All You Need to Know About a Foreign Currency Certificate of Deposit

The Basics of an ACH Hold

If you ever see the phrase “ACH hold” when checking on your bank account, it can be helpful to know that this means funds are on hold, anticipating a completed electronic transfer.

ACH, which is short for Automated Clearing House, is a system that enables the electronic transfer of funds between accounts at different financial institutions. Both businesses and individuals may use this method to move money between bank accounts. When you grant a business or government the right to conduct an ACH debit (which is the electronic removal of funds from your bank account), you may see those words “ACH hold” on funds in your account, telling you that verification is taking place.

This may cause you to wonder if your bank account and financial affairs are in good shape. But there’s usually no need to worry. Here’s what you need to know about ACH holds on your account.

Key Points

•   ACH holds refer to funds being placed on hold in anticipation of a completed electronic transfer.

•   ACH stands for Automated Clearing House, a network used for electronic fund transfers.

•   Banks put ACH holds on accounts to verify funds availability before approving transactions.

•   ACH holds can last up to 24 to 48 hours and are typically processed in batches throughout the day.

•   If an ACH hold doesn’t clear within a few days, contacting the bank is necessary to resolve the issue.

What Is an ACH Hold?

So what does ACH hold mean? When a company or institution that you have authorized to make a withdrawal from your account submits an ACH debit, your bank will receive and acknowledge the transaction. At that point, the bank might place an ACH hold on your account. Here’s what is happening:

•   While there is a hold on your bank account for the amount of the ACH debit, you will not be able to use those funds for a purchase.

•   During the ACH hold, the bank is verifying that you have the funds in your account to cover the requested debit.

•   Once confirmed, your bank will deduct the money from your account.

•   If there are not adequate funds for a transaction, it could be rejected.

In such an instance, the ACH hold simply makes the funds you will owe unavailable before they are actually debited from your account.

On the flip side, you may sometimes notice a pending ACH credit in your account. Here’s a bit of detail about what that may represent:

•   If you open your mobile banking app a day before payday, you might see the pending direct deposit, but the funds are not yet available.

•   This means your employer has sent the money through ACH, but your bank has simply placed a hold until it can verify the transaction and push the funds through to your account.

Get up to $300 when you bank with SoFi.

No account or overdraft fees. No minimum balance.

Up to 3.80% APY on savings balances.

Up to 2-day-early paycheck.

Up to $2M of additional
FDIC insurance.


Understanding Automated Clearing House

ACH stands for Automated Clearing House, a U.S.-based network governed by Nacha (National Automated Clearing House Association). The system enables businesses and individuals to electronically debit (take money from) or credit (put money into) accounts.

ACH credit transfers are quite common today. For instance:

•   Examples of a company or government agency putting funds into an individual’s or company’s account include direct deposit payments from an employer to an employee, social security benefits, and tax refunds.

•   As an individual, you likely utilize ACH debit as well. If you have connected your online bank account to a peer-to-peer or P2P payment app like Venmo or Apple Cash and you utilize standard transfers, you are likely using ACH debit when you pay friends and family.

•   You may also use ACH when you enable autopay for bills each month, such as your mortgage, rent, or utilities. When you sign up for this kind of payment, those companies are using ACH debit to withdraw the necessary funds to cover your monthly payment.

But money does not go directly from one account to another. Before your direct deposit paycheck reaches your bank account — or your automatic payment reaches your landlord or the electric company — it goes through the clearing house, which batches payments multiple times a day. That means ACH payments are not immediate, though they can be same-day.

Recommended: What Happens if a Direct Deposit Goes to a Closed Account?

How Does an ACH Hold Work?

When an ACH hold turns up in your account, here are the steps that are typically going on behind the scenes:

1.    The ACH request is sent to your bank to debit or credit funds from/to your account.

2.    The bank receives the request and begins work.

3.    The bank puts a hold on the funds.

4.    The bank ensures the funds are available.

5.    The transaction is completed.

Recommended: ACH vs. Check: What Are the Differences?

How Long Does an ACH Hold Last?

There is not a set time that an ACH hold will last. ACH transfers are often processed in batches throughout the day, so if a transfer misses one batch, it likely waits for the next one. For this reason, ACH transfers typically occur in one or two business days.

For this reason, it’s unlikely a hold would last any longer than 24 to 48 hours.

Tracking Your ACH Hold

But what happens if the days are passing and an ACH hold doesn’t clear? This can be a major inconvenience, whether the transaction involved is an incoming paycheck or an outgoing bill payment.

Unfortunately, as the customer, you will not be able to resolve this on your own. You will need to to contact the bank and make an inquiry, giving them the pertinent details. This will likely include your account number, the amount of the ACH, and how long you have seen the hold in your account. If you are able to see any other specifics under a section such as “transaction details,” those can be helpful as well.

Tracking an ACH hold can be a wise move if a couple of days have passed (say, you are on day three) and the funds in question still have not cleared. Usually, by this point, the transfer would either have taken place or been rejected.

Why Do Banks Perform an ACH Hold?

ACH holds allow banks to verify that funds are in place before approving the transaction. For example, say your account has $100 in it, but a bill collector has initiated an ACH debit for $500. It will be in the bank’s best interest to place the hold on your account. Once the bank realizes that your account does not have the funds to complete the transaction, it will likely reject the ACH transfer.

This protects the bank’s assets, but it means you have an unpaid bill. In this example, you may also have to pay late fees in addition to the funds you owe. What’s more, the bank might charge you an ACH return fee. These fees can certainly add up.

It is a good idea to monitor your account closely and set up low-balance alerts. As a best practice, you might want to keep track of scheduled automatic payments via calendar reminders so your account balance is always high enough to cover charges.

Unauthorized ACH Holds

ACH holds can benefit you as well as your bank. For example, if you monitor your checking account closely and notice a pending ACH transaction that you weren’t expecting, you can contact your bank to learn more about the transaction.

If a person or entity is attempting to debit your account without your authorization, this could mean that your banking details have been compromised. Your bank will be able to help you with next steps to protect you from fraud.

Another scenario to consider: The Consumer Finance Protection Bureau (CFPB) advises that you can stop electronic debits via ACH by payday lenders. These payday loans are a way to get an advance on your paycheck. To curtail unauthorized account deductions, you must revoke their payment authorization (or ACH authorization) by calling and writing to the loan company and your financial institution or by issuing a stop payment order. Visit the CFPB website for sample letters .

Note: Stopping payment via ACH debit does not cancel your contract with payday lenders. You must still pay off the full balance of your loan, but you can work with the lender to determine an alternate method.

Keep in mind, however, that an ACH hold is typically part of a financial institution’s processing protocol and the end user (you) likely isn’t able to intervene. That said, if you’d like to try to remove the hold or cancel the transaction, you may contact your bank’s customer service representative to see if anything can be done.

Also, you can follow the steps above to revoke ACH authorization if the hold reflects an unauthorized transaction. That step may or may not cancel the pending transaction but can help curtail future debits that you don’t want to take place.

The Takeaway

ACH (or Automated Clearing House) holds work to protect banks during transfer processing. While delays may seem annoying at times, there are also pros to ACH holds for account holders. When a company initiates an ACH debit from your account, the hold allows the bank to confirm that funds are available to complete the transaction, which can ensure good flow of finances. Such holds also give you an opportunity to identify any unauthorized ACH debits, which is definitely a plus.

Having a bank that looks out for your best interests is also a major plus. If you’re looking for a new banking partner, see what SoFi has to offer.

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.


Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.80% APY on SoFi Checking and Savings.

FAQ

How long can a bank hold an ACH transfer?

When an entity, such as your employer or the government, issues you a direct deposit via Automated Clearing House (ACH) transfer, your bank must generally make the funds available for withdrawal by the next business day. However, weekends and bank holidays do not count as business days, so it may take a few days to get your money even after an ACH transfer has gone through.

How long does it take an ACH check to clear?

Financial institutions may be able to process Automated Clearing House (ACH) transfers in one to two business days or on the same day. However, a bank or credit union might hold onto transferred funds once it receives them, generally until the next business day.

What is the ACH hold check order fee?

Financial institutions may be able to process Automated Clearing House (ACH) transfers in one to two business days or on the same day. However, a bank or credit union might hold onto transferred funds once it receives them, generally until the next business day.


Photo credit: iStock/max-kegfire

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2025 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 3.80% 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. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 3.80% 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 members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

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 3.80% 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.

Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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.

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at sofi.com/legal/banking-fees/.
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.

SOBNK-Q125-019

Read more
The Complete Guide to Using Your Debit Card

The Complete Guide to Using Your Debit Card

A debit card is a payment card that is linked to your bank account. These cards can help you make purchases either online or in-store, as well as withdraw cash at an ATM. A debit card can allow you to breeze through your day, paying to pick up a few things at the store, then later grabbing some takeout for dinner.

Debit cards can also facilitate your financial life in other ways. But if you are new to using one, you may have questions. That’s where this guide comes in. Read on to learn:

•   What is a debit card?

•   How do you use a debit card?

•   When and where can you use a debit card?

•   What are the pluses of using a debit card?

What Is a Debit Card?

A debit card is a payment card that is typically linked to a bank account. These cards can be used in place of cash when making purchases.

Debit cards have many of the same characteristics as credit cards, such as a 16-digit card number, expiration date, and CVV or a similar code. In addition, they often use the same payment networks as credit cards, like Visa or Mastercard.

Usually, you will receive a debit card when you open a checking account at a bank. However, debit cards can be linked to other types of accounts in some cases, like a health savings account (HSA).

How Does a Debit Card Work?

You can use your debit card to make purchases in-store or online, or use it to withdraw cash. When you use it in a store, you can swipe, insert, or tap (provided the card supports contactless payments).

What distinguishes a debit card from other kinds of plastic is where the money comes from. While a credit card works like a loan you pay off over time, a debit card typically draws directly from your checking account. Hence, a debit card will be allied with the bank that holds your cash balance. Contrast that with credit cards, which you can open with any of a number of banks, even if you haven’t deposited cash there.

How to Use a Debit Card

Learning how to use a debit card is usually a simple process. In general, it’s a matter of transmitting your card’s information to a merchant or service provider. You can do this by swiping, inserting, or tapping your card. When making purchases online, you must provide basic information printed on your card. Typically, that means sharing the card’s number and three-digit code, along with other personal information.

In most cases, using a debit card is much the same as using a credit card. However, you often need to type in a personal identification number (PIN), while credit card purchases don’t usually require that.

Get up to $300 when you bank with SoFi.

No account or overdraft fees. No minimum balance.

Up to 3.80% APY on savings balances.

Up to 2-day-early paycheck.

Up to $2M of additional
FDIC insurance.


Ways That You Can Use a Debit Card

There’s no shortage of ways to use a debit card. You can use your debit card to make everything from in-store purchases to ATM withdrawals. As long as you have cash available, debit cards are a convenient way to pay.

•   In-Store Purchases You can typically pay with your debit card at an array of businesses in the United States, from the dry cleaner to your local yoga studio. Many debit cards have a Visa or Mastercard logo on them, which doesn’t mean they are credit cards but does indicate that they are likely accepted wherever those cards can be used.

   To pay, either swipe the card, insert it into a terminal, or simply tap your card near the sensor. You may or may not have to sign for the purchase. Also, you may be able to access features you don’t usually see with a credit card, like the ability to request cash back.

•   Online Purchases You can use your debit card for online purchases much the same way you would a credit card. Ordering flowers to send your mom on Mother’s Day? Or perhaps snapping up some new shoes on sale? Your debit card may well be accepted.

   At checkout, you’ll have to enter information like the name on the card, the card number, and the card’s expiration date.

•   At an ATM You can perform several tasks at an ATM using a debit card. These may include: withdrawing money, depositing cash at an ATM, depositing a check, viewing your balance, and transferring money. Usually, you must enter your PIN to complete a transaction.

Recommended: What Is a Cardless Withdrawal?

Debit Card vs Prepaid Card: What’s the Difference?

Debit cards and prepaid cards have many similarities, but they are not the same. The main difference is that debit cards are linked to a checking account, while prepaid cards must be loaded with money before you can use them.

There are pros and cons to prepaid debit cards. For instance, the fact that they aren’t linked to a checking account makes them a great gift. However, they can also come with high fees.

Here’s a side-by-side comparison of debit cards vs. prepaid cards:

Debit Card

Prepaid Card

Linked to checking account?YesNo
Reloadable?No. It’s linked to an account’s cash balanceTypically yes
FeesNot in many cases, though some checking accounts may have monthly feesYes. Many prepaid cards have monthly, transaction, and other fees
Minimum balance?VariesNo

Recommended: Breaking Down the Different Types of Debit Cards

Benefits of Using a Debit Card

Debit cards have a number of benefits that may make them a valuable part of your money management plan. Some of their benefits include:

•   Convenience: Most stores in the United States will let you pay with a debit card, making them an easy way to pay. Plus, you can use them in place of cash, so you don’t have to fumble through your wallet or purse for dollars and cents.

•   Cash back: Some stores let you request cash back when making a purchase with a debit card, saving you a trip to the ATM.

•   No interest charges: When you first get a credit card, you may realize that they are like a loan and so you will be charged interest on the money borrowed. Debit cards, however, don’t involve any such fees.

•   Limits overspending: When you compare debit cards vs. credit cards, you may realize that credit cards can lead to ringing up significant debt. With a debit card, you are drawing from your own cash balance, so you can only spend the cash you have on hand.

The Takeaway

Debit cards are typically provided when you open a bank account. They let you conveniently shop online or in-store. You can also use them to make deposits and withdrawals at an ATM. Debit cards are often branded as Visa or Mastercard, allowing you to use them at a broad array of merchants and service providers.

Getting a debit card can be an important factor when picking a bank. If you’re opening an online bank account, see what SoFi offers.

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.


Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.80% APY on SoFi Checking and Savings.

FAQ

What happens if my debit card is declined?

This depends on the reason it was declined. For instance, it could be that your bank suspects unusual activity or that you have an insufficient balance. Depending on the reason, you may have a hold placed on your card, overdraft protection might kick in, or your recurring payments might fail. Contact your bank to learn more.

Are debit cards better than credit cards?

Both debit cards and credit cards have their advantages, and one is not necessarily better than the other. Debit cards have benefits like a lack of interest charges, the inability to overspend, and the ability to request cash back at some stores.

What are the drawbacks of a debit card?

Perhaps the biggest drawback of a debit card is that it can make it more difficult to recover from fraud than credit cards, mainly because debit cards are tied directly to the cash balance in your checking account. Because credit cards don’t draw money directly, it’s easy to reverse a fraudulent transaction. Debit cards also lack the rewards and benefits that certain credit cards offer, and they don’t contribute towards your credit score either.

Where can I not use a debit card?

Many debit cards can be used anywhere that accepts Visa or Mastercard. That means you can use them at most stores. Some establishments, like independently owned restaurants or rental car agencies, may not let you use your debit card.


Photo credit: iStock/chabybucko

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2025 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 3.80% 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. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 3.80% 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 members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

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 3.80% 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.

Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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.

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at sofi.com/legal/banking-fees/.
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.

Third Party Trademarks: Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

SOBNK-Q125-017

Read more
Are Payment Apps Safe?

Are Mobile Payment Apps Safe?

Mobile payment apps are certainly convenient, and, when compared to other payment methods, they are quite safe. They allow you to make payments with devices like smartphones and smartwatches, and can be even faster than using a debit or credit card.

That said, you should know a few details before deciding to use a payment app and when deploying one in daily life to keep your hard-earned cash as safe as possible. This guide will help you with such questions as:

•   What are mobile payment apps?

•   Are mobile payments secure?

•   What are the pros and cons of mobile payments?

•   How do I use a mobile payment app?

Key Points

•   Mobile payment apps allow you to make contactless payments and conduct other financial transactions using your mobile device.

•   While no payment app may be 100% secure, mobile payment apps typically use a number of features to enhance security, including tokenization, encryption, and two-factor authentication.

•   To authenticate each transaction, a mobile payment app may require a PIN or use biometrics, such as a fingerprint or face ID.

•   There are steps mobile app users can take to help minimize risk, such as setting up payment notifications, enabling two-factor authentication, and allowing automatic updates, which might include security features.

•   Always double-check recipient details to avoid sending money to the wrong person or to potential scammers — once funds are transferred, it can be hard to get them back.

What Are Mobile Payment Apps?

Mobile payment apps enable contactless payments by waving a smart device at a payment terminal. This can be faster and touchless versus pulling out a debit card or credit card and then inserting it into a reader. In addition, mobile payment apps allow you to send and receive money with friends and family. These apps can be installed on devices like smartphones, smartwatches, and tablets. Many payment apps are available, but common choices include Apple Pay, Google Pay, Samsung Pay, and Venmo.

Some mobile payment apps have a wallet feature that allows you to store credit and debit cards and things like boarding passes and tickets. Instead of having to carry each card individually, you can load them all into your mobile wallet.

How Mobile Payments Work

Typically, mobile payment apps work by connecting directly to your bank account, debit card, or credit card. To connect the app to your checking account, you generally need to enter details like your bank’s routing number and your personal account number.

To link a debit or credit card, you’ll need basic information such as the card number, expiration date, and CVV (those few digits, often found on the back). Then, instead of paying with the card directly, you’ll use your device to pay using the payment app. Your device sends your necessary information via what’s known as near field communication (NFC) but without revealing your actual account numbers, which is a welcome security feature.

Benefits of Mobile Payments

Mobile payment apps have several benefits that can make them preferable in our increasingly connected world. Some of those benefits include:

•   Convenience: On any given day, you may find you need to carry a wide variety of cards. Not just credit cards and debit cards, but also things like loyalty cards, boarding passes, and sporting event tickets. All of these can be loaded into popular mobile payment apps, so you have everything you need in one place.

•   Security: When you wave your device to pay with your mobile app, it doesn’t share your card number. Instead, it generates a series of random numbers (called a token) for each transaction you make. Plus, mobile payment apps require you to enter a PIN (personal identification number) or authenticate with biometrics like a fingerprint or face ID with every transaction. So, even if someone gets access to your device, it’s unlikely they would be able to use it to make purchases.

•   Speed: Paying with a mobile payment app tends to be much quicker than having to open a “real” wallet, fish for the right card, then insert or tap to pay. This benefit may seem minor in the grand scheme of things, but it can make a big difference when you’re in a rush.

Are Mobile Payments Safe?

Usually, mobile payment apps are safe compared to other payment methods. Most of that safety comes down to the tokenization mentioned in the previous section. Not only are these tokens different from your card number, but they are also encrypted and unique for each transaction.

This renders “sniffing” of mobile payment data (a common hacking method) virtually useless. Indeed, mobile payments are usually safe in most scenarios in the same way that mobile banking is safe. However, this doesn’t mean mobile payment apps are completely guaranteed to never have security issues or other glitches.

Consider this scenario:

•   Most of these apps allow you to send money directly to friends and family to cover the portion of the meal you had together. To be sure, that can be more convenient than dealing with cash.

•   However, there may not be a lot of safeguards in place when you send money with a mobile payment app. If you have a new person in your friend group and you accidentally send money to the wrong person (whose username is just one letter or digit different), it can be difficult to get it back.

This shows that mobile payment apps are safer in some contexts but aren’t perfect. The answer to “Are payment apps safe” may never be 100% certainly “yes.” One good way to protect yourself from problems is to always check that your money is going to the right place when paying with a mobile payment app.

Get up to $300 when you bank with SoFi.

No account or overdraft fees. No minimum balance.

Up to 3.80% APY on savings balances.

Up to 2-day-early paycheck.

Up to $2M of additional
FDIC insurance.


Drawbacks of Mobile Payments

Like all technologies, mobile payments have their pros and cons. Here are a couple of the downsides:

•   While the popularity of mobile payments has rapidly expanded, there might still be some merchants that don’t accept them.

•   You may find that the payment terminal has a technical issue preventing it from accepting mobile payments. Thus, you might occasionally find you aren’t able to make a purchase by, say, waving your phone.

•   There are many different players in the mobile payments field, all of whom may have different policies. For example, the guidelines can be murky around things like data sharing. In addition, many mobile payment apps are available, which can create confusion as people navigate this new technology.

•   While rare, money scams and hacking involving mobile payments are possible.

Features of Payment Apps to Look Out For

Because there are so many mobile apps available right now, it can be helpful to look for certain features. Here are some key features to keep in mind:

•   Ease of use: One of the best aspects of mobile payment apps is they tend to be convenient and easy to use. If you find yourself struggling to link your cards or make payments, the app you are using may not be the best choice for you.

•   Security: The other great thing about mobile payment apps is that they sometimes provide greater security than credit cards alone. You’ll want to ensure your payment app has security features like two-factor authentication and PIN or biometric verification for purchases. It should also never display your full card number in your wallet or payment method screen.

•   Privacy: Privacy is increasingly an important part of any app’s policies, especially as more and more of our data lives online. However, it can be tough to know how your data is being used without diving into documents like the app’s terms of use and privacy policy. Still, it may be helpful to at least skim them if privacy is important to you. If the app sells your data to advertisers, it should be disclosed in these documents.

You may also feel safer going with a widely recognized mobile payment app, one that has many users and very positive reviews.

How to Use a Mobile Payment App

Each mobile payment app is different, but there are usually just a few steps to using one. Typically, this is how they work:

•   Start by downloading your payment app of choice. Or you may already have a payment app loaded on your device, like Apple Pay, Google Pay, or Samsung Pay.

•   Once you have your payment app on your device, link the payment card(s) you want to use with it. At this stage, you may have to complete a two-step verification process. For example, you might receive a verification code from your bank, or you may have to call the bank.

•   After completing the verification process with your bank, your payment app should be ready to use with your linked cards. You can use your payment app (or a contactless credit card) if you see the NFC symbol when you pay. There are a few different versions of the NFC symbol, but it usually shows an image of waves that increase in size.

•   Note that payment apps usually require you to add a PIN or biometric unlock (your fingerprint or face, for instance) to your phone and enter it before each payment.

•   Once you unlock and hold your device near the terminal, you will likely see an indication on your phone screen that the transaction is successful. You may also hear an alert sound. When that happens, ta-da: You’ve paid with your mobile payment app.

Recommended: How to Send Money to Someone Without a Bank Account

Tips to Safely Use Mobile Payment Apps

Although mobile payment apps can be safer than other payment methods, there are a few steps you should take to ensure they are secure:

•   Set up payment notifications: These will alert you to any payments on your card, so you will know immediately if someone gains access to your information.

•   Enable two-factor authentication: Two-factor authentication is an extra layer of security that makes it more difficult to gain access to your account. For example, you must enter a code from a text message or email to verify it after you link a payment card.

•   Enable automatic updates: Mobile payment apps frequently receive updates, which might include security features. Auto-update is often toggled on as a default setting, but double-check it’s enabled on your device.

   For instance, open the Google Play Store app on Android and tap the menu icon > Settings > Auto-update apps. On iPhone, open Settings > App Store and enable App Updates.

•   Check that you are sending money to the right person. It can be difficult to get your money back if you send it to the wrong person using a mobile payment app. Before sending money, double-check (and perhaps triple-check) the details on your screen match those of the person who should receive the money.

•   Beware of scams. Mobile payment apps are a common way for scammers to get money from unsuspecting victims. An easy way to prevent this is to avoid using a payment app to send money to people you don’t know.

Recommended: Key Features of Mobile Banking

The Takeaway

Mobile payment apps allow you to pay using a smart device like a smartphone, smartwatch, or tablet, and to do so in a fast, contact-free manner. They may also allow you to send and receive money with friends and family. These apps can be safer than other payment methods, like credit cards. However, they can sometimes be fallible, so you should always be careful when sending money.

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.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.80% APY on SoFi Checking and Savings.

FAQ

What are the pros and cons of mobile payment apps?

The pros of mobile payment apps include their convenience, security, and speed of payment processing. Cons include that they aren’t yet accepted everywhere and are sometimes used by scam artists.

Does card fraud happen on payment apps?

There have been some instances of card fraud on payment apps, like when scam artists use flaws in the app’s design to extract money from victims. However, thanks to features like tokenization (encryption of your personal financial information), most payment apps make fraud much more difficult.

Are payment apps stealing my information?

Some payment apps might use your information in certain ways, like capitalizing on it to market products or selling it to advertisers. However, these details are often laid out in the app’s policy documents.


Photo credit: iStock/Ridofranz

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2025 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 3.80% 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. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 3.80% 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 members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

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 3.80% 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.

Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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.

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.

SOBK1222025

Read more
woman with laptop on the floor

7 Different Types of Budgeting Methods

Budgets come in all shapes and sizes, from the old-fashioned, “write down everything you spend” approach to ones that use streamlined apps. There is likely at least one method out there that can help you gain insight and manage your finances effectively. Once a budget is up and running, it can help you wrangle your spending and reach your savings goals, too.

Here, you’ll learn about such budgeting options as the 50/30/20 rule, zero-sum plan, and envelope system. Everyone’s financial situation is different, and this list is in no way exhaustive, but it can be a solid start to taking control of your cash.

Key Points

•   Budgets can help provide insight and financial management by tracking income, spending, and saving.

•   Line-item budgets track detailed monthly expenses, aiding in precise financial control.

•   The 50/30/20 budget rule splits income into needs, wants, and savings, promoting balanced financial management.

•   The envelope system uses cash for categories, making it easier to manage and reduce spending, which the zero-sum budget assigns every dollar a purpose.

•   Tech tools, including those provided by financial institutions, can also play a role in effective budget management.

1. Line-Item Budget

A line-item budget is what you may first imagine when you think of a “typical” type of budgeting. You know the kind: a spreadsheet that lists out each expense by category. The goal with a line-item budget is to keep track of monthly expenditures so they don’t exceed spending targets.

Often, you’ll hear the term “line-item budgeting” in terms of business accounting. Businesses use this technique to track cash inflows and outflows. In your own personal budget, it might help you to do the same, keeping track of the money coming into your checking account and going out.

You can set up a line-item budget using a spreadsheet, whether you like to use pencil and paper or any of the online programs available, like doing a budget in Excel. You list each expense, or category of expenses, over a given time period such as a month or a year. As you progress throughout the year, you can compare current expenses to past expenses to make sure you’re on track.

Because a line-item budget is mostly used to track spending and not to prioritize saving, don’t forget to build a savings line-item into your list of expenditures.

Pros:

•   For new budgeters, this method is relatively easy to create and intuitive.

•   Because a line-item budget is detailed, it can be a good starting place for tracking expenses and can be helpful for those who require more control over their spending.

Cons:

•   Line-item budgets can be a bit rigid. They may not allow the flexibility to track irregular expenses. It will be up to the budgeter to make adjustments.

•   Because line-item budgets are simply a tracking methodology, they do not necessarily help the budgeter to reach savings and other financial goals.

•   Because a line-item budget is relatively detailed, it will be more time-intensive (and potentially frustrating) than some of the other methods.

2. Proportional Budgets

Proportional budgeting is a system where you divide up your monthly income into three categories, based on percentage. One pool of money is allocated towards “needs,” another towards “wants,” and lastly, and perhaps most importantly, towards savings and other money goals.

•   “Needs” are classified as spending that is required to stay alive and employed, such as housing, food, transportation to work, and insurance.

•   “Wants” are anything that you buy for personal enjoyment, such as eating out, traveling, and shopping for clothes (beyond basic needs). You may also hear these called discretionary expenses.

•   The “savings” category encompasses financial goals like building an emergency fund in, say, a high-yield online bank account; retirement; or paying down debt.

It is generally easiest to do this calculation with after-tax figures — also known as your take-home pay. There’s an example of one popular proportional budget below, the 50/30/20 budget, but you can set the amounts per category as you see fit.

Pros:

•   Proportional budgets can help the saver think about the big picture.

•   This is a simple type of budgeting that doesn’t get bogged down with minutiae. Thanks to its simplicity, it may help some budgeters stick with it.

•   Because proportional budgets focus on making room for saving, this budgeting method may work well for those who want to save money but don’t want to count every penny of spending.

Cons:

•   Proportional budgeting provides an end goal, but not necessarily a path to arrive there.

•   It might not work for someone who needs more help setting targets and identifying problem areas in their spending and/or saving.

3. Paying Yourself First

This no-nonsense budget revolves around one premise: Pay yourself first, and whatever happens with the rest isn’t as important. “Paying yourself first” simply means allocating money towards savings or other financial goals.

Say that you’ve decided that you want to save 25% of your take-home income. You set up an automatic contribution of 15% of your income to go towards retirement, 5% to a down payment fund, and 5% to a travel fund. For the remaining 75%, you’d spend as you wish.

Pros:

•   This budgeting method prioritizes saving, which is the desired end-goal for many people. It can help ensure that you stay on track, and there’s money you have after paying bills that can go toward future goals.

•   There’s no need to track all expenses, which can make this budget appealingly fast and easy for some people.

Cons:

•   This strategy probably won’t work for folks who are not yet ready to prioritize saving (such as those with too much debt to stash cash away for the future).

•   Some people may need a tracking technique with more insight into spending in order to save, such as a budgeting app.

•   There is a risk of overdrafting if too much is allocated towards saving and not enough towards spending. This budgeting strategy should only be used by those who are not at risk of having a negative bank balance.

Get up to $300 when you bank with SoFi.

No account or overdraft fees. No minimum balance.

Up to 3.80% APY on savings balances.

Up to 2-day-early paycheck.

Up to $2M of additional
FDIC insurance.


4. Envelope Budget

Here’s a different type of budgeting to consider: The envelope budget, a hands-on way to divvy up money and control spending. With the envelope budget, you have a set amount of cash to spend in each budget category per month. The pools of money are kept separate in different envelopes — hence the name.

The goal is to make the cash last all month. Once the envelope is empty, you’ll either be done for the month or will need to take cash out of a different envelope to pay for an expense.

How it works:

•   The first step to building an envelope budget is to determine the amount of after-tax income you have each month.

•   Next, you’d determine how much you’d like to allocate to each category of spending, such as “entertainment” and “groceries.”

•   After that’s done, you’d take cash out from the bank to keep in each envelope. No need to take all your envelopes full of cash with you every day — you can just take what you need or adapt the system to use your debit card, keeping careful track of your spending.

Pros:

•   Some studies show that people spend less when they use cash.

•   This budgeting method is a tangible, tactile plan to spend only the money you have available.

Cons:

•   The budget itself does not address saving.

•   Going to the bank each month to get cash can require extra time and effort. (You could, however, adapt this method for debit card use.)

5. Zero-Sum Budgeting

The idea here is to spend every dollar that you have. No, this doesn’t mean spend every dollar on anything you want. Instead, you would assign a specific purpose to each dollar that you earn, whether it’s for savings or discretionary spending.

It’s called a zero-sum budget because after you’ve picked a job for each dollar, you’ll end with zero leftover dollars. The theory behind the budgeting strategy is that dollars without a job will be spent carelessly.

To create a zero-sum budget:

•   Start with your monthly after-tax income.

•   Assign dollars to each of your non-negotiable bills, such as rent, insurance, student loan payments, and groceries.

•   Assess how much money you have left for discretionary spending and saving.

•   Then assign where your remaining money is going to go. Specificity can help: For example, say “dining out” and “Netflix” instead of “entertainment.” Say “retirement savings” and “extra payments towards debt” instead of “saving.”

Pros:

•   This budget requires you to think critically about every dollar you spend.

•   Done right, zero-sum budgeting makes room for savings goals.

Cons:

•   Because you are breaking spending down into small categories and assigning a dollar value, this budget requires more effort than some of the other budgeting systems.

6. 50/30/20 Budget

The book, “All Your Worth” by Sen. Elizabeth Warren and Amelia Warren-Tyagi popularized this variation on proportional budgeting, which calls for a 50/30/20 budget. Here’s the breakdown:

•   With your after-tax dollars, allocate 50% to “needs,” or expenses like housing, utilities, and food.

•   Put 30% to “wants,” which would include things like dining out, travel, premium streaming services, or some new artwork for your home’s walls.

•   The remaining 20% of monthly income has an important job: It goes toward savings goals.

Here’s how the benefits and drawbacks of this budgeting method stack up.

Pros:

•   This budget gives clear but flexible spending guidelines.

•   The 50/30/20 rule definitely emphasizes saving, which can be important to achieving short- and long-term goals.

Cons:

•   This budgeting system may not be detailed enough for some people, since it allocates money in broad strokes.

•   The 50/30/20 rule may not help identify areas of overspending, which can be an important aim for some budgeters.

Recommended: 50/30/20 Rule Calculator

7. 60 40 Budget

This is a different type of budgeting that also uses a proportional approach. The 60 40 budget is a very general way of managing your money. Here are this budgeting system’s principles:

•   The 60 represents 60% of your after-tax income, which is allocated towards the “musts” in life: food, shelter, utilities, debt, and other basic needs.

•   The 40 represents the rest of your income, to be allocated as you see fit. Some people like to subdivide this quantity into smaller buckets, such as 20% for non-essential spending (entertainment, dining out, etc.) and 20% for savings.

Here are the upsides and downsides of this plan:

Pros:

•   This budget provides a good deal of freedom and flexibility.

•   The simplicity of the plan can be a positive for people who don’t like complicated, time-consuming budgets.

Cons:

•   This budget rule may not provide enough guidance for those who really need to take control of their finances. For instance, it doesn’t offer a detailed way to track and rein in overspending.

•   The 60 40 plan leaves savings allocation up to the individual. That means some people could say they can’t afford to save and thereby sidestep this important path to achieving financial security.

Sticking to a Budget

You now have lots of ideas on different types of budgeting strategies that you can utilize. But next is the hard part — putting theory into practice. Here are some tips to consider as you embark on your budgeting journey:

Overcome Mental Barriers

Having financial discipline and sticking to a budget is difficult. If you are struggling with discipline, you might try these tactics:

•   Start by acknowledging the issue. Out loud. You can only fix a problem if it’s been identified.

•   Create space for yourself to succeed. For example, put a 20-minute block on your calendar to look over your budget every week.

•   Try anchoring the task of budgeting to another activity that you either enjoy (making coffee on Sunday morning). This way, you’ll start to associate the two tasks and think about them in tandem.

Set Realistic Expectations

A common pitfall when setting a budget is to be too restrictive in your spending targets right out of the gate.

While it’s great to have big goals, it is unlikely that you’ll make sweeping changes in your spending just because you set lofty targets. And in fact, missing big targets could be disheartening.

•   Instead, try to set yourself up for success by choosing realistic targets for the upcoming months. Increase or decrease those targets as you are able to amend your behavior.

•   Celebrate victories as they come. Pat yourself on the back for meeting a goal, and know that success in budgeting comes from making everyday adjustments to behavior.

Consider Irregular Expenses

No matter what methodology of budgeting you choose, there will always be the issue of irregular expenses. Irregular expenses can be both expected, like annual memberships or holiday gifts, and unexpected, like car repairs. Some ideas:

•   Find a place for the irregular expenses in your budget as you do for regular monthly expenses.

•   Create a list of possible and expected annual expenses even before you build out your monthly budget. That way, you can spread out the cost of large and irregular budget items across months.

•   It might also be helpful to build up an emergency fund to help cover for unexpected costs.

Stay Out of the Weeds

Don’t get overwhelmed by the details when budgeting. Some advice:

•   Avoid strategies that feel complicated or require hours of effort. You need a budget you will stick with, and that is likely one that suits your style and feels simple.

•   Test-drive a couple of budgets to see which suits you best.

•   Recognize that a budget is never going to be perfect. And that’s okay! If you are tracking every last dollar and go over in a category or two, it may feel like a failure when it’s not.

Recommended: How to Make Money From Home

Leveraging Technology

For some folks, a pen and paper method of tracking spending and keeping a budget will work best. Others may find this challenging, given how much of our lives have been moved to the computer. If so, you might consider the ways that technology can aid you in creating and sticking to a budget.

There are plenty of apps that can help you with budgeting and make tracking spending and saving easier. There’s a good chance that your financial institution offers one.

The Takeaway

Budgeting is a system that can help you track and manage your money better, which in turn can optimize your spending and saving. There are many different budgeting methods, and some popular ones include the 50/30/20 budget rule, the zero-sum system, and the envelope technique. Take some time experimenting to find the system that works best for you. A good budget and the right banking partner can help you along the path to financial wellness.

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.


Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.80% APY on SoFi Checking and Savings.

FAQ

What’s the best budget plan?

The best budget plan is one that works for you. In order to choose the best fit, consider your goals and needs. Some people want to control their spending and like a really detailed budget, such as a line-item budget. Other people are more focused on making sure they allocate funds towards savings, in which case a 50/30/20 rule could be a good option.

What is the simplest way to budget?

A basic budget typically requires the following: knowing your take-home pay, evaluating your “musts” (spending on basics like housing, food, and debt), tracking your spending on “wants” (dining out, clothes, travel), and allocating for savings.

What is the 50/30/20 rule budget?

In this popular proportional budget strategy, you divide your take-home pay into three buckets: 50% for the “needs” in your life (housing, utilities, food, debt); 30% for the “wants” (dining out, shopping for clothes and other items, entertainment); and 20% for savings (for, say, your emergency fund or retirement).


SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2025 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 3.80% 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. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 3.80% 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 members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

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 3.80% 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.

Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at sofi.com/legal/banking-fees/.
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.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

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

This content is provided for informational and educational purposes only and should not be construed as financial advice.

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.

Third Party Trademarks: Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

SOBNK-Q125-028

Read more
# Interesting Debit Card Facts

21 Facts About Debit Cards You May Not Know

You may have a debit card in your wallet and swipe, tap, or wave it over a terminal multiple times a day. But did you ever take a moment to think about what an impressive invention that little rectangle of plastic actually is?

Debit cards offer an extremely convenient payment method and are a relatively recent addition to banking services. To learn more about these handy payment cards, keep reading for 21 debit card facts.

Key Points

•   Debit cards are owned by over 90% of Americans, with more than 1.2 billion in circulation.

•   Visa and Mastercard dominate the market, with Visa handling over 60% of transactions.

•   Debit cards evolved from store credit systems, with magnetic stripes introduced in the late 1960s.

•   Metal and eco-friendly debit cards cater to premium and environmentally conscious users.

•   Potential fees associated with debit cards include out-of-network ATM usage and overdraft charges.

21 Interesting Debit Card Facts

Want to learn some interesting facts about debit cards? These are debit card facts that may surprise you.

1. Over 90% of Americans Have a Debit Card

Recent surveys reveal that over 90% of Americans have a debit card that’s typically linked to their checking account. That’s a lot of plastic! Many people have multiple debit cards. One report noted that there were at least 1.2 billion debit cards in the U.S.

2. Most Debit Cards Have a Familiar Logo

Many debit cards feature the Mastercard or Visa logo, even if your bank sends you the card. This means those two familiar card issuers’ networks can help support the transaction.

Over 60% of debit card transactions are run on Visa-branded cards, making them the most popular of the players.

3. Debit Cards Followed Store Credit

Who came up with the ingenious idea for a debit card? Store cards likely sparked the idea. Before debit and credit cards launched, if someone didn’t want to make payments in cash (or couldn’t afford to), they often had the option to use store credit. U.S. banks actually got the idea for debit cards from the store credit system in the 1940s.

Recommended: How to Earn Passive Income

4. Magnetic Stripes Debuted in the Late 1960s

Magnetic stripes quickly became the preferred method for making plastic cards machine-readable in the late 1960s. In early 1971, the American Bankers Association (ABA) endorsed the magnetic stripe — also known as the magstripe — to make plastic debit cards readable on a machine. This helped usher in a new era of convenience, although debit cards were originally better suited for withdrawing cash from an ATM than shopping.

5. Magnetic Stripes Are on the Decline

Nowadays, magnetic stripes are becoming less popular as new technologies evolve. By 2033, Mastercard doesn’t plan to use magnetic stripes on their debit or credit cards at all anymore.

6. Kids Can Get Debit Cards

While 18 is usually the minimum age to open a bank account, some kids’ accounts come with debit cards. Chase offers a First Banking account with a debit card for those ages six to 17, and Greenlight and Acorn Early also offer debit cards for young customers.

7. Metal Debit Cards Exist

While many of us are accustomed to plastic debit cards, some issuers make them out of metal. For instance, N26, an online bank overseas, offers premium banking clients a card made of 18 grams of stainless steel, in three different metallic shades.

8. Some Debit Cards Are Going Green

Starting in 2023, Bank of America is beginning to use recycled plastic for all of its debit and credit cards. This move is aimed to help reduce the amount of single-use plastics by 235 tons. It’s a good example of green banking at work.

9. Most People Have Daily Debit-Card Spending Limits

There may be exceptions to the rule, but most debit cards come with limits about how much you can swipe per day. These limits are typically between $200 and $5,000 per day, or higher still. Check your agreement with your bank to find your financial ceiling.

Recommended: Guide to Paying Credit Cards With a Debit Card

10. The Public Resisted Debit Cards Initially

At first, people said a big “thanks, but no thanks” to debit cards. In 1972, a report commissioned by the Federal Reserve Bank in Atlanta found that the majority of the public didn’t support any kind of electronic payments system. Times have certainly changed.

Get up to $300 when you bank with SoFi.

No account or overdraft fees. No minimum balance.

Up to 3.80% APY on savings balances.

Up to 2-day-early paycheck.

Up to $2M of additional
FDIC insurance.


11. You Can Customize the Photo on Your Debit Card

Do you like expressing yourself? Some financial institutions will let you put the photo of your choice on your debit card. For instance, Wells Fargo shows an example of putting an image of a furbaby on their debit card.

12. A West Coast Bank Released the First Debit Card

Debit cards made their debut in 1978, thanks to the First National Bank of Seattle. However, some say an early forerunner was introduced in the 1960s by the Bank of Delaware and should get credit as the true pioneer. Either way, it shows debit cards have been around for a while.

13. Debit Cards May Carry Fees

While you won’t rack up debt and charges the way you could with a credit card, not all debit card transactions are free. For instance, if you use your debit card to get cash at an out-of-network ATM, you might get hit with a charge. Or if you overdraw your account, you might get a fee similar to those incurred when you bounce a check. Check your account agreement or ask a bank rep for details. You may find that online banks charge no fees or lower fees than traditional ones.

14. UK Banned All Debit Card Surcharges

Originally, debit cards in the UK came with fees, such as processing charges. However, in 2018, the UK government banned any surcharges on debit cards which makes it possible to use them for a transaction of any size, even super small ones, without fees being added.

15. Chip Technology Leads to Contactless Payments

During the pandemic, contactless payments surged in popularity. This was made possible by chip technology. With chip technology, consumers can simply hold their debit card over a payment terminal to make a payment. There’s less risk of passing germs around via touch.

16. Chip Technology Doesn’t Require a PIN

Not only does chip technology make it possible to skip entering a debit card physically into the payment terminal, the use of a PIN may not be required.

17. You Can Be Liable for Charges on a Lost Debit Card

There’s a downside to the convenience of debit cards. If yours is lost or stolen, the Federal Trade Commission (FTC) you’ll be liable for:

•   $0 if reported immediately and before any unauthorized charges are made

•   Up to $50 if you notify the bank within two days

•   Up to $500 if you notify the bank within 60 days after your statement was issued showing unauthorized usage

•   Unlimited if you don’t notify the bank within 60 days of the statement showing unauthorized usage being issued.

Recommended: Savings Account Calculator

18. Some Debit Cards Can Be Used Worldwide

Having a debit card from a well-known issuer like Mastercard or Visa has some benefits. For example, because these two card issuers are so popular, they are accepted as a form of payment in most countries. This can make payments much easier for global travelers. That said, be wary of possible international conversion fees (possibly 1% to 3% of the amount you swipe) plus foreign ATM usage charges.

19. There Were Three Major Players Until 2002

Until 2002, there were three main players in the debit card space. Alongside Mastercard and Visa, Europay was the other big player. In 2002, Europay merged with Mastercard.

20. Debit Cards Are More Popular than Credit Cards

Consumers have the option to use debit cards or credit cards if they don’t want to have cash on them when shopping or if they are shopping online. In one recent study, debit cards were found to be used almost twice as often as credit cards.

21. People Spend Less With Debit Than Credit Cards

While people may use debit cards more often than credit cards, they tend to spend more when using credit cards (almost 30% more), whether purchasing in person or shopping online.

The Takeaway

There’s a whole array of interesting facts about debit cards, from how they were developed to how they are made to how they can be used. What may stand out most among these 21 debit card facts is just how far payment technology has come in recent years and how much more convenient purchasing has become. As a key part of a bank account’s features, debit cards have unlocked new ease when spending.

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.


Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.80% APY on SoFi Checking and Savings.

FAQ

Are debit cards more popular than credit cards?

Debit cards tend to be more popular than credit cards for in-person purchases, while credit cards are used more often for online spending.

What is the difference between debit and prepaid cards?

The main difference between debit and prepaid cards is where the funds for payment come from. A debit card is linked to a bank account, but a prepaid card is not. Consumers need to load money onto a prepaid card before they can use it. Once they do so, that amount acts as their spending limit.

What debit card is the most popular?

Most banks offer their own debit card, but the majority of these are backed by one of two issuers, Visa or Mastercard. Currently, Visa is the more popular issuer.

What debit card fact is the most useful?

The most useful debit card fact to know could be either that you have a daily spending limit or that you must report a lost or stolen debit card ASAP to avoid being liable for any unauthorized usage. The longer you wait, the more you might owe.


Photo credit: iStock/Daisy-Daisy

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2025 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 3.80% 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. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 3.80% 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 members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

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 3.80% 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.

Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at sofi.com/legal/banking-fees/.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

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.

Third Party Trademarks: Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

SOBNK-Q125-030

Read more
TLS 1.2 Encrypted
Equal Housing Lender