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Sure, you could store all the cash you’re likely to need in the near future in a checking account and call it a day. But that would mean missing out on the many benefits of having a savings account.

While savings accounts don’t offer the returns you could potentially get in the market, they pay interest (generally a lot more than you can earn in a checking account), while still keeping your money safe and accessible. This makes them ideal for housing your emergency funds and money you’re saving for shorter-term goals, like buying a car or going on vacation.

Here’s a closer look at the perks of having a savings account and why this type of account likely deserves a place in your financial toolkit.

What Savings Accounts Are

A savings account is a type of deposit account at a bank, credit union, or other financial institution where you can safely store your money and earn interest. Savings accounts at banks insured by the Federal Deposit Insurance Corporation (FDIC) are typically covered up to $250,000 per depositor. Co-owners of joint accounts at the same bank are typically each insured up to $250,000. Credit unions offer similar insurance through the National Credit Union Administration (NCUA).

Unlike a checking account, which is set up for everyday money management, a savings account is designed to store money you don’t need right away, separate from everyday spending cash. These accounts typically don’t come with checks and debit cards, and some banks may limit you to a certain number of withdrawals per month.

Because savings accounts offer safety, liquidity, and interest, they can be a great place for setting aside money for shorter-term goals, such as:

•   An emergency savings fund

•   A down payment on a house

•   A wedding

•   A vacation

•   A new car

•   A large purchase

•   Home renovations

Dive deeper: How Do Savings Accounts Work?

6 Benefits of Savings Accounts

Here’s a look at some of the main advantages of a savings account.

1. You Earn Interest on Your Deposits

Savings accounts earn interest, expressed as an annual percentage yield (APY). That means you’ll earn money just for keeping your funds in the bank, making it a low-risk way to build wealth. Not every savings account offers the same interest rate, however. While the current national average savings yield is 0.57 percent, top-yielding savings accounts are currently earning APYs above 5% percent.

To see how that translates into actual dollars, let’s say you currently have $5,000 sitting in your checking account you don’t need right away, and you transfer it to a 5% APY high-yield savings account. Even if you don’t add any additional money to the account, you could increase your balance in one year to $5,250, just by letting the initial deposit sit in your new savings account.

Recommended: How Does a High-Yield Savings Account Work?

2. Your Money Is Insured

Savings accounts are typically insured by the FDIC or NCUA, depending on where the account is held. That means your money is protected against major losses (up to $250,000) in the event that the bank or credit union goes out of business. You would either be paid that money directly or, more likely, a new account would be opened for you at another bank with the same balance as before. This makes a savings account safer than keeping your money in a sock drawer or under the mattress, where it is susceptible to theft or loss.

3. It’s Low Risk

Savings accounts don’t offer high returns compared to what you could potentially make in an investment account over the long term. However, these accounts won’t let you down either. With many investments, you can lose money over the course or days, weeks, months, and even years. The balance on a savings account, on the other hand, will typically continue to go up over time (unless, of course, you make a withdrawal).

If you have money you plan to use within the next couple of years that you can’t afford to lose, a savings account can be the perfect place to store it.

4. It Doesn’t Require a Large Initial Investment

Savings accounts are easy to open and typically do not require you to make a big initial deposit. In fact, many online-only savings accounts allow you to open an account with $0, so you can start saving from scratch. Savings accounts at traditional brick-and-mortar banks may require deposits of $25 to $100 to open a new account. By contrast, many investments (such as real estate and mutual funds) often require a significant amount of money as an initial investment, sometimes as much as several thousand dollars.

Keep in mind, though, that some savings accounts do offer higher interest rates and low (or no fees) if your balance stays above a certain minimum threshold or you meet other criteria.

5. You Can Separate Money for Different Goals

If you’re saving for a particular goal, like buying a car or putting a downpayment on a home, it can be helpful to keep that money in a separate savings account. This helps to ensure that you don’t blow the money on something else, like groceries or clothing.

If you have several things you’re saving for, you might even want to open multiple savings accounts, such as one for emergency savings, one for a new car, and one for a vacation. Separating money can help you visualize progress toward each goal. Some savings accounts let you organize your savings into separate buckets or “vaults” so you can save toward multiple goals within one account.

6. Easy Access When You Need It

Savings accounts are relatively liquid, meaning you can access your money when you need it by transferring it into your checking account or withdrawing it at an ATM or through a teller at a local branch. That’s not true for many investments, which may take a few days to convert to cash. Some investment products, such as real estate properties, can potentially take months or years to sell off.

That makes a savings account an ideal spot for your emergency fund. When an unexpected expense comes up, you can access your funds immediately — and avoid running up expensive credit card debt — in order to cover it.

That said, the money is not quite as accessible as the money in a checking account. Savings accounts typically don’t come with checks and debit cards, and some banks limit the number of withdrawals you can make to six or nine per month. However, you might see these limitations as benefits, since they encourage saving rather than spending.

Recommended: Can You Write Checks From a Savings Account?

Is a Savings Account Right for You?

Savings accounts offer numerous benefits, including insurance on your deposits, higher APYs than checking accounts, and liquidity. Plus, you generally don’t need a large (or sometimes any) initial deposit to get started.

However, the interest you earn on a savings account may not always keep up with inflation, which means your balance could become less valuable over time. As a result, a savings account is generally not the best place to put the money you are saving for a long-term goal, such as retirement or your child’s college education. You might earn a better return if you invest that money in the market.

If you’re interested in opening a savings account, it’s a good idea to research your options and compare APYs, minimum deposits, balance requirements, and any fees. And if you have a savings account but aren’t satisfied with the perks, there’s likely a better fit for you offering the full benefits of a savings account.

Recommended: Perks of Long-Term Savings Accounts

Opening a Savings Account With SoFi

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

FAQs

What is the benefit of a savings account?

The primary benefit of a savings account is that it allows you to grow your money over time (by earning interest), while still keeping it safe and accessible.

What are the advantages and disadvantages of a savings account?

Advantages of savings account include:

•   Earning Interest Savings accounts accrue interest on deposited funds, helping your money grow over time.

•   Safety and security Funds in savings accounts are typically insured by the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA), providing protection against loss.

•   Liquidity Savings accounts offer easy access to your funds, making them ideal for emergency savings.

Disadvantages of savings accounts include:

•   Lower interest rates While savings accounts offer interest earnings, the rates are often lower compared to other investment options.

•   Inflation risk Inflation may erode the purchasing power of your savings over time, especially if the interest earned does not keep pace with inflation rates.

•   Fees and minimum balance requirements Some savings accounts may have fees or minimum balance requirements, potentially reducing the overall return on your savings.

How is a savings account most useful?

Savings accounts can be most useful for storing your emergency funds and money you plan to spend in the next few months or years, since they pay interest while keeping your funds safe and accessible. However, returns on savings accounts are often lower than what you could potentially earn by investing in the market over time. That makes these accounts less useful for long-term savings goals like retirement or a child’s future college education.

Photo credit: iStock/PeopleImages

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 11/12/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible 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 (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, 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 Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. 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.

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.

SOBK-Q224-1855608-V1

You likely agree that saving money is a good idea. Putting extra cash aside every month can help you reach your financial goals, whether that’s building an emergency fund, going on vacation, or putting a down payment on a car or home.

But wanting to save money and actually doing it are two very different things. It’s easy to get caught up in day-to-day needs (and wants), and never gain any traction on savings. But don’t give up. We’ve got 33 tricks and tips that can make saving simple and pain-free. The best part — you can get started as soon as today.

Saving Money Doesn’t Have to Be Overwhelming

While spending less and saving more admittedly sounds painful, it doesn’t have to be that hard. You don’t have to go to the extremes like never shopping or having fun. Just making a few small changes in your day-to-day spending habits can actually add up to a big difference in how much you save each month.

Getting better with money is like any type of behavior modification — the key to lasting change is to make small, incremental changes that stick.

33 Easy Ways to Save Money

What follows are 33 simple money-saving tips you can start working on right now.

1. Tracking Your Spending

One of the best ways to spend less and save more is to take a close look at where your money is currently going. You can track your spending by scanning your checking account and credit card statements over the last few months. But a simpler way is to use a budgeting app that syncs with your accounts and keeps track of what you spend in different categories in real time.

Once you have a big-picture idea of your cash flow, you can make adjustments. Spending a lot more on takeout than you thought? Commit to cooking one or two more nights per week. Is keeping up with fashion killing your budget? You may want to focus on spending less on clothing.

2. Selling Items You Never Use

An simple way to earn some extra cash is to periodically sell gently used items you no longer want or need. You might organize a yard sale or resell your items piecemeal via online marketplaces like OfferUp, Facebook Marketplace, or eBay. If you have extra clothes, shoes, or accessories in good condition, consider listing them on Poshmark or thredUP. Selling your unwanted stuff is essentially getting paid for clearing out clutter.

3. Limiting Time Spent on Social Media

Watching influencers take luxury vacations and promote their favorite products can prompt you to spend more and live beyond your means. In fact, recent research finds that social media can significantly impact your finances — and not in a good way.

Putting a time limit on daily phone scrolling, on the other hand, can automatically lead to less spending and more saving. It also frees up time for activities that can truly enhance your life, like reading, exercising, seeing (real) friends, even taking up side hustle (and earning more money).

4. Setting Goals for Saving

When we do things with focus, intention, and a clear goal in mind, we usually have an easier time making it happen. Instead of saving for the sake of saving, consider setting specific savings goals with target dates and amounts. For instance, maybe you want to save $5,000 for a summer vacation or $2,000 for a new computer.

By setting a target date, you can work backward and figure out exactly how much you need to set aside regularly. For example, if you want a new laptop in eight months, and it will cost you about $2,000, you’ll need to save $250 a month or about $60 a week.

5. Buying Generic Brands

Generic brands typically have the same ingredients and offer comparable quality to name brands but for a fraction of the price. For example, generic drugs usually cost 80% to 85% less than their brand-name counterparts. During your next supermarket or drugstore visit, try to go generic whenever it’s offered. Chances are, the only difference you’ll notice is less money draining out of your checking account.

6. Comparison Shopping

Spending a bit of extra time comparison shopping can help you scoop up the best deals and avoid paying full price. You can do it on your phone while you shop in-store. For online shopping, consider installing a browser extension that helps you find the lowest prices and automatically applies coupons and cash-back options at checkout. Many of these tools will also alert you when the price of an item you intend to purchase drops.

7. Automating Your Savings

Rather than transfer money to your savings account whenever you think of it, consider putting your savings on autopilot. Simply set up a recurring transfer from your checking account to your savings account for the same day each month (perhaps right after you get paid). It’s fine to start small. Even $50 can add up to a sizable sum over time, since the transfer happens every month without fail.

8. Making Monthly Debt Payments

While it’s not directly putting money into your bank account, making on-time, consistent payments on your debt means you’ll pay it off quicker. Once your debt is paid off, the money you are currently spending on principal/interest can go towards savings. In addition to your monthly minimum payments, try to put extra payments towards high-interest debt each month. You’ll whittle those balances down faster and save on interest.

9. Delaying Gratification

If you see something you want to buy but don’t actually need, consider putting off the purchase for at least one week (or ideally 30 days). Tell yourself that if you still want the item and can afford it after the waiting period, you can go ahead and buy it. Chances are good that once that waiting period is over, you’ll no longer have a burning need to purchase the item and simply move on.

10. Meal Planning

If it’s 6pm, you’re tired from a full day of work, and have no food in the house, you’ll probably seek out the path of least resistance — getting takeout or eating out. Your best defense against overspending on food is to sit down every Sunday to scan recipes and come up with a meal plan for the week (including breakfast, lunch, dinner, and snacks). You can then make a shopping list and hit the store.

Recommended: Examining the Price of Eating at Home Versus Eating Out

11. Avoiding the Daily Coffee

While it’s fine to occasionally splurge on a fancy coffee, getting your daily coffee out can add up, especially if you sometimes throw in a tempting pastry at the last minute. Even cutting back your coffee shop visits to just two or three times a week and brewing at home the other days can help you save a lot on coffee.

12. Making Repairs Instead of Buying New

While it is easier to replace items than fix them, the latter approach is better for both your wallet and the environment. Depending on the item, a repair could end up costing significantly less expensive than a replacement. Call around for quotes or ask for help from a tech-savvy or handy friend. Also see if there are “repair cafes” in your community. These are volunteer-run events where you can get items mended or fixed for free.

13. Using Cash Instead of Credit Cards

While credit cards are convenient, they make it all too easy to spend money. When you tap or swipe to make a purchase, you don’t really have a sense that you are giving up physical money. Switching to cash-only, even for just a month or so, can help you become more mindful about your spending. You might even try the envelope system. This involves labeling envelopes for each spending category, dividing your available cash for the month into the envelopes, and then only spending what’s in each envelope.

14. Switch to a New Cell Phone Carrier

When it comes to cell service, you don’t have to stick with the big names. Mobile virtual network operators (such as Mint Mobile, Consumer Cellular or Republic Wireless) typically offer the same quality of service at a much lower price tag. It’s also a good idea to look at your last cell phone bill to see how much data you actually use. You may be able to get a smaller plan to save even more.

15. Doing it Yourself Instead of Hiring Someone

Before you hire someone for a home repair or improvement job, like painting a room, re-caulking your tub or shower, or installing a water filter under your sink, consider whether or not you could do it yourself. Often, the cost of materials and a simple YouTube search will lead to significant savings.

16. Stacking Coupons

There are two major types of coupons: Store coupons, which are issued by a specific retailer and can only be used at those locations (you can find these in the paper and through a retailer’s app or mailer); and manufacturer’s coupons, which are found on manufacturer’s and coupon sites. By stacking them, you get an even deeper discount. Stacking coupons for an item that is on sale is a triple whammy that can bring you back to pre-inflation prices.

17. Canceling Some Subscriptions

Dropping subscriptions that you hardly use or are redundant is a simple money-saving move with a potentially big payoff, since these debits occur monthly. It’s worth scanning your checking account and credit card statements for recurring charges to see if there are any items you can cut. If you primarily watch one streaming service but pay for four, for example, canceling three can save you significant cash.

18. Using a Refillable Water Bottle

While keeping bottled water (and seltzers or sodas) on hand is convenient, the cost can add up, especially if you have a family. A simple way to spend less at the grocery store each week is to give each person in your household their own reusable water bottle. You can then take bottled drinks off your shopping list. This will not only save money but also reduce plastic waste.

19. Taking Advantage of Free Resources

You might be surprised at how many things you can actually get for free. For example, your library can grant you access to movies, books, activities, and in some cases, passes to state parks and other nearby attractions. You might also join a Buy Nothing group. These are hyper-local virtual communities where neighbors can give and receive essentially anything for free.

20. Canceling Your Gym Membership

If you’re becoming a stranger to your gym, consider canceling your membership. Even if you got a great deal, gyms debit money out of your bank account every month, whether you go or not. You might look for alternative, low-cost ways to get physically fit, such as walking/jogging/biking around your neighborhood, lifting free weights at home, and taking hikes.

21. Saving Change

A nickel here and a quarter there might not seem like much, but if you start dropping all your spare change into a jar every day, you’ll be surprised at how much you’ll accumulate. If you rarely carry or pay in cash, consider collecting digital change. Many money-saving apps automatically round up your purchase to the nearest dollar, then transfer the difference into your savings account.

💡 Quick Tip: Want a simple way to save more everyday? When you turn on Roundups, all of your debit card purchases are automatically rounded up to the next dollar and deposited into your online savings account.

22. Skipping Alcohol at Restaurants

Ordering a cocktail or a glass of wine (or three) when out to dinner can significantly inflate your bill. Consider getting water or a non-alcoholic beverage instead, then perhaps having a glass of wine when you get home. If you must drink, local beer, “house wine” options, and happy hour cocktails are usually the cheapest options.

23. Finding Free Family Entertainment

Taking the family to concerts, movies, and immersive art exhibits can add up quickly. Instead, look for free or low-cost community activities. These offerings typically spike during the summer months and around holidays. To stay abreast of upcoming goings-on, you can sign up for newsletters or follow social media accounts of your local community, recreation centers, and libraries.

24. Doing a No-Spend Challenge

A simple way to save (potentially hundreds) is to do a no-spend month. This involves spending money only on essentials for 30 days. Before you begin, it’s a good idea to set parameters for what you will and won’t spend money on and then commit to the plan. It’s only a month! By the end of the challenge, you may realize there were certain things you didn’t really miss and rethink your approach to spending.

25. Reducing Your Energy Use

You may be able to significantly lower your utility bills with just a few tweaks to your habits and home. Try taking shorter showers, fixing any drippy faucets or constantly running toilets, turning off lights whenever you leave a room, and washing your clothes in cold water. Once you see a difference in your monthly bills, you’ll be encouraged to carry on and find more ways to cut energy use.

26. Adjusting Your Tax Withholdings.

If you typically get a refund after doing your taxes, you’re essentially giving the government an interest-free loan. That’s money that could be working for you by earning interest in a high-yield savings account. Revisit your withholdings and put that extra money into your own bank account.

27. Taking a Staycation Instead of a Vacation

It may sound boring, but you’d be surprised how much a staycation can feel like a fun and luxurious getaway. The key is to take a complete break from your daily routine, change up the scenery, and spend time doing things you truly enjoy. This can provide the respite you’ve been longing for — minus the headaches of travel — and for a fraction of the price.

28. Finding Cheap Ways to Reward Yourself

If you focus too hard on saving and never on fun, you might end up feeling deprived and give up on the whole project. Instead, allow yourself to celebrate small money wins and life events on the cheap. For instance, for every X amount you’ve put away into your emergency fund, you might reward yourself with a fancy coffee, a $5 “spree” at the dollar store, or getting a treat at your favorite ice cream shop.

29. Avoiding Bank Fees

Overdraft fees, ATM fees, and monthly maintenance fees can make your bank account balance move in the wrong direction — down instead of up. To ditch costly overdraft fees, keep regular tabs on your checking account to make sure you have enough to cover your debits and checks. To eliminate other fees, you may want to look for a bank account that doesn’t charge monthly maintenance fees and ATM fees.

30. Haggling

Negotiating prices isn’t just for buying cars or houses. You can haggle for just about any product or service — your cable and cell phone bills, things you buy in stores, and even your rent. The key to success is to come to the negotiation prepared (do all the research you may need in advance), speak with confidence, and start off the conversation with the question, “What flexibility do you have?”

Recommended: 15 Creative Ways to Save Money

31. Saving Your Windfalls

It can be tempting to go hog wild and spend your windfalls. But next time you get a work bonus, cash gift, or tax refund (which you actually want to avoid, see tip #26), consider spending a small percentage of it on something frivolous and fun, then putting the rest into your savings account. This can help you reach your savings goals significantly faster.

Recommended: The Fastest Ways to Get a Tax Refund

32. Timing Your Purchases Right

If you want to buy something that you don’t need right away, it’s worth researching the best times of the year for deals and sales. For example, you can often find great deals on cars in May, October, November and December; clothes are typically cheapest at the end of any season; and the end and the very beginning of the year are generally the best times to buy appliances.

33. Switching to a High-Yield Savings Account

If your extra cash is sitting in a traditional savings account, you’re missing out on a free source of extra cash. A high-yield savings account is a type of savings that you can open at many banks and credit unions. But it differs from a traditional savings account in that it offers an annual percentage yield (APY) that’s 10 to 20 times higher. If, for example, you put $25,000 into a savings account with a 4.60% APY, you’ll earn an extra $177.78 by the end of the year — just for letting the money sit in the bank.

Saving Money with SoFi

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

FAQ

Why is saving money important?

Saving money enables you to build an emergency fund that protects you against the unexpected. It also allows you to work towards — and achieve — future goals, such as buying a car or home, sending your kids to college, and being able to one day retire.

How can I find the motivation to save money?

To find the motivation to save money, it helps to set specific goals. Think about the things you want to buy or do in the next year or two and how much these things will cost. You can then determine how much you need to set aside each month to reach your goals. Watching your savings account balance go up can also help keep you motivated.

What are the consequences of not saving money?

When you don’t have a cushion of savings, any bump in the road (such as a car or home repair, trip to the ER, or loss of income) can force you to run up credit card debt. This can lead to a debt spiral that can take months, if not years, to recover from. Not saving also means you won’t make any progress towards your financial goals and simply continue living paycheck to paycheck.

Photo credit: iStock/Chaninan Boongate

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 11/12/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible 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 (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, 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 Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. 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.

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.

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.

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.

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.

SOBK0124057

ACH transfers typically take between one and three days, but that’s only part of the story. The Automated Clearing House (ACH) is a network of interconnected banks that allow for transfers between customers with accounts at different banks. You can send money to another person, as well as receive funds from them, even if you don’t share a bank.

ACH transfers usually take up to two business days to happen, although it’s possible that it can take a longer or shorter time. Financial institutions can pay for same-day transfer, although not all banks may offer this service to their customers. Because ACH transfers generally take a few days to transfer, if you need to transfer money sooner, you may want to explore other options.

Read on to learn more about ACH transfers.

What Is an ACH Transfer?

An ACH transfer is a way to electronically transfer money to or from another person who may have a checking or savings account at a different bank from you. One way to think about the ACH transfer system is that it’s the electronic version of writing a paper check.

When you send an ACH transfer, the money will generally be debited from your account when you make the transfer. The money may take one to three business days to go to the recipient’s bank account. The ACH transfer time is often quoted as taking two days; the transactions are processed in batches, which can help explain why they are not instantaneous.

Types of ACH Transfers

The ACH system classifies a few different internal routing and transaction codes, but most customers can think of two distinct types of ACH transfers: ACH debits (money coming out of your account) and ACH credits (money going into your account, or an ACH payment). Here’s a look at those two types of ACH transfers:

ACH Debit Transactions

An ACH debit transaction is where money is taken from your account and sent to an account at another bank. Common examples of ACH debit transactions might be recurring payments, online subscriptions or mortgage payments. When your account receives an ACH debit, your savings or checking account balance will decrease.

ACH Credit Transactions

An ACH credit transaction is the opposite of an ACH debit transaction. An ACH credit transaction is when another person or company sends money to your account. There are a variety of different scenarios where you might receive an ACH payment or credit.

•   You might get an ACH credit when you receive your direct deposit from your employer.

•   Social Security and certain other government payments can be ACH credits to your account.

•   An ACH credit will increase your bank account balance when you receive one.

How Long Does an ACH Transfer Take?

The ACH network processes ACH transfers several times a day, but it’s common that ACH transfers take one to two business days, or sometimes three. If you are scheduling an ACH debit to make an online bill payment, you’ll want to make sure to allow enough time before your bill is due.

You’ll also want to be aware of this processing time when receiving an ACH credit. Knowing that the credit will take that amount of time to clear can help you manage your account balance. It’s wise to be aware that ACH transfer time isn’t instantaneous, so you don’t risk drawing on funds that aren’t yet available. Otherwise, you could end up overdrafting your account.

Recommended: Guide to ACH Routing Numbers

Expediting ACH Transfers: Same-Day ACH Transactions

While most ACH transfers take a few business days, it is possible to expedite the process. Banks can pay an additional fee to process an ACH transaction on the same day. Your bank may or may not support a same-day ACH transaction. Additionally, it will depend on the financial institution and whether or not they pass that banking fee on to you.

Ask your bank’s customer service rep or check their details online or in their app to see what’s possible and if you need to pay a surcharge for this service.

Recommended: How to Stop or Reverse ACH Payments

The Takeaway

How long does an ACH transfer take? These electronic transfers, which allow money to be sent and received between customers at different banks, typically take around two days. ACH transfers make for a convenient way to send and receive money as compared to sending paper checks. It may be possible to pay for an expedited ACH transfer if you don’t want to wait a couple of days.

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

FAQ

What are the restrictions to external funds transfers?

Restrictions on external funds transfers may vary depending on your bank. Some banks may limit external transactions to $5,000 per transaction, $10,000 per day, and $50,000 per month, as one example. Check with your bank to see what restrictions might be in place for you.

What does ACH transfer cost?

Every financial institution that sends or receives ACH transfers must pay a fee to the National Automated Clearing House Association, which is the organization that governs and manages the ACH system. Depending on the bank, they may or may not pass these fees on to the customers who receive or send ACH transfers. Check with your bank to see how much an ACH transfer might cost you, especially same-day transactions.

Why is an ACH transfer not an instant transfer of funds?

Although it may be possible to pay for an expedited (same-day) ACH transfer, transfers do not happen instantaneously. The answer to “How long do ACH transfers take?” is usually a couple of days. Typically, ACH transactions are processed in batches vs. right away, which can explain the timing.

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Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, 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 Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

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