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Because check writing is a less popular form of payment these days, it’s easy to get confused about how the whole process works. When someone writes a paper check, there may be a carbon copy attached to the back of each check. These are known as duplicate checks.

But what exactly are duplicate checks? How do you use them? And when do you need them? Keep reading for more insight.

What Are Duplicate Checks?

Duplicate checks are a type of checkbook you can get from your bank that makes it easier to keep track of the checks you write. Behind each check is a thin sheet of paper that records what you write. This check is known as a carbon copy or “duplicate”.

When you write on a check to fill it out, your writing transfers over to the duplicate check. In this way, the duplicate that is created can act as a record of the payment made, including the check number, how much was spent, the day the check was written, and to whom the check was given.

The same information found on the duplicate check can also be found by logging into your account online, but it can be helpful to have duplicate checks on hand for quick reference.

How Do Duplicate Checks Work?

A duplicate check is attached to the back of a normal check in the form of a thin piece of paper. This acts as a carbon copy of the original check. All duplicate checks have the same check number printed on them as the original. The pressure from the check writer’s pen transfers what is written on the original check to the duplicate check.

Once you are done writing a check, you only pull the original check out of your checkbook and leave the duplicate check in the checkbook so you can reference it when and if you need to. (The original check goes to the person or business you are paying). All of the information included in the payee, amount, date, and memo sections transfers over. The one area of the original check that doesn’t copy over is the signature. This is to protect you, the account holder, from identity theft in the event someone steals your checkbook. Basically, a duplicate check mirrors the information and can help you verify the check you just wrote. You can see all the details right there, on the carbon copy.

Are Duplicate Checks Legal?

Yes, duplicate checks are legal and simply serve as a record of a check that the account holder already wrote. Where legal issues arise is if someone were to steal a checkbook and try to cash it or use the information on the check to commit bank fraud.

Where Can I Get Duplicate Checks?

If you have a checkbook, you may already have duplicate checks on hand. If not, you can order this style of checkbook from the bank or credit union where you have a checking account. It can also be possible to order duplicate checks from select reputable online check printers who may charge less than a bank does for checks.

Single vs Duplicate Checks: What’s the Difference?

Single checks are the type of check you typically receive in a standard checkbook. The checkbook contains a series of individual checks that are ready to be written out and used for payment. Duplicate checks come in a special checkbook that is pre-assembled with carbon paper and two copies of every check.

Pros of Duplicate Checks

Once you understand the principle of a duplicate check, you may wonder if these are right for you. Here are a few advantages of using duplicate checks.

Safer than Carrying Cash

While someone can easily steal cash out of a wallet, checks are not as simple to steal. This is especially true if you take steps to manage your checkbook well and keep it in a secure place.

Ease of Use

You don’t have to do anything to create the duplicate check thanks to the carbon copy function. No writing the check number, date, payee, and amount in your check register (unless, of course, you want to do so).

Convenience

The whole point of a duplicate check is to make staying organized and tracking former check payments easier. While most check information is available through online bank accounts, having a paper copy can act as a helpful backup.

Checks Can Be Canceled If Stolen

If you have reason to suspect a check was stolen, you can stop payment on the check before it is cashed. Again, that’s a big advantage over cash; once bills are stolen, they are gone.

Cons of Duplicate Checks

Of course, there are also some disadvantages associated with duplicate checks worth keeping in mind.

Security and Privacy Risk

Because duplicate checks have important information on them about your bank and your spending habits, it’s important not to lose a check and minimize the possibility of your checkbook getting stolen.

Cost More Than Regular Checks

Some banks or check providers charge more for duplicate checks than they do for single checks.

Not all Check Printers Provide Them

Not all check vendors can create duplicate checks, so they may not be available from the company where you normally order checks.

Checks Usage Is on the Decline

Checks (including travelers checks) are becoming a less popular form of payment as people shift to online payments, electronic checks, and other options. In many cases, it may not be worth the fuss of ordering and managing a checkbook for the occasional payment.

Alternatives to Duplicate Checks

If you want to keep good records of checks you have written but don’t want to hold onto duplicate checks, you have a few options.

•   Log into your account online. Most banks and credit unions give customers an online bank account where you can access information about your transaction history, including the information one would find on a duplicate check. A warning: This is not a reliable way to keep track of every check ever written as banks eventually stop sharing old transactions. But it is possible to download these statements and save them electronically.

•   Make a digital copy. You can take a picture of or scan each check you write and store them digitally.

•   Use a check register. To keep all information about written checks in one place, it’s possible to use a check register. These registers can be on paper or can be digital; they capture the check number, payee, when a check was written and for how much. This process can make it easy to balance, say, your high-yield checking account by copying down check-payment information and subtracting the amounts from your balance.

The Takeaway

What is a duplicate check? In short, a duplicate check is a carbon copy of a regular check. Though it can’t be used to make a payment, a duplicate check makes record-keeping easier. When you write a check, the attached duplicate check creates an automatic copy of the check that you can easily reference. While checks aren’t as widely used as they once were, a duplicate check system can be a bonus for those who like writing checks, as it can make it easier to keep tabs on your checking account.

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

FAQ

What is a single check?

A single check is the type of check you get in a standard checkbook. The book contains a series of numbered individual checks that you can write out and use a payment.

What is the difference between a single and duplicate check?

Single checks are the kind of check you receive in a standard checkbook. Duplicate checks come in a special checkbook that is pre-assembled with carbon paper and two copies of every check. This makes it easier to keep track of all the checks you’ve written.

Can you cash a duplicate check?

No. A duplicate check is simply a copy of a check you’ve written that stays in your checkbook and cannot be cashed. Only the original check can be cashed.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

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

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

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

*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.

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If your credit isn’t stellar, you may find it challenging to get approved for a traditional unsecured credit card. One option can be a prepaid or secured credit card, which can be more easily available than an unsecured credit card. However, these cards come with a few key differences. Understanding how a prepaid card and a secured card vary can help you choose the right one for your specific situation.

One key point: When you apply for a secured credit card, you will put down a refundable security deposit. This serves as your initial credit limit, and you can borrow against that initial deposit. Your borrowing history on a secured credit card is typically reported to the major credit bureaus and will impact your credit score.

Learn more about the similarities and differences between these types of credit cards.

What Is a Prepaid Credit Card?

A simple way to think about what prepaid credit cards are is that they are just debit cards that aren’t tied to your bank account. Worth noting: These aren’t truly credit cards because you aren’t being extended credit; no one is lending you funds. For this reason, you may hear them referred to as just “prepaid cards” (which is what you’ll see as you keep reading).

You purchase a prepaid card (often with an activation fee) and can then use the card to make purchases. Because prepaid cards are not considered a loan, their use is not reported to the major credit bureaus. This means that they do not have a positive or negative impact on your credit score or credit history.

How Prepaid Cards Work

When you buy a prepaid card, it comes loaded with a specific amount of money on it. Generally prepaid cards are issued by some of the major credit card processing networks (e.g. Visa or Mastercard). Once you have purchased the prepaid card, you can then use it anywhere that network is accepted. Some prepaid cards only have a certain amount loaded onto them that is fixed at purchase, and others allow you to reload the card at your convenience.

Pros and Cons of Prepaid Cards

One positive thing about using a prepaid card is that it can make purchases much more convenient. It can also be more secure than carrying cash for all of your purchases.

However, a potential downside to using them is that, if you are wondering whether prepaid cards help build credit, the answer is a hard no. So if you are looking for an option that can help build your credit score, you’ll need to look elsewhere.

Recommended: Breaking Down the Different Types of Credit Cards

What Is a Secured Credit Card?

If you’re looking for an alternative to a traditional unsecured credit card, you will also probably want to understand what secured credit cards are. A secured credit card is a type of credit card that requires you to apply (which likely involves a credit check). If approved, you put down an upfront security deposit to the lender. This upfront deposit will serve as your initial credit limit, and it determines the amount of money you can spend on your card.

How Secured Credit Cards Work

With an unsecured credit card, you will put down an initial deposit. Some secured credit cards have a specific amount that you must put down, and other secured cards may allow you to put down more of a deposit. As you spend money on your secured credit card, your available credit decreases. However, you can likely increase your credit line by making payments or additional deposits.

Pros and Cons of Secured Credit Cards

One of the biggest pros of a secured credit card can be that your usage is reported to the major credit bureaus. In other words, if you use it responsibly, the card can help build your credit.

Many banks that issue secured credit cards also provide a pathway to automatically increase your credit line and help you transition from a secured to a unsecured credit card. One thing to watch out for is that some secured credit cards come with high interest rates and/or fees, so it can be worthwhile to pay your balance in full each month, whenever possible.

Recommended: Secured vs. Unsecured Credit Card: What’s the Difference?

Secured vs Prepaid Cards

Here is a quick look at how prepaid cards compare to secured credit cards in a few key areas:

Is One Better for Establishing Credit?

If you’re looking to establish or build your credit, a secured credit card is likely to be your better option. Prepaid cards are not considered a line of credit so they are not reported to the major credit bureaus. This means that using a prepaid card will not have any impact on building your credit. Using a secured credit card responsibly can help you build credit, but it can take a while to build credit with a secured credit card.

Is a Secured or Prepaid Card Right for You?

Deciding whether a secured or prepaid card is right for you depends on what your overall goals are. If you’re just looking for a convenient and secure way to make purchases without impacting your credit, a prepaid card can be a great choice.

But if you’re looking to build or establish your credit, you might consider a secured credit card. Of the two, a secured card is the only one where your usage and payment history is reported to the major credit bureaus.

Recommended: Tips for Using a Credit Card Responsibly

The Takeaway

Prepaid cards and secured credit cards are both options that allow people with limited or poor credit histories to make secure and convenient payments. Both options allow you to easily pay for purchases wherever their issuer is accepted. But usage of prepaid cards is not reported to the major credit bureaus, so it won’t have an impact on your credit score. If you’re looking to build your credit, you will be better off with a secured card.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

Are prepaid cards more secure?

Prepaid cards are typically issued by one of the major card issuers, like Mastercard or Visa. Each of these issuers is known for payment security. One thing to watch out for with a prepaid card is that it works just like cash — if you lose your card, you’re likely to lose all of the money that is stored on your card.

What is one disadvantage of a prepaid card?

One disadvantage of a prepaid card is that your usage is not reported to the major credit bureaus. This means that using a prepaid card will not appear on your credit report and will not have any impact on your credit score. If you’re looking to build your credit, however, you’re better off getting either a traditional credit card or a secured credit card.

What are the downsides of getting a secured credit card?

A secured credit card can be a good option if you’re looking to build your credit and are having trouble getting approved for a traditional unsecured credit card. One downside of a secured credit card to keep in mind is that you will have to put down a security deposit upon being approved. Many secured credit cards also come with higher-than-average interest rates and fees, so make sure you watch out for that as well.

Photo credit: iStock/Elena Uve

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.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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.

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The term “growth savings account” or “grow savings account” generally refers to a savings account that earns more than the average interest rate for a savings account. This allows your money to grow faster, just for sitting in the bank.

But are these accounts always a good bet? Important points to consider are:

•   What is a growth savings account?

•   How do growth savings accounts work?

•   The pros and cons of a growth savings account

•   How to open a growth savings account.

What Is a Growth Savings Account?

Growth savings accounts are similar to regular savings accounts, except that they tend to pay a higher annual percentage yield (APY), which represents how much an account holder will earn in interest over the course of a year.

More commonly referred to as a high-yield savings account, these accounts can pay 10 to 20 times more than the average APY for a savings account, while keeping those funds safe and accessible.

You may get the best interest rate on a growth savings account at an online bank or credit union versus a traditional, brick-and-mortar, bank. However, even at their best, the APYs on these savings accounts generally lag behind what you could earn by investing in the market over time. That makes growth savings accounts best suited for your emergency fund and money you’re saving for a short-term goal, like a vacation or large purchase.

How Do Growth Savings Accounts Work?

Growth savings accounts work in the same way as regular savings accounts. You open the account at a bank or credit union, deposit money into the account, and begin to earn interest on your balance. You can continue adding money to the account, either by making a deposit at a branch or ATM, transferring money from a linked account, or via mobile check deposit or direct deposit.

Savings accounts are typically insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC) at banks and the National Credit Union Administration (NCUA) at credit unions. So you can’t lose your money (up to certain limits) even if the bank were to go out of business.

Savings accounts allow easy access to your money when you need it, though some institutions may limit the number of withdrawals or transfers you can make to six or nine per month.

Recommended: How High-Yield Savings Accounts Work

Pros of a Growth Savings Account

Here’s a look at some of the advantages that come with opening a growth or high-yield savings account.

Higher Interest Rates

Because these savings accounts can offer higher interest rates, the money held in the account tends to grow faster than money held in traditional savings accounts. When determining what is a good interest rate, it’s a good idea to also look into minimum balance requirements. You may see that you need to keep your balance above a certain threshold to earn the highest available rate.

Accessible Form of Growth

Putting money in a savings account can be a great way to earn interest while keeping that money liquid, meaning you can access it as soon as you need it. You don’t need to sell off investments or wait until a particular maturity date to withdraw the money.

Recommended: CDs vs Savings Accounts Compared

Good Way to Build an Emergency Fund

Because these funds are fairly accessible, a growth savings account can be a great place to build an emergency fund. That way, the emergency fund can continue to grow until it might be needed.

Cons of a Growth Savings Account

There are also some downsides to growth savings accounts worth keeping in mind before opening one.

Limited Growth Opportunity

Yes, growth savings accounts typically earn more interest than traditional savings accounts. However, when considering your long-term savings options, there may be more strategic investments that can enhance growth over time. If, for instance, you’re saving for retirement, which is a few decades away, you might take a look at the stock market for growth.

Withdrawal Limits

Growth savings accounts generally provide easier access to funds than keeping money in investments. That said, you may only be able to make a certain number of withdrawals or transfers per month (such as six or nine) or risk running into fees. While the Federal Reserve withdrew this rule during the pandemic, banks are allowed to continue imposing those limits, so it’s a good idea to check.

Earnings Are Taxable Income

The interest earned in a growth savings account can count as taxable income. By contrast, the money you put into a Roth Individual Retirement Account (IRA) grows tax-free.

Recommended: What is a Roth IRA and How Does it Work?

Choosing a Growth Savings Account

When you’re looking for ways to earn more interest on your money, a growth or high-yield savings account might be a good option. It’s a good idea to shop around to find the best fit for your needs. Here are a few factors to keep in mind when looking for a new savings account:

•   APYs

•   Minimum balance requirements

•   Fees

•   Account features

•   Mobile app

•   Other product and service offerings

How to Open a Growth Savings Account

While each banking institution will have its own process, opening a growth savings account typically includes the following steps:

•   Fill out the application. When filling out a savings account application, you’ll usually provide details like your name, Social Security number, proof of address (say, from a utility bill), and government-issued photo ID.

•   Choose the account type. There may be different savings account types, such as an individual account or a joint account (to share with a spouse or family member). Select the kind that’s right for your needs.

•   Designate beneficiaries. It’s important to choose a beneficiary for your growth savings account, just as you might select a beneficiary for a 401(k) plan. This is the person who would receive the account’s funds if you were to become incapacitated or pass away.

•   Deposit funds. Some banks require a minimum initial deposit, so you may need to make that deposit to open the account.

•   Create login information. To set up your online account, you’ll need to create login information such as a username and password. Be sure to create a unique and complex password with at least one capital letter, number, and symbol.

While there may be another step or two in some situations, that’s how to open a bank account.

The Takeaway

Growth savings accounts generally offer higher interest rates than traditional savings accounts, which can help your money grow faster. In some cases, however, these accounts may come with monthly fees and/or require you to maintain a certain minimum balance to earn the higher rate, so it pays to shop around.

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

FAQ

How do growth savings accounts work?

Growth savings accounts function similarly to traditional savings accounts. The only difference between these account types is that growth savings accounts tend to have higher interest rates.

What does “growth account” mean?

A growth account — also known as a high-yield account — typically offers a higher interest rate than a traditional savings account. This higher interest rate leads to more growth on deposited funds.

How much interest does a growth savings account earn?

These days, a growth or high-yield savings account can earn as much as 5% APY.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

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

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

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

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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Saving money can be a challenge, especially for those with a lower household income. To help individuals and families with lower incomes save, some financial institutions offer a type of bank account known as a micro saving account.

A micro savings account works similarly to a traditional savings account, but it’s designed for consumers who can only make small deposits. It can also be helpful for anyone else who finds that stashing away small amounts suits them. Regardless of your income, if micro saving suits your financial style, it can be a win-win.

What Is a Micro Savings Account?

A micro savings account (also sometimes seen written as microsavings account) is a savings account that can help meet the financial needs of consumers with smaller household incomes. It can also suit any saver who likes to tuck away small amounts here and there.

A micro savings account works a bit differently from how a savings account works at most financial institutions. Micro savings accounts typically don’t have a minimum deposit requirement, don’t charge service fees, and are more flexible regarding the possible amount of withdrawals.

Many financial institutions that offer micro savings accounts do so to incentivize consumers to save $1,000 a year by encouraging them to save just $20 a week. They often have educational initiatives in place to help guide micro savings account holders towards meeting this goal.

Benefits of Micro Savings Accounts

The following benefits are typically associated with micro savings accounts:

•   Low-risk savings account that can earn interest

•   Little to no upfront costs

•   No credit checks required for new account holders

•   Additional microfinance services such as microloans may be available for account holders

•   Lower or fewer fees or no fees at all

•   No minimum account balance requirements

•   More flexible withdrawal limits

Disadvantages of Micro Savings Accounts

There aren’t any real disadvantages associated with micro savings accounts. That said, here are a few small downsides worth considering:

•   Savings accounts tend to have a smaller return than other forms of investing (such as a CD vs. a savings account)

•   Micro savings accounts can be harder to find than normal savings accounts

What Are Micro Savings Accounts Used For?

Here’s a closer look at what micro savings accounts are typically used for.

Creating a Regular Savings Habit

Micro savings accounts can help savers boost their liquid assets at an incremental level while giving them the chance to earn interest on their savings. Financial institutions offer micro savings accounts to help encourage good saving habits. These accounts can help remove barriers to saving for those who can’t afford to put away a lot of money. They can also suit those who like to save a little money here and there.

Saving Money Consistently in Smaller Amounts

One of the ideas that drives micro savings accounts is the concept that consistently saving small amounts of money can add up and make an impact. It may not seem that worthwhile at first glance, but setting aside $10 a week can help make a difference. That sum can begin to build a savings fund that can help consumers meet their financial goals or avoid taking on debt when unexpected expenses arise.

Keeping Savings Separate

Storing money in a checking account makes it a lot harder to ignore when spending temptations arise. Keeping money stored in a savings account (where it can grow slowly but surely if not touched) can make it easier to keep it separate from spending money.

Maybe you are saving for a vacation or you need a new washer/dryer. Whatever your goal is, when you are ready to spend money from a savings account, the funds will be there for the taking.

Managing Money Through a Mobile App

Today, lots of people love the convenience of using apps for P2P transfers and other activities. That ease is available with the many micro savings accounts that can be managed through mobile banking accounts. These can make it simpler to monitor spending and saving.

There are also micro savings apps (like Acorns) that have automated savings features that make it easier to save small amounts of money.

Alternatives to Micro Savings Accounts

If you don’t find a micro savings account that meets your needs, there are alternative saving options that can offer similar benefits. Here are two options worth considering.

•   Credit unions: Because credit unions are member-owned, unlike not-for-profit financial institutions such as banks, they tend to charge less fees and offer higher interest rates on savings. Applying to a credit union where you can consider opening a checking vs. savings account (or perhaps both) may be able to replace the purpose of a micro savings account.

•   High-yield savings accounts: High-yield savings accounts work the same way that normal savings accounts do but they tend to have a much higher interest rate on deposits.

   A high-yield savings account is a great way to take advantage of the power of compound interest and help your money grow faster.

   These savings accounts can often be found through online banks. Because these institutions don’t have the overhead of brick-and-mortar locations, they may be able to afford to offer higher interest rates.

   You don’t have to do anything differently than you would with a normal savings account to earn this extra interest. You can add small deposits as funds become available.

Recommended: A Guide to High-Yield Savings Accounts

The Takeaway

Saving money is hard and requires a lot of discipline. Micro savings accounts are designed to help those with lower incomes or who simply like to save little by little. These accounts typically allow you to make small contributions, charge fewer (or no) fees, and have lower minimum balance requirements. Having the right savings account can make it easier to meet your financial goals.

Another way to save successfully: Open a high-yield bank account.

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

FAQ

How do I create a micro savings account?

Creating a micro savings account works the same as opening any type of savings account. First, you will need to open a bank account or just the savings account by filling out an application and providing the necessary identifying information and documentation. Once you’ve opened the account, you can start making contributions to the micro savings account.

What are the advantages of micro savings?

The main advantages of micro savings accounts are rooted in accessibility: These accounts tend to have no or lower account fees, have smaller or no minimum account balance requirements, and have more flexible withdrawal options. They make it easy to save with small contributions. Many financial institutions that offer micro savings accounts also offer educational initiatives and mobile banking apps that make it easier to learn how to save more money.

Are micro savings apps worth it?

Yes, micro savings apps can be worth downloading, as they can make it a lot easier to achieve savings goals. Alongside making it easier to track spending and saving habits, micro savings apps even have automated savings features that make it easier to stash away small amounts of money.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

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

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

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

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*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.

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.

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Everyone likes to win big. So what if saving money could offer the potential to win more money? Such a scenario is possible, thanks to prize-linked savings accounts that combine a normal savings account with an opportunity to win prize money.

What Is a Prize-Linked Savings Account?

A prized-linked savings account is essentially a savings account that gives account holders the opportunity to win prizes. In addition to their presence in the U.S., are found in other countries, including Germany, Argentina, and Japan.

The way that prize-linked savings accounts work is they allow account holders to enter raffles to earn cash prizes. If you have one of these prize accounts, how would you enter? By making deposits into a savings account. Currently, these types of accounts are offered by financial institutions such as credit unions in more than 30 different states.

These savings accounts earn a nominal amount of interest and aren’t a solid replacement for a traditional savings account or a high-yield savings account in the long run.

However, prize-linked savings accounts may be good for short-term savings. They’re designed to encourage people with low- or moderate-income levels to save more.

Recommended: Checking Accounts vs. Savings Accounts: Key Differences to Know

Types of Prize-Linked Savings Accounts

To make it easier to understand how prize-linked savings accounts work, here are a few real-life examples of these savings accounts that are available domestically.

Save to Win

Save to Win allows participating credit unions to hold savings promotion raffles. Every qualifying $25 an account holder deposits into a Save for Win account earns them an entry into a drawing for cash prizes. Save to Win says it awards more than $200,000 in prizes every year.

Lucky Savers

Lucky Savers is designed to motivate New Yorkers to save by rewarding smart savings habits. This program is exclusive to credit unions and is formatted as a 12-month share certificate with unlimited deposit capabilities. Opening this account requires a $25 initial deposit. Then, for every $25 in month-over-month balance increase, account holders earn one entry into monthly and quarterly prize drawings.

WINcentive

WINcentive® Savings is another credit union-exclusive program. This program in Minnesota offers prize drawing entries for every $25 an account holder saves for up to four entries each month. Prize drawings occur monthly, quarterly, and annually. In 2023, $100,000 in cash prizes were awarded to account holders.

Are Prize-Linked Savings Accounts (PLSAs) Legal?

Prize-linked savings accounts are legal in approximately 32 states that have enacted legislation to allow these types of accounts. In response to concerns surrounding prize-linked savings programs, Congress passed the American Savings Promotion Act which authorizes banks and thrifts (a financial institution specializing in savings accounts and mortgages) to conduct savings promotion raffles. It also excludes these raffles from the prohibition against financial institutions dealing in lotteries.

Pros of Opening a Prize-Linked Savings Account

Depending on your circumstances and financial goals, a prize account can offer a number of advantages. The pros of these savings accounts are:

•   Prize-linked savings accounts can incentivize individuals to save more money. Programs have found the amount of savers and savings amounts increase when there is a prize incentive.

•   It’s possible to win money that can help offset monthly expenses or may be large enough to be the equivalent of a small lottery prize.

•   It’s possible to win prize money without any of the typical risks that come with gambling or buying lottery tickets. These accounts are designed so that the account holder gets to keep their savings whether they win a prize or not.

Cons of Opening a Prize-Linked Savings Account

Along with the benefits, there are disadvantages to prize-linked savings accounts. These include:

•   Prize-linked savings accounts earn little to no interest. The chance of winning money may not be worth forgoing a bank account with a higher yield.

•   Winning any prize money at all is not guaranteed and not predictable, like a steady stream of interest earnings is.

•   These prize-linked savings accounts are often cheaper for financial institutions to offer than traditional savings accounts. For this reason, they might not promote the better savings options an account holder might have.

Opening a Prize-Linked Savings Account

If you want to open a prize-linked savings account, these are the steps you’ll generally take.

1.    Find a credit union that offers prize-linked savings accounts. These accounts aren’t available in all states and are more commonly found at credit unions.

2.    Apply to open a prize-linked savings account. The applicant will usually need to provide two forms of identification during the application process.

3.    Make a deposit. Most prize-linked savings accounts have small initial minimum-deposit requirements.

Are There Taxes on PLSAs?

There are tax requirements surrounding prize-linked savings account winnings. Sure, you can go and spend money from your savings account that’s been plumped up thanks to a cash prize. However, anyone who wins money from one of these accounts should be prepared to pay taxes on their winnings according to state and federal laws.

Alternatives to a Prize-Linked Savings Account

Because there’s no guarantee that you will win any money with a prize-linked savings account, you may want to consider these other savings options that can offer a more guaranteed return.

•   High-yield savings accounts. High-yield savings accounts are savings accounts with high interest rates. Often, high-yield savings accounts are found at online banks. Because online banks don’t have to spend a lot of money on brick-and-mortar banking locations, they may be able to offer higher interest rates, lower fees, or other bank account bonuses. High-yield savings accounts also allow consumers to take advantage of compound interest.

Learn more: Basics of High Yield Savings Accounts

•   Money market account. Money market accounts are savings accounts that tend to have a higher annual percentage rate (APY) than traditional savings accounts do, but they may have withdrawal limits. Check with your financial institution to see if there is a cap on the number of withdrawals you can make per month.

•   Certificate of deposit. A certificate of deposit (CD) generally has a minimum deposit requirement. It also has a set timeframe during which you can’t withdraw your money from the CD without having to pay a penalty fee. CDs may have higher interest rates than both savings accounts and money market accounts.

The Takeaway

The potential to win prize money through a prize-linked savings account can make saving more appealing for some consumers. That being said, these accounts tend to have much lower interest rates than traditional savings accounts, and there is no guarantee the account holder will ever win any money. Before opening one, carefully consider if a prize-linked savings account can meet your needs or if you would be better off with a different financial vehicle, such as a high-yield savings account instead.

FAQ

Are prize-linked savings accounts legal?

Yes, prize-linked savings accounts are legal in about 32 states. Congress passed the American Savings Promotion Act in 2014, which authorizes banks and thrift banks to conduct savings promotion raffles.

Is a lottery account safe?

Lottery accounts are generally a safe way to save money. There is no actual gambling involved with a prize-linked savings account. These accounts are designed so that account holders get to keep all of their savings whether or not they win prize money.

How do I open a lottery account?

The process of opening a prize-linked savings account is the same as opening a normal savings account. Once someone finds a credit union that offers this type of savings account, they will apply and provide all of the information and identifying documentation required during the application process. Then they will make an initial deposit.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

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.

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

3.30% APY
Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

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

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
This article is not intended to be legal advice. Please consult an attorney for advice.

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.

*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.

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