Guide to Keeping Your Bank Account Safe Online

Guide to Keeping Your Bank Account Safe Online

Online and mobile banking is now woven into many people’s daily lives. It’s fast, easy, and so convenient. But with its benefits come some downsides. One of the biggest negatives is the rising ranks of fraudsters and hackers, who put your money at risk. It’s up to each of us to manage our bank accounts responsibly and use the tools at our disposal to keep our accounts secure.

This guide explains why it’s so important to keep your bank account safe, how to log in to your account safely, which tools that are available to ensure secure banking, and how to recognize fraud. Follow these tips, and you’ll likely reduce the odds of getting hacked or scammed.

Importance of Keeping Your Bank Account Safe

Research shows that almost two out of three Americans are banking online. Much as you may enjoy the convenience of online and mobile banking, you may also be concerned with how to keep your bank accounts safe from criminals and fraudsters.

If your personal and financial information is stolen, the thief could open credit cards using your name. Money can be swiped from your account via fraudulent wire transfers, and you could be inconvenienced for weeks as you close accounts, open new ones, and replace compromised credit and debit cards. Who wants to deal with that kind of stress? No one. So here’s how to help keep your bank accounts safe online.

Tips for Keeping Your Bank Account Safe

Want to do what you can to stymie criminals? We thought so. Here are some ways to keep your bank account safe from fraudulent activity.

Not Accessing Financial Information on Public Wi-Fi

Public WiFi networks offer free access to the internet when you are not at home. It can seem like a gift while you’re on the go, but the connections at coffee shops, restaurants, airports, and hotels are simply not secure.

According to the Federal Trade Commission, public WiFi connections usually involve unencrypted sites, so other users on the network can see what you are doing. It’s easy for hackers to hijack your session and then login with your credentials. Stay safe if you are using public WiFi : Only visit encrypted sites that say “https:” at the start of the URL and show the lock symbol. Also consider setting up a personal virtual private network (VPN) service on your device to add a layer of protection.

Monitoring Auto Payments and Limit Withdrawals

Auto withdrawals occur when you give permission to a service provider to withdraw payments from your bank account on a recurring basis. This requires you to give the company your checking account or debit card information and permission to electronically withdraw money from your account. If you have signed up for automatic bill pay for, say, your utilities or streaming services, then you are familiar with this process.

These auto payments should be closely monitored. Some companies may fail to stop an automatic withdrawal when you request that they do so.

Before you give a company permission to make automatic withdrawals, check that they’re legitimate and trustworthy, ask for written terms of agreement for the automatic payment, watch for overdraft and insufficient funds (NSF) fees, and make sure you know how to stop payments.

Watching Out for Phishing Scams

Phishing scams are ever more prevalent and sophisticated. These scams trick you into providing your personal and banking information that can then be used for fraudulent activity.

For example, you could receive an email, supposedly from your bank, saying there’s been a problem with your account and sharing a link where you are asked to login and update your information. The website you are led to could look just like your bank’s website. If you input your details, hackers now have your login information. A couple of ways to avoid these scams:

•   If you get communication that says it’s from your bank and asks you to click a link, don’t. Log into your banking website or app, and check messages there to see what’s going on. Or call your bank to ask if the message is legitimate.

•   Hover over the email sender’s address. You may be surprised to see the message is coming from a different identity than the one it’s pretending to be. If that’s the case, don’t click on anything; mark the email as spam.

Safeguarding Your Checkbook, Debit Cards, and Credit Cards

Checkbooks, debit cards, and credit cards still have a place in our increasingly digital and contactless world of banking. They are, however, vulnerable to robbery and other criminal activity. Here are moves that help protect these items and your bank account safe.

1.    Keep your checkbook locked away at home; you don’t want to risk anyone getting your bank account and routing number, which is printed on each check. Also don’t leave your wallet, checkbook, or bank cards in your vehicle. It’s bad enough if your car is broken into, but even worse if the thieves find your wallet and credit cards.

2.    Report a lost or stolen debit card to your bank immediately to avoid fraudulent charges.

3.    Keep an eye on your mail. Thieves may steal your credit card bills and then apply for a new one in your name. Or if you’ve ordered checks, they could steal those. Alert your bank if they don’t arrive on time and report the checks as lost; if they are stolen and get used, report identity theft.

4.    Never make a check payable as cash until you are ready to cash the check. If you fill it out and then lose it, whoever finds it gets the cash.

5.    Watch for skimming devices that steal information from your debit or credit card. These devices are most commonly placed in ATMs or the card slots at gas pumps; you can learn to identify skimmers because they appear raised and bulkier than normal. Put your card in, and your card number and PIN code can be stolen, giving the criminal access to your account.

Not Pre-signing Blank Instruments or Documents

It may seem temptingly convenient to sign some checks for future use, without putting the name of the payee, just so you’re better prepared. Or, you might write the name of the payee but not the amount if someone is delivering the check for you. If the check is lost, whoever finds it can add in their name and pay the check into their account. Never pre-sign a blank check or a one that’s lacking a payee and dollar amount.

Verifying Transactions

Don’t assume that your banking is happening like clockwork. Instead, check your balance regularly and make sure there aren’t unexpected transactions. Digital banking makes this process much easier because you can access your bank account at any time by a website or app and see what’s going on. The idea here is to be vigilant about suspicious activity and catch any issues early.

Not Sharing Bank Details

Once in a blue moon, it may be necessary to share bank details with a close family member, perhaps in an emergency. But otherwise, simply don’t let anyone know the login details for your bank account. The same holds true for your credit card; don’t share your account number, expiration date, or CVV code. If these numbers fall into the wrong hands, they can allow fraudsters to hack your finances.

Choosing Unique and Strong Passwords

Criminals love nothing more than a password that’s super simple to figure out, like your birthdate or, say, “password123.” To help secure your online banking life, follow the following advice:

•   Don’t use personal information, such as your name, your pet’s name, or your address. It’s too obvious for hackers.

•   Use a combination of upper- and lower-case letters, numbers, and special characters in your password.

•   Don’t use the same password for multiple logins.

•   Change your passwords regularly.

Enabling Two-Factor Authentication

Financial institutions increasingly use two-factor authentication, which adds an additional layer to protection and security. With two-factor authentication, you typically log in in the usual way but then need to pass a second level of security. You may be asked to enter a special code to verify your identity using a free authenticator app that you downloaded when you set up your account. If your bank offers this technology, opt in. It can help deter hacking.

Signing Up for Banking Alerts

Go ahead and turn on banking alerts. Notifications such as email, app, or text alerts can help you protect your bank account. These alerts are sent in the event of new credit and debit transactions, failed logins, password changes, and outgoing wire transfers. If there is fraudulent activity on your account, you’ll be notified right away and can take action.

The Takeaway

Online banking is convenient, but it can have risks, such as getting hacked or scammed. You can fight back by managing your digital and physical banking assets to help protect your finances. From storing your checkbook safely to knowing how to avoid phishing and skimming, there are steps you can take to minimize your risk.

Keeping your money safe is a priority at SoFi, and so is growing it. Sign up for our Checking and Savings with direct deposit, and you’ll earn a terrific 1.25% APY, pay no account fees, and get access to your paycheck up to two days early.

Are you ready to bank better with SoFi?


What is the best way to keep my bank account safe?

Keep your bank account safe by protecting your bank cards, checks, and your digital and mobile accounts. Use strong passwords for logins, two-factor authentication, and avoid accessing your bank account over public WiFi. Sign up for text and email alerts, and if you lose a debit or credit card or suspect fraudulent activity, contact your bank immediately.

How can I protect the money in my bank account?

The money in your bank account is vulnerable to hackers and fraudsters. To protect it, manage your passwords well, never give your banking details to anyone, and take the time to verify all your transactions. If you don’t recognize a withdrawal, contact your bank.

Where is the safest place to keep your money?

Bank accounts are safe and FDIC-insured, but there are other options. For instance, U.S. Treasury bonds are considered one of the safest places to invest and to keep your money because they are low risk and provide an annual return.

SoFi members with direct deposit can earn up to 1.25% annual percentage yield (APY) interest on all account balances in their Checking and Savings accounts (including Vaults). Members without direct deposit will earn 0.70% APY on all account balances in their Checking and Savings accounts (including Vaults). Interest rates are variable and subject to change at any time. Rate of 1.25% APY is current as of 4/5/2022. Additional information can be found at
SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2022 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
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.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Photo credit: iStock/insjoy

Read more
couple walking on beach

Benefits of Health Savings Accounts

A health savings account, or HSA, is a tax-advantaged account that can be used to pay for qualified medical expenses including copays, coinsurance, and deductibles. By using pre-tax money to save for these expenses, an HSA may be used to help lower overall medical costs. (You may hear some people refer to it as HSA health insurance, but it’s actually separate from your insurance policy.)

What’s more, HSAs can also be a savings vehicle for retirement that allows you to put away money for later while lowering your taxable income in the near term.

To learn more about HSAs, read on and learn:

•   The meaning of an HSA

•   HSA benefits

•   Who’s eligible for an HSA

•   How much an HSA costs

How Can an HSA Benefit You?

HSA benefits can help make some aspects of healthcare more affordable. An HSA (meaning a health savings account) is a tool designed to reduce healthcare costs for people who have a High Deductible Health Plan (HDHP). In fact, you must have an HDHP to open an HSA.

If you’re enrolled in an HDHP, it means you likely pay a lower monthly premium but have a high deductible. As a result, you typically end up paying for more of your own health care costs before your insurance plan kicks in to pick up the bill. Combining an HDHP with an HSA may help reduce the higher costs of health care that can come with this type of health insurance plan.

Yearly HSA contributions can be up to $3,650 for individuals, or up to $7,300 for families, in 2022. Persons 55 or older by the end of the tax year have the option to make an additional contribution of $1,000 per year, which is known as a catch-up contribution. HSA contributions can be made by the qualified individual, their employer, or anyone else who wants to contribute, including friends and relatives.

Contributions are made with pre-tax money and can grow tax-free inside the HSA account. Some accounts allow money to be invested in mutual funds or even stocks. Withdrawals made to cover qualified medical expenses may not be taxed. And because money in the account is pre-tax — Uncle Sam never took a bite out of it — qualified medical expenses can essentially be paid for at a slight discount. And by contributing pre-tax dollars to an HSA, you are decreasing your taxable income and potentially moving into a lower tax bracket.

How Can You Use an HSA?

The money you contribute to your HSA can be used on an array of healthcare expenses that aren’t paid by your insurance. Rather than dipping into your checking or savings account, you can use an HSA to pay for qualified medical expenses. The IRS provides a long list of these expenses, including:

•   Copays, deductibles, and coinsurance

•   Dental care

•   Eye exams, contacts, and eyeglasses

•   Lab fees

•   X-rays

•   Psychiatric care

•   Prescription drugs

But there are also a number of unqualified expenses as well. These costs include:

•   Cosmetic surgery

•   Teeth whitening

•   Health club dues

•   Nonprescription drugs

•   Nutritional supplements

How Can an HSA Benefit You?

You may wonder if an HSA is worthwhile. Depending on your situation and your healthcare expenses, it may be a good use of your funds. To help you decide whether or not to start a health savings account, here are some important HSA benefits to consider.

Triple Tax Advantages

Putting money into an HSA lowers taxable income. The money contributed by a qualified individual to the account is pre-tax money, so it will be excluded from gross income, which is the money on which income taxes are paid. This is the case even if an employer contributes to an employee’s account on their behalf. So if you earn $50,000 a year and max out your HSA contribution, you will only be taxed on $46,350. Contributions made with after-tax funds are tax-deductible on the current year’s tax return.

There are other considerable tax advantages that come with HSAs. Contributions can earn interest, or returns on investments, and grow tax-free. This tax-free growth is comparable to a traditional or Roth IRA. However, HSAs have a significant tax advantage over these accounts.

Here’s another angle on these HSA benefits: Not only are contributions made with pre-tax money, but withdrawals that are made to pay for qualified medical expenses aren’t subject to tax at all. Compare that to say, Roth accounts where contributions are taxed on their way into the account, or traditional IRAs where withdrawals are taxed.

Recommended: Common Questions about IRA’s

It’s Investable

As money builds in an HSA, you can save it for future healthcare costs. The funds can be invested in ways that are similar to other workplace retirement accounts. They can be put into bonds, fixed income securities, active and passive equity, and other options. You could potentially be investing money in this way for decades prior to retirement.

Using an HSA for retirement might also be a good way to prepare for the healthcare expenses as you age. In fact, healthcare may be one of the biggest retirement expenses. According to some estimates, a 65-year-old couple will need more than $387,000 to cover healthcare costs over the rest of their lives. An HSA could be a good way to stash some cash to put towards those charges.

If you were to become chronically ill or need help with the tasks of daily living as you age, you might need long-term care at home or in a nursing facility. Medicare does not cover long-term care, but long-term care insurance premiums are qualified expenses and can be paid with HSA funds. Saving in an HSA before these potential costs arise may offset overall spending on healthcare expenses later in life.

The Money Is Yours and Stays That Way

Another advantage of HSAs is that contributions roll over from year to year. In comparison, flexible spending account (FSA) funds, which also allow pre-tax contributions to save for qualified healthcare expenses, must be spent in the same calendar year they were contributed, or you risk losing the funds. HSAs don’t follow this same use-it-or-lose-it rule. Funds contributed from year to year are available the next year. There is no time limit or expiration date saying you must spend the money by a certain year. What’s more, your HSA funds follow you even if you change jobs and insurance providers. It can be very reassuring to know those funds won’t vanish.

Who’s Eligible for an HSA?

If you are covered by a HDHP, you are probably eligible to open an HSA. For 2022, the IRS defines high deductible plans as any plan with a deductible of $1,400 or more for individuals and $2,800 or more for families. What’s more, your yearly out-of-pocket expenses can’t exceed $7,050 ($14,100 for families). These limits do not apply for out-of-network expenses.

Here’s one eligibility situation to be aware of: Once you enroll in Medicare, you can no longer contribute to an HSA, since Medicare is not an HDHP. If you have an HSA, those funds are still yours, but you can’t continue adding to the account.

Who Can Open and Contribute to an HSA

You may open and contribute to an HSA if you enrolled in a High Deductible Health Plan, or HDHP. The IRS defines this as having a deductible of at least $1,400 for an individual and $2,800 for a family.

What if I Already Have an HSA?

If you already have a healthcare savings account, you may continue to contribute to it as long as you have that plan and are not enrolled in Medicare, which is not an HDHP. Even if you no longer have an HSA-eligible insurance plan, that money is yours to spend on healthcare expenses, invest, or transfer.

Choosing between Two Different HSAs

Not all HSAs are identical. If you open an HSA or already own an HSA, you will have to make a key decision (this is especially true if you are using a healthcare savings account to build up money to use when you retire). The choice is: Do you want to manage the fund yourself, or would you like a financial professional to manage your portfolio and guide your growth? There is no right answer; it’s all about your personal taste and money style. But keep it in mind, and know that there are choices available. You can open an HSA at a number of different financial and other institutions, with or without account management.

How Much Does It Cost?

If you decide that a healthcare savings account is right for you, don’t be surprised if you are hit with fees when you open one. Some of these accounts may charge you every month to maintain the account, especially if a professional is advising you on investments. These fees may be as low as $3 or $5 a month, but could be higher. You may also be assessed a percentage of the account’s value, with that fee rising as your account’s value increases. It’s important to read the fine print on any account agreement to make sure you know the ground rules.

On the other hand, some HSAs involve no fees at all. Usually, these will involve more hands-on management by the account holder versus a financial professional.

Common Fees Charged by an HSA

As mentioned above, some HSA providers charge a monthly fee for account maintenance. These fees are typically no more than a few dollars a month. But even a $5 monthly fee adds up to $60 over the course of a year, which could be more than the cost of a co-pay for an annual check-up with a physician. So be aware that fees might take a significant bite out of potential savings.

Also note that if you withdraw funds from your account for something other than a covered medical expense before you turn 65, you could be hit with fees. These withdrawals will be subject to income taxes and a 20% penalty.

Do HSAs Give You More Options?

Many people first encounter HSAs when they are offered the opportunity to enroll at work. However, even in this situation, you have choices. You may open an account with any HSA provider, as long as you qualify on the basis of having a HDHP. So in that way, you have options regarding which account you choose and how much you save in it.

Beyond that, as outlined above, there are dozens of qualifying expenses for which you may use HSA funds. Perhaps it’s lab tests that weren’t fully covered by insurance or contact lens or counseling services. It’s up to you how to allocate the funds in your account.

HSAs are Different from FSAs

HSAs, as described above, are healthcare savings accounts for individuals who have a High Deductible Health Plan. Another financial vehicle with a similar-sounding name are FSAs, or Flexible Spending Accounts. An FSA is a fund you can put money into and then use for certain out-of-pocket healthcare expenses. You don’t pay taxes on these funds. Two big differences vs. HSAs to be aware of:

•   To open an FSA, you don’t need to be enrolled in an HDHP. This is only a qualification for HSAs.

•   The money put in an FSA account, if not used up by the end of the year, is typically forfeited. However, there may be a brief grace period during which you can use it, or your employer might let you carry over several hundred dollars. With an HSA, however, once you put money in the account, it’s yours, period.

Ready for a Better Banking Experience?

Open a SoFi Checking and Savings Account and start earning up to 1.25% APY on your cash!

The Takeaway

Health savings accounts, or HSAs, offer a way for people with High Deductible Health Plans to set funds aside to help with healthcare expenses. The money set aside is in pre-tax dollars, and it brings other tax advantages. What’s more, funds in these HSAs can roll over, year after year, and can be used as a retirement vehicle. For those who qualify, it can be a valuable tool for paying medical expenses and enhancing financial health, today and tomorrow.

Looking for a bank that can help you boost your financial life? Take a closer look at SoFi. Open our linked high interest bank accounts with direct deposit, and see how your money can earn more, faster. SoFi pays a stellar 1.25% APY, 41 times the national average for checking accounts. And we let you keep more of that interest rather than eating away at it with fees. SoFi doesn’t charge monthly, minimum-balance, or overdraft fees.

Get ready to save for tomorrow with SoFi.

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.
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.
SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2022 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
SoFi members with direct deposit can earn up to 1.25% annual percentage yield (APY) interest on all account balances in their Checking and Savings accounts (including Vaults). Members without direct deposit will earn 0.70% APY on all account balances in their Checking and Savings accounts (including Vaults). Interest rates are variable and subject to change at any time. Rate of 1.25% APY is current as of 4/5/2022. Additional information can be found at
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Read more
Does Switching Bank Accounts Affect Credit Score?

Does Switching Bank Accounts Affect Your Credit Score?

Most of the time, changing banks won’t affect your credit score. Which is a good thing, because during your banking life, you might consider a switch if you’re looking for a better rate on savings or want to pay fewer fees. The facts are, opening new accounts generally doesn’t trigger a hard check of your credit. What’s more, checking and savings account information isn’t reported to the credit bureaus. So your credit score probably won’t shift.

Now, that said, there are indeed some instances where banking activity may influence credit scores indirectly. So let’s take a look at how things play out when you are changing bank accounts and answer the question, “Does switching bank accounts affect my credit score?” We’ll cover, among other topics, the following:

•  Is switching banks visible in your credit file?

•  Will changing banks affect your credit score?

•  Can switching banks impact your chances of getting a loan?

Ready? Let’s learn more about this important aspect of your financial life.

Will Switching Banks Be Visible on Your Credit File?

Does switching bank accounts affect credit score ratings? Probably not, because banking history related to checking and savings accounts typically doesn’t show up on your credit reports.

Here’s what does show up on your credit file, according to MyFICO:

•  Personal information, such as your name, date of birth, and Social Security number

•  Credit accounts, including creditor names, account numbers, balances, and payment history

•  Credit inquiries

•  Public records and collection accounts

Information relating to your credit accounts, credit inquiries, and public records or collections influence your FICO credit score calculations. So what is a FICO score?

In simple terms, it’s a three-digit number that reflects how responsibly you use credit. Lenders can check your FICO credit scores when deciding whether to approve you for loans or lines of credit. The higher your score, the more likely you are to be approved for credit, and you may even be granted lower interest rates than those with less stellar scores.

Does Switching Current Accounts Affect Your Credit Score?

Opening a new bank account typically does not affect your credit rating, as long as the account that’s closed is in good standing. There may be credit score implications, however, if you’re shuttering the account with a negative balance, there’s an unpaid loan, or you’re closing a credit card with the bank at the same time. Here’s a little more to consider about what gets shared with the big three credit reporting agencies (Equifax, Experian, and TransUnion):

•  Negative bank account balances can occur as a result of overdrafts. An overdraft means that your bank has processed transactions on your behalf that exceed your available balance. The bank can also charge you one or more overdraft fees for covering those transactions.

  If you’re switching accounts with an overdraft in place, the bank may transfer that account to a collection agency. The collection agency could then take action against you, including reporting the delinquent debt to the credit bureaus and suing you for the balance due. Delinquencies, collection accounts, and judgments can all show up on your credit reports and harm your score.

•  You could experience the same situation if you have a loan outstanding with the bank at the time you close your account and fail to pay. You might miss a payment, for example, if you had previously set up automatic payments from your now-closed account to the loan. Those could be reported to the credit bureaus, along with late or missed payments that occur for any other reason.

•  If you close a credit card at the same time as you switch bank accounts, it could negatively impact your credit score. Here’s why: Closing credit cards can affect your credit utilization ratio. This ratio measures how much of your available credit you’re using at any given time. A lower credit utilization ratio is generally better for credit scoring. Closing an account can shrink your overall credit limit, which in turn can increase your utilization ratio. Your score might take a hit.

Ready for a Better Banking Experience?

Open a SoFi Checking and Savings Account and start earning 1.25% APY on your cash!

Will Switching Banks Affect Your Chances of Getting a Loan?

Switching banks might affect your chances of getting a loan if your score drops for any reason when moving your account. Again, this could happen if you’re closing an account with an overdraft that you must pay, a past due loan, or if you’re shutting down one or more credit cards.

Your odds of being approved for a loan may also be affected if your new bank performs a hard inquiry as a condition of opening an account. Hard inquiries are requests for your credit history that are reported to the credit bureaus. But this usually doesn’t happen unless the financial institution has reason to be concerned about your application. Typically, when you open checking and savings accounts, banks do credit checks that are soft inquiries. These have no credit score impact.

If you’re interested in getting a debt consolidation loan, personal loan, or any other type of loan, you may want to wait until after you’re approved to switch banks if you’re concerned about credit score impacts. That way, you won’t run the risk of having any unexpected hard inquiries showing up on your credit and possibly lower your score.

Recommended: What’s the Difference between a Hard and Soft Credit Inquiry?

Can Your Credit Score Be Affected If You Open Multiple Bank Accounts?

Opening multiple bank accounts shouldn’t affect your credit scores unless you’re subjected to a hard credit check (as described above) each time. As mentioned, your credit scores are based on credit accounts, such as credit cards or loans, rather than bank accounts. Things like how much money you keep in checking and savings or how many bank accounts you have don’t affect your credit rating. What does matter to your score is how good a record you have of borrowing and repaying funds in a timely fashion.

While your banking history isn’t sent to the credit bureaus, it will usually be reported to ChexSystems, which is a check verification and consumer credit reporting system specifically for banks. ChexSystems tracks information on closed accounts, including accounts closed with overdrawn balances. Negative ChexSystems information could result in a bank denying you an account, though it wouldn’t affect your credit score.

Does Opening and Closing Bank Accounts Hurt Your Credit Score?

Opening and closing bank accounts shouldn’t hurt your credit score unless you’re dealing with delinquent loans, collection accounts, or closed credit card accounts. If you’re opening new accounts and applying for credit cards at the same time, that could also hurt your score if it means multiple hard inquiries. Here’s why: It looks as if you are shopping around for a lot of new lines of credit, which can make you look like a risky customer.

Steps That May Help Repair Bad Credit

Now, let’s consider how long does it take to repair credit if you have unpaid bank balances or loans? Generally, negative information can linger on your credit reports for up to seven years. The most immediate credit score impacts are felt in the first year or two. After that, the impact begins to fade though negative marks will remain on credit reports.

You can take steps that could improve your credit score on the off chance that opening or closing credit accounts while switching bank accounts decreases your rating. Some of the best ways that may raise your score include:

•  Consistently paying bills on time

•  Paying off debt balances, or keeping your credit utilization ration under 30% (preferably to 10% or lower)

•  Keeping older credit accounts open to extend your credit history

•  Reviewing your credit reports (you can get one free report per agency each year) for errors. When you correct any mistakes on your report, your score may well rise.

The Takeaway

Opening new checking or savings accounts could be a good move if your current bank no longer meets your needs. But before you do so, it’s wise to know the impact that this shift can have on your credit score, the measure of your credit worthiness. In most cases, your rating won’t decline, but in a few instances, it could. Understanding these situations can help you avoid them. If you support your credit score in this way, you’re taking steps to protect your financial health.

Another way to boost your financial wellness: Banking with SoFi, an online bank that helps your money grow faster. We offer a hyper-competitive 1.25% APY when you open Checking and Savings with direct deposit. And we don’t charge any of the usual account fees, so you don’t get hit with overdraft, monthly, or minimum-balance charges. One more perk: access to your paycheck up to a full two days early.

Come bank better with SoFi.


Is switching banks bad for your credit?

Switching banks isn’t usually bad for your credit since bank accounts don’t show up on consumer credit reports. If, however, you closed an account with a negative balance that was given to a collection agency, your score could be lowered. Typically, though, your banking history will be reported to ChexSystems, which is a check verification and credit reporting system for banks, not the credit scoring agencies.

Is switching bank accounts a good idea?

Switching bank accounts can be a good idea if it allows you to get a better interest rate on savings (and possibly checking), reduces banking fees, or gives you more perks and better access to your money. Before changing banks, it’s helpful to compare features, benefits, rates, and fees to find the right banking option for your needs.

Will getting a new bank account affect my credit score?

Getting a new bank account should not affect your credit score unless your new bank performs a hard check of your credit or you’re closing accounts with overdrawn balances or outstanding loans in place. Closing a credit card account at the same time you close a bank account could also hurt your credit score if it increases your credit utilization ratio.

Photo credit: iStock/Passakorn Prothien

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2022 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
SoFi members with direct deposit can earn up to 1.25% annual percentage yield (APY) interest on all account balances in their Checking and Savings accounts (including Vaults). Members without direct deposit will earn 0.70% APY on all account balances in their Checking and Savings accounts (including Vaults). Interest rates are variable and subject to change at any time. Rate of 1.25% APY is current as of 4/5/2022. Additional information can be found at
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

Third-Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Read more
What to Do if There Is a Bank Error in Your Favor

What to Do When There Is a Bank Error Made in Your Favor

If you ever see a bank error made in your favor, you might think, “Free money!” but the truth is, you need to report the error ASAP.

An unfortunate fact of life is that people — and sometimes technology — can make mistakes. Every once in a while, your bank might make an error and deposit cash into your account that wasn’t meant for you. A teller at a bank branch could have entered the wrong digit in an account number as a customer tried to deposit a check or transfer funds, for example. Whatever the reason, you’ll notice that your bank account balance is higher than it ought to be.

While this may seem like a cash windfall and you might be tempted to keep the money, you should report the error to your bank as soon as you notice it. That way, the mistake can be corrected as quickly as possible.

Let’s take a closer look at this scenario and answer these questions:

•  Can I keep money from a bank error?

•  Is there a penalty if I keep money from a bank error?

•  How and when should I report the error?

Can I Keep the Money from a Bank Error in My Favor?

So what happens when money is accidentally deposited into your account? You may wonder if it’s a case of “finders, keepers.” Well, the only time that you can keep funds added to your account is when the money deposited was legitimately meant for you.

When a bank error occurs in your favor, you cannot keep the money — even if the error seems small and likely to fly under the radar. The money isn’t legally yours, so you must return it.

What’s more, the customer whose money accidentally landed in your account will probably notice the mistake and ask the bank to track down the money. Or, the bank will catch the mistake in one of the regular audits that it makes on accounts and withdraw the money again. If the money isn’t in your account, they may ask you why you didn’t report the mistake earlier.

Recommended: Ways to Deposit Money into a Bank Account

What Is the Penalty for Attempting to Spend or Keep the Money?

Now, let’s consider what would happen if you didn’t report and return the money mistakenly put in your account. Even if you are a person who doesn’t pay much attention to your banking details and assume the money is yours, it is still a big problem if you use it. If you spend the money from a bank error in your favor, move it to another account, invest it, or give it away, you could wind up in a lot of hot water.

Failing to return the money may be tantamount to theft, and you could face criminal charges, such as theft of property lost by mistake or receiving stolen property. Criminal charges may be made to get a court order to force you to repay the amount, and in some cases, you could end up with probation or prison time. That’s a very good reason to get the funds back to your bank as soon as you realize there’s been an error.

A few years ago, a Pennsylvania couple went on a spending spree when their bank accidentally deposited $120,000 in their account instead of a business’ account due to a teller error. The couple bought various vehicles with the money and also gave $15,000 away to friends in need.

The bank requested that the couple return the money and then reversed the transfer, causing an overdraft on the couple’s account of over $100,000. The couple was eventually convicted of theft, sentenced to seven years’ probation, 100 hours of community service, and ordered to repay the money they stole. Surely, this is a good example of why there’s no such thing as free money in this situation.

Ready for a Better Banking Experience?

Open a SoFi Checking and Savings Account and start earning 1.25% APY on your cash!

When Should I Report the Error?

If you discover money in your account and can’t explain where it came from, contact your bank right away, and ask them to figure out the origins of the funds. If it turns out the money really was for you — perhaps a relative deposited it in your account as a gift, for example — your bank will let you know that you are free to access the funds and use them for whatever you’d like.

If the funds weren’t originally meant for you, the bank can start the process of reversing the transaction.

To report the error, first call your bank. Take down the name of the person you talked to and make a note of the time and date. Follow up your call with an email that outlines the details of the error. That way, you’ll have a paper trail of your attempts to correct the issue. The time frame in which to report a bank error varies, so check with your particular account’s fine print to know the specifics.

What Happens if the Bank Does Not Respond?

Generally speaking, banks have 10 days to complete an investigation into an account error. But it is possible the investigation could take as long as 45 days. You can take a look at your deposit account agreement to find out how long it should take your bank.

If nothing has changed after that period of time, contact your bank again to check in on the progress of the investigation. Do not assume the money has somehow become rightfully yours. You don’t want to make a bad situation worse, cause legal action, and wind up eventually having to hire a lawyer to represent you.

What Should I Do So That I Don’t Get in Trouble?

When an erroneous deposit is made to your account, here are the steps you should take to help ensure that you don’t get into any trouble.

Do Not Touch or Transfer Money

First things first, if you notice money in your account that’s not yours, don’t touch it. Don’t spend, don’t give it to someone else, and don’t move it into a different account. Don’t even spend the money if you plan to repay it and report the mistake later. Anything you do to tamper with the money, no matter how benign it seems, could have big consequences later.

Contact Your Bank

As we mentioned above, contact your bank immediately when you notice the error, and keep records of your interactions.

Monitor Your Account

Get in the habit of scoping out your financial accounts regularly, whether it’s checking your credit report, bank account, or even checking medical bills for errors. The fact that even your bank can accidentally deposit money into your account illustrates the necessity of reviewing your bank account regularly.

If you don’t look at your account statement frequently, you may not notice small errors, and these can have a big impact on your personal finances. How often should you check your bank account? There’s no precise answer, but between once a week and once a month can be a good place to start.

For example, say a small deposit of just a few hundred dollars is accidentally made to your checking account. Say, too, that you don’t notice the deposit and spend some of the funds. When the bank discovers the mistake, they can withdraw the funds without your permission, freeze your account, or put a hold on your funds. If you’re still operating unaware of the erroneous deposit, this can wreak havoc on your account. It could cause overdrafts or your checks to bounce. It might gum up the works on any automated bill pay that you may have set up.

As a result, you may be on the hook for overdraft fees, or you may end up paying some bills late.

Keeping careful tabs on your account can help you catch errors so you can avoid these situations and improve your financial health. Consider setting up alerts for deposits in your account. That way you can spot any mistakes as soon as they happen. You may want to consider other automatic ways to monitor your finances, such as credit score monitoring and card security and protection, to help keep your accounts safe.

The Takeaway

Now you know what to do if money is accidentally deposited into your bank account. If a financial institution makes a mistake in your favor, sorry to say, this isn’t the moment to go on a spending spree. The best thing you can do is act quickly to alert your bank. That way, the error can be corrected, the right person can receive the money they need, and you can continue banking as usual. If you fail to do so, you could wind up with overdrafts and other issues when the bank takes the money back. Worse still, you could face legal consequences with far-reaching effects. So do the right thing, and keep your financial life on the up and up.

Here’s a no-funny-business way to help your money grow: Bank with SoFi. We’re committed to zero account fees as well as superior interest rates. Sign up for our Checking and Savings with direct deposit, and you’ll earn a super competitive 1.25% APY which is 41 times the current national checking account average. Plus, we won’t deduct any monthly, minimum balance, or overdraft fees.

Bank smarter with SoFi.


Can I keep money credited in error to me?

No, you cannot keep money that is deposited in your account in error. You should alert your bank and have the funds redirected to their rightful owner.

Do I have to report a bank error?

Yes, you should report the error. Contact your bank and report the mistaken deposit as soon as you notice it so the problem can be corrected.

What happens if the bank makes a mistake? Who is responsible and why?

If your bank makes a mistake, you should alert them as soon as you notice it. Your bank will also run regular audits of your accounts, which can help them catch errors. When they do catch a mistake, it must be resolved with the funds going back to the correct account. To do so, the bank can reverse transfers, withdraw funds from your account, freeze your account, or place a hold on the funds without your permission. If the money isn’t there, you will be asked to repay it, and you may face criminal charges.

Photo credit: iStock/fizkes

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2022 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
SoFi members with direct deposit can earn up to 1.25% annual percentage yield (APY) interest on all account balances in their Checking and Savings accounts (including Vaults). Members without direct deposit will earn 0.70% APY on all account balances in their Checking and Savings accounts (including Vaults). Interest rates are variable and subject to change at any time. Rate of 1.25% APY is current as of 4/5/2022. Additional information can be found at
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.
This article is not intended to be legal advice. Please consult an attorney for advice.

Read more
Fixed vs Variable Credit Card Interest Rates: Key Differences

Fixed vs. Variable Credit Card Interest Rates: Key Differences

Anyone who’s ever had a credit card knows they have an interest rate, which represents the cost consumers pay for borrowing money. What you may not know is that interest rates come in two forms: fixed and variable interest rates.

Fixed interest rates stay the same over time and are generally tied to your creditworthiness. Variable interest rates, on the other hand, may change over time and are connected to economic indexes. Read on to learn how to determine if the interest rate of a credit card is fixed or variable, as well as why it’s important to know.

What Is Credit Card APR?

A credit card’s annual percentage rate, or APR, represents the cost a consumer pays to borrow money from credit card issuers, represented as a yearly cost. When a cardholder doesn’t pay off their credit card balance in full each month, they’ll owe credit card interest charges on the remaining balance, with the rate based on their APR.

Credit card APRs vary among credit card issuers, individual cardholders, and credit card categories. However, the average credit card interest rate stood at 16.44% APR as of November 2021.

Recommended: What is a Charge Card

Types of Credit Card APRs

Your credit card payment is impacted by what type of APR your credit card has. Let’s have a look at how a fixed rate credit card and a variable rate credit card may affect your credit experience.

Fixed Interest Rate

Fixed rate credit cards have an interest rate that generally doesn’t vary over the course of your credit card contract. Rather than being tied to economic indexes, fixed interest rates are generally determined based on payment history and creditworthiness, as well as any ongoing promotions.

However, just because the term “fixed” is used, doesn’t mean a fixed interest rate can never change. While a fixed rate credit card’s interest rate won’t change based on factors like the prime index, increasing credit card APR can occur if payments are late or missed or if your credit score dips. If that occurs, the credit card company must notify the cardholder at least 45 days before the adjusted rate takes effect.

While fixed rate credit cards offer the benefit of predictability, one downside is that their rates are, on average, higher than variable credit card rates.

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

Variable Interest Rate

A variable rate credit card offers interest rates that can shift over time. There’s a reason for that, as variable card rates are tied to major benchmark interest rates, like the U.S. prime rate.

Since major benchmark rates change, so will variable interest rates. That’s why banks and other major financial institutions often shift rates for things like credit cards, home mortgages, auto loans, and student loans. When major interest indexes change, the rates for loans change with them.

What does that mean for a cardholder? For starters, there’s more risk with variable interest rates. Rates can go up, and credit card payments increase when interest rates rise. Conversely, variable rates may go down, which works in favor of the credit cardholder, who will then pay less in interest.

Credit card consumers should check their credit card contracts for the specific conditions that can trigger a variable rate change. Credit card issuers don’t have to notify you of interest rate changes with variable rate cards, so it’s up to the consumer to keep a sharp eye out for changing interest rates.

When Do Variable APRs Change?

As mentioned, the interest rate on a variable rate credit card changes with the index interest rate, such as the prime rate. If the prime rate goes up, so will your credit card’s APR. Similarly, if the prime rate goes down, your APR will drop.

How often your interest rate changes will depend on which index rate your lender uses as a benchmark as well as the terms of your contract. As such, the number of rate changes you may experience can vary widely, often multiple times a year.

Details on how a card’s APR may fluctuate over time will appear in a cardholder’s agreement, which you can generally find on the card issuer’s website. If you’re unable to locate it, you can request a copy from your card issuer.

Differences Between Fixed and Variable Credit Card Rates

Both fixed and variable credit card rates have pros and cons. Here’s a look at the major differences with a credit card with a variable or fixed interest rate.

Fixed Interest Rate Variable Interest Rates
The interest rate usually remains the same Variable rates change on an ongoing basis
Fixed rates are calculated with payment histories in mind Rates are based on a benchmark index, like the U.S. primate rate
The card provider is required to let you know when the rate does change (usually for late or missed payments) The credit card issuer is not required to let you know when rates shift

How Credit Card Interest Rates Are Determined

Credit card interest rates are generally determined based on your creditworthiness — meaning, your payment history and credit score — as well as prevailing interest rates and the card issuer and card type. For instance, a bare bones card may have a lower rate than a premium rewards card. Additionally, credit cards can have different types of APRs, such as an APR that applies for credit card charges and another rate for cash advances or balance transfers.

Another factor that can impact credit card rates is promotional offers. Sometimes, credit card issuers may offer low or no interest periods. After that period ends, the card’s standard APR will kick in, and the card’s rate will go up.

Once determined, how and why a credit card’s interest rate changes over time depends on whether the interest rate is fixed or variable. A fixed rate will generally stay the same, though it may increase if payments are late or missed, or if the cardholder’s credit score takes a dive. Meanwhile, variable rates fluctuate depending on current index rates.

Recommended: Tips for Using a Credit Card Responsibly

Reducing Interest Charges on Credit Cards

Perhaps the easiest way to reduce interest charges on credit cards is to pay your statement balance in full each billing cycle. By doing so, you’ll avoid incurring interest charges entirely.

Of course, this isn’t always feasible. If you may end up carrying a balance and want to decrease how much a credit card costs, there are ways to do so. For one, you can call your credit card issuer and request a lower rate. Of course, for this to be successful, you’ll likely have needed to stay on top of payments and have a history of responsible credit card usage.

Perhaps the surest way to secure a better interest rate on your credit card is to improve your credit score. In general, lower interest rates are awarded to those who have higher credit scores and follow the credit card rules, so to speak. You can improve your credit score by making your payments on time, every time, and by keeping your credit utilization ratio (how much of your available credit limit you’re using) well below 30%. You might also avoid applying for new credit accounts, which results in hard inquiries and temporarily lowers your score.

And if you simply feel in over your head with credit card debt and a skyrocketing APR, you may choose between credit card refinancing or consolidation as potential solutions.

Recommended: When Are Credit Card Payments Due

Fixed vs Variable Interest Rate Cards: Which Is Right for You?

In a word, choosing between a fixed rate or variable rate credit card comes down to whether you prefer stability or risk versus reward.

A fixed rate credit card offers a known quantity — a rate that stays the same over time, as long as you pay your credit card bill on time. On the other hand, a variable rate credit card offers an element of risk and reward. If the rate goes up, the cardholder usually spends more money using the card. If card rates go down, however, the cost of using the card usually goes down, too, as interest rates are lower.

Of course, cardholders can largely negate the impact of credit card interest rates by paying their bills in full every month. Of, for those who don’t quite feel ready to tackle the responsibility, there’s always the option of becoming an authorized user on a credit card of a parent or another responsible adult.

The Takeaway

As you can see, it’s important for a number of reasons to know whether a credit card is fixed or variable. Fixed interest rates offer more predictability (though there’s no guarantee they’ll never change), but rates also tend to be higher compared to variable rates. With variable rates, your interest rate will fluctuate over time based on market indexes.

As you shop around for credit cards, interest rate is critical to pay attention to. With the credit card offered by SoFi, for instance, you can secure a lower APR by routinely making on-time payments. Learn more about getting a credit card with SoFi today.


Do all credit cards have fixed interest rates?

No, actually most credit cards come with variable interest rates tied to major interest rate indexes. That connection to interest rate changes enables card companies to keep rates competitive on a regular basis.

How do I get notified of an interest rate increase?

By law, credit card companies must notify cardholders in writing at least 45 days ahead of an interest rate change taking effect. Card companies are not allowed to change interest rates during the first year an account is open.

Can I control whether I have a fixed or variable interest rate?

Yes, you can opt for a fixed or variable rate credit card, but know that most credit cards come with variable rates. It’s tougher to find a fixed rate card, but banks and credit unions, which are more likely to offer both, are a good place to start your search.

Photo credit: iStock/AlekseiAntropov

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

The SoFi Credit Card is issued by The Bank of Missouri (TBOM) (“Issuer”) 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.

Read more
TLS 1.2 Encrypted
Equal Housing Lender