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Even people who closely monitor their spending might go over budget now and then. What’s important is how they handle getting back on track.

If you go over your budget, there are a few different steps you can take to get back on course. And combining some of them might help speed up the budget repair process. Here’s what you need to know.

Keep an Eye on Spending

Reviewing account balances and statements once a week is an easy way to keep track of money coming in and money going out. A few big purchases can easily upset an otherwise balanced budget.

Waiting until the end of the month to check in on accounts leaves you at risk for excess spending and potentially overdrawing a checking account or having a higher credit card bill than you anticipated.

Checking in once a week leaves time to self correct and adjust the budget to help balance the numbers.

Identify What Went Wrong

Going over budget sometimes means there’s uncertainty about where the money went. Overspending can mount quickly, putting the budget out of balance. It might only take a few extra additions to your grocery cart, an unexpected car repair, or a couple of splurge purchases.

When there is general overspending or if it’s just in a specific budgeting category, looking at recent bills and credit card statements might help identify where the money was spent. Were there too many restaurant meals, increasing food spending as a result? Was there too much temptation to shop online sales? Identifying budget lapses can make it easier to avoid them in the future.

💡 Quick Tip: Help your money earn more money! Opening a high-yield bank account online often gets you higher-than-average rates.

Cut Unnecessary Expenses Temporarily

When a budget is too restrictive, it can feel punishing. A budget can account for the unnecessary spending that makes life fun like travel, dining out, shopping, gifts, and beauty treatments. If these expenses create a problem in the budget, you can temporarily cut back on those categories. Once your budget is balanced again, those expenses can be put back into the mix. Balance is key.

Use a Budgeting Tool

A free budget planning app can help you customize your spending categories and even keep track of your bills. It will send you updates on your progress and let you see where your earnings and spending go each month. This can make creating a realistic budget even easier.

Build an Emergency Fund

One thing you can do to get back on track after going over budget is to make sure you have an emergency fund for financially difficult situations, such as expensive medical bills or necessary home repairs.

Emergency funds can also be used to prevent emergencies. For instance, an emergency fund might provide extra support if a debt payment is at risk of being paid late, which could incur fees and interest and add to your debt load.

💡 Quick Tip: If you’re faced with debt and wondering which kind to pay off first, it can be smart to prioritize high-interest debt first. For many people, this means their credit card debt; rates have recently been climbing into the double-digit range, so try to eliminate that ASAP.

Explore Different Budgeting Techniques

Sometimes the trick to sticking to a personal budget—or bouncing back after going over that budget—is to try a different budgeting method. Not all methods work for all personality types. Take some time to find the right budgeting fit, even if the first few rounds don’t go according to plan. There are a few different popular budgeting methods that might help someone get their budget back on track, such as:

1. Line-item budget. This is probably what most people think of when they think of a budget. With a line item budget, the income and expenses are usually in a spreadsheet format where each expense is listed by category with the goal being not to exceed spending targets in any of the categories.

2. Proportional budget. This type of budgeting system requires dividing monthly income into three categories—needs, wants, and savings—based on percentages. The budgeter will allocate a spending percentage to each category and aim to stick to that budget. A common proportional budget is the 50/30/20 budget, with 50% of income going to needs, 30% to wants, and 20% to savings.

3. Paying-yourself-first budget. For those who want to keep their budget simple, this method is pretty straightforward. You simply “pay yourself first” which means you put money towards savings or financial goals first (perhaps 25% of your take-home income). Then you can spend the rest of your income exactly as you need or wish to.

4. Envelope budget. This technique provides a hands-on approach to spending that can be helpful for people who tend to swipe their credit card without fully realizing the potential consequences. With the envelope method, you use envelopes to hold cash that represent different spending categories. You then make all your purchases for the month in cash. If an envelope runs out of money, spending in that category stops until the next month — unless you borrow money from another envelope, limiting spending in that category.

5. Zero-sum budgeting. With zero-sum budgeting, you “spend” every dollar you have, allocating each one to a specific purpose, like adding money to your savings account. Once every dollar is allocated, there are zero leftover dollars, hence the name zero-sum budgeting.

Recommended: 15 Creative Ways to Save Money

Cut Out Temptations

Temptations happen, and it’s generally better to learn from budget mishaps than agonize over them. However, if there is a certain temptation that seems to rear its ugly head again and again while wreaking havoc on your budget, it might be time to send that temptation packing.

Common Triggers of Overspending

There are many things that might trigger overspending, but some common ones to look out for might be:

•   Email sale and coupon promotions

•   Social media advertisements

•   Friends who pressure others to spend

•   Grocery shopping when hungry

•   Shopping when emotional

•   Shopping as a reward

💡 Quick Tip: When you feel the urge to buy something that isn’t in your budget, try the 30-day rule. Make a note of the item in your calendar for 30 days into the future. When the date rolls around, there’s a good chance the “gotta have it” feeling will have subsided.

Launch a Side Hustle

For someone who wants to get their budget back on track, a side hustle can be one way to bring in more cash and maybe even build valuable career skills and opportunities. Launching a side hustle might allow you to pursue a passion outside of your day job while benefiting your budget.

The Takeaway

Sticking to a budget can be challenging. If you go off track, don’t beat yourself up over it. Instead, determine what went wrong and how you can prevent it from happening in the future, cut your expenses for a few weeks, and figure out the best method to get your spending and savings back on track. You may even want to try another type of budget that could be easier to follow going forward.

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

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

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

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

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

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

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

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.

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

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.

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More than 80% of Americans now use some form of contactless payment, such as a contactless credit card or debit card or a digital wallet feature. Tapping your card or phone when making a purchase has become much more common since the Covid-19 pandemic, and the growth of contactless payment is projected to continue.

While contactless payments have a number of benefits, there are also a few drawbacks to this payment method that it’s important to know about.

How Do Contactless Payments Work?

Contactless payment was born out of the credit card chip. Before then, most cards used the magnetic stripe, and consumers had to swipe at checkout.

When a chip card is inserted into a payment terminal, the machine reads the card’s security information, completing a safer transaction than the old swipe method. The payment terminal uses RFID (radio-frequency identification), to read the card’s chip.

When payment terminals were upgraded to read the chips, the technology grew by leaps and bounds. The tech that reads chips also enabled machines to accept payment with a simple tap from a card, phone with a mobile wallet, or even a watch.

Consumers can now connect their credit cards to their phone or smartwatch using technology like Apple Pay or Google Pay. Then they can tap to pay from their phone or watch at checkout.

💡 Quick Tip: Make money easy. Enjoy the convenience of managing bills, deposits, transfers from one online bank account with SoFi.

What Transactions Are Eligible for Contactless Payment?

For contactless credit card payment to work, both the terminal and card have to have the technology.

To determine if a payment terminal is contactless payment enabled, check for the symbol that looks like a WiFi signal turned on its side next to a hand with a card in it.

Nearly all plastic forms of payments, debit cards, and credit cards have a chip, but not all are eligible for contactless payment. To determine if your card is, look for the WiFi signal turned on its side somewhere on the card.

Pros of Contactless Payment

Contactless payment comes with some pros for the cardholder:

•   Ease of use. With contactless payment, users just have to tap their chosen payment method on the terminal. There’s no swiping or inserting for the transaction to go through.

•   Speed. Since there’s no swiping or inserting, contactless payments tend to be faster.

•   Leave the wallet at home. If smartphone users have uploaded their credit and debit card information to their phone, they can pay for things using their phone.

•   Security. Contactless payment with chips is more secure than traditional magnetic-strip credit cards. Contactless payments are encrypted. This system makes it much harder for credit card scammers to steal people’s credit card information.

•   Hygiene. Dollar bills are dirty and can serve as host to germs. Alternatives like contactless payments keep touching to a minimum.

Overall, contactless payment may make for faster transactions, and might not even require you to pull out your wallet.

💡 Quick Tip: When you feel the urge to buy something that isn’t in your budget, try the 30-day rule. Make a note of the item in your calendar for 30 days into the future. When the date rolls around, there’s a good chance the “gotta have it” feeling will have subsided.

Cons of Contactless Payment

However, just like mobile banking has pros and cons, contactless payments do have some drawbacks, including:

•   Glitches in technology. A card and point-of-sale system might not line up from time to time, resulting in glitches.

•   It’s not available everywhere. While contactless payment is being adopted more and more, not every store has it. If there’s no symbol, customers will have to insert or even swipe to pay.

•   Privacy. Contactless payment is generally secure, but when customers use payment apps on their smartphone or watch, they may be unknowingly sharing data from their device. In addition, scammers may also be able to skim a user’s credit card information from close proximity. You can buy protective sleeves and wallets to help prevent this.

•   Limited transactions. It largely depends on bank policies, but because tap to pay doesn’t require authentication like signing or a PIN, there may be limits on withdrawals and purchase amounts. For more details on transaction limits, contact your bank or credit card company.

Recommended: Guide to Keeping Your Bank Account Safe Online

The Takeaway

While contactless payment isn’t foolproof, it can make purchasing transactions faster, easier, and more convenient. It’s also becoming commonplace as a payment method, and it’s more secure than cards with magnetic stripes. You can weigh the pros and cons of contactless payment to determine if it’s right for you.

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

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

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

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

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

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

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

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

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

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Opening a certificate of deposit (CD) account is one way to save for short- or long-term financial goals. You can deposit money, then earn interest for a set term until the CD maturity date rolls around.

At that point, you’ll have to decide whether to continue saving or withdraw the money. Your bank may renew the CD automatically if you don’t specify what you’d like to do with the account.

Understanding CD maturity options (and there are several) can help you decide what to do with your savings once the term ends. Here, learn more about:

•   What happens when a CD matures

•   What you can do with your CD when it matures

•   What to do if you miss the grace period to withdraw funds

•   What are the tax implications when a CD matures

What Can I Do When My CD Matures?

A certificate of deposit is a time deposit account. That means you make an initial deposit which earns interest over a set maturity term. You’re typically not able to make additional deposits to your CD, though some banks offer what are known as add-on CDs that allow you to do so.

You are not supposed to withdraw any or all of the funds until the CD matures; you’ve committed to keeping your cash there. That’s why CDs may pay a higher annual percentage yield (APY) than a conventional savings account.

Early withdrawal can trigger penalties, though there are some penalty-free CDs available, typically at a lower interest rate.

So what happens when a CD matures? It largely depends on your preferences, but there are four main possibilities for handling a CD once it reaches maturity.

Deposit It Into a Different Bank Account

If your financial goals have changed or you’d just like more liquidity when it comes to your savings, you could deposit CD funds into a bank account. For example, savings accounts and money market accounts are two types of deposit accounts that can earn interest.

You might deposit funds at the same bank or at a different bank if you’re able to find a higher rate for savings accounts elsewhere. Or you may choose to put your CD savings into checking if you were saving for a specific purchase and the time has come to spend that money.

Quick Money Tip: If you’re saving for a short-term goal — whether it’s a vacation, a wedding, or the down payment on a house — consider opening a high-yield savings account. The higher APY that you’ll earn will help your money grow faster, but the funds stay liquid, so they are easy to access when you reach your goal.

Deposit It Into a New CD

Another option is to continue saving with a new CD. You might prefer a certificate of deposit vs. savings account if you know that you won’t need the money prior to the CD maturity date.

Otherwise, you could end up paying a CD withdrawal penalty, as noted above, if you need to break into the new CD before it matures. The penalty for withdrawing money from a CD early can vary from bank to bank but it could cause you to forfeit a significant portion of the interest earned.

Automatically Renew the CD

Banks can renew CDs automatically if the account owner doesn’t specify that they’d like to make a withdrawal at maturity. In that case, your initial deposit and the interest you’ve earned would be moved into a new CD that would begin a new maturity term of similar length. The interest rate might be different, however, if rates have increased or decreased since you initially opened the account.

Continuing to save in CDs (or a savings account) can keep your money safe. When accounts are held at a FDIC-member bank, they’re protected up to $250,000 per depositor, per account ownership type, per financial institution by the Federal Deposit Insurance Corporation. If you choose to have a CD at an insured credit union, NCUA (the National Credit Union Administration) will provide similar insurance. So if you’re wondering, “Can CDs lose money?” fear not. You can rest assured knowing your savings are covered.

A point worth noting: When you invest in CDs, their security can make them a good way to balance out your holdings. They can be a wise move if you have some funds in the stock market or other more volatile uninsured investments.

Withdraw CD Savings In Cash

A fourth option is to withdraw your CD savings in cash. That might make sense if you need the money to pay for a large purchase. For example, if you were using a CD to save money so you could buy a car, you might use the proceeds to cover the cost.

How Long Do I Have to Withdraw My CD?

Banks typically offer a grace period for CDs which allows you time to decide what you’d like to do with the money at maturity. The CD grace period is usually around 10 days (say, one to two weeks), and the clock starts ticking on the day the CD matures.

Your bank should notify you in advance that your CD maturity date is approaching so you have time to weigh your options. You may also be able to find your CD maturity date by logging in to your account or reviewing your account agreement.

It’s important to keep track of CD maturity dates, especially if you have multiple CDs with varying terms. For example, you might build a CD ladder that features five CDs with maturity terms spaced three, six, nine, 12 and 18 months apart. Being aware of the dates and grace periods can help you plan in advance which of the maturity options mentioned earlier you’d like to choose.

What Happens If I Miss the Grace Period to Withdraw?

Once the CD grace period window closes, you’ll generally have to wait until maturity to make a withdrawal. As mentioned, banks can impose an early withdrawal penalty if you take money from a CD ahead of schedule.

The penalty may be a flat fee, but it’s more common for the fee to be assessed as a certain number of days of interest. The longer the maturity term, the steeper the penalty usually ends up being. For example, you might have to pay three months’ worth of interest for withdrawing money early from a 6-month CD but that might get bumped up to a year’s worth for a 5-year CD.

There is one way to get around that. If your bank offers a no-penalty CD, you’d be able to withdraw money at any time during the maturity term without paying an early withdrawal fee. There is something of a trade-off, however, since no-penalty CDs typically offer lower interest rates than regular CDs.

Things to Think About When Your CD Matures

If you have one or more CDs that are approaching maturity, it’s important to have a game plan when deciding what to do with them. Otherwise, you could end up locked in to a new CD which may not be what you want or need.

Here are a few things to consider when weighing your CD maturity options:

•   Do I need the money right now?

•   Could I get a better rate by moving the money to a new CD or savings account elsewhere?

•   If I let the CD renew automatically, how much of a penalty would I pay if I decide to withdraw the money early later on?

•   Would it make more sense to keep the money in a savings account so that it’s more accessible if I end up needing it?

•   If I have multiple CDs in a CD ladder, does it make sense to roll the money into a new CD “rung” or use the funds for something else?

Thinking about your financial goals and your current needs can help you figure out which option might work best for your situation.

What Are the Tax Implications Once a CD Matures?

Here’s one more question you might have about CD maturity: Are CDs taxable? The short answer is yes. Interest earned from CDs is considered taxable interest income by the IRS if the amount exceeds $10. That rule applies whether the bank renews the CD, you deposit the money into a new CD or savings account yourself, or withdraw the money in cash. If you have a CD and it accrues more than $10 in interest, those earnings are taxable.

Your bank should send you a Form 1099-INT in January showing all the interest income earned from CDs (or other deposit accounts) for the previous year. You’ll need to hang onto this form since you’ll need it to file taxes. And if you’re tempted to just “forget” about reporting CD interest, remember that the bank sends a copy of your 1099-INT to the IRS, too.

The Takeaway

CDs can help you grow your money until you need to spend it. Assuming your goals line up with your CD maturity dates, that shouldn’t be an issue.

On the other hand, you might prefer to keep some of your money in a savings account so you have flexible access. When you open an account with SoFi, you can get Checking and Savings (and the ability to spend and stash your cash) in one convenient place. You’ll earn a competitive APY on balances, and you won’t pay any of the usual account fees. Those are two features that can really help your money grow and work harder for you!

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

FAQ

Which should you do when your CD matures?

When a CD matures, you can roll it into a new CD, deposit the funds into a savings account, allow the CD to renew, or withdraw the money in cash. The option that makes the most sense for you can depend on your financial goals and whether you have an immediate need for the money.

Do you have to pay taxes when your CD matures?

Interest earned on CDs is taxable. Your bank will issue you a Form 1099-INT in January showing the interest earned for the previous year. You’ll need to keep that form so you can report the interest earnings when you file your annual income tax return.

Are there penalties if you withdraw a CD early?

Banks can charge an early withdrawal penalty for taking money out of a CD before maturity. You may pay a flat fee or forfeit some of the interest earned. The amount of the penalty can vary by bank and by CD maturity term. Generally, the longer the maturity term, the higher the penalty ends up being.

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Photo credit: iStock/PIKSEL

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.

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

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

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

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

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

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

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

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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In most parts of the United States, people move their clocks back by one hour in the fall and move them forward by one hour in the spring. Many people have been doing this their entire lives, yet they don’t fully understand it. Perhaps still worse, many don’t know just how expensive daylight savings time can be.

Here, learning more about this topic, including:

•   What is daylight savings time?

•   What are the benefits of daylight savings time?

•   How much does daylight savings time cost Americans?

•   What would happen if daylight savings time was eliminated?

What Is Daylight Savings Time?

Daylight saving time (DST), commonly known as daylight savings time, refers to moving clocks forward one hour in the spring and back one hour in the fall. You may be used to hearing this referred to as “spring forward, fall back,” which is the clever phrase people often use to help them remember which way to reset the clock.

The idea behind DST is to sync times of activity (work and school, for instance) with daylight, so less energy is needed for artificial illumination. Using less energy is, in turn, a way to live more sustainably.

A couple of bits of DST trivia:

•   New Zealand entomologist George Hudson was the first to propose daylight saving time in 1895. Major countries adopted the standard shortly thereafter.

•   The United States adopted DST with the Standard Time Act of 1918 and later with the Uniform Time Act of 1966.

While most states observe daylight saving time, there are some exceptions. For instance, it is not observed in Hawaii and most of Arizona. It is also not observed in Guam, American Samoa, Puerto Rico, the Virgin Islands, and the Northern Mariana Islands. The places in the U.S. that don’t have DST generally have a lot of sunlight year-round, making the practice far less appealing.

Countries around the world observe daylight saving time as well. That includes most of Canada and Europe, plus parts of Asia and South America.

Recommended: The Benefits of Automating Your Finances

Who Benefits From Daylight Savings Time?

Given that daylight savings time has been a fact of life for many years, you might wonder why exactly it exists. What are the pros of this system? Here are some answers:

•   Typically, daylight savings time is credited with saving energy. Proponents of DST say it reduces energy usage, thus improving the financial health of the country.

One study from the Department of Energy showed that daylight saving time leads to a mere 0.5% reduction in energy usage, however. And economist Kurt Rankin notes the evidence around reduced energy usage is inconclusive, with some studies asserting that there would be no economic impact of daylight savings time on energy usage at all.

•   A common belief is that industries like tourism and retail might benefit from daylight saving time. The idea is that more hours of daylight in the warm months incentivizes more people to give these businesses their patronage. Again, though, there is debate about the efficacy of this. Rankin says there is no evidence to support this claim.

•   There could be certain social benefits of daylight saving time, such as a reduction in robbery and sexual assault. Longer days mean people spend less time outside after dark, which might reduce these crimes.

How Much Does Daylight Savings Cost Americans?

Now that you know what daylight savings time is and its goals, here’s some intel on the other side of the story: What is the cost of daylight savings time?

The exact cost (or benefit) of daylight saving time is difficult to estimate because there are many variables. A frequently cited study places the cost at $430 million annually, a figure that could lead to significant money depression. The research credited the time change with lowering productivity and increasing health issues.

But the true cost can be tough to estimate. Part of the difficulty of estimating the cost of DST is that the impact is not the same for everyone. For instance, some industries, such as agriculture, are negatively impacted by DST. But others, like tourism, sports, and retail, believe daylight saving time helps their businesses.

Daylight saving time can also lead to reduced productivity for workers after they spring ahead and lose an hour of sleep. Sleep experts say the change in sleep patterns can affect people’s circadian rhythm for weeks. While also difficult to measure, the cost of lost sleep can be significant.

Recommended: Tips for Saving Money Daily

What Would Happen if Daylight Savings Time Was Removed?

The immediate impact of removing daylight saving time is that clocks would stay the same year-round. No longer would you fall back in November and spring ahead in March. This could help keep sleeping patterns more consistent year-round, potentially increasing quality of life.

Without DST in the United States, you would also enjoy light later in the day in the winter months. However, the sun would rise later, which could mean groggy mornings. The inverse would be true for the summer. The sun would rise very early in the morning, but it would also set earlier.

(In parts of the world that are close to the equator, the length of days is not as varied throughout the year. Thus, changing the clocks would have little impact on these parts of the globe.)

Some groups suggest there could be a real benefit to removing DST for office workers. For instance, one study from the University of Alabama Birmingham suggests losing an hour of sleep in the spring increases the risk of heart attack. While some say DST contributes to increased traffic accidents and deaths, others say the difference is insignificant.

As you see, there are many viewpoints to consider in this debate about DST.

The Takeaway

Daylight saving time, or DST, involves setting the clocks back one hour in the fall and forward one hour in the spring. There is a debate about the value of this system, which is designed to provide daylight when it’s needed most. Some believe it boosts productivity; others say the cost of daylight savings time in the U.S. is actually hundreds of millions of dollars. In addition, there is a debate about the potential health impacts of changing the clocks.

3 Money Tips

1.    Typically, checking accounts don’t earn interest. However, some accounts do, and online banks are more likely than brick-and-mortar banks to offer you the best rates.

2.    If you’re creating a budget, try the 50/30/20 budget rule. Allocate 50% of your after-tax income to the “needs” of life, like living expenses and debt. Spend 30% on wants, and then save the remaining 20% towards saving for your long-term goals.

3.    When you overdraft your checking account, you’ll likely pay a non-sufficient fund fee of, say, $35. Look into linking a savings account to your checking account as a backup to avoid that, or shop around for a bank that doesn’t charge you for overdrafting.

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

FAQ

Does daylight saving time save money?

The main way in which daylight saving time might save money is with lower energy costs. For example, it would cause people to have lights on for an hour less time in the evening, potentially saving energy. However, the Department of Energy released a study showing the energy savings to be just 0.5% per household on average.

How does daylight saving time boost the economy?

Some sectors, such as retail, believe daylight saving time can provide an economic boost by giving people an extra hour of daylight to go shopping. But the real-world evidence for this kind of idea tends to be mixed.

What are the downsides to daylight savings?

In today’s economy, the biggest downside to daylight savings might be the negative effect it has on workers when they lose an hour of sleep in the spring. For instance, it could lead to lost productivity due to drowsiness in the days and weeks after we spring ahead. Others believe it can lead to more severe consequences, such as an increase in the number of car accidents and heart attacks. However, the evidence for these more extreme impacts is inconclusive.

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Photo credit: iStock/baona

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

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

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

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

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

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

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

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

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The death of a spouse can be one of the hardest things a person ever has to go through. It can be extremely difficult to process how we feel during such a difficult time. In addition, losing a spouse can also cause financial strain.

Depending on the circumstances, it could mean a loss of income or a bigger tax bill. Fortunately, there are certain steps you can take to avoid the worst impacts of an already precarious situation.

Here. you’ll learn 11 financial steps to take after a spouse’s death. This insight can help as you move through a deeply challenging time.

The Difficulty of Losing a Spouse

As you navigate this difficult and uncertain time, it’s important to surround yourself with the right people. A spouse can be someone’s biggest source of emotional support, and you may need someone to provide that support where your spouse would have in the past.

Who that person might be won’t be the same for everyone. Perhaps you have a relative or a close friend who will be there for you. If necessary and if you have the means, you could also consider working with a professional therapist. For many people, the best solution will be to talk to a few people.

During this time of tremendous grief and stress, it can be wise to remember to take care of yourself. While there will be a lot to manage during this time, it’s important to get the rest, good nutrition, and the other forms of self-care that you need.

11 Financial Steps to Take After Losing a Spouse

Taking the right steps after losing a spouse can help you avoid financial stress later. You should ensure you have documents in order, update records, and submit applications as necessary.

Here are 11 steps that will help with this endeavor and can provide a form of financial self-care as you get these matters under control.

1. Organize Documents

One of your first steps should be to gather and organize documents. You may need several documents, such as a birth certificate, death certificate, and marriage license. You will likely want to order or make several copies of each, as you might need them multiple times as you work through the steps ahead.

2. Update Financial Accounts

You may have several financial accounts that need updating, especially if you and your spouse had joint finances. For example, you might have checking, savings, and investment accounts with both names. You might also have credit cards in both names. Contact the financial institution for each account and let them know it needs updating.

3. Review Your Spouse’s Estate and Will

Review your spouse’s estate and will to see how their assets should be handled. Their planning documents, such as a will, are usually filed with an attorney or held in a safety deposit box. Contact the attorney with whom your spouse filed the documents to find the paperwork if necessary.

If they didn’t already have a will or estate plan, you can work with an attorney to determine next steps. State law will likely play a role in determining how assets are managed. Working with a lawyer skilled in this area can be an important aspect of financial planning after the death of a spouse.

4. Review Retirement Accounts

Your spouse may have left retirement accounts, such as a 401(k) or individual retirement account (IRA). Check whether you are the beneficiary of your spouse’s retirement accounts. If you are the beneficiary of any of them, you will need to establish that with the institution holding the account. When that’s settled, it will likely be up to you to determine how to handle the funds.

While it is possible to transfer all of the money to your accounts, that isn’t always the best move. For instance, if you roll a 401(k) into your IRA and need the money before age 59½, there will be a 10% penalty on the withdrawal. There may be tax consequences, too.

In some cases, the best choice may be to leave the money where it is until you reach retirement age, if you haven’t already.

5. Consider Your Tax Situation

A spouse’s death can also create tax complications. For example, the tax brackets when filing as an individual are lower than those for married couples filing jointly. If you are still working, you might find yourself suddenly in a higher tax bracket, especially if you are the breadwinner. As a result, you might decide to reduce your taxable income by putting more money in a traditional IRA or 401(k).

6. Review Social Security Benefits

Another financial step to take after a spouse’s death: Review Social Security benefits if your partner was already receiving them. If you’re working with a funeral director, check if they notified the Social Security Administration of your spouse’s passing; if not, you may take steps to do so by calling 800-772-1213.

If you were both receiving benefits, you might be able to receive a higher benefit in the future. Which option makes the most sense depends on each of your incomes.

For instance, if your spouse made significantly more, you might opt for a survivor benefit.

Recommended: 9 Common Social Security Myths

7. Apply for Survivor Benefits

Survivor benefits let you claim an amount as much as 100% of your spouse’s Social Security benefit. For instance, if you are a widow or widower and are at your full retirement age, you can claim 100% of the deceased worker’s benefit. Another option is to apply for a survivor benefits now and receive the other, higher benefit later.

You can learn more about survivors benefits on the Social Security website.

8. Review Your Budget

If you had joint finances with your spouse, you should revise your budget. Chances are, both your expenses and your income have changed. While you may have lost the income your spouse earned, your Social Security benefits may have increased.

Your revised budget should reflect all these changes and reflect how to make ends meet in your new situation. This kind of financial planning after the death of the spouse can be invaluable as you move forward.

9. Downsize if Necessary

As you review your budget, you may realize your living expenses will be too much to cover without your spouse’s income. Maybe you want a fresh start, or maybe you decide the big house you owned together is too much space these days. You might move into a smaller house and sell a car you no longer need.

Whatever the case, downsizing your life can be a way to not only lower costs but also simplify things as you enter this new phase. Financial planning for widows

10. File a Life Insurance Claim

If your spouse had a life insurance policy with you as the beneficiary, now is the time to file a claim. It might include a life insurance death benefit. You can start by contacting your insurance agent or company. Life insurance claims can sometimes take time to process, so it’s best to submit the claim as soon as possible.

Your spouse might have had multiple policies as well, such as an individual policy and a group policy through work. You might have to do some research and file multiple claims as a result. And, once you receive a life insurance benefit, you will need to make a decision about the best place for that money.

11. Meet With a Financial Advisor

These steps might be a lot to process, and you might feel overwhelmed thinking about everything you must do. And you may not know the best way to handle the myriad decisions — benefits, retirement accounts, investments, etc. You likely don’t want to make an unwise decision, nor wind up raising your taxes.

Fortunately, some financial advisors specialize in this very situation. It can be worth meeting with one at this moment in your life, at least for a consultation. They can help you decide how to handle your assets as you move forward and help you do some financial planning for widows. That can help to both reduce your money stress and set you up for a more secure future.

The Takeaway

For many people, there is nothing more emotionally challenging than losing a spouse. It can also be a financially challenging time as well. As you navigate this difficult time, there is no shame in seeking a helping hand. By taking steps like reviewing estate plans, filing a life insurance claim, and applying for survivor benefits, you can take control of your finances as you move into this new stage of life.

3 Money Tips

1.    If you’re saving for a short-term goal — whether it’s a vacation, a wedding, or the down payment on a house — consider opening a high-yield savings account. The higher APY that you’ll earn will help your money grow faster, but the funds stay liquid, so they are easy to access when you reach your goal

2.    When you feel the urge to buy something that isn’t in your budget, try the 30-day rule. Make a note of the item in your calendar for 30 days into the future. When the date rolls around, there’s a good chance the “gotta have it” feeling will have subsided.

3.    When you overdraft your checking account, you’ll likely pay a non-sufficient fund fee of, say, $35. Look into linking a savings account to your checking account as a backup to avoid that, or shop around for a bank that doesn’t charge you for overdrafting.

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

FAQ

Which is the most important financial step to take after a spouse’s death?

There isn’t one single step that is most important. However, filing insurance claims, reviewing your spouse’s will, applying for any survivor benefits, and updating financial accounts are among some of the important moves to make.

How can I help a widow financially?

How you can help a widow depends on your expertise and how long it has been since the widow lost their spouse. If the death happened recently, they might still need help submitting documents and updating accounts. However, they might need emotional support long after that process is done.

Are there any tax breaks for widows?

Widows may qualify for certain tax breaks, such as state property tax credits. Check with your state’s department of revenue to find out what tax breaks are available, if any.

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Photo credit: iStock/martin-dm

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

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

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

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

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

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

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

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

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

SOBK1122017

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