SoFi

The annual percentage rate (APR) of a credit card represents how much someone pays in interest on an annual basis if they carry a balance on their credit card. The lower someone’s APR is, the less they would pay in interest. Because of this, it makes sense to try to secure the lowest APR possible.

Keep reading to learn how to lower the APR on a credit card.

What Is Credit Card APR?

A credit card’s APR represents the total cost of borrowing money using a credit card. The APR on a credit card is the interest rate charged to carry a balance. In the case of credit cards, annual fees and other fees like late fees are not added to the APR like they are with installment loans. A credit card can have a fixed or variable interest rate, meaning the rate can either stay the same or change over time based on index rates.

Understanding what APR is can help credit card users know how much they’d need to pay in interest if they don’t pay off their credit card balance in full each month. If they don’t carry a balance, they can avoid paying credit card interest.

Recommended: What is a Charge Card

Ways a Lower Interest Rate Can Help

Having a good APR for credit cards is important for a number of reasons. A lower interest rate can save consumers money. In turn, this can make it easier and faster to pay off debt. This can also help them to improve their credit score.

The higher someone’s interest rate is, the harder it is to chip away at their credit card balance, as the bulk of credit card payments will go toward interest. This is why achieving a lower credit card APR can make escaping high-interest credit card debt easier.

Recommended: How to Avoid Interest On a Credit Card

How to Lower APR on a Credit Card

If someone is interested in lowering their credit card APR, there are steps they can take to try to do so.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score

Apply for a Balance Transfer Card

If someone has a high APR, one option for how to get a lower interest rate on a credit card is to get a balance transfer card with a lower interest rate. They can then transfer their balance from the high-interest credit card to the balance transfer card.

Usually, this new balance transfer credit card can’t be issued by the same company or any affiliates of the original card. Balance transfer cards may offer a 0% APR promotional period. During that period, the cardholder won’t pay any interest, which means all of their payments will go toward paying down the principal.

However, once the promotional period ends, a higher APR will kick in (this is one example of what can increase your credit card’s APR). Additionally, a balance transfer fee may apply to move over the existing credit card balance to the new card. It might make sense to calculate your credit card interest rate on your old card to ensure you’ll save money.

Recommended: When Are Credit Card Payments Due

Negotiate With Your Credit Card Issuer

When it comes to figuring out how to get lower APR on a credit card, it’s possible to simply ask for an APR reduction with a credit card issuer. This strategy may be particularly effective if the cardholder has used their credit card responsibly and consistently paid their credit card bill on time — one of the cardinal credit card rules.

The account holder also can provide a reason why they’re requesting a reduction. They may have experienced a job loss or have unexpected medical bills to pay. Maybe they got a raise and are really motivated to pay off their debt, and having a lower interest rate would help them do that. It’s also possible to leverage new credit card offers with lower interest rates to try to negotiate a current APR down.

Consumers can also ask for a temporary reprieve if the credit card issuer won’t offer a lower rate indefinitely. For example, it may be possible to request a one-year rate reduction of 1 to 3 percentage points.

Low-Interest Credit Cards

If someone can’t quite figure out how to get a lower interest rate on a credit card with their current issuer, they also can step away from using that specific credit card. Instead, they may apply for a low-interest credit card to use in lieu of the card with the higher APR.

Cardholders who have consistently made on-time payments and taken other steps to improve their credit score may be able to secure a new card with a lower interest rate. As an added bonus, doing so can make it easier to negotiate a lower APR with a current credit card.

Some different types of credit cards even reward cardholders for their good behavior by lowering their APR.

Recommended: Can You Buy Crypto With a Credit Card

The Takeaway

Can you lower your APR on a credit card? In short, yes.

If someone pays off their credit card balance in full each month, they won’t have to worry about their APR too much. That being said, it’s always smart to try to secure the lowest APR possible in case it’s necessary to carry a balance from time to time.

Having a lower APR on a credit card means the cost of borrowing money is lower. When someone has a lower APR, more of their monthly payments can go toward paying down their principal balance instead of interest. In turn, this can help them pay off their debt faster, save money, and even improve their credit score.

The SoFi Credit Card offers unlimited 2% cash back on all eligible purchases. There are no spending categories or reward caps to worry about.¹

Take advantage of this offer by applying for a SoFi credit card today.

FAQ

How can I reduce my credit card interest rate?

Cardholders have a few different options for figuring out how to lower the interest rate on credit cards. To start, they can try to negotiate a lower interest rate on any current credit cards by calling their issuer and trying to come to an agreement. If that doesn’t work, they can simply apply for a new credit card or a balance transfer card. If they can secure a lower interest rate on a new credit card, they can choose to use that credit card instead. Or, they might take that offer back to their current lender to try to negotiate a lower APR.

Why do credit card issuers charge varying APRs?

Credit card issuers use a consumer’s credit score to help determine what the APR on a credit card should be for a specific consumer. The reason that APRs vary is because credit card issuers give a custom APR to each applicant based on their financial history. Generally, the lower someone’s credit score is, the higher their APR will be.

---

Photo credit: iStock/Charday Penn

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

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

The SoFi Credit Card 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.

¹See Rewards Details at SoFi.com/card/rewards.

¹Members earn 2 rewards points for every dollar spent on purchases. No rewards points will be earned with respect to reversed transactions, returned purchases, or other similar transactions. When you elect to redeem rewards points into your SoFi Checking or Savings account, SoFi Money® account, SoFi Active Invest account, SoFi Credit Card account, or SoFi Personal, Private Student, or Student Loan Refinance, your rewards points will redeem at a rate of 1 cent per every point. For more details please visit the Rewards page. Brokerage and Active investing products offered through SoFi Securities LLC, member FINRA/SIPC. SoFi Securities LLC is an affiliate of SoFi Bank, N.A.

SOCC0522014

Read more

With so many options available, choosing a credit card isn’t as simple as signing up for whichever card happens to be popular at the moment. Instead, you should consider things like your credit score, preferred features, and spending habits.

After all, there are many different types of credit cards meant for different purposes. Making the best choice is about not only knowing your approval odds, but also how you intend to use the card after signing up. Using a step-by-step approach for how to choose a credit card will help you make the right decision for your situation.

Where To Begin When Choosing a Credit Card

Choosing a credit card is a matter of understanding which type of credit card works best for you. You’ll want to consider a number of factors, including:

•   Your credit score

•   How you plan to use your new credit card and which features you’ll need

•   How the card stacks up to other options

•   The card’s interest rates and fees

•   Which rewards you want

•   Any sign-up bonuses offered

Read on to learn more about each of these items and what specifically to look for.

Checking Your Credit Score

Checking your credit score should be one of the first steps you take before applying for a new credit card. One of the best ways to know your approval odds is to check your score.

One way to do so is to use AnnualCreditReport.com. This website allows you to request a copy of your credit report from each of the major credit reporting bureaus: Experian, Equifax, and TransUnion. Federal law allows you to request one copy of your credit report from each reporting bureau per year.

However, you may want to check your credit score more often than once per year, especially if you are in the process of building your credit. Fortunately, several big banks allow you to check your FICO score — the most widely used credit score — on a monthly basis. This includes Discover Credit ScoreCard and CreditWise from Capital One. Neither service requires you to be a customer.

There are several credit scoring models available, but most lenders use FICO, so getting this score can be a good way to gauge your chance of approval. These checks won’t guarantee you’ll get approved for a credit card, but they can help you get a better sense of where you stand. Plus, pulling your credit report won’t hurt your credit score.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score

Identifying the Features You Need

There are many different types of credit cards, each of which has its own set of features. Identifying the features you need can help you find the right credit card, as how credit cards work varies depending on the type.

Credit Builder Credit Cards

Some credit cards are meant for those who are working on building their credit. This could include college students, those trying to repair their credit, or anyone with little to no credit history.

In those cases, you might need a secured credit card or a student credit card. Secured credit credit cards require a security deposit, usually around $200, that is fully refundable. Your credit limit is usually equal to your security deposit, so the card issuer has little risk of losing money. Student credit cards, on the other hand, are usually unsecured and may have special perks for students.

Here are some features to look for in credit builder credit cards:

•   No annual fee: If you are working to build your credit, annual fees could make things more difficult.

•   Credit limit increases: Credit limits often start low with these cards; some offer credit limit increases if you use your card responsibly.

•   Free credit score: Some credit builder cards offer free credit score monitoring to let you know where you stand.

Recommended: What is the Average Credit Card Limit

Balance Transfer Credit Cards

Balance transfer credit cards are ideal for consolidating and paying off debt. Thus, the key with this type of card is finding one that keeps fees as low as possible:

•   0% introductory APR: Balance transfer credit cards may come with low or 0% balance transfer APR for a specified introductory period, sometimes lasting a year or more. Some even have a separate 0% APR introductory period for purchases. This can allow you to avoid paying much in interest for a certain period of time and instead put your money toward paying down the principal balance.

•   Balance transfer fees: These cards often charge separate balance transfer fees, which you should be aware of if you plan to transfer large balances.

Recommended: What is a Charge Card

Rewards Credit Cards

Credit card rules say that you shouldn’t get a card just for the points. However, rewards credit cards may come with a variety of benefits. These include cash back, points and miles, and various perks, such as rental car insurance and airport lounge access. You can redeem points and miles for statement credits, gift cards, flights, and hotels, so you’ll have to decide what’s most important to you.

Here are some rewards credit card features to consider:

•   Sign-up bonuses: Some rewards credit cards include sign-up bonuses that can be worth hundreds of dollars.

•   Low or no annual fee: While some of these credit cards have annual fees, not all of them do.

•   Rewards categories: Rewards credit cards generally let you earn a percentage of your purchases in cash back or points/miles. Some have higher earning rates for certain categories, such as groceries or travel. Look for one that earns a lot of points where you normally spend the most.

•   Other perks: These cards can come with a variety of other perks, from UberEats credits to free hotel nights. If you never travel, for example, you may not be interested in free hotel stays.

Narrowing Your Choices by Doing Research and Asking Questions

The key to how to pick a credit card is understanding how you want to use it. While some credit cards are more like generalists, doing many things somewhat well, others are niche cards that are great in certain scenarios. Consider what’s most important to you and how much you need certain features.

Once you’ve decided which type of credit card you want, the next step is to compare some of the best options. For instance, if you want a rewards credit card and don’t want to pay a high annual fee, look for no annual fee rewards credit cards. For balance transfer credit cards, you can look for ones with the lowest fees, including a lengthy 0% introductory APR. Also keep in mind you don’t need to rely on one card to meet all of your needs — here’s a primer on how many credit cards you should have.

Identify a handful of cards that look like good candidates based on your research. Once you have two to three cards that seem like the right fit, you might want to submit a pre-qualification form. This process will give you a hint about whether you might qualify — and it won’t affect your credit score. Pre-qualification doesn’t guarantee approval, but it will help you know where you stand.

Familiarizing Yourself With the Interest Fees and Rates

Having a basic understanding of interest rates and fees will help you avoid paying more than expected to use your new credit card.

Different types of credit cards tend to come with varying interest rates. For instance, the minimum annual percentage rate (APR) for travel cards tends to exceed 15%. However, the maximum APR for these credit cards can be slightly lower than the maximum for 0% APR and low-interest credit cards.

Of course, fees also matter. Balance transfer cards might have a 0% introductory period, but a fee may apply every time you initiate a balance transfer. Depending on the card, other fees may be involved, such as late fees and penalties, annual fees, and foreign transaction fees. Be sure to review all relevant fees before signing up for and using a credit card.

Recommended: How to Avoid Interest On a Credit Card

Deciding Which Rewards You Want

The answer to ‘what credit card should I get?’ may be a rewards card, but you’ll then need to decide which type of rewards you’ll want to earn. There are a few different types of rewards that credit cards can offer:

•   Cash back: With a cash back rewards credit card, you will earn a percentage in cash on each eligible purchase you make with your card. You could get a flat rate across categories, or you may earn a higher rate in specific categories. If you want to earn rewards across spending categories and don’t want to worry about calculating and converting, cash back might be the right rewards option for you.

•   Points: Another way to earn credit card rewards is through points. You’ll earn a certain number of points for every dollar spent, with the rate and redemption options varying depending on the issuer. The perk of points is that you can redeem them in a number of different ways, including cash back, travel, charitable donations, statement credits, gift cards, and more.

•   Miles: If you’re a frequent flier, you might prefer earning airline miles. Credit cards that allow you to earn miles let you redeem your rewards for flights and other travel-related perks, such as hotel stays or access to airport lounges.

Looking at Sign-Up Bonuses

Some credit cards feature sign-up bonuses to attract new customers. Usually, you have to spend a certain amount in the first three or four months of opening the card. If you meet the minimum spending threshold within that time frame, you’ll receive cash, points, or miles as a reward. The trick is to ensure you can meet the spending threshold on time.

There can be a wide range of bonus amounts; for instance, the Chase Freedom® Student credit card has a $50 bonus for making a purchase in the three months. On the other end of the spectrum is the American Express Platinum Card, which at the time of writing offers 100,000 points after spending $6,000 in the first six months.

Most sign-up bonuses fall somewhere in between. The Chase Freedom Flex, for example, has a $200 bonus after spending $500 on purchases in the first three months. The Citi Rewards+® Card, which is good for balance transfers, offers a 0% APR for 15 months. But it will also give you 20,000 points after spending $1,500 in the first three months of account opening.

Choosing the Card With the Highest Overall Value

There are several credit cards available that offer similar benefits. In those cases, you will want to compare them directly to one another and find features that give one card the edge. Here are a few things to consider for each type of credit card:

Student and secured credit cards:

•   Credit limit increases: Some student credit cards will automatically increase your credit limit if your account remains in good standing.

•   Flexible credit lines: Some secured credit cards give you access to a larger credit line than your deposit.

0% introductory APR or balance transfer credit cards:

•   No late fees or penalties: Some credit cards waive these fees, which might be helpful when transferring balances.

•   Installment plans: Some balance transfer cards offer installment plans to help you repay your balance over time.

Rewards or travel credit cards:

•   Low spending threshold: Requirements to earn sign-up bonuses can vary; look for one that’s well within your budget.

•   Points transfer: Some travel credit cards let you transfer points to airlines or hotels, which can lead to better redemption rates in some cases.

How Your Credit Score Affects Your Chance of Approval

Your credit score is one of the biggest factors in determining whether you’re approved for a credit card. If you have poor or no credit, you probably won’t get approved for a card that requires very good to excellent credit, regardless of other factors, given what a credit card is and how the approval process works.

Luxury credit cards, for example, may require a credit score of 670 or higher. If your score is higher, you might be approved for one of these cards (though approval is not guaranteed). If your credit score is below 670, however, your approval odds will probably be quite low.

While credit score is a big factor, it may not be the only one a card issuer considers. Issuers might also look at things such as your employment status and income. This is one of the reasons that a good credit score doesn’t guarantee approval.

Still, a better credit score can help you secure the credit card you want. As such, you might consider taking steps to build your credit score before applying for a credit card, such as by making on-time payments or lowering your credit utilization ratio.

Recommended: When Are Credit Card Payments Duere

What Comes Next After Choosing a Credit Card?

If you’ve already submitted pre-qualification forms, you should have some idea about your approval odds for each card. As mentioned, those forms do not guarantee approval but can serve as a valuable guideline.

Once you have chosen a credit card, it’s time to apply. Some general steps are to:

1.    Visit the card issuer’s website and click apply.

2.    Fill in the required information.

3.    Submit your application.

In some cases, you may receive instant approval (or denial). In others, the card company will need more time to review your application. If approved, you can usually expect to receive your card in the mail in seven to10 business days.

If you are denied, you can call the card’s reconsideration line and provide additional information. Perhaps you forgot some additional sources of income that could help your case. Anything that may help is worth mentioning.

The Takeaway

Deciding which credit card is best for you can be a long and arduous process. However, once you have a better understanding of what you need, the process of choosing a credit card doesn’t have to be so complicated. Some credit cards are simply better than others, and picking them is a surprisingly easy choice after comparison shopping.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

How does your credit score determine the card to choose?

Your credit score is one of the most important factors in deciding which credit card to choose. For example, if your credit score is poor, you probably won’t be approved for a card that requires good to excellent credit.

How do you choose a credit card for the first time?

In most cases, the best choice for your first card should have no annual fee. Some good choices are student credit cards (for students) or secured credit cards. These cards are ideal for building credit and often have low fees.

What is the most important factor when choosing a credit card?

The most important factor when choosing a credit card is probably how you intend to use it. For example, a premium credit card may offer excellent benefits for the frequent traveler, but someone who just wants to earn cashback on groceries may not benefit from travel perks.

---

Photo credit: iStock/Eva-Katalin

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

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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.

SOCC0522022

Read more

Working from home is more common than ever. What was once a fantastic work perk has become the norm for many occupations. According to the Pew Research Center, 59% of workers who are able to work remotely continue to do so by choice in 2022, even as many others are returning to the office.

If you’re one of those fortunate enough to continue working from home (or have the option to), your budget probably looks a lot different than it used to. Commuting expenses turned into food delivery charges and wardrobe spending turned into exercise subscriptions. You might be trying to keep your home at a comfortable temperature in the middle of the day, which increases the cost of utilities. You may also have substantial costs maintaining a work-from-home office.

If you need to make some adjustments in your work-from-home (WFH) budget, check out these tips.

How Working From Home Affects Your Spending

Working from home changes what you spend money on — and possibly how much you spend every month. You probably expect to save on regular expenses that you no longer have like transportation and lunches out. But you’ll spend more in other areas such as electricity, heat, maybe decorating the space behind your desk chair for video meetings.

Here are some big expenses you may have already incurred:

Home Office Equipment

When you’re regularly working from home, the dining table may not be a great place to set up shop. Also, a chair that is meant for all-day sitting, aka an ergonomic chair, may lessen any stiffness or aching you feel in your back or neck.

If you’re a fantastic scavenger, you might have scored a desk and good chair for free, but most people spend anywhere between $240 to $2,500 on basic office furniture. If you needed to add an office to the existing space in your home via a remodel, you could have paid anywhere between $15,000 and $80,000.

Technology

Your company likely provided a laptop. But connecting it to a larger screen makes work easier on the eyes. And if you have a lot of programs open, two monitors are even better. Likewise, a full-sized keyboard and mouse help reduce the strain on your back and shoulders. And if you video-conference a lot, a ring light, external mic, and wireless headphones can enhance the experience — all of which are likely not offered by your IT department.

Fitness Equipment

If you’re not going out to work out in the gym, you may have invested in some fitness equipment such as an indoor exercise bike or treadmill as well as subscriptions for your at-home workouts.

Steps for Adjusting Your Work From Home Budget

More than two years into working from home (if you started when the pandemic did), you’ve likely made any big office furniture and technology purchases already. So now you just need to figure out how much more or less you are regularly spending. These steps can help:

Track current and pre-pandemic home and home-office expenses

Combing through your bank account and credit card statements, calculate what you’re spending on electricity, gas, water, internet, cell phone, landline, printer cartridges, paper, and office supplies for at least one month — and the same month in 2019. To get a better picture of costs, you may want to compute costs for the past three months and corresponding three months in 2019 (or even better, the past 12 months and corresponding 12 months in 2018 and 2019) and get an average. Now subtract your pre-pandemic costs (probably the smaller number) from your current costs. This is roughly how much your monthly home expenses have increased.

Track current and pre-pandemic office or work expenses

Include work clothes, shoes, dry cleaning, gas or other commuting expenses, lunch, happy hour bills, coffee drinks, and anything else related to work. Again, you can do this for one month this year and the corresponding month in 2019. Or for three months this year and pre-pandemic or last 12 months and corresponding months pre-pandemic — and calculate the average. Next, subtract today’s costs (probably the smaller number) from your pre-pandemic costs. This is roughly how much your monthly office or work-related expenses have fallen.

Compare your home costs to your office expenses

Do your increased costs offset your decreased costs so that you’re basically spending the same amount now than you did pre-pandemic? That’s great! There are no adjustments to make.

If you’re spending more now than pre-pandemic, find ways to save

Part of the increase is likely related to inflation, but you’ll still want to lower your home expenses that have increased. Find areas to target for making cuts, below.

Or perhaps you want to rethink working from home if your company is offering flexibility. Read on for WFH pros and cons to help you make the decision.

Recommended: How Much Money Should I Save a Month?

If you’re spending less now than pre-pandemic, find ways to grow your savings — and celebrate!

It looks like you are keeping more of your paycheck working from home. It’s no surprise, actually: average commute costs exceed $4,500 each year, and that figure continues to climb with rising gas prices. Of course, you could spend some of the freed-up disposable income, but you may be best off putting the money somewhere it can grow. Check out some ideas, below.

Ways to Trim Costs in a Work-From-Home Budget

If your WFH budget needs some recalibrating, here’s where you may want to look for costs that can be cut.

Utilities

Working from home means you’ll most likely see a bump in utility costs to keep everyone comfortable throughout the day. California residents, for example, used 15-20% more energy through 2020 than the previous year. To shave costs, consider taking energy-conserving steps such as shutting down your computer at the end of the workday and closing AC and heat vents and doors of unused rooms during the day.

Food

You’re likely spending less on lunch if you are making it in your kitchen. But are you? Or are you ordering in dinner more than before? Food delivery apps saw tremendous growth during the pandemic — as did online grocery delivery services. When looking for ways to cut expenses, you may want to limit how many times you order in a week — and stop having your groceries delivered.

Potential Impulsive Spending

According to a study of 2,000 Americans in 2020, the pandemic brought on a slew of impulse purchases, especially in hard-hit areas with shortages and price increases. At the time of the poll, the price of the average impulse buy was more than $180. Be aware of this whether you’re shopping online or in person.

Recommended: 33 Ways to Make Money From Home

What to Do With Saved Money From Working From Home

During the pandemic, the personal savings rate skyrocketed to as much as 33% — almost five times what Americans were normally able to save prior to the shutdown (7%). Working from home turned out to be a boon for the bank accounts of many. If you’ve been able to save as a result of working from home, you may want to consider making one or more of these moves:

•   Pay off debt

•   Start an emergency fund if you don’t have one yet

•   Increase your contribution to your retirement account

•   Park the money in a high-yield savings account

•   Invest through a brokerage account

Rethinking Working From Home

If your employer is letting you choose where you work and you are spending more now than you did before, you may want to reconsider working from home. Consider which advantages and disadvantages apply to you, and how much they matter to you.

Advantages of Working From Home

•   Flexibility

•   Better work-life balance

•   No commuting

•   Fewer office politics

•   More independence

•   Save on expenses like wardrobe, coffee runs, lunches with coworkers

Disadvantages of Working From Home

•   Lack of separation between work and personal life

•   Increased childcare or housework load

•   Many, many distractions at home

•   Possible less productivity

•   Weaker connections to coworkers

•   Isolated work environment

Figuring out how to make working from home work is no small task. Beyond the increased amount of juggling you’ll have to do, many struggle with how to stay productive working from home. Some people prefer the environment of a formal office.

The Takeaway

Working from home has its pluses and minuses — and one plus is saving money on all the expenses that come with commuting to work, having to be presentable, and eating lunch outside the home. But if your work-from-home expenses exceed those savings, you may want to look for ways to lower your spending — and possibly reconsider working from home (if it’s optional).

But if you’re saving more by working from home, you’ll want to figure out where best to sock away the money. If you decide you want to keep it liquid but still have it earn interest, SoFi high-yield banking offers a competitive APY with direct deposit. You’ll also pay no minimum account fees, monthly account fees, or overdraft fees.

Get the most out of your money with SoFi Checking and Savings.

FAQ

How much money do you save when working from home?

How much money you save working from home depends on your situation and personal habits. If you no longer have high transportation costs or pay less for childcare, you could be saving a substantial amount of money. If you’re spending more on utilities or food delivery while working from home, you may not save that much.

Does working from home cost more?

Working from home may increase costs in your utilities, groceries, and home office equipment. However, it may be cheaper if you had been paying a lot in transportation and wardrobe expenses that are no longer required.

Is it better or worse to work at home?

While some appreciate the found time from not commuting back and forth or freedom from not having someone breathing down their necks, others enjoy the structure and separate space that working from an office provides. The financial impact on your life will also vary according to your circumstances.

---

Photo credit: iStock/AsiaVision

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

SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

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

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

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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

SOBK0622025

Read more

Summertime can lure us into spending more money simply because our usual habits and routines are disrupted. Kids are out of school and desperate for entertainment. Adults are eager to spend time outdoors after months of being stuck at home.

In the heat of the moment, it’s easy to forget that summer fun comes at a cost. To make the most of the season without breaking the bank, keep reading for 10 tips on how to save money in the summer and how to stick to a summer budget.

Why Saving and Budgeting in the Summer Can Be Tough

Holidays aside, many of us are satisfied spending the colder months curled up on the couch enjoying a succession of movie marathons. So when summer rolls around, we’re eager to get outside — and that increases the temptations to spend exponentially. Because while sun and surf are technically free of charge, the food, drink, and transportation costs that inevitably follow can steadily chip away at your summer budget.

Another reason that saving money in summer can be tough is the spontaneous nature of summer fun. Consider that last-minute happy hour invite to a new rooftop bar ($$). Or those friends who have an empty bedroom in their rental house by the lake ($$$$). The last thing you want to think about is your bank account. And the less advance planning that’s involved, the more likely it is you’re living beyond your means.

10 Tips for Saving in the Summer

Sure, small indulgences add up over time. But so do honest attempts to curtail overspending. Let’s look at 10 ways to save money and get financially fit for the summer.

Recommended: Where to Keep Your Travel Fund

1. Not Feeling Obligated to Plan a Vacation

From airfares to gas prices, travel costs soar during the summer. Planning your big trip for the fall, when prices drop, can make it easier to stretch a travel budget. The benefits aren’t just financial: You’ll enjoy fewer crowds and less sweltering temperatures. And you can still arrange a few fun yet inexpensive staycations for summer.

2. Finding Local Events in Your Community

Many communities host special summer events like outdoor movie nights and concerts, street festivals, and sports tournaments — most of which are free to attend. Make a point of checking out free events in your area. You may discover your neighborhood has more to offer than you ever imagined.

Recommended: Visiting National Parks on a Budget

3. Suspending Your Gym Membership

When the skies are clear, who needs an indoor treadmill? Pause your gym membership during the summer months, and go for a run in the park instead. You may save enough cash to book an affordable vacation in summer.

4. Using the Outside to Cool Your House and Car

Open windows before bed and early in the morning, and use fans to keep indoor air moving. You’ll cool your home without having to rely on air conditioning. You may even find you prefer the feel of no AC.

Did you know using your car’s air conditioning can reduce your gas mileage? On hot days, park your car in the shade and place a sunshade over your windshield to reduce the need to crank the AC during your next quick trip.

5. Planning Ahead Before Going to the Store

No matter the season, a shopping list can help prevent overspending at the market. After all, groceries take a major chunk of your monthly budget. In the summer, it’s natural to enjoy wandering around air conditioned grocers and big-box stores. But that strategy (or lack thereof) may lead to a cart filled with impulse purchases. Create a shopping list before heading to the store, and try not to stray from it.

6. Tracking Your Spending

Another seasonless tip for sticking to a budget is to track your spending, especially for unplanned events. Generally, when consumers track how they spend their money, they become more mindful of their purchases and actually find it easier to stick to a budget. (Bonus: They’re also more likely to catch fraudulent charges on their credit cards.)

7. Setting Budget Limits

Setting summer budget limits, on things like dining out and airfare, can help you squirrel away extra cash for next year’s big trip. That’s because budgeting is the leading strategy to help you reach financial goals. By seeing how much money is left over at the end of each week or month, you can earmark that amount for more long-term costs.

8. Utilizing Cash Over Credit Cards

Paying cash for summer activities can protect your budget in more ways than one. First, cash is more concrete: Forking over multiple Jacksons will slow your spending better than throwing down a card.

Second, if you can’t afford to pay off your entire credit card bill each month, relying on cash will help you avoid paying interest on the balance.

9. Suspending Unused Monthly Subscriptions

From streaming services to meal kit delivery, monthly subscriptions can really add up. It’s important to review subscription charges on a monthly basis to see which no longer make the cut. And because our habits change so drastically in the summer, you may find you can cancel or pause some subs until you need them again.

10. Planning Accordingly if You Are Vacationing

For families with school-age children, summer may be the only time they can take a real vacation. If you hope to take a summer trip, you’ll benefit from creating a special vacation budget that outlines how much you plan to spend for things like dining out, activities, hotels, and souvenirs. Going overboard now and then is only human, but setting a detailed budget makes it less likely you’ll overdo it.

Managing Your Finances With SoFi

To get the benefits of both worlds, you may want to open an online bank account with SoFi. You’ll be able to easily access your money with mobile banking and our network of 55,000+ fee-free ATMs, and with direct deposit, you’ll earn a competitive APY. Plus, you won’t pay any monthly fees or other account fees.

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

FAQ

How can I save money on summer vacation?

Choosing less trendy destinations and creating a detailed vacation budget can make it easier to save money on a summer vacation. Avoiding travel around holiday weekends can also save you a bundle, as can postponing your big trip until after Labor Day.

Why is it hard to save money in the summer?

In a nutshell, our habits and routines change significantly with the seasons. Keeping kids entertained during the long school break, spending less time at home, and going on vacation can all tempt folks to hand over more cash than they should.

Where do budgets change the most during summer?

We all tend to spend a lot more on things like travel, entertainment, and dining out in the summer. Some less exciting costs can also run higher, like electric and water bills thanks to increased air conditioning and garden maintenance.

---

Photo credit: iStock/Hispanolistic

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.

SOBK0622021

Read more

A demand deposit account is a type of bank account that allows you to withdraw money “on demand,” without having to provide advance notice beforehand. Time deposit accounts only allow you to withdraw funds once the account reaches maturity.

Banks and credit unions typically offer both demand deposit and time deposit accounts, though you might know them better as checking and savings accounts (demand deposit accounts) and certificates of deposit, or CDs (a time deposit account).

These two types of accounts are designed to meet different financial goals. Understanding the difference between demand deposits vs. time deposits can help you decide where to put your money.

What Are Time Deposits?

Time deposit accounts are savings accounts that require you to keep your money in the account for a set time frame. They can also be called term deposit accounts or term deposits since the bank can specify the term that the money must stay in place.

If you’d like to withdraw money before the term ends, the bank may allow that. However, they will likely charge you a penalty fee. They may also require you to give them a certain amount of advance, either in writing, in-person, or over the phone. Once you open a time deposit account, you typically can’t add any additional funds at a later date.

How a Time Deposit Works

A time deposit works by effectively “locking in” your money for a set time period or term. During this term, your money can earn interest at a rate specified by the bank.

A certificate of deposit account is the most common type of a time deposit or term deposit account. Banks often offer CDs with varying maturity terms, which can range anywhere from one month to five years or more.

While your money is in the CD, it earns interest. Once the CD matures, you can do one of two things:

•   Roll the principal and interest earned into a new CD with different terms

•   Withdraw the principal and interest earned

If you take money out of the CD before it matures, the bank will likely impose an early withdrawal penalty. This penalty usually involves forfeiting some of the interest earned. The size of the penalty can vary depending on how early you withdraw the money and the length of the CD.

What Are Demand Deposits?

With a demand deposit account, you are allowed to put money into the account or take money out of the account when you want and without giving any advance notice. Demand deposit accounts include checking accounts, savings accounts, and money market accounts.

The money in a demand deposit account is generally considered to be liquid, or ready cash, and you can withdraw any amount (including the entire balance) at any time without paying a penalty. However, some banks may charge a fee if you exceed a certain number of withdrawals from a savings account within one month.

How a Demand Deposit Works

Demand deposit accounts work by allowing you convenient, flexible access to your money. The most common example of a demand deposit account is a checking account. With a checking account, you can deposit money, then access it by:

•   Using a debit card to make purchases online or in stores

•   Withdrawing cash at ATMs or through a teller

•   Scheduling online bill payments

•   Linking it to mobile payment apps

A trade off for this easy access to your money is that demand deposit accounts typically don’t pay high rates of interest, and checking accounts generally don’t pay any interest at all. While you can sometimes find an interest-bearing checking account, checking account interest rates tend to be on the lower side.

There are other types of interest-bearing accounts that fall under the demand deposit umbrella. They include: traditional savings accounts, high-yield savings accounts, money market accounts, and kids’ savings accounts.

Recommended: How Do Calculate Interest on a Savings Account?

Federal Insurance for Demand and Time Deposits

The Federal Deposit Insurance Corporation (FDIC) provides insurance coverage for member banks, which is passed on to account holders. The FDIC insures both demand and time deposit accounts, including:

•   Checking accounts

•   Savings accounts

•   Money market accounts

•   CD accounts

The standard FDIC coverage limit is $250,000 per depositor, per account ownership type, per financial institution. The National Credit Union Administration (NCUA) offers similar coverage for time and demand deposit accounts held at member credit unions.

Demand Deposit Pros

When comparing demand deposit vs. time deposit accounts, it helps to understand the pros and cons of each type of account.

Here are some of main benefits of demand deposit accounts:

•   They give you access to your money without being required to give the bank advance notice.

•   They offer multiple ways to manage and access money, including online and mobile banking, automated clearing house (ACH) transfers, direct deposit, ATM banking, and branch banking.

•   There is the potential to earn interest on balances and, in some cases, rewards on purchases.

Demand Deposit Cons

While demand deposit accounts can make managing money and growing savings convenient, there are some potential downsides to keep in mind. These include:

•   There may be monthly fees or other fees.

•   Since interest rates can vary, you may need to shop around to find the best rate.

•   Banks may limit the number of withdrawals you’re allowed each month.

Time Deposit Pros

Time deposit accounts can be a great place to keep your savings — if you understand how they work. Here are some of the advantages of opening a time deposit account:

•   They offer a guaranteed rate of interest, so there’s very little risk of losing money.

•   They typically offer a higher interest rate than you can get on a demand deposit account.

•   There are generally no fees if you leave the money in the account until maturity.

Time Deposit Cons

Opening a time deposit account could make sense if you want a place to park your money for several months to years and earn a higher rate of interest. But it’s important to keep these cons in mind:

•   You may pay an early withdrawal penalty if you need to take any or all of the money out prior to maturity.

•   There is often a minimum deposit required.

•   Most time deposit accounts do not allow you to make additional deposits once the account is open.

How to Choose Between a Demand and Time Deposit Account

Demand deposit vs. time deposit: which one should you pick? The answer will depend on your financial needs and goals.

You might choose a demand deposit account if you:

•   Want convenient access to your money via a debit or ATM card, online banking, mobile banking, or at a branch

•   Want to be able to earn some interest on your savings while still having easy access to the money

•   Don’t mind the possibility of paying checking or savings account fees

A time deposit account, on the other hand, may be more appropriate if you:

•   Want to earn a higher interest rate than you can get on a standard checking or savings account at a bank

•   Have a sum of money you don’t need to touch for the immediate future

One good solution is to have a mix of demand deposit accounts and time deposits. This might include a checking account (for paying bills and everyday spending), a savings account (to hold your emergency fund), and one or more CD accounts to fund your longer-term goals. Just be sure to pay attention to minimum balance requirements and fees for each account you open.

When choosing between different types of savings accounts and CDs, you’ll also want to consider the interest rate and the annual percentage yield (APY). The difference between the interest rate vs. APY is that the APY tells you the total amount of interest you earn on the account over one year. While it’s based on the interest rate, the APY also takes into account the compounding interest (when interest accrues on previously accrued interest) to give you the most accurate idea of what you’ll earn in a year.

APY, however, is not to be confused with annual percentage yield, or APR, which refers to what you can owe in interest charges on a loan.

Recommended: Fixed vs. Variable Rate Loans

The Takeaway

There are two key differences between demand deposit and time deposit accounts: how easily you can access the money in the account and how much interest the account earns.

Demand deposit accounts (which include checking accounts, savings accounts and money market accounts) allow you to withdraw money from the account at any time, whereas time deposit accounts (such as CDs) require you to deposit your money for a specific length of time. While demand deposit accounts offer more flexibility, they typically offer lower interest rates than time deposit accounts.

To get the benefits of both worlds, you may want to open an online bank account with SoFi. You’ll be able to easily access your money with mobile banking and our network of 55,000+ fee-free ATMs, and with direct deposit also earning competitive interest. Plus, you won’t pay any monthly fees or other account fees.

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 is the difference between demand deposit and time deposit?

The key difference between demand deposit vs. time deposit is access. With demand deposit accounts, you generally access your money at any time without paying a penalty or giving the bank any advance notice. With time deposit accounts, you generally can’t withdraw money until the account reaches maturity.

Which type of deposits with the banks are called demand deposits?

Demand deposit accounts include checking accounts, savings accounts, and money market accounts. Checking accounts can allow you to use a debit card, pay bills online, and manage money through online and mobile banking. Savings accounts are used to hold money you don’t plan to spend right away and may offer interest. Money market accounts combine features of both checking and savings accounts.

Why are demand deposits considered money?

Demand deposit accounts hold money that you can withdraw whenever you want. You can use this account to get cash, pay bills, make purchases, or complete other financial transactions.

---

Photo credit: iStock/FG Trade

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

SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

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

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

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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

SOBK0422036

Read more