and see how the funds grow over time. Also, once your grandchild is a little older, it’s a good idea to sit down and review the account with them:

•   If it’s a savings account, walk them through how compound interest works.

•   If it’s a 529 plan, talk to them about college costs and how student loans work.

•   If it’s a custodial account, talk to them about the basics of investing and the importance of saving for retirement.

The Takeaway

It’s never too early to start thinking about your grandchild’s future. Savings accounts, 529 plans, and custodial accounts offer several ways for you to give them money that will help them fund college fees, general expenses, and even their retirement. While saving for grandkids is important, it’s also advisable to take care of your own finances.

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

Better banking is here with SoFi, named the #1 Bank in the U.S. for the fourth year in a row by Forbes (2026).* Enjoy up to 3.30% APY on SoFi Checking and Savings.

FAQ

What are the contribution limits for custodial accounts?

There are no contribution limits for Uniform Gifts to Minors Act (UGMA)/Uniform Trasnfers to Minors Act (UTMA) custodial accounts. But be aware that contributions above a certain amount (which changes each year) are subject to a federal gift tax. Contribution limits apply for custodial IRAs just as they would for regular IRAs.

Can grandparents open a 529 plan for grandchildren?

Yes, grandparents can open a 529 plan for their grandchildren. If the grandchild’s parents have already set up a 529 plan, grandparents can also contribute to that plan directly. This may simplify account management and withdrawals for the recipient of the funds.

What happens to the account if the grandchild doesn’t need the funds?

If a grandchild doesn’t need funds from a 529 plan for college, they can still use them to attend a trade or vocational school or roll them into an individual retirement account (IRA). Grandparents can also reassign the 529 plan to another grandchild.

---

Photo credit: iStock/gorodenkoff

This content is for educational and informational purposes only. The products, services, or features discussed may not currently be available via the SoFi platform. Any references to third-party products, services, or companies do not constitute an endorsement, recommendation, or solicitation by SoFi. Readers should independently evaluate their options and consider their individual financial needs and circumstances before making any decisions. ©2026 SoFi Technologies, Inc. All rights reserved.
SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2026 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

CN-Q425-3236452-103

SOBNK-Q426-016

Read more

Most states require licensed drivers to carry auto liability insurance — and for good reason. Liability coverage helps pay for damages to other people involved in a car accident if you’re found responsible.

State law may leave it up to the individual to decide if they want to carry the kind of insurance that will help pay to repair their own wrecked car or injured body. But in most cases, drivers won’t have an option when it comes to liability coverage.

Since your automobile could cause physical or material harm to others, you’ll generally be expected to carry enough insurance to cover those potential costs or, in some states, provide proof of financial responsibility.

What Is Liability Car Insurance?

If you’re found at fault — or “liable” — for an accident, liability insurance helps pay the other driver’s expenses.

There are several other types of car insurance coverage available to drivers, so it’s easy to get them confused. Collision coverage, for example, pays to repair damage to your own car after an accident. And comprehensive coverage helps pay for damage to your car that’s caused by other factors, such as hail, a fire, or theft.

Auto liability insurance is all about the other guy. It’s not there to cover your costs or the costs of anyone who was riding in your car when the accident occurred.

Recommended: How Much Auto Insurance Do I Really Need?

What Does Liability Insurance Cover?

In general, there are two types of liability insurance offered on most standard policies:

Bodily Injury

This type of liability coverage protects the at-fault driver by paying for the other person’s emergency and continuing medical expenses related to the accident. It may also cover lost income, funeral costs, or legal fees if there’s a lawsuit.

Property Damage

Property damage liability coverage helps pay for repairs to the other person’s car or other property (their home, a business, a fence, a bicycle, etc.) when the policyholder causes an accident.

Are There Limits on What an Insurer Will Pay?

Yes. The amount an insurer will pay for a claim depends on the coverage limits a policyholder chooses. Note that the amount of coverage you’re required to carry varies from state to state, and you might choose to purchase a higher level of coverage than your state mandates.

Coverage caps are usually broken down into three categories:

Bodily Injury Liability Limit Per Person

This is the maximum amount an insurer will pay out for each individual who is injured in a car accident (other than the at-fault driver who is the policyholder).

Bodily Injury Liability Limit Per Accident

This is the maximum amount an insurer will pay overall for medical expenses if multiple people are hurt in an accident. Again, it does not include medical costs for the at-fault policyholder.

Property Damage Liability Limit

This is the maximum amount an insurer will pay to repair any damage a policyholder caused to another person’s property. Any amount over that limit will likely be the responsibility of the policyholder.

How Much Liability Insurance Should a Driver Have?

You cannot buy less than the minimum amount of liability insurance your state legally requires. But some states require significantly less coverage than others.

For example, the minimum liability insurance requirements in California are $30,000 for injury/death to one person, $60,000 for injury/death to more than one person, and $15,000 for damage to property.

But the minimum requirements in Maine are considerably higher: $50,000 per person for bodily injury, $100,000 per accident for bodily injury, and $25,000 for property damage. (A combined single limit of $125,000 will also satisfy the minimum limit requirement in Maine.)

Industry guidance generally cautions that state minimums may not be enough. As the Insurance Information Institute puts it, drivers will likely need more liability insurance than the state requires, because accidents often cost more than the minimum limits.

Keep in mind that when you’re shopping, you may not be able to choose standalone limits for each category of liability coverage. Most insurers set their coverage limits as part of a package, and you may have to make your purchase from those pre-established plans.

For example, a 25/50/10 policy would set the bodily injury limit per person at $25,000, the bodily injury limit per accident at $50,000, and the property damage limit at $10,000. Any costs that exceed those set amounts would be the responsibility of the policyholder.

Some people also consider purchasing an umbrella policy that would cover any excess costs if liability limits are exhausted. This type of policy can help protect you from large liability claims or judgments if you’re sued. And your umbrella policy may cover you as well as other members of your family or household.

According to the Insurance Information Institute, the average auto liability claim in 2024 was $28,278 for bodily injury and $6,770 for property damage. But a claim could go much higher, if there are multiple victims, for example, or if there are serious injuries or someone is killed.

Recommended: How to Lower Car Insurance

What’s the Difference Between Full Coverage and Liability Only?

An auto insurance policy that includes liability, collision, and comprehensive coverage is sometimes called “full coverage,” because it covers both your costs and the costs of others involved in an accident.

Most states require liability coverage. But if your car is paid off, your state may not require collision (which helps to repair or replace a car that’s damaged in an accident) or comprehensive (which pays if the car is stolen or damaged by fire, vandalism, or some other non-collision scenario).

And if your car isn’t worth much, you might decide to forgo one or both when purchasing car insurance. If your car is financed, however, the lender could require full coverage even if the state doesn’t.

Some states also may require other types of coverage:

•   Uninsured motorist and underinsured motorist coverage can help cover your medical expenses if you’re in an accident with a driver who has little or no insurance.

•   Uninsured motorist property damage coverage can help repair damage to your car if you are hit by an uninsured motorist.

•   Personal Injury Protection (PIP) and/or Medical Payments can offer protection if you or your passengers are hurt or killed in an accident.

Do You Need Liability Coverage If You Live in a No-Fault State?

A dozen states have instituted “no-fault” laws for drivers. Coverage rules and limits may vary from state to state, so you should be clear on the specifics of what your state requires.

Generally, when you live in a no-fault state and you’re in a car accident, everyone involved files a bodily injury claim with their own insurance company, regardless of who was at fault. Still, every no-fault state requires some level of liability coverage.

Drivers in no-fault states also typically must have Personal Injury Protection (PIP) insurance included in their car insurance policy to cover their own potential medical bills and expenses. PIP plans cover medical expenses for the car’s driver and passengers, which can include hospital bills, medication, rehabilitation, and other injury-related costs.

PIP insurance doesn’t replace bodily injury liability coverage in every state, and it doesn’t cover property damage. Your insurance company pays for repairs to your car if you have collision coverage. Or you may have to make a property damage claim against the at-fault driver’s insurance.

What If You Have an Accident in Another State?

Ready for a road trip? If you have an accident, your liability insurance may increase to match the minimum limits in whatever state you’re in, and in Canada. But you may want to check with your insurance company if you like to travel, especially if you have a bare-bones policy.

What’s Covered If Someone Else Is Driving Your Car?

The short answer is that the auto insurance covering the vehicle, not the person driving, is usually considered the primary insurance. So if you let someone else drive your car and that person causes an accident, your insurance company probably would be responsible for paying the claim.

Your liability coverage wouldn’t pay the medical bills of the person driving your car or the repairs to your car, although those costs may be covered by other parts of your policy. But it likely would be your liability insurance that pays for the driver of the other car’s medical bills and property damage.

Again, state laws may affect who is responsible in this situation, so it can help to know the rules before letting someone else drive your car.

How Much Does Liability Coverage Cost?

The price you’ll pay for liability coverage could be based on several factors, including how much you buy and where you live. Your age may also play a factor — younger drivers may pay more for coverage, for instance. You can do a little online shopping to compare rates in your area.

But a better question might be, “How much will it cost to bump up my liability insurance beyond the state-mandated minimums?” Getting twice as much coverage won’t necessarily cost twice as much. If the price fits your budget, you may want to consider carrying more coverage than the law requires.

Upping coverage might increase your comfort level, considering the expenses that might be involved in a major accident, even if you have insurance. The extra coverage may cost more, but if you’re a safe driver, you may qualify for better rates. You can research car insurance online and compare quotes to find one that fits your budget.

The Takeaway

If you’re held responsible for a car accident, liability auto insurance helps pay the expenses of the others involved. Most states mandate this coverage, including “no-fault” states. But the amount of coverage you must carry may vary from state to state, so when you’re researching automobile insurance, it can be useful to know your state’s rules. Shopping around for insurance in your area can help you figure out how much coverage you really need and what your premium might be.

Having the right auto insurance means knowing you're truly protected — not just checking a legal box. SoFi lets you shop and compare quotes from top carriers in minutes, so you can find coverage that gives you real peace of mind on the road. Explore your coverage options.

SoFi brings you real rates, with no bait and switch.

FAQ

Does liability car insurance cover damage to my own car?

No. Liability coverage pays for damage you cause to other people’s vehicles and property. Repairs to your own car would fall under collision coverage, or under comprehensive coverage if the damage came from something other than a crash like theft, fire, or hail, for example.

Does liability insurance cover injuries to passengers in my car?

Typically not. Bodily injury liability is designed to cover injuries you cause to others, and the Insurance Information Institute describes medical payments and Personal Injury Protection as the coverages that pay for treatment of the driver and passengers in the policyholder’s own car. What applies in a given accident can depend on your policy and your state, so it’s worth checking which coverages you carry.

What do the numbers in a policy like 25/50/10 mean?

They’re the coverage limits, in thousands of dollars. A 25/50/10 policy sets the bodily injury limit at $25,000 per person and $50,000 per accident, and the property damage limit at $10,000. Costs above those amounts would be your responsibility.

What happens if an accident costs more than my liability limits?

Any amount above your limits would generally be your responsibility to pay. That’s one reason some drivers carry more coverage than their state requires, or add an umbrella policy, which can cover excess costs if liability limits are used up.

---

INSURANCE PRODUCTS ARE NOT FDIC INSURED • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY • NOT A DEPOSIT OR OTHER OBLIGATION OF, OR GUARANTEED BY SOFI BANK, N.A. OR ANY OF ITS AFFILIATES

SoFi Insurance Agency, LLC ("SoFi Agency"), doing business in the state of California as Social Finance Insurance Agency, is a licensed independent insurance agency and affiliate of SoFi Technologies, Inc. and SoFi Bank, N.A. SoFi Agency is compensated via commission or referral fee by its insurance carriers and other related service providers. Not all carriers or options in the marketplace are shown. SoFi Agency and its affiliates do not guarantee the services of any insurance carriers or other related service providers. California Entity License Number: 0L13077, Resident License No. 762363. See all licenses.

How SoFi Agency Is Compensated:
There is no charge to use SoFi Agency. However, we receive compensation from insurers and other vendors in the following ways:

● Commissions: A fee paid by the insurer for originating your policy, typically calculated as a percentage of your premium.
● Contingent & Supplemental Commissions: Performance-based bonuses from insurers for hitting annual targets, like customer volume or retention. (Supplemental commissions are based on past performance and known in advance; contingent commissions are not).
● Marketing Fees: Compensation for presenting promotions or linking you to an insurer’s application site.
● Affinity Partner Revenue: Income earned when you engage with or request services from third-party partners advertising on our platform.

If you have any questions about how we are compensated, please feel free to reach out to SoFi Agency.

All insurance products shown on SoFi are underwritten and provided by licensed insurance carriers, not SoFi Agency. SoFi Agency does not underwrite or price insurance policies. Insurance products presented may not be available in all states, and your rates and savings will vary based on individual factors. The rates or savings advertised are not necessarily available from all providers or advertisers. Not all carriers or options in the marketplace are shown.

This content is for educational and informational purposes only. The products, services, or features discussed may not currently be available via the SoFi platform. Any references to third-party products, services, or companies do not constitute an endorsement, recommendation, or solicitation by SoFi. Readers should independently evaluate their options and consider their individual financial needs and circumstances before making any decisions. ©2026 SoFi Technologies, Inc. All rights reserved.

SOPRO-Q326-009

Read more

The general trend is that the older you are, the better your credit score. The average credit score for Gen Z is 678. That rises to 747 for baby boomers. This is largely because boomers have had more time to build a credit history. Your credit history shows how well you manage your debt over time and how much of a risk you are to a lender.

You can improve your credit score by paying bills on time, not using more than 30% of the credit available to you, and using a variety of loans responsibly.

Here’s an in-depth look at credit scores by age and how you can maximize your score regardless of age.

What Is a Credit Score?

Your credit score is a measure of how well you manage your debt. Lenders can access your credit score from the three main credit reporting agencies: Equifax®, Experian®, and TransUnion®. The scores you receive from each bureau vary because each bureau may have different information about your credit.

Your credit reports, on which your scores are based, show information such as loan-paying history and the status of your credit accounts. When you apply for a loan or financing, lenders use your credit score to establish how risky you are as a borrower. The riskier you are, the lower your score, and the more interest you may pay for a loan.

SoFi Coach℠ Chat is a tool designed to help you view and analyze your financial data, get personalized insights, learn about SoFi products, troubleshoot issues, and take certain actions in chat. Coach responses are information for you to consider and not financial advice. Coach responses are based on limited information from your connected accounts and may have inaccuracies. The insights are meant to help you think about your finances and options —they are not advice or recommendations, and they do not guarantee results. Coach may offer you options to explore SoFi products on which SoFi would earn revenue. You are solely responsible for any financial decisions you make. Coach is offered by Social Finance, LLC.

Recommended: How to Check Your Credit Score for Free

Average Credit Score by Age

Here’s the average credit score by age and generation as of the third quarter of 2025, according to Experian.

Generation	Age	Average Credit Score
Gen Z	18-28	678
Millennials	29-44	689
Gen X	45-60	709
Baby Boomers	61-79	747
Silent Generation	80+	760

How Does My Age Affect My Credit Score?

While age doesn’t have a direct effect on your credit score, older generations tend to have higher scores because they’ve had more time to establish a solid credit history. Factors that affect your credit score include your payment history, your credit utilization, the length of your credit history, your credit mix, and how often you’ve recently opened a new line of credit.

However, according to OpenLending and TransUnion’s “Financing the Future” report, Generation Z and millennials are more likely to move up to higher credit tiers at a faster rate than older generations because of their borrowing habits.

What Factors Affect My Credit Score?

There are five main factors that make up your FICO® credit score, each with varying weights.

Payment History

Your payment history makes up 35% of your FICO Score. It includes how promptly you pay your credit card bills, your mortgage, and any installment loans. A few late payments on credit cards or a mortgage won’t ruin your score, but any bankruptcies or collections may.

Credit Utilization

Your credit utilization makes up 30% of your FICO Score. It measures the amount of revolving credit you use versus the total amount of credit you have available (credit card limits, lines of credit, etc.).

Length of Your Credit History

The length of your credit history accounts for 15% of your FICO Score. The longer your credit history, the better, assuming you manage your credit well. Your credit history includes how long your credit accounts have been open, the age of your oldest account, the age of your newest account, and the average age of all your accounts.

Credit Mix

Your credit mix, or the diversity of your debt, accounts for 10% of your FICO Score. This includes credit cards, mortgages, home equity lines of credit (HELOCs), installment loans, student loans, and car loans. If you are successfully managing a variety of financing types, it will be reflected in your FICO Score.

New Credit Applications

When you apply for a new credit card, the lender will do a hard inquiry on your credit that could cause your score to dip slightly. New accounts also reduce the average age of your accounts, which could lower your score as well. On the flip side, a new credit card account increases the amount of credit available to you, which might lower your credit utilization rate. It might also diversify your credit mix, and if you make payments on time, it could help build your credit score.

Recommended: How Long Does It Take to Build Credit?

Average FICO Score by State

The state with the highest average credit score is Minnesota at 741, and the state with the lowest average score is Mississippi at 677, according to Experian. Average credit scores are typically influenced by demographics, unemployment rates, poverty levels, education, and income.

State	Average Credit Score
Alabama	689
Alaska	720
Arizona	709
Arkansas	693
California	721
Colorado	729
Connecticut	724
Delaware	713
District of Columbia	711
Florida	704
Georgia	692
Hawaii	730
Idaho	729
Illinois	720
Indiana	710
Iowa	728
Kansas	720
Kentucky	704
Louisiana	686
Maine	731
Maryland	714
Massachusetts	731
Michigan	717
Minnesota	741
Mississippi	677
Missouri	712
Montana	730
Nebraska	728
Nevada	699
New Hampshire	735
New Jersey	722
New Mexico	701
New York	719
North Carolina	707
North Dakota	730
Ohio	713
Oklahoma	693
Oregon	730
Pennsylvania	720
Rhode Island	719
South Carolina	699
South Dakota	731
Tennessee	703
Texas	692
Utah	728
Vermont	737
Virginia	721
Washington	734
West Virginia	699
Wisconsin	737
Wyoming	722

FICO vs VantageScore

FICO and VantageScore® are the two leading companies in the credit score industry. Both use slightly different criteria in their scoring models to determine your credit score.

The VantageScore models and the base FICO models are generic credit scores created for use by a wide range of creditors, such as private student loan companies, online lenders, and credit card issuers. FICO also creates industry-specific auto and bankcard scores, which are built on the same criteria as the base FICO Scores but are tailored for auto lenders and card issuers.

Both VantageScore and FICO update their scoring models regularly to keep up with technology and industry changes but also to ensure they remain predictive as consumer behavior changes.

With all credit scores, the lower your score, the more risk you pose to lenders. That’s why borrowers with the highest credit score get the best loan terms.

Both the base FICO Scores and the base VantageScores range from 300 to 850, while FICO’s industry-specific scores range from 250 to 900.

What Is a Good Credit Score?

According to Experian, 670-739 is considered good. Credit scores above 740 are very good, and scores above 800 are exceptional.

Here is how credit scores are categorized:

•   Poor: 300-579

•   Fair: 580-669

•   Good: 670-739

•   Very good: 740-799

•   Exceptional: 800-850

Average Credit Score by Income

Your income is not considered as part of your credit score. However, some studies, including a 2018 Federal Reserve study, found that your income may have a “moderate correlation” to your credit score.

Average Credit Score by Income (according to the latest data from American Express)
Annual Income	Average Credit Score
Low Income	658
Moderate Income	692
Middle Income	735
High Income	774

The reason your income might affect your credit score is that the higher your income, the likelier you will be able to pay your debts on time and build a strong payment history. For example, if you earn $120,000, it will be easier to pay down a debt of $10,000 than if you earn $50,000.

Nevertheless, you don’t have to be a high-income earner to build credit over time. Paying bills and debt payments on time is the most important thing.

Tips for Building Your Credit Score

•   Make on-time payments. Consistently paying bills on time is one of the most effective ways to build and maintain a strong credit score.

•   Keep credit utilization low. Aim to use no more than 30% of your available credit to show responsible credit management.

•   Limit new credit applications. Avoid frequent credit applications, as each inquiry can temporarily lower your score and indicate potential financial strain.

•   Pay down debt. Reducing outstanding balances on existing debts can improve credit utilization and positively impact your score.

•   Maintain old credit accounts. Keeping older accounts open contributes to a longer credit history, which is favorable for your score.

•   Review credit reports regularly. Check your credit report for errors and dispute any inaccuracies that could be lowering your score.

•   Use a mix of credit types. A blend of credit types, such as installment loans and credit cards, shows you can manage different forms of credit.

Practicing good fiscal management will help keep your credit score from dropping and slowly help to build your credit score over time.

The Takeaway

The general trend is that the older you are, the better your credit score. That’s because older individuals have had more time to demonstrate that they can use debt responsibly. With a higher credit score, lenders consider you less of a risk and may charge you a lower interest rate on a loan.

You can build your credit score by paying bills on time, not using more than 30% of the credit available to you, and using a variety of loans responsibly. Also, don’t apply for new loans too often, as this can lower your score.

Take control of your finances with SoFi Coach. You can easily view all of your accounts in one convenient dashboard: bank and investment balances, current debts, spending breakdowns, and credit score. Easily set up budgets and spot upcoming bills. And get personalized insights on everyday money questions and take action with Coach chat, the AI guide that’s powered by the playbooks of SoFi Financial Planners, so its guidance comes from expert knowledge.

Meet SoFi Coach, your smart personal guide to getting your money right.

FAQ

How rare is an 800 credit score?

According to Experian, nearly a quarter (22.9%) of Americans have a FICO Score of 800 or higher. The credit scoring company describes this as exceptional.

What is the average American’s credit score?

The average credit score in the U.S. was 713 in 2025, decreasing by two points from its 715 average in the third quarter (Q3) of 2024, according to Experian. Despite the slight decrease, consumers are still better off than they were 10-15 years ago.

Is 750 a good credit score for a 25-year-old?

Yes, a 750 credit score is excellent for a 25-year-old, showing responsible credit management at an early age. With this score, you’re likely to receive favorable terms on loans and credit products, setting a strong foundation for future financial goals.

What is a good credit score to buy a house?

While credit score requirements vary based on loan type, lenders generally require a credit score of at least 620 to buy a house with a conventional mortgage. Meanwhile, you can secure an FHA loan with a credit score of 580 with a 3.5% down payment or even a 500-579 credit score if you put down 10%.

What is a good FICO Score to buy a car?

You will likely need a credit score of 661 or above to get an auto loan at a good interest rate. If you have poorer credit, you can still get a loan, but you will probably have to pay more for it or find a cosigner.

---

Photo credit: iStock/Jacob Wackerhausen

This content is for educational and informational purposes only. The products, services, or features discussed may not currently be available via the SoFi platform. Any references to third-party products, services, or companies do not constitute an endorsement, recommendation, or solicitation by SoFi. Readers should independently evaluate their options and consider their individual financial needs and circumstances before making any decisions. ©2026 SoFi Technologies, Inc. All rights reserved.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SORL-Q326-061

Read more

An authorized signer is a person who has access to a bank account but doesn’t actually own the funds in the account. Their limited rights to the account differentiate an authorized signer from, say, a joint owner.

It could make sense to add an authorized signer to personal or business bank accounts if you’d like someone else to have access either for convenience or in case you’re unable to manage the account yourself. Here’s a closer look at what it means to be an authorized signer on a bank account and how to add one.

Definition of an Authorized Signer

An authorized signer on a bank account is someone who has the right to make transactions from the account at the discretion of the account owner. However, an authorized signer does not own the funds in the account. The account owner can choose to whom to grant authorized signer status, and they can revoke that designation at any time.

In addition, it’s worth noting that the account holder may be able to limit the authorized signer’s access. For instance, some financial institutions may allow the account owner to cap check-writing privileges at $500 or $1,000 for the authorized signer. Any amount above that could require two signatures on the check.

Online banks and traditional banks often allow customers to add authorized signers, and some may allow you to add more than one. A bank account authorized signer may be a:

•   Spouse

•   Adult child or grandchild

•   Parent

•   Sibling

•   Another relative

•   Friend

•   Business partner (if you’re adding someone to business bank accounts)

Some points to note:

•   Authorized signers are often added to business accounts so that the authorized signer can make deposits or write checks as needed.

•   Authorized signer status applies while the account owner is still living. You can’t be an authorized signer on, for example, a savings account after the death of the account owner, as your authority ends with their passing.

•   As briefly noted above, an authorized signer is different from a joint owner of an account. With a joint account, the parties each have access to as well as ownership of the money in the account.

Also, adding an authorized signer is not the same as opening a bank account for someone else. For example, a parent might open a bank account for their minor child. The parent is the primary account owner, while the child is a joint owner, or the account might be a custodial account. (This will depend on the financial product chosen.)

Roles and Responsibilities of an Authorized Signer

An authorized signer on a bank account typically has the right to:

•   Check account balances

•   Sign checks drawn on the account

•   Pay bills

•   Schedule transfers to other accounts

•   Use a debit card to make purchases or withdraw cash from the account

•   Deposit funds into the account

•   Stop payments

You may be able to add an authorized signer to a business account, checking account, or savings account. If state laws allow, an authorized user may also be able to close the account.

You may wonder why someone would add an authorized signer to a bank account. It could make sense in certain situations:

•   Seniors may choose to add their children as authorized signers to help them manage their money.

•   A business owner may add one of their employees to the account and delegate certain tasks, such as paying invoices or making deposits.

•   Someone who’s undergoing medical treatment for a serious condition may add a family member or friend to make sure their bills are paid so they can focus on their health.

An authorized signer has no right to any assets in the account after the account owner passes away unless they’re also listed as a beneficiary. If you’d like your authorized signer to be able to inherit your account, you’d need to fill out a beneficiary form with your bank.

Differences Between an Authorized Signer and Account Holder

The main difference between an authorized signer and an account holder is simple: The account holder owns the account, whereas an authorized signer doesn’t.

An authorized signer can’t make any changes to the account’s ownership. They don’t have any automatic right to the money once the account holder passes away. The account owner can revoke their authorized signer status at any time. Account holders are also legally responsible for anything authorized signers do with the funds in the account.

To recap:

•   Account owners (including joint account owners) own the funds in the account and have discretion over how the account is managed, including when to add or withdraw an authorized signer.

•   Authorized signers have the right to conduct certain transactions in the account, but they don’t own it, and their authority ends when the account holder dies. (In other words, there’s no access or rights for an authorized signer on a bank account after the death of the owner.)

•   Beneficiaries inherit funds in the account once the account owner passes away but have no rights to it during the account owner’s lifetime.

Another angle on this matter: The difference between an authorized signer and a joint owner bank account is that joint owners have equal ownership, control, and access with one another. They also share equal legal responsibility for account transactions.

A joint bank account owner may or may not automatically inherit a bank account when the other account owner passes away. If the account is held with rights of survivorship, the account becomes theirs. If it’s held as tenants in common, the share of the account belonging to the deceased owner passes to their heirs.

How to Add or Remove an Authorized Signer

Adding or removing an authorized signer typically requires you to fill out a form with your bank. You may add an authorized signer when you open a new bank account or after the account is established.

You’ll need to give the bank some information about the person you want to add, including their:

•   Name

•   Date of birth

•   Social Security number

•   Address and phone number

The bank may allow you to specify the level of access you’d like your authorized signer to have. This is similar to how credit cards may allow you to set spending controls for an authorized user. Your bank may also request an in-person meeting with your authorized signer to confirm their identity and create a signature card.

If you want to remove an authorized signer, you’ll need to let the bank know and complete any paperwork that’s required. You may be able to complete the process on your bank’s website or via its app. Once an authorized signer is removed, they no longer have any rights to transact in the account.

Legal Implications and Considerations

As the account holder or owner, you’re responsible for anything that an authorized signer does. That could lead to tricky legal situations if they engage in irresponsible or even criminal behavior, such as check fraud. At the very least, you could put yourself at risk for overdraft charges or other fees if the authorized signer mismanages funds in the account.

Before you add someone as an authorized signer, it’s important to consider how trustworthy they are and how comfortable you feel giving someone else access to your bank account. If your bank allows you to set controls on what an authorized signer can or can’t do, you may want to weigh the benefits of doing so. That way, you could likely minimize worries about an authorized signer overspending from your account.

Recommended: Savings Account Calculator

The Takeaway

Adding an authorized signer to a bank account may be something to consider if you’d like to have a backup person who could access your account if needed or someone to whom you could delegate some personal finance tasks.

If you’re interested in opening a new checking account or savings account and are exploring joint accounts, see what SoFi offers.

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

Better banking is here with SoFi, named the #1 Bank in the U.S. for the fourth year in a row by Forbes (2026).* Enjoy up to 3.30% APY on SoFi Checking and Savings.

FAQ

Can an authorized signer withdraw money from the account?

Authorized signers can typically write checks on the account, use a debit card to make purchases, withdraw cash at ATMs, or make withdrawals in person at bank branches. If your bank gives you the option, you may be able to limit the types of withdrawals an authorized signer can make. For instance, you could possibly put a cap on ATM withdrawals or make it necessary to have two signatures on checks for more than $1,000.

Does an authorized signer have access to online banking?

An authorized signer can have access to online and mobile banking if the bank offers that feature. They would need to create a unique user ID and password to log in and access any accounts they have access to.

Can an authorized signer be held liable for account activities?

Account owners, not authorized signers, are legally responsible for any activity that occurs in the account. That’s an important legal point to consider if you’re thinking of adding an authorized signer to bank accounts you own. It’s wise to be sure that you feel they are a trustworthy individual.

---

About the author

---

Photo credit: iStock/miniseries

This content is for educational and informational purposes only. The products, services, or features discussed may not currently be available via the SoFi platform. Any references to third-party products, services, or companies do not constitute an endorsement, recommendation, or solicitation by SoFi. Readers should independently evaluate their options and consider their individual financial needs and circumstances before making any decisions. ©2026 SoFi Technologies, Inc. All rights reserved.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2026 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.

SOBNK-Q326-164

Read more

A national bank is a large commercial bank that is supervised by the Office of the Comptroller of the Currency (OCC), which is an independent bureau of the U.S. Treasury. National banks, which include some of the best-known ones, can operate in any state, making them distinct from state-chartered banks. They play a pivotal role in the U.S. economy by offering a wide range of services, including savings and checking accounts, credit cards, and loans, on a national scale. Here’s a closer look at what national banks are and how they work.

Understanding National Banks

To understand national banks, it helps to know how they are officially defined, how the current U.S. system of banking came to be, and how national banks are regulated today.

Definition of a National Bank

In the U.S., a national bank is defined as a financial institution chartered and regulated by the federal government. National banks operate under a charter granted by the Office of the Comptroller of the Currency (OCC), an agency within the U.S. Department of the Treasury. They can legally operate in any state.,

National banks are members of the Federal Reserve System and authorized to provide a wide spectrum of banking services, including lending, taking deposits, and managing financial transactions., National banks typically serve a national clientele and offer services across multiple states, making them key players in interstate commerce.

National banks can include both online banks and traditional banks (the latter also being known as brick-and-mortar banks), and they typically have “National” in their names or “N.A.” (for National Association) listed after their names.

The OOC maintains a current list of all active national banks in the U.S. If you don’t see your bank on the list, it’s likely a state-chartered bank vs. a national one.

History and Origins

Now that you know the definitions of a national bank, consider how it came about. The national banking system as it’s recognized today was shaped by the National Banking Acts of 1863 and 1864, which were enacted to create a system of national banks, establish a national currency, and offer greater financial stability during the Civil War. Here are some details on how this unfolded:

•   In the decades prior to the Civil War, regulation of banks was in the hands of the individual states, and each bank issued its own currency. Banks were required to get a charter from their state government. But the increasing demand for banks led to corruption, with petitioners often bribing state legislators to obtain a charter.

•   To reduce corruption and to make the process of opening a bank easier, many states enacted free banking laws. This meant that virtually anyone could open a bank, provided they met certain basic criteria, such as having a certain minimum amount of capital and depositing bonds (or another type of security) with the state government to back the notes issued by the bank.

•   To create a more organized system, Congress passed the National Banking Act in 1863 (originally known as the National Currency Act). Under this system, banks could only issue a new kind of paper money —- national currency —- backed by government bonds. The Act also established the OCC to regulate national banks.

While the National Bank Act has evolved over the years, it continues to provide the basic governing framework for the operation and regulation of national banks in the U.S. today.

Regulatory Framework

Here are some important points about how national banks are regulated:

•   National banks in the U.S. are regulated by the OCC, which oversees their operations and ensures compliance with federal banking laws. As of 2025, the OCC oversees 970 national banks.

•   National banks are also members of the Federal Reserve System, which enables them to borrow from the central banking system to meet reserve requirements or to address a temporary funding problem.

•   In addition, national banks must belong to (and pay premiums to) the Federal Deposit Insurance Corporation (FDIC). This FDIC offers protection to account holders by insuring bank accounts up to $250,000 per depositor, per account category, per insured financial institution. (Co-owners of joint accounts at the same bank are each insured up to $250,000.)

This regulatory framework ensures that national banks remain financially sound, protect consumer interests, and follow guidelines for safe and effective banking practices.

Advantages of National Banks

National banks provide a number of benefits that make them attractive to customers. These include:

•   Stability: National banks must meet stringent regulatory requirements, including maintaining sufficient capital reserves, which reduces the risk of bank failure.

•   Oversight: Because they are supervised by the OCC and are members of the Federal Reserve System, national banks are held to high operational and ethical standards. This oversight reduces the risk of fraud and mismanagement.

•   Broad accessibility: If you have an account at a national bank, you can likely find branches and/or in-network ATMs throughout the U.S. and, in some cases, overseas.

•   Wide range of services: National banks often offer multiple checking and savings accounts, as well as a variety of loan products. Some also offer investment services. A national bank can be a good fit for those who prefer to do all of their banking in one place.

These are the key features that set national banks apart from others.

National Banks vs State-Chartered Banks

The key difference between national banks and state-chartered banks is whether their charter was granted by the state government or the federal government. The OCC charters national banks, while the state banking departments charter state banks.

National banks typically operate across state lines, providing a broader range of services on a national level. State-chartered banks, on the other hand, often serve local or regional markets, focusing on the needs of their specific communities.

Regardless of whether a bank is national or state-chartered, the way banking regulations work is quite similar. In addition, both national and state-chartered banks offer FDIC-insured deposits.

Becoming a National Bank

Becoming a national bank requires a financial institution to meet specific criteria and undergo a rigorous approval process. Here’s a look at the steps involved.

1.    Application for a federal charter: Institutions that want to operate as national banks must apply for a charter from the OCC. The application process involves submitting detailed information about the bank’s business plan, management structure, and financial health.

2.    Meeting capital requirements: National banks must meet minimum capital requirements, which ensure they have enough reserves to provide a safety net for their operations.

3.    Applying for FDIC insurance: Final approval for an application to establish a national bank is not issued until the OCC receives written confirmation by the FDIC that it will insure the accounts of the bank.

These steps are necessary to make sure that a bank is qualified as a national entity.

The Role of National Banks

National banks play three critical roles in the U.S. economy:

•   Provide financial services: National banks provide a wide range of essential financial services to individuals and businesses, including checking and savings accounts, loans, mortgages, credit cards, investment products, and wealth management services.

•   Facilitate interstate commerce: With their federal charters, national banks provide banking services to businesses and consumers throughout the U.S., facilitating transactions that drive economic activity on a national scale.

•   Promote economic growth: Without access to credit, many businesses would not be able to launch and grow. In addition, consumers would be unable to finance their education, cars, and homes. As a result, national banks play a crucial role in providing the credit necessary for economic growth.

In these ways, national banks play a crucial role in the U.S. economy and daily life.

Recommended: Guide to Commercial Banking

The Takeaway

Chartered under federal law, national banks play a vital role in the national economy. They offer a range of financial services to their customers, provide capital to support economic growth, and facilitate commerce across state lines.

National banks generally have more resources and a wider reach than state-chartered banks, which tend to offer more personalized, community-focused services. Which type of bank is the right fit for you will depend on your needs and personal preferences.

If you think a national bank would suit your needs, see what SoFi offers.

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

Better banking is here with SoFi, named the #1 Bank in the U.S. for the fourth year in a row by Forbes (2026).* Enjoy up to 3.30% APY on SoFi Checking and Savings.

FAQ

Are national banks safer than state-chartered banks?

Whether a bank is national or state-chartered, it must adhere to strict regulations. National banks are chartered, regulated, and supervised by the OCC to ensure they conform to national laws. State banks are chartered and regulated under state laws and are supervised by a state agency. Both types of banks are insured by the Federal Deposit Insurance Corporation (FDIC), which protects deposits up to $250,000 per depositor, per account category, per insured institution.

What are the major national banks in the United States?

The four largest banks in the U.S, each with over $1 trillion in assets, are:

•   JPMorganChase

•   Bank of America

•   Wells Fargo

•   Citibank

As national banks, these institutions are able to operate across state lines and offer a wide range of services, including checking and savings accounts, credit cards, mortgages, and investment options. National banks are chartered and regulated by the federal government, which allows them to provide banking services on a national scale.

How are national banks regulated differently than state banks?

National banks must adhere to a uniform set of federal regulations, including membership in the Federal Reserve System. State banks, on the other hand, follow state-specific regulations, which can vary by jurisdiction. Both types of banks are insured by the Federal Deposit Insurance Corporation (FDIC).

---

About the author

---

Photo credit: iStock/georgeclerk

This content is for educational and informational purposes only. The products, services, or features discussed may not currently be available via the SoFi platform. Any references to third-party products, services, or companies do not constitute an endorsement, recommendation, or solicitation by SoFi. Readers should independently evaluate their options and consider their individual financial needs and circumstances before making any decisions. ©2026 SoFi Technologies, Inc. All rights reserved.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2026 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.

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

SOBNK-Q326-162

Read more