Mail-In Rebate Guide: How to Submit & Extra Savings Tips

Mail-In Rebate Guide: How to Submit & Extra Savings Tips

Mail-in rebates sound simple: To submit one, you purchase a qualifying product, fill out its rebate form, and mail the form – and its requested proof of purchase – back to the product manufacturer. If accepted, you should receive a refund in roughly two to four months.

This kind of incentive has become quite popular. You’ve probably seen them in-store (say, an offer of $5 off a purchase of shaving cream) and online, where pop-ups may promise $100 back after buying a $200 smartphone. Even television ads are known to guarantee massive savings on appliances and cars, as long as they’ve first been bought at full price and then a mail-in rebate has been submitted.

It sounds like the path to easy money, but the truth is, many rebates sit and languish. According to ConsumerAffairs.com, more than $500 million in rebates go unclaimed every year. We don’t want you to miss out on this kind of opportunity, so here’s how to claim your savings. Here’s some insider intel plus tips. They’ll help you take advantage of these potential discounts and know the uh-ohs to avoid.

What Exactly Is a Mail-in Rebate?

A mail-in rebate is an offer for a full or partial refund on a product purchase in exchange for providing proof that you bought the item. Rebates are offered directly from manufacturers for any number of reasons. They may be conducting market research, enticing the sale of a pricey item, or looking to empty their inventory of a product that hasn’t captured the consumer’s imagination. Whatever the motivation is, it gives consumers the opportunity to purchase items at a lower cost if they invest a bit of time and effort.

How Do You Submit a Mail-in Rebate?

The concept of mail-in rebates has been around for years, and the process of applying for them largely remains the same. Following these five simple steps can help you successfully submit your rebates.

Step 1: Look in the Right Places

A rebate can appear in many forms. Tear-off pads on product displays or sticker tabs directly on products that say “rebate” are some of the most obvious. Others can be found in the coupon section of a newspaper, on couponing websites, and even the direct websites of the manufacturers. Sometimes, they will come inside the box along with something you’ve ordered or as a tear-off section at the bottom of your receipt. Knowing how to spot them is the first step toward claiming them. But of course, you don’t want to buy something just because it offers a rebate. Many of us are trying to cut back on spending, so only snap up products that you really need.

Step 2: Purchase the Right Product

Rebate offers are very specific about the products to which they apply. This means that when purchasing a product, you should double-check (maybe even triple-check!) that it and triple matches the item specified on the rebate form. If a product is simply the wrong color or size, you run the risk of your rebate being rejected by a manufacturer. When purchasing a product for rebate, carefully check details such as the brand name, style, color, model number, quantity, and even weight against the details on the rebate form to make sure they match.

Step 3: Complete the Rebate Form

The rebate form itself is what outlines the specific parameters of the rebate offer, but it is also where contact information must be provided so that the rebate can be issued upon acceptance. Expect to include contact details such a full name, address, and a phone number in order to fully submit a rebate claim.

Step 4: Collect the Proof of Purchase

The crux of rebate submissions relies on being able to prove that a product was purchased. Rebate forms will specifically outline which forms of proof they require to be submitted, and they can vary from product to product. Two of the most common forms of proof are the purchase receipt and the UPC barcode from the product’s packaging. Be sure to gather the specific proof requested for each product before submitting a rebate.

Step 5: Mail and Wait

After filling out a rebate form and collecting the proof of purchase, the rebate can be mailed to the manufacturer. Use the specific address outlined on the rebate form, and prepare to wait anywhere from 6 to 12 weeks (or even longer) to receive your rebate upon its approval. Processing times vary widely across manufacturers but the fine print on a rebate form will outline what return date to expect for that specific product. Rebates are submitted by countless people worldwide, and even more during the holiday season, so the process will take time.

Mail-in Rebate Tips

Even though the process for submitting a mail-in rebate is fairly simple and straightforward, there are few things to know that can help make the process even easier to manage.

1. Always Get a Receipt

More often than not, a rebate will require a receipt as a proof of purchase. Opting for a receipt with every purchase can help ensure you always have one when you need it. Even in cases where a rebate item may not have been purchased it is good practice to collect a receipt anyway and hold onto it until you’re positive that it is no longer of use and can be discarded. Bonus: Keeping track of receipts and spending can go a long way towards helping you create a budget and stick to a budget.

2. Take Note of Expiration Dates

Rebates aren’t valid forever! With the amount of work required to properly submit a mail-in rebate, not being aware of the expiration date can derail the entire submission. Always check the expiration date on the rebate form, and aim to mail the rebate at least a week prior to the date. This tactic can help ensure that the rebate arrives to the manufacturer on time. Otherwise, your effort to submit will be in vain, and you’ll wind up leaving money on the table, as the saying goes. Don’t let that happen to you!

3. Don’t Consolidate Purchases

It’s common to find multiple product rebates in a single shopping trip, and purchasing them in the same transaction would seem like common sense. However, in the case of multiple rebates, it’s wise to process each rebate in its own separate transaction. Because rebate requirements can differ and each submission will require its own proof of purchase, collecting a unique receipt for each product purchased will help avoid any confusion. You don’t want to be stuck with a single proof of purchase that needs to be sent to multiple locations.

4. Keep the Packaging

Proof of purchase requirements for product rebates can vary, but they all require the product to be in possession of the buyer. The UPC barcode is one of the most commonly requested details, and it’s not uncommon for the manufacturer to request that the barcode be cut out and physically submitted. Depending on the packaging, the UPC barcode can appear on inner or outer product packaging, and without paying attention, it can be easy to discard the packaging altogether without collecting it. Keeping product packaging until all mail-in-rebate requirements have been collected and submitted can help avoid any mishaps during the process. Once you’ve filed your rebate (or, better still, received your money back), go ahead and declutter.

5. Prepare to Follow Up

Though rebate refunds typically take six to eight weeks to arrive, it’s not uncommon for that time to stretch to 12 weeks or longer, if they arrive at all. To prepare for a refund that is delayed past its expected return date, create a spreadsheet that records all the details of a submitted rebate, including the contact information for the manufacturer. Also, make sure to keep copies of everything that has been mailed off — the receipt, the UPC code, and anything else you sent. When contacting a manufacturer for a rebate status, having a detailed tracker and copies of your rebate materials to reference will help the process of claiming your rebate run more smoothly. Yes, it’s an extra (possibly annoying) step, but if you’ve made the effort to get your money back, you do want to follow through!

The Takeaway

Mail-in rebates provide great opportunities to save money on everyday products, but they do require a bit of effort to redeem. With a little attention to detail and a lot of patience, your diligence could result in a moderate stash of savings that could be used toward other financial goals.

Rebates will only get you so far! Opening a new bank account with SoFi can help you store those savings and snag you some interest. Earn more on your money with our competitive APY when you direct deposit into a SoFi Checking and Savings account. Plus, pay no account or overdraft fees, get your paycheck two whole days early, and more.

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.


Photo credit: iStock/AndreiDavid

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 recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit 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, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

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

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

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

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

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


SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

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.

SOMN0821074

Read more
What Is a Credit Card Convenience Fee? How to Avoid It

What Is a Credit Card Convenience Fee? How to Avoid It

If you, like 80% of Americans, use credit cards, you’ve probably been hit with a convenience fee — an additional charge levied by merchants — at some point. Perhaps it was tacked on when you bought concert tickets online rather than at the box office or assessed when you paid your rent online with your plastic. Or maybe you only noticed it when reviewing your monthly bill. Whatever the case, you may well have asked yourself if this is a fair fee and how you can avoid this kind of charge in the future.

We can help! Read on to learn more about credit-card convenience fees, when and why they are charged, and whether you can avoid them.

What Is A Convenience Fee?

A convenience fee is a flat fee that’s tacked on to the cost of your transaction that you, the cardholder, are expected to pay. It is typically charged by merchants when a customer uses a credit card in a payment channel that it’s the usual one for the business. For instance, if a trade school usually accepts payments in-person and you choose to pay online, you might be assessed the additional fee for the convenience of not turning up at their place of business. A convenience fee may be either a small percentage of the transaction’s total or a flat fee charged when you use a credit or debit card with the merchant.

This fee is the result of a lawsuit between retailers and the brands (Mastercard/Visa) that was settled in January 2013. To make a long story short, the verdict permits merchants to add a surcharge when a customer uses a credit card. It helps to understand why retailers fought for this right: When merchants allow a customer to use a credit card as a payment method instead of cash or checks, they (the retailer) are charged a credit-card processing fee for the transaction. When you, the customer, receive a convenience fee, it reflects the merchant trying to offload that processing fee onto you. The convenience fee is what you pay for the “convenience” of being able to use a credit card for a transaction instead of cash or another form of payment. In some cases, a retailer will factor these fees into their business model and won’t pass along the additional charge. That is why you may notice that convenience fees strike you as somewhat random.

Example of a Convenience Fee

In general, the consumer pays a convenience fee when purchasing a product or service in an alternative way than paying in person. One example of a convenience fee is purchasing tickets for a play over the phone or online. Anyone who’s ever reserved seats for the theater knows that you often pay a lot more than the ticket price for the final purchase amount. You may be hit with a credit card convenience fee for this purchase as well as other fees! Buying a ticket in person at a ticket office for a show will often help you avoid convenience fees.

Another example of these convenience fees at work can be found at the gas station. When you fill up your tank, you may notice that the price for gas is about $0.10 cheaper per gallon if you pay with cash than with a credit card.

Why Do Convenience Fees Exist?

Many credit card holders already get hit with an annual fee and monthly interest fees; so why do you have to pay even more money for using plastic as a payment method? The main reason you’re getting stuck with these convenience fees is because the merchants have to pay processing fees to payment networks. The payment networks or payment processors work with the financial institutions that issue your cards (like SoFi), and the card network (Visa, Mastercard, Discover, American Express) to make sure the transaction is secure and processed smoothly. The bank that issues the cards often charges the merchant a fee for allowing them to accept this card – a credit card processing fee. Sometimes, payment networks also charge the merchant a fee. Often, credit-card processing fees cost the merchants between 2% and 4% per transaction. That’s why the merchant might pass those fees on to you, the consumer, as a convenience fee.

This is also another reason some small businesses may not accept credit cards at all: They don’t want to have to pay the fees associated with taking them or pass them on to you.Other merchants choose not to accept certain credit cards, like Discover or American Express, since those companies tend to collect higher fees per purchase.

Credit Card Company Rules on Convenience Fees

Here’s the breakdown for how some of the major credit-card brands handle fees.

Brand

Rules for Merchants on Convenience Fees

Visa

Merchants can add convenience fees on all nonstandard payment methods, except for income tax payments in some states.

Retailers are required to register the surcharge with the payment network. They must also display a notice of the surcharge at the point of sale — both in-store and online. You’ll usually see the additional fee on your receipt.

Mastercard

Only select government agencies and educational institutions can charge credit card convenience fees.

Retailers must register the surcharge with their payment network. They must also display a message about the surcharge at the point of sale — both in-store at the checkout and online. You’ll usually see the additional fee on your receipt as well.

American Express Only government agencies, educational institutions, utility companies, and rental companies can charge credit-card convenience fees.
Discover The retailer cannot charge convenience fees to Discover cardholders unless it charges the same fees to those using credit cards from other card issuers.

Convenience Fees vs Surcharge Fees: What’s the Difference?

When thinking about the additional charges you wind up paying, you may have wondered what the difference between convenience fees and surcharge fees are. Let’s explain.

A surcharge fee covers the cost of you having the privilege of using a credit card. It’s added before taxes. Sometimes called a “checkout fee,” it is usually a percentage of the sale and it’s optional for the merchant to add a surcharge fee onto a transaction. Each specific credit card company has rules about surcharge fees.

Credit card surcharges are prohibited by law in 10 states. If you’re a merchant doing business in Colorado, Utah, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas, you’re not allowed to add a surcharge to a purchase. So if you’re a customer in those states and paying with a credit card, you might be able to avoid some additional fees.

In comparison, a convenience fee covers the cost of doing a transaction with a credit card instead of another payment method. Sometimes this is charged as a percentage of the transaction. Other times, it is charged as a flat fee, regardless of the cost of the products or services purchased. A retailer might add $3 to $5 to the transaction completed with a credit card, regardless of what or how much was purchased.

How Can Convenience Fees Be Avoided?

When you’re trying to avoid credit card convenience fees, you can choose to pay with a method other than plastic, such as cash, check, or money orders at some merchants. For example, if you’re paying for college tuition, you might be able to set up an online payment using an electronic check, money order, or personal check. At some schools, this could save you nearly 3% per payment transaction. If one semester of college tuition was $5,000, avoiding a convenience fee charge could save you about $150.

That being said, if you have a high-rewards credit card, conducting an expensive transaction might be beneficial if you can get cash back.

So, it’s important to scan for notices about convenience fees. When making a purchase at a bricks and mortar location, look at the point of entry and at the checkout area to see if they have messages posted about surcharges or convenience fees. You could always ask before purchasing a product or service if paying by cash will save you money. This often works well in service businesses. If you’re paying someone to install or service an appliance in your home, for example, paying with cash could save you a chunk of money if it allows you to avoid fees. If you are purchasing something online, look carefully at the charges before hitting “purchase.” Credit card fees are fairly common today, so you want to be alert to how they can crop up – and avoid them when you can!

The Takeaway

Knowing that credit card convenience fees (and surcharge fees) exist, whether they are legal in your state, and how to avoid them can help save you money in the long run. Oftentimes, these fees are added at the merchant’s discretion, and you may — with a little sleuthing and a work-around or two — be able to avoid them. Using a credit card can be an expensive proposition, so it’s good to know how you can trim some of these additional charges. Using cash or a check can sometimes be the most economical path forward.

Get Money-Smart With SoFi Checking and Savings

Avoiding additional fees and paying you interest for the privilege of holding your money are two benefits SoFi can offer you! With our online checking and savings accounts, eligible accounts will pay no account or overdraft fees, plus you’ll earn a competitive APY.

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


Photo credit: iStock/blackCAT

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 recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit 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, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

As an alternative to direct deposit, 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.

SOMN0821069

Read more
Rebuilding Trust in a Marriage After Financial Infidelity

Rebuilding Trust in a Marriage After Financial Infidelity

Marriage is a wonderful but challenging institution. It is supposed to be built on trust and honesty, but infidelity does occur — and it can be devastating. That holds true for financial infidelity, too: Maybe one partner racks up a major amount of debt without disclosing it, or each spouse is keeping a secret account “just in case.” When this kind of behavior takes root and is then exposed, it can do serious harm to a union.

But if financial infidelity in marriage occurs, it doesn’t necessarily mean the partnership is on the rocks. In fact, with the right approach, a marriage can emerge even stronger. Read on to find out:

•   What is financial infidelity?

•   What are the warning signs of financial infidelity?

•   How can you prevent financial infidelity?

•   How can you recover from financial infidelity?

What Is Financial Infidelity?

Financial infidelity occurs when one person in a relationship hides, manipulates, or falsifies information about their financial position, bank accounts, or transactions. The problem can be unintentional to start with but then grow into a significant problem with severe detriment to the relationship.

For example, one spouse may offer to take care of the bills and the finances, and the other spouse trusts them to be responsible. However, the spouse who pays the bills may begin to spend excessively unbeknownst to their partner. They might spend on clothing, stocks, expensive meals out, or any other expense. The result of these splurges could do harm to both partners’ finances, even though only one is aware of it and responsible for it.

What Are Some Common Examples of Financial Infidelity?

Financial infidelity can occur in a variety of situations; whether both couples work or only one spouse doesn’t; whether they have joint vs. separate bank accounts. There’s no one main type.

Here’s a closer look at the different forms of financial infidelity that can occur in a marriage.

Spending Money in Secret

As mentioned above, if one partner splurges and keeps that secret, it can be a form of financial infidelity. This can impact a couple’s shared goals, such as saving for a down payment on a house. Some spouses may establish how much they can spend without having to consult the other. This can help keep the finances fair and avoid this kind of secret spending.

Hiding Debt From One Another

Not disclosing debt to a partner is dishonest and can negatively impact both spouses. For joint bank accounts and credit cards, both partners are equally liable for any debt. For this reason, it’s wise if couples discuss their financial situation early in their relationship, before they enter into a financial partnership to avoid any surprises later on.

Hiding Accounts From One Another

Some people may hide bank accounts from their partners, perhaps considering it their secret “mad money” on the side. While spouses don’t need to know everything about each other’s lives, they do need to be transparent about finances to be on the same page working toward the same goal.

Lying About Income

A spouse might disclose that their income is lower than it really is. They may then use the difference for their own purposes, rather than for shared goals.

Why Do People Commit Financial Infidelity?

There is no one reason why people lie about finances in a marriage, but many do. According to a survey by U.S News & World Report, close to a third of couples experience financial infidelity. Here are three possible explanations.

•   Embarrassment. An individual who has financial difficulties might be ashamed to disclose their financial circumstances when they marry or live with another person. So rather than confess, they hide their debt, say, or a salary that’s lower than they said it was.

•   Revenge. In an unhappy relationship, one partner may tap into shared wealth to exact revenge or punish the other. This behavior, known as “revenge spending” can increase debt (particularly credit card) debt that is not likely to be repaid if there are irreconcilable differences.

•   Emotional issues. One spouse may have an addiction or psychological problem that causes them to act irresponsibly with money. For example, they might have compulsive buying behavior (CBB; which some people refer to as a shopping addiction), bipolar disorder, substance abuse, or gambling.

What Are the Effects of Financial Infidelity?

The most immediate effect of discovering financial infidelity is probably loss of trust. The longer-term consequences can be financial difficulties and, ultimately, divorce. Here’s a closer look:

•   Loss of Trust. When one person in a relationship or marriage withholds, hides, or misconstrues information, they abuse the trust that the person places in them.

•   Financial Difficulties. If one partner has hidden their debt or another financial minefield from the other, it can cause problems for their shared finances. They may both experience cash flow issues and have trouble paying bills and saving.

•   Lower Credit Score. Acting irresponsibly with money, failing to pay bills, or falling deeper into debt will likely cause a lower credit score for the parties involved.

•   Divorce. The problems that result from financial infidelity can lead to separation and divorce.

Tips for How to Deal with Financial Infidelity

Can a marriage survive these kinds of money problems? In all likelihood, yes, provided both partners are committed to moving ahead together. Also worth noting: According to an AICPA survey, seven in 10 married or cohabiting Americans have argued about finances in the past year, but they don’t all divorce. That bolsters the idea that there is a road forward.

Here are some signals that trouble is brewing. Know them so you can hopefully spot them early and save your marriage if financial infidelity occurs.

Watch for Signs

Look out for signs that your spouse’s financial management is suspect. For example, are they unwilling to discuss financial issues? Have you noticed a sudden change in your spouse’s spending? Do you suspect your spouse is hiding information about their finances or lying about money?

If you cannot ask questions and get an honest answer about your marital finances, there is a problem to address.

Keep Tabs on Your Finances

Keeping an eye on your finances will help you recognize problems and tackle them immediately. Do you notice that your spouse isn’t contributing to your retirement account anymore? Are you falling behind on bills and struggling to catch up? These are signals that something has changed.

Get Involved

If one spouse has been holding the purse strings, it’s probably time for that to change. A marriage is an equal partnership, and both partners should play a role in managing the finances. It’s not fair for one partner to bear all the financial responsibility and decision-making. Getting involved is also a good way to stay informed about your shared finances.

If financial infidelity has occurred, you and your partner have options. You might work it out between the two of you, or you might consult a couples counselor, try financial planning, or see a financial therapist (which combines interpersonal and money advice).

Tips for Preventing Financial Infidelity

There are steps you can take to avoid financial infidelity in a marriage and repair missteps. A good place to start is for both partners to have a clear picture of each other’s financial position and their spending habits from the outset. But it’s never too late to sit down (with or without a financial advisor) and develop a plan for managing finances and building wealth. Here, some tactics to try:

Have Frequent Meetings

Agree to meet with your spouse regularly to discuss finances. It could be weekly at first as you get into a rhythm, sort out bank accounts and bills, develop a plan and commit to money goals, and create a budget. But once you are on sound footing with a system, the meetings could be less frequent, perhaps monthly.

Share Responsibilities of Finances

Use the meetings to hold each other accountable. Discuss how decisions should be made on purchases. How are you going to save toward retirement? Decide who will be responsible for what when it comes to the finances, but ensure that both of you are involved.

Communicate All Financials

Review everything — mortgage or rent payments, joint bank accounts, individual bank accounts, credit card payments, car loans, insurance, savings and investments, liens, and credit scores. If both of you have a clear picture of your financial situation, it’s easier to come up with ideas for cutting costs or making financial decisions.

Create a Joint Budget

Try budgeting as a couple, not two separate budgets for you as individuals. As a couple, create and follow a budget. A household budget is unlikely to do its job if members of the household overspend or hide information. If spouses can start working together toward a common goal, trust can be established or, after an instance of financial infidelity, rebuilt.

Recommended: Is a Joint Account Right for You?

Address Any Issues

As the two of you go over the finances, issues are bound to arise. And money can be a very charged topic. Do your best to discuss things calmly. If one person gets defensive, consider taking a break and resuming the meeting at a later time. If you are guilty of financial infidelity, admit it, apologize, and use this as an opportunity to get back on track.

Can a marriage survive financial infidelity? Yes, it can. But each spouse must be open to working through the problem, repairing the damage, adopting a forgiving attitude, and moving forward with transparency and trust.

The Takeaway

Financial matters can be a leading cause of divorce. While partners do have the right and the need for some privacy, financial infidelity is a serious issue. If one partner is hiding money, debt, or income information from the other, it can feel like betrayal and can negatively impact both spouse’s financial futures.

Financial infidelity does not, however, have to mark the end of a marriage. It can be the start of a stronger commitment to work together toward financial stability and greater respect. It starts with a willingness to talk openly and regularly, behave responsibly fiscally, shoulder the financial responsibilities, and admit blame if you are in the wrong.

Managing your finances together can be simple and transparent when you open an online bank account with SoFi. Our Checking and Savings gives you tools to track your cash at a glance. Set up your account with direct deposit, and you’ll also earn a competitive APY with no account fees, which can help your money grow faster.

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

FAQ

Can marriages survive financial infidelity?

A marriage can survive financial infidelity if both partners are committed to rebuilding the trust that has been lost. This requires accepting responsibility. Going forward, both partners need to develop a plan to communicate openly and regularly about finances and to work toward mutual goals. Lastly, both should play a part in managing finances.

Is financial infidelity a leading cause of divorce?

Money is often cited as one of the leading causes of stress in a marriage and one that can lead to divorce. Money touches every aspect of our lives and dictates how we live, so it is an extremely sensitive and personal topic, which can trigger major issues in a relationship.

Is financial infidelity the same as cheating?

Financial infidelity can have the same impact as an affair; both destroy trust in a relationship. Whether one or the other is worse depends on your point of view. Both can be overcome, and trust can be rebuilt with commitment and the right approach.


Photo credit: iStock/Stadtratte

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 recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit 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, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

As an alternative to direct deposit, 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.

SOBK0722031

Read more

14 Tips for Saving Money on a Low Income

If you have a low income and sometimes struggle to make ends meet, you are hardly alone. As of now, 64% of Americans live paycheck to paycheck, meaning almost two out of every three people are feeling somewhat strapped.
Factors that can make saving money challenging include inflation (the cost of living has been rising steeply) and heavy debt loads, with the average person carrying $6,000+ on their credit card balance.

These two forces can quickly eat away income, making it feel impossible to save. Thankfully, there’s a way forward—with a little strategizing.

Here, learn 14 smart tips for how to save money on a low income. They can help boost your financial wellness.

Smart Ways to Save Money with Low Income

1. Finding a Budget Method That Suits You

A budget is a way for you to track your income, help you make good financial decisions, and plan towards goals.
It paints a picture of how much money you have coming in and going out and how you are allocating funds, which you can use to identify areas for improvement. A budget also will help you see what resources you have available to cover your living expenses. With it, you can see how to make money stretch further.

There are a wide range of budget methods to choose from. A traditional approach is building a line item budget, which involves tracking your expenses in a spreadsheet. You can build a spreadsheet from scratch, or use a template.

Google Sheets has a free template that’s great for beginners, and you can also create a budget in Excel.

Apps are an automated form of budgeting—they track all the expenses for you. If you prefer keeping track by hand, you can find budget-ready notebooks.

Whatever style or programs you use, it’s essential to find one that works for you, helps you save, and can assist in your progress towards a financial goal. Decide what technique works best for you.

2. Watching Money Spent on Food and Drink

If you’re thinking about how to save money with a low income, one wise move can be dining in. That may mean opting for pasta at home instead of the cute Italian place nearby.

Making meals at home is typically cheaper than eating out. And the gap has widened: In 2021, meals at home increased 2% in price. The cost of eating out, however, increased 9% that same year!

Cooking at home is cheap as long as your grocery bill is sensible. Look for budget-friendly recipes that are simple and use all the ingredients in your pantry. Search online for affordable recipes, including recipes under $10. You’ll likely find many options.

Choose more affordable proteins like eggs, beans, chicken, fish, and quinoa over beef and lamb. Red meats typically cost more than other proteins. The U.S. Bureau of Labor Statistics shows that ground beef, a less expensive cut, ranged from $4.10 to $5.90 per pound in May 2021. Any cut of chicken, on the other hand, ranged from $1.50 to $3.40 per pound.

Finally, you might want to trade wine for beer…or go on a dry spell. Alcohol is a costlier commodity than other beverages. Consider looking for alternatives like antioxidant-packed teas, juice, or reliable tap water. You might decide to save alcoholic drinks for special occasions like celebrations for a while to cut costs.

3. Getting Rid of Debt One Step at a Time

Studies show that debt can cause stress and negatively impact mental and even physical health. Paying off debt can be a major motivation to save money. It’s one less bill to pay at the end of the month, and the freedom is empowering.

How to approach debt reduction? Always be sure to pay at least the minimum amount due. Then consider these two techniques that can help you be financially stable with a low income:

•   In the snowball method, you use extra funds to pay off the smallest debt first, giving you a sense of accomplishment for wiping out a balance. Then you move on to the next smallest debt.

•   In the avalanche method, you use extra funds to pay off high-interest accounts first, regardless of the balance. That can be a wise move since this is the kind of debt that often keeps people owing money for a long period of time. Credit card debt, which currently has interest rates of 15% to 19%, is a common example of high-interest debt.

You also can combine your debts into one account with a debt consolidation loan. These personal loans typically have a significantly lower APR (annual percentage rate) which can save you considerable money in the long run.

4. Finding Ways to Get Rid of Non-essentials

Look at your budget, and separate your list of basic living expenses from non-essentials.

Essential expenses will include housing, food and drink, transportation, utility bills, and more. An example of transportation costs might be car payments, car insurance, gas, monthly train passes, and so forth.

Non-essentials usually include wants vs. needs (items like clothing you like but don’t require, and entertainment). If you’re a sneakerhead or handbag collector, it may be time to pause shopping. But if you need fresh clothes and shoes for work, set a target amount you can afford to spend that month. Make your dollars stretch with sales racks at stores or second-hand steals.

Love video games and eating out? Look at alternatives. Consider investing in cheaper board games and hosting game nights. Or, make friends with video console owners!

5. Changing to a Cheaper Entertainment Subscription Model

Can’t live without Netflix? What about Netflix, HBO, Disney, and Hulu? Combined, those streaming services can quickly total $35 per month before taxes. In one year, that’ll set you back $420.

While it’s important to unwind, sometimes cutting entertainment is worth the savings. Consider free entertainment on your TV or computer. There are plenty of apps that offer free on-demand and live streaming services. You can also get classic TV antennas that pick up free national channels.

Finally, try the library. Most carry more than just books—movies too. You just need a library card.

6. Cutting Back on Larger Expenses

Looking for other ways to save money on a low income? You can also find cheaper options for large bills in your budget to save money when you have a lower income.

Your biggest expense will probably be housing, so start there. Several factors affect rent or mortgages, like location and amenities. Consider living in a cheaper neighborhood temporarily. Also, a home with fewer amenities like a patio or pool are typically cheaper.

Consider getting roommates to split housing costs or even going rent-free. If you have family nearby—it might be worth asking to live with them for a low fee or even rent-free, provided you have a plan to get on your feet or can contribute to the household (say, by cooking or cleaning).

Transportation is another large cost. If your job is a safe and reasonable distance to bike to, try it out. Bikes are low-cost maintenance—with the benefit of staying fit and going green.

7. Saving What You Can

Try to cut habits that add up. A $5 fancy coffee once a week costs $260 a year. On a smaller income, that can eat away your earnings. If you can save $5 or $10 a week—that’s a good start. It’s better than saving zero dollars. But, developing a financial plan is a key step to saving anything you can.

You won’t know how much money you have until you have a budget in place. Once you have a picture of your money, look at where you can cut costs. It may be in categories like groceries, shopping, or entertainment, which are flexible costs.

Get up to $300 when you bank with SoFi.

Open a SoFi Checking and Savings Account with direct deposit and get up to a $300 cash bonus. Plus, get up to 4.60% APY on your cash!


8. Separating Money for Yourself From Other Expenses

Though you pay utility companies, the landlord, and your debt, remember to pay yourself. One technique: Save whatever change you have leftover from bills. Put it in a jar, and deposit it into a savings account regularly.

Living within your means or spending less of what you earn on living expenses can help you keep more of your earnings. If you have a significant amount of money leftover at the end of each month, create new savings goals like a home purchase fund or a retirement fund.

9. Turning On Alerts for Bill Payments

Get reminders for your bills. This will help you avoid late fees, which can eat up your funds.

When you open an online bank account, you can sign up for alerts on upcoming bills. Some banks offer a feature on mobile and browser programs that allows you to create alerts for your bills. You can add any type of upcoming bill you have, like your internet or electricity bill due dates, and get reminders via text, email, or phone notifications that a bill is due soon.

10. Spending Less on Your Car

A car can be expensive. Some tips to make it more affordable:

•   Buy a car—don’t lease. You get more value paying off a car compared to leasing a car. A lease also comes with more restrictions and costly penalties. It’s also more expensive in the long run than buying pre-owned.

•   Buy used. Used cars are cheaper. And, because they’re used, the insurance tends to be cheaper as well. Buying a pre-owned car means it won’t lose value as quickly as a new car. Some estimates say that a new car loses 40% of its value in the first year.

•   Aim to get a car that gets great gas mileage. An SUV or truck can easily cost $75 for a full tank. If you’re paying for a gas guzzler, it might be worth downsizing to a car that gets better gas mileage.

11. Finding Ways to Cut Entertainment Costs

Reading, listening to music, and tuning into your favorite program has its health benefits. From reducing stress and pain to improving memory—it’s important to have a little fun.

Instead of booking concert tickets for your favorite band, consider listening to their tunes on free apps (YouTube, for instance). Also check listings and see which local bands are playing; that could be a good way to discover some new favorites.

If you enjoy a good show, check out free TV streaming apps like Tubi or Pluto TV. Both have a great selection of movies and shows on demand or live.

12. Eliminating Your Bad Habits

When asking yourself, “How can I improve my financial situation?” look at your good and bad spending habits.
Do you buy groceries at the gourmet deli instead of a cheaper supermarket? Do you tend to eat out because you didn’t pack a lunch? Do you leave the AC running in your apartment while you’re out all day?

These are all costly habits you can change. Find a cheaper grocery store. You’ll find your dollar can stretch a lot further with cheaper prices. Try meal prepping on weekends so you can pack lunches for work each week. Lastly, run electricity only when you need it—and compare bills. You’ll likely see a difference.

13. Committing to a Month of No Spending

A no-spend challenge can be a fun way to save.

A no spend-challenge means that you avoid discretionary spending altogether, except for necessities like rent and groceries. That means not spending money on movie theater tickets, clothes, or even chocolate.

Write down a list of your non-essential expenses, like buying a cup of coffee each morning or eating out with friends on the weekend. Try alternatives like making coffee at home or taking a walk in a park instead of brunch with your friends. Let them know you’re doing the challenge—they might even join.

14. Getting Help if You Need It

If you find yourself still living paycheck to paycheck, there’s help.

If you have substantial debt, consider getting free debt and credit counseling from the nonprofit National Foundation for Credit Counseling (NFCC). The sessions take place over the phone or online. Call or fill out an online form to get started.

Also, cities, states, and the federal government provide help in the form of subsidized housing, discounted healthcare and free groceries. Simply call the 211 network 24/7 to share your situation and get connected to the right people.

You can also use the government’s benefit finder that can match you with the right programs.

15. Automating Your Savings

Once you have a budget in place, it’s easier to know how much to save a month.

To simplify saving (as mentioned briefly above), try automating transfers, a feature many banks offer that moves money from your checking account to your savings account on a certain date. For example, if you’re paid every Friday, you can set up an automatic transfer of the desired amount to your savings or investment accounts.

If you put away just $50 each week, you’ll have $2600 at the end of the year.

Why Saving Money With a Low Income Is Possible

No matter what your income, it’s tempting to live like a rock star or just try to keep up with your higher-earning friends. Or you might feel like your smaller earnings are not worth saving, and you’ll wait till you make more. But it’s possible to save more than you think even on a lower income.

If you make savings a priority and adjust your lifestyle to your income, it can pay off and help you increase your financial wellbeing. Simple changes like learning to budget, shopping at cheaper grocery stores, trading in your car for a greener one, or buying second hand can all help you take control. These moves can also help you pay down any debt you may have, build your rainy-day savings, and achieve longer-term financial goals.

The Takeaway

Whether you earn a lot or a little, living within your means always pays off.

Budgeting is the first step to getting your finances organized. It’ll help you see how much money you have to cover your monthly expenses and how much you have leftover for savings. You’ll also see a clearer picture of your spending habits.

Once you have a sense of your spending habits, find ways to spend smarter. That means finding cheaper options for necessities and cutting non-essential spending.

Finally, set attainable savings goals and put your cash away in a high-yield account. SoFi can help you here: When you open an online bank account with direct deposit, you’ll earn a competitive APY, pay zero account fees, and have tools to track your expenses, set up bill payments, and automate savings.

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

Why is saving money so hard?

Saving can often be hard because of our mindset. We don’t focus on creating and sticking to a budget and instead spend feely, in the moment. If you are following a budget but find it hard to free up cash to save, you might take on a side hustle to help bring in more income.

What happens if you don’t save money?

Not having savings puts you in a precarious position. Having money in savings is a safety net for unexpected expenses like a medical bill or job loss. Without one, you may find yourself unable to pay for bills, which could cause you to take on high-interest debt and/or pull you closer towards poverty. It’s wise to have at least three to six months’ of living expenses stored away in case of emergency.

How do I get the motivation to save when I do not make much?

With social media in today’s culture, it might seem like everyone has what they want (except you). So it’s important to put on blinders, and focus on your journey. Delete apps that encourage you to overspend, and ask trusted friends or mentors to navigate this territory together. Save whatever amount you can: Don’t get discouraged by comparing yourself to others’ savings plans.


Photo credit: iStock/Rocco-Herrmann

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.

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 recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit 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, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

As an alternative to direct deposit, 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.

SOBK0622023

Read more
What Is a Nostro Account? How Does it Work?

All You Need to Know About Nostro Accounts

When a domestic bank needs to handle foreign transactions, they can establish a nostro account with a foreign or correspondent bank, which holds the funds and makes transactions on behalf of the domestic bank. Nostro comes from the Latin, meaning “ours.”

Having a nostro account enables the bank to process transactions for their customers in other countries without having to set up a base of operations abroad. The correspondent bank in the other country handles deposits and other transactions, which are denominated in the local currency, minus any foreign transaction fees.

Since nostro accounts are bank-to-bank accounts, not personal ones, it’s unlikely you’ll encounter one of these. But it’s useful to know how financial matters work between countries, in case you’re thinking about what to do with leftover foreign currency, or other financial dealings while traveling or doing business.

What Is a Nostro Account?

A nostro account is set up by a bank in one country, let’s call it the domestic bank, and the funds are held and partly managed by a bank in another country (the foreign bank).

The foreign bank holds all the funds needed for the domestic bank’s transactions in that country, denominated in the local currency, within the nostro account.

When customers of the domestic bank have relocated, or are traveling or doing business abroad, they can use the foreign bank to make deposits and withdrawals, and so on. The foreign bank works with the domestic bank to ensure that the currency exchange for all transactions is accurate.

A nostro account is the bank’s bank account in another country. Individuals do not have nostro accounts. This system operates behind the scenes, and isn’t something you need to think about if you’re wondering how to invest in a foreign currency, although nostro and vostro accounts do help with foreign currency trading.

How Does a Nostro Account Work?

When opening a nostro account, you open an account with another bank in a foreign country. The foreign bank is also sometimes called the facilitator bank or correspondent bank.

Financial institutions and large corporations that are involved in international trade will typically set up nostro accounts. This gives the organization the ability to hold funds in a foreign currency (via the facilitator bank), without the need to convert its own currency into a foreign currency.

Interestingly, for accounting purposes, the foreign bank calls this account a vostro account, meaning “yours.” It is the same as the nostro account, but each bank uses a separate term for their accounting purposes.

Recommended: What Are Traveler’s Checks?

Example of a Payment Using a Nostro Account

What is a nostro account and how, exactly, does it work in real life?

Say that a small domestic bank located in Colombia has a number of customers who are traveling, living, and working in the U.S. temporarily. The Colombian bank might establish a nostro account with a bank in the U.S. to offer services to those customers.

The U.S. bank would be the facilitator bank in this arrangement. As such, the U.S. bank could accept deposits on behalf of the domestic Colombian bank into its nostro account. Those deposits would be denominated in U.S. dollars (which is also considered the world’s reserve currency).

Funds, such as deposits to the U.S. bank, could then be forwarded to the domestic bank in Colombia through the SWIFT system. SWIFT is the Society for Worldwide Interbank Financial Telecommunications, a cooperative that offers safe and secure financial communications to facilitate cross-border transactions.

The Colombian bank could then convert the deposits to its local currency, and credit customers’ accounts with the corresponding amount of money, minus any fees charged.

Recommended: What Is Forex Trading?

Nostro Account vs. Vostro Account

The terns nostro and vostro both describe the same bank account, but from each bank’s perspective. That’s because the domestic bank looks at the funds in the other bank as “ours” — nostro.

Meanwhile, the bank in the other country that holds the account considers it a “vostro” account (vostro means “yours). The money in the account is held in a foreign currency (i.e., the currency of the correspondent bank), then converted to local currency once the funds are transferred to the domestic bank.

Essentially, the terms vostro and nostro simply help to distinguish between the two sets of records that must be kept and reconciled by the two banks.

Get up to $300 when you bank with SoFi.

Open a SoFi Checking and Savings Account with direct deposit and get up to a $300 cash bonus. Plus, get up to 4.60% APY on your cash!


Advantages of a Nostro Account

•   There are several advantages to having a nostro account.

•   Ease of transactions in conducting international currency exchanges.

•   Nostro accounts allow you to pay money in your currency without having to incur foreign exchange risk.

•   Nostro accounts allow holders to keep funds in a foreign currency.

Disadvantages of a Nostro Account

•   There are also some disadvantages that come along with maintaining a nostro account.

•   There may be some added expenses associated with money transfers using nostro accounts.

•   Since you are working with financial institutions outside of the U.S., there are rules and regulations you have to comply with.

The Takeaway

Nostro accounts are an important behind-the-scenes system that banks and large corporations rely on to make international and foreign exchange transactions seamless. This specialized system helps settle international trades and payments without one bank having to physically set up operations in a new country.

Nostro is Latin for “ours,” which is the term used by the domestic or originating bank. Vostro means “yours” and is the term used by the correspondent or facilitating bank that holds the funds on behalf of the other institution. The two terms refer to the exact same account, just from different perspectives for accounting reasons.

Despite the convenience, nostro accounts come with certain fees and expenses, along with regulations that must be adhered to when executing these transactions.

Fortunately, most individuals don’t have to consider vostro or nostro systems when opening up their personal bank accounts. For example, if you open an all-in-one bank account with SoFi, you’ll just enjoy the convenience of banking easily and securely from your phone or computer, no matter what is happening across borders. If you set up direct deposit, you can earn a competitive interest rate. Also, SoFi members pay no account or overdraft fees, and can access complimentary financial advice from professionals as needed.

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 a nostro account and why is it used?

A nostro account is a bank account a bank holds at a foreign bank denominated in a foreign currency where the account is held, and facilitates foreign exchange transactions with ease.

How do I open a nostro account?

Individuals don’t open nostro accounts. If you are part of a large bank or corporation, you would establish a nostro account with a bank overseas.

Does a nostro account earn interest?

A nostro account may earn interest, so it’s likely that deposits made with the foreign bank would offer competitive rates to customers relative to that location.


Photo credit: iStock/delihayat

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 recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit 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, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

As an alternative to direct deposit, 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.


SOBK0422004

Read more
TLS 1.2 Encrypted
Equal Housing Lender