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There are many reasons why you might want to sock away some cash and perhaps earn interest while you’re at it. Perhaps you’re saving up for a down payment on a house or gathering funds for an epic cross-country road trip. Or maybe you are trying to build up a healthy emergency fund or save for grad school. Or you might just need a safe place with good rewards to store your paycheck as you pay bills.

Whatever the scenario may be, a deposit account can be the answer. There are several different kinds of these accounts that can help your money stay secure but accessible and perhaps earn an annual percentage yield (APY) to help it grow.

Here, you’ll learn about the different account options that are available, including the pros and cons of each.

Basic Checking and Savings Accounts

There are several different kinds of basic checking and savings accounts. You may find standard accounts, premium accounts, and other variations offered by financial institutions. Here are the pros and cons of these deposit accounts.

Checking Account Pros and Cons

First, the pros:

•   A checking account usually has very low monthly account fees or no monthly account fees.

•   A checking account typically allows access in multiple ways. You can write checks and get an ATM card or debit card. You might get access to online and mobile banking apps so that you can mobile deposit money and pay your bills.

•   These accounts provide a hub for your financial life: You have a home for your paycheck to be direct-deposited, you’ll have records of your transactions, and more ways to anchor and track your money.

•   You’ll usually enjoy FDIC (Federal Deposit Insurance Corporation) or NCUA (National Credit Union Administration) insurance of $250,000 per account holder, per account ownership category, per insured institution. Some institutions offer enhanced coverage, too.

•   You may find an interest-bearing checking account, though the rate is usually not as much as a savings account.

Next, the cons:

•   Many checking accounts pay no interest or very low interest, so you’re not helping your money grow.

•   There can be minimum balance requirements on checking accounts, especially ones with enhanced levels of service.

•   You may be charged accounts fees as well, which can cut into your cash.

Savings Account Pros and Cons

Savings accounts come with slightly different pros and cons. First, the upsides:

•   Most of the different kinds of savings accounts don’t charge account fees.

•   Savings accounts are interest-bearing, meaning your money can grow, especially through compound interest. However, not all savings accounts are created equal: Some standard accounts pay quite low interest. Look to online vs. traditional banks for higher rates (more on this below).

•   These accounts are also typically insured by FDIC or NCUA.

As for the downsides:

•   You probably can’t access your account via checks or a debit card. You will likely be limited to transfers and ATM withdrawals.

•   In addition, while the Federal Reserve has lifted the six-transaction limitation on savings accounts due to the pandemic, many banks still impose some transfer and withdrawal limitations on savings accounts.

•   You may encounter minimum balance requirements and fees if you go below that amount.

5 Other Deposit Account Options

Here are some other deposit account types you might consider beyond checking and savings:

1. High-Interest Savings Accounts

Some banks offer special, high-interest savings accounts that can offer much higher rates than traditional savings accounts. Some institutions don’t charge monthly fees for these accounts while others do but will waive them if you meet a balance minimum.

As with all savings accounts, you may be limited in terms of the number of withdrawals or transfers you can make each month.

One good place to look for this type of account is at an online bank. Because these institutions typically have lower operating expenses than brick-and-mortar banks, they can often offer rates that can be considerably higher than traditional banks, and may also be less likely to charge monthly fees.

2. Money Market Accounts

A money market account is a type of deposit account that pays interest on deposits and allows withdrawals.
Money market accounts are similar to standard savings and checking accounts, except that they typically pay higher interest rates, require higher initial deposits, and may also require minimum balances, which can run anywhere from $100 to $10,000.

Unlike standard savings accounts, some money market accounts also come with a debit card and checks, although institutions may require that they not be used more than six times per month.

You may want to keep in mind the difference between a money market account vs. a money market fund. A money market account is a federally insured banking instrument, whereas a money market fund is an investment account.

Typically, money market funds invest in cash and cash-equivalent securities. It is considered low risk but doesn’t have a guaranteed return.

3. Certificates of Deposits (CDs)

A certificate of deposit (CD) is a product offered by consumer financial institutions, including banks and credit unions, that provides a premium interest rate in exchange for leaving a lump-sum deposit untouched for a certain period of time.

The bank determines the terms of a CD, including the duration (or term) of the CD, how much higher the rate will be compared to the bank’s savings and money market products, and what penalties will be applied for early withdrawal.

CDs offer different term lengths that usually range from a few months to several years. Interest rates tend to be higher for longer terms. Some CDs have a minimum deposit amount that can be over $1,000 or more, though there are banks that offer CDs in any amount.

Sounds good? Well, it is if you know you won’t be touching that money for the entire term length. If you suddenly need the money, then you will likely have to pay a penalty to withdraw money early from your CD.

While you can get no-penalty CDs or early withdrawal CDs, it’s a good idea to make sure to read the fine print, as many of these accounts only have no penalties or withdrawal fees if you take money out during the first few weeks after you invest. In return for that withdrawal window, you often give up a significant amount in APY.

If ease of access is a concern, it might make sense to invest in CDs that feature fewer restrictions around withdrawals. Or, you could set up a CD ladder strategy where you buy CDs that have different maturity dates, ensuring access to funds as your CDs mature at staggered intervals.

4. High-Yield Checking Accounts

Though interest is normally associated with savings, and not checking, accounts, many financial institutions offer high-yield checking accounts.

These interest-bearing accounts, sometimes called rewards checking, work like regular checking accounts and come with checks and an ATM or debit card.

In return for getting a higher interest rate, these accounts often come with rules and restrictions. You may, for example, only earn the higher rate on money up to a certain limit. Any money over that amount would then earn a significantly lower rate.

You may also be required to make a certain number of debit card purchases per month and sign up for direct deposit in order to earn the higher (or rewards) rate and to avoid a monthly fee.

The benefit of an interest-bearing checking account is that you’ll always have access to your money and you may have fewer limitations on how you can use your account than you might with a savings account, all while still earning a bit of interest.

5. Cash Management Accounts

A cash management account is a cash account offered by a financial institution other than a bank or credit union, such as a brokerage firm. These accounts are designed for managing cash, making payments, and earning interest all in one place.

Cash management accounts often allow you to get checks, an ATM card, and online or mobile banking access in order to pay your bills. They also typically pay interest that is higher than standard savings accounts.

Cash management accounts also generally don’t have as many fees or restrictions as traditional savings accounts, but it’s important to read the fine print.

Before opening a cash management account, you may want to ask about monthly account fees and minimum balance requirements.

Some brokerage firms require a sizable opening deposit and/or charge monthly fees if your account falls below a certain minimum. Others will have no monthly fees and no minimums.

Time vs Demand Deposit Accounts

When you consider different kinds of deposit accounts, you may hear the terms time vs. demand accounts. Here’s how they differ:

•   A time deposit, such as a CD, requires you to keep your money with a financial institution for a particular period of time.

•   With a time deposit, if you withdraw funds before the end of the term, you may face penalties.

•   With a demand deposit account (such as a checking account), you may access your cash whenever you like.

•   While you won’t pay a penalty for withdrawing money, you may earn a lower interest rate than with a time deposit account.

Here’s the difference between these two kinds of accounts in chart form:

Type of Account	Access	Fees	Interest
Time Deposit	At the end of a predetermined time period	Penalties for early withdrawal	May be higher than demand accounts
Demand deposit	At the account owner’s discretion	Typically no penalties for withdrawals	May be lower than time deposit accounts

Opening a Bank Account With SoFi

If you’re looking for a safe, convenient place to keep your money and also earn some interest while you’re at it, there are a number of great options to pick from.

When you open a Checking and Savings account with SoFi, you’ll spend and save in one convenient place, while earning a competitive APY and paying no account fees. Plus you’ll have fee-free access to 55,000+ ATMs worldwide within the Allpoint Network.

SoFi Checking and Savings: The better way to bank.

FAQ

What are the different types of deposit accounts?

There are several different kinds of deposit accounts, including checking, savings, certificate of deposit (CD), cash management, and money market accounts.

What is the most common type of deposit account?

Among the most common types of deposit accounts are a standard checking account or other kind of checking account.

Is a CD considered a deposit account?

A CD is considered a deposit account, but a time deposit vs. a demand deposit. That means that you are supposed to let the money stay in the CD until it reaches the maturity date or else you will likely be charged a fee. A demand deposit account, on the other hand, can be accessed when you please.

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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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Shopping can be necessary (how else are you going to get what you need?), and a lot of the time, it can be fun. But it also leads to impulse purchases, which can mean overspending and winding up with high-interest credit card debt.

That’s where the 30 day rule can help. It’s a technique that can help you slow down shopping and save money. It gives you a way to pump the brakes on a purchase and wait before buying.

This, in turn, can help you determine if you really need or want an item vs. getting caught up in the moment. If you’re able to take time and decide not to make a purchase, it can help your overall financial outlook (that credit card bill, for instance, may be more manageable).

Here, you’ll learn more about the 30 day rule and how it can help you save money.

What Is the 30 Day Rule?

The 30 day rule is a simple strategy that has the power to help you control your spending and make solid financial choices. Here’s how it works:

•   If you feel the urge to make a significant purchase of something that’s non-essential, whether it’s in a store or online, the rule says: Stop. Leave the store, or click away from the site.

•   Write down what you wanted to buy, along with where it can be found, and its price. Date the document and then mark on your calendar when 30 days will have passed.

•   Some people find this additional step helpful: Rather than just write down the amount of the discretionary purchase, you could put that amount of money into your savings account. Seeing your pumped-up savings account balance can potentially help you decide not to purchase something that’s an impulse buy.

•   During the 30 days, you can think about whether you really need the item or, if it’s a “want” rather than a “need,” whether you want to spend discretionary funds on it.

•   After 30 days have passed, if you still wish to purchase the item, then you can potentially do so, knowing that it’s no longer an impulse buy. Rather, it’s likely to be a well thought-out and planned financial choice. It can also help your budget to compare prices with different vendors after you’ve made your decision to buy.

Pros and Cons of the 30 Day Savings Rule

Now that you understand the principle behind the 30 days savings rule, consider the upside:

•   It helps you avoid impulse buys.

•   It gives you time to assess a major purchase, comparison-shop, and budget.

•   It helps you avoid shopping due to boredom.

However, the 30 day savings rule can also have downsides:

•   It can lead to feelings of frustration or deprivation not to be able to buy in the moment.

•   If you wait 30 days and then decide to buy, the item you want could be more expensive or sold out.

Needs vs Wants

The 30 day rule can be an excellent way to manage the causes of overspending and help you differentiate needs from wants.

Examples of Needs

Needs are your basic living expenses; the items that are vital for daily life. For example, if you’re out of toilet paper, that clearly goes into the needs category, and doesn’t fit the rule. You could shop for a better price, sure, but it’s a pretty necessary purchase.

If your car is almost out of gas and you’ve got to drive to work in the morning, the same concept applies. Yes, if you need to eat dinner and the cupboards are bare and the fridge is empty, you’ll need food (but not necessarily steak and lobster).

Examples of Wants

On the other hand, wants are things that are not part of daily survival. Groceries to cook dinner are an example of needs, but a pricey sushi dinner or even that vanilla latte to go in the morning are clearly wants.

When it comes to shopping, you may find yourself giving into wants when you pick up some new shoes just because they’re on sale or decide to upgrade your phone even though your current one works fine.

There’s a middle ground, of course, where it may be tougher to decide if something is a need or want, and whether the rule applies. For example, you may have a big work conference coming up, and there’s a really sweet suit on sale.

On the one hand, you may have an outfit that will work just fine, but on the other, this one may be more appropriate, giving you the confidence to shine at the conference. In that case, it may make sense to think about the purchase for a day or two, rather than for a full 30.

The Role of FOMO Spending

FOMO (which stands for Fear of Missing Out) spending is the kind in which you feel that if you don’t buy a particular item, you might miss out on something important. This could happen if you see social media posts where friends (and perhaps even people you don’t know!) are buying something you don’t have.

This anxiety can significantly influence how people spend their money, serving as motivation to spend funds that they can’t really afford. Some points to consider:

•   The reality is that not everyone’s financial situation is the same. Your friends may earn a higher income, have a different debt situation, and manage lesser expenses than you do.

•   If you find yourself feeling peer pressure to spend in ways that aren’t healthy for your budget, it may make sense to come up with alternative, less expensive activities to do together.

   For instance, instead of going out to an expensive new restaurant with a friend, you could cook together. And just because everyone else may seem to be spending their summer vacation at a far-flung destination doesn’t mean you can’t have a great getaway at a nearby cabin on a lake or travel somewhere exotic during the off-season.

•   If you’re more tempted to buy when you use your credit or debit card, it may be wise to bring a set amount of cash instead when going to spending-trigger locations. If you love to shop, shop, “window-shop” online to your heart’s content, and then maybe consider visiting a brick-and-mortar store when it’s time to make a purchase. This can help ensure that the item lives up to your expectations.

Each of these strategies is a way of practicing delayed gratification — and there are plenty of benefits to engaging in this healthy behavior (besides from possibly fattening your wallet).

Recommended: Why Do We Feel Guilty Spending Money?

Benefits of Delayed Gratification

Delayed gratification, according to studies, is often a trait found in successful people. When someone can delay satisfaction until the appropriate time, they are more likely to thrive financially, as well as in their relationships, careers, and health than those who haven’t yet mastered the skill.

It isn’t always easy to wait when doing something might make you feel good right now, but waiting can lead to bigger rewards in the future. As this becomes a practice, it can help to boost your overall self-control and achieve long-term goals.

One of the more well-known studies on delayed gratification involves, of all things, marshmallows. This study was conducted at Stanford University in the 1960s, and went like this:

•   Participating children were taken into a room where they each found one marshmallow on their plates.

•   The children could choose to eat their marshmallow now, or wait 15 minutes and then get a second one.

The children who chose to wait, the researchers discovered, had higher standardized test scores. They also were found to have fewer behavioral issues and health problems.

You might use this study to think about your own ability to wait for greater rewards. Focusing on finances, you might consider times when a quick impulse purchase didn’t turn out to be the best move, as well as times when saving for something better was ultimately more rewarding. These moves can help you cut back on spending.

Recommended: How to Achieve Financial Discipline

Tracking Your Spending and Saving

The above strategies all have one thing in common. They involve tracking your spending and saving so that you can make choices that fit your budget, lifestyle, goals, and dreams.

As part of that process, it may make sense to identify where you’re overspending. The reality is that it’s gotten super easy to spend — and, therefore, overspend — in today’s frictionless financial world.

You may find that you’re spending literally hundreds of dollars a month in ways you didn’t realize, whether that’s by picking up a quick coffee at the drive-thru window, a subscription you rarely use, or something else entirely.

When you know where your money is going, down to the last penny, it can help you adjust your budget in a way that prioritizes your financial needs and money goals. That could involve paying down debt, saving up for a vacation next summer, or banking some cash for the down payment on a house in the future.

4 Other Tips and Strategies to Save Money

Here are some additional savings strategies to consider:

Pay Yourself First

Want to pay yourself first? You can do this by having money automatically deducted from your paycheck and transferred into your savings account. By automating your savings, you can make sure that you don’t spend money that can be helping to fund your future dreams.

Try Out Different Budget Methods

It can take a little trial and error to find a budget that works for you and your unique situation. Some people like the 50/30/20 rule, others use the envelope system, and there are many other options. Do a little online searching and experimenting to find one that works for you.

Use an App

Technology can help you track your spending and save more. Your financial institution may have tools that make this a snap. Or you might decide to take advantage of a roundup app that puts a little money into savings with every purchase you make. Again, an online search can reveal alternatives, or see what your bank offers.

Start a Side Hustle

Another way to save more is to earn more. Starting a low-cost side hustle can be one way to do just that. Whether that means walking dogs, selling your nature photos, or providing social media services for local businesses, there could be a simple and satisfying way to tap your talents and bring in more cash.

Opening a Savings Account with SoFi

With a SoFi Checking and Savings Account, you can spend and save in one convenient place while earning a competitive annual percentage yield (APY) and paying no account fees. You can track your weekly spending within the dashboard in the SoFi app. Tracking your spending can help you stay on target with your financial goals. If you’ve got multiple goals, then you can use our Vaults feature to save towards each of them.

Check out SoFi Checking and Savings to track your spending and saving.

FAQ

What is the 30 day rule for saving money?

With the 30 day rule, you wait 30 days before making a major purchase to be sure you really want or need it. This technique of waiting can help you delay gratification, feel more in control of your finances, and potentially avoid overspending on impulse buys.

Does the 30 days rule work?

The 30 day rule can work if you stick with it. By waiting 30 days before making a major purchase, you have time to consider whether you really need it, shop around for the best price, or decide that it was an impulse buy and you don’t really want it anymore.

What is the golden rule of saving money?

The golden rule of saving money is to save money before you spend. Some people refer to this as “paying yourself first.” By prioritizing saving, you can potentially minimize debt and reach your financial goals.

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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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It can be daunting to sit down and try to learn even just the basics about the stock market—for example, it might be downright revelatory to learn that there is no all-encompassing “stock market,” but instead many stock exchanges and markets. Rather than trying to absorb everything in one go, a good crash course that can help newcomers wanting to be better informed about the topic side-step a lot of minutiae of the alphabet soup (NASDAQ, NYSE, DJIA, etc.) starts with a good look at the S&P 500.

For further context, here’s SoFi’s guide on how stock exchanges work in general.

Who is Standard & Poor’s Anyway?

Standard & Poor’s is a financial services company specializing in conducting research and analysis that helps investors recognize opportunities and make better, more informed decisions. The company’s roots date back to 1860 with the publication of a book of financial information on the US railroad industry—which is only worth mentioning and being aware of in the 21st century as an indication of how steeped the company is in its mission to help provide transparency into the world of investing.

A History of the S&P 500: 1957 – Now

The S&P 500 was first introduced in 1957, the result of ongoing and gradual expansions to S&P’s previous, comparatively more limited stock indexes—like 1926’s roll-out of a daily round-up of 90 stocks. Its emergence in 1957, according to S&P’s official history, was made possible by “an electronic calculation method developed by Boston-based Melpar, Inc., that allowed S&P to perform index calculations much more efficiently than before.” And while S&P reportedly could have tracked every stock on the New York Stock Exchange, it was decided to instead limit its scope to stocks that account for over 90% of total US market value. (When it began, the S&P 500 consisted of 425 industrial companies, 25 railroad companies, and 50 utility companies.)

A big reason why the S&P 500 is today widely considered by many investors to be perhaps the single best overall indicator of how large US stocks are performing is because of, as the name suggests, how comprehensive this index is. The S&P 500 is comprised of 500 large-cap stocks (meaning a company valued at being worth more than $10 billion) representing the leading industries of the US economy, including everything from healthcare and information technology to utilities and many more. The S&P 500 tracks both the liquidity (how easily their stock can be purchased) and also the risk associated with those companies.

Altogether, the S&P 500 gives an overview of how larger companies are performing, and as a result how many investor portfolios are performing as well. Through mutual funds or exchange-traded funds, it’s possible to participate as an investor in these large companies. SoFi’s financial planners can advise interested investors on what might make sense for your situation.

While on paper the S&P 500 is by a great measure more comprehensive than the Dow Jones Industrial Average (which measures the stock performance of only 30 large companies listed on stock exchanges), it should also be noted that a handful of the S&P 500 either are incorporated in or have headquarters located in other countries, like manufacturer Trane Technologies (Ireland) or oil and gas company TechnipFMC (England). In other words, while the S&P 500 can give a solid overview of how large American companies are performing, it’s also an international index. To learn more about index investing and building a portfolio bigger than what might be right in your backyard, this overview on index investing is worth a look.

S&P 500 Earnings History

A quick look at the S&P 500 price history’s biggest milestones only further bolsters its potential usefulness as a market indicator for investment decisions. To start with the bummer news and get it out of the way first, consider some of the lowest performances tracked and posted by the S&P 500: The stock market crash of 2008, for example, saw the market close at 903.25, with a point loss of 565.10 and overall being down 38.49%. The stock market crash of 1931, part of the Great Depression, was even worse, with Standard & Poor’s clocking a closing level of 8.12, a point loss of 7.22 and the market being down 47.07%.

In contrast, and maybe not a surprise, when the United States pulled out of the Great Depression in 1933 stands among some of the biggest high points in this country’s earnings history: That year S&P clocked the market surge ahead by 46.59%, closing at 10.10 and a point increase of 3.21. More recently, March 13, 2020 saw the market close at a record closing level of 2,711.02, representing a 230.38 point change and a 9.29% jump.

As that recent date and activity suggests, while things are getting more volatile nationwide with COVID-19 with massive layoffs, unemployment claims, and uncertainty about when the economy will reopen, the markets are being shaken up quite a bit: Just 10 days after that previously cited higher point, on March 23, 2020 the S&P 500 closed at 2,237.4. On April 17, 2020 it had already bumped back up to 2,874.56.

But if there’s anything that can make eyes gloss over more than alphabet soup it’s a wall of numbers. All these figures really mean is that the S&P 500 is regarded as one of the leading authorities in gauging how the US is doing financially.

Getting Started

SoFi has a team of credentialed financial advisors available to answer investors’ questions and help them reach their goals. Whether they’re interested in choosing individual stocks or trying an index fund, it’s important for investors to keep track of their portfolio and current market trends.

Talk with a financial planner today to get started investing with SoFi Invest®

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SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
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.

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If you’ve been thinking about going back to college to finish your degree, you may have wondered, how long are college credits good for? Are the credits I earned years ago still worth anything? Do college credits expire?

The answers to those questions depend on a few different factors. Here’s what you need to know about when college credits expire.

When Do College Credits Expire?

Some folks wonder: Do college credits expire after 10 years? Technically, college credits don’t expire. When students earn credits for taking college courses, those credits will always appear on the official transcript from the school they attended.

The question is whether another school or program will accept those credits if a student wants to transfer them. And that can be a gray area.

The good news is that older, “nontraditional learners” — undergraduate and graduate students in their mid-20s, 30s, 40s, and up — are not an unusual sight on college campuses these days. Schools that hope to attract students who are looking to complete a degree may be especially open-minded about transferring their credits.

In the fall of 2021, more than 6.4 million adults ages 25 and older were enrolled in college, accounting for approximately one-third of total enrollment, according to the National Center for Education Statistics. And the number of adults getting a bachelor’s degree or higher has been on the rise for at least a decade, the Census Bureau reports. So most college admissions offices should be prepared to answer questions about how long are college credits good for, the possibility of transferring old credits, or if some credits have a shelf life at their school.

Those policies can vary. A college doesn’t have to accept transfer credits unless it has a formal agreement with the transferring institution or there’s a state policy that requires it. A credit’s transferability also may depend on the type of course, the school it’s coming from, or how old the credit is. These deciding factors are sometimes referred to as the three R’s: relevance, reputation, and recency.

What Criteria Do Schools Consider?

How long do college credits last? Here are some things schools may look at when deciding whether to accept transfer credits:

Accreditation Is Key

Accreditation means that an independent agency assesses the quality of an institution or program on a regular basis. Accredited schools typically only take credits from other similarly accredited institutions.

General Education Credits Usually Transfer

Subjects like literature, languages, and history tend to qualify for transfer without a challenge. So if you completed those core classes while working toward your bachelor’s degree, you may not have to repeat them.

Other Classes May Have a ‘Use By’ Date

Because the information and methods taught in science, technology, engineering, and math courses can quickly evolve, credits for these classes may have a more limited shelf life — typically 10 years.

Graduate Credits May Have a Short Life Expectancy

If the coursework for your field of study in graduate school would now be considered out of date, it’s likely that some or all of your credits won’t transfer. Graduate program credits are generally denied after five to seven years.

There Could Be a Limit on Transfers

Many institutions set a maximum number of transfer credits they’ll accept toward a degree program. For example, the Rutgers School of Arts and Sciences won’t take more than 60 credits from two-year institutions for an undergraduate degree, and no more than 90 credits from four-year institutions. No more than 12 of the last 42 credits earned for a degree may be transfer credits.

At the University of Arizona, the maximum number of semester credits accepted from a two-year college is 64. There is no limit on the credits transferred from a four-year institution, but a transfer student must earn 30 semester credits at Arizona to earn an undergraduate degree. And credit won’t be given for grades lower than a C.

Some Transfer Credits May Count Only as Electives

If a student’s new school determines that an old class was not equivalent to the class it offers, it may require the student to repeat the coursework in order to fulfill requirements toward a major. But the new school still may consider the old class for general elective credits, which can at least reduce the overall course load required to obtain a degree.

If at First You Don’t Succeed, You Can Try Again

Many schools allow students to appeal a credit transfer decision — whether it’s an outright denial or a decision that a course will be allowed only as an elective. The time limit for an appeal may be a year, a few weeks, or just a few days, so it can pay to be prepared with the evidence necessary to make your case.

The relevant paperwork might include a class syllabus, samples of completed coursework, and a letter from the instructor that explains the coursework.

Students also may have to meet with someone at the school to talk about their qualifications, or they may be asked to take a placement exam to test their current level of knowledge in a subject.

How to Request Transcripts

Some schools allow students to view an unofficial record of their academic history online or in person through the registrar’s office. So if it’s been a while and you aren’t sure what classes you took or what your grades were, you might want to start there.

After a refresher on what and how you did at your old college, it might be time to check out how your target school or schools deal with transfer credits.

Many colleges post their transfer credit policies on their websites, so you can get an idea of what classes you may or may not have to repeat. Or you can use a website like Transferology.com, or try the “Will My Credits Transfer” feature at CollegeTransfer.net, to get more information about which credits schools across the country are likely to accept.

When you’re ready to get even more serious, you may want to see if your target school makes transfer counselors available, or if someone in the academic department you’re interested in will evaluate your record and advise you as to how many of the credits you’ve earned might be accepted toward your major.

You’ll probably need to have an official transcript sent directly to your target institution to document your grade-point average, credit hours, coursework, and any degree information or honors designations. There may be a small fee for this service, and it could take several days to process the request.

Once your target school has had time to review your transcripts, you can expect to receive a written notice or a phone call telling you how many of your credits will transfer. When you know where you stand, you can decide if you want to appeal any of the school’s transfer decisions, if you’re ready to move forward in the application process, or if you want to check out other schools.

It’s important to note that students who still owe money to their old school may find it difficult to have an official transcript sent to a target school.

While the Family Educational Rights and Privacy Act gives students the right to inspect their educational records, the law doesn’t require schools to provide a signed and sealed hard copy of a transcript to students who haven’t fulfilled their financial obligations.

State governments may have different laws when it comes to withholding these documents, and schools may have their own policies. So some students might hit a road bump at the registrar’s office if they’re behind on their loans or haven’t paid an old fee.

Recommended: Private Student Loans Guide

How Old Debt Can Affect Transferring Credits

Of course, one of the basics of student loans is repaying them. If you’re delinquent, the problems caused by unpaid student debt can go beyond trouble with transcripts.

If you’re planning to return to school and you’re behind on your student loans, you may have difficulty borrowing more money until you’ve put some money toward student loans and gotten them back on track.

The Federal Student Aid (FSA) Program offers flexible repayment plans, loan rehabilitation and consolidation opportunities, forgiveness programs, and more for borrowers hoping to get back in good standing. The Federal Student Aid office’s recommended first step (preferably before becoming delinquent or going into default) is to contact the loan servicer to discuss repayment options.

Another possible solution for those who have fallen behind on their payments can be refinancing student loans. Borrowers with federal or private student loans, or both, may be able to take out a new loan with a private lender and use it to pay off any existing student debt.

One of the advantages of refinancing student loans is that the new loan may come with a lower interest rate or lower payments than the older loans, especially if the borrower has a strong employment history and a good credit record. (Note: You may pay more interest over the life of the loan if you refinance with an extended term.)

Even if you’re doing just fine and staying up to date on your student loan payments if you’re thinking about going back to school and you’ll need more money, a new loan with just one monthly payment might help make things more manageable.

However, if you have federal loans and refinancing sounds appealing, it’s critical that you understand what you could lose by switching to a private lender — including federal benefits such as deferment, income-driven repayment plans, and public student loan forgiveness.

Recommended: How to Get Out of Student Loan Debt

Moving Forward (With a Little Help)

If you’re excited about the possibility of going back to school to finish your degree (or earn a new one), you might not have to let concerns about financing keep you from moving forward.

You can contact your current service provider with questions about payment options on your federal loans. And if you’re interested in refinancing with a private loan now, you can start by shopping for the best rates online, then drill down to what could work best for you.

With SoFi, for example, you can prequalify online for student loan refinancing in just two minutes, and decide which rate and loan length suits your needs.

There are no fees with SoFi student loans (that’s something you should always check), and SoFi members have access to career coaching, financial advice, and other benefits that could come in handy when starting a new chapter in life.

Find out how SoFi can help you refinance old student debt.

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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 Student Loan Refinance
If you are a federal student loan borrower, you should consider all of your repayment opportunities including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. Please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans or extended repayment plans.

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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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.

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