What Are Wire Transfer Fees & How Much Are They?

All You Need to Know About Wire Transfer Fees

Wire transfers are a way to quickly and conveniently send and receive money, both domestically and internationally. Maybe you want to securely send some cash as a security deposit to a landlord across town ASAP. Or perhaps you need to pay for a painting you bought at an auction overseas. Either way, a wire transfer may be a good option.

However, there are often wire transfer fees in exchange for their speed and convenience. The cost to send and receive money via wire transfer varies, but international wires are usually costlier than domestic wires.

However, with the right steps, you can reduce or even eliminate the fees you’ll pay using wire transfers.

Key Points

•   Wire transfers provide a fast and secure method for sending money both domestically and internationally, with same-day processing available for many domestic transactions.

•   Fees for wire transfers vary significantly; domestic transfers typically cost between $0 to $35, while international transfers can range from $35 to $50 or more.

•   International wire transfers are generally more expensive than domestic ones due to additional processing steps, currency conversion fees, and the involvement of third-party institutions.

•   To avoid wire transfer fees, consider sending money in the recipient’s local currency, using digital platforms that offer lower fees, or seeking banks that waive such fees.

•   Alternative methods for sending money without high fees include using payment apps, bank transfers (ACH), or cashier’s checks, each with its own processing times and conditions.

What Are Wire Transfer Fees?

A wire transfer is an electronic funds transfer between financial institutions. Wire transfers can be faster than bank transfers, with same-day processing possible for most domestic wires. Wire transfers can occur domestically or internationally, but most banks charge fees both for sending and receiving funds in this way.

In addition to speed, another reason to use wire transfers is when sending money internationally, as a regular bank transfer isn’t possible in this situation. But international wire transfers can have higher wire transfer fees than domestic wires, and there might be more steps involved. For instance, the transaction might have been processed by the foreign country’s system and also possibly involve a currency conversion.

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

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How Much Do Wire Transfer Fees Cost?

As mentioned earlier, how much wire transfer fees cost can vary. Some financial firms waive wire transfer fees in certain situations, and others waive them entirely. When sending and receiving international wires, there can be a fee of $50 or more for each transaction

Typically, you might expect the following fees:

•   For domestic wire transfers, outgoing fees usually range from $0 to $35; incoming fees can range from $0 to $15.

•   For international wire transfers, outgoing fees can often range from $35 to $50; incoming fees are likely to be between $0 and $16.

Wire Fees by Financial Institution

Below is a list of wire transfer fees for large banks in the United States. However, third parties may be involved that charge additional fees, especially for international wires.

Bank Incoming domestic Outgoing Domestic Incoming international Outgoing international
Bank of America $15 $30 $16 $45 or $0 when sent in foreign currency
Capital One Up to $15 Up to $30 Up to $15 $40-$50
Chase $0-$15 $25-$35 $0-$15 $0-$50
Citi Up to $15 Up to $25 Up to $15 Up to $35
Fidelity $0 $0 $0 $0
PNC $15 $25-$30 $15 $40-$45
TD Bank $15 $30 $15 $50/td>
USAA $0 $20 $0 $45
U.S. Bank $20 $30 $25 $50
Wells Fargo $15 $30 $16 $45

Do International Fees Cost More Than Domestic?

On average, international wire transfer fees are higher than domestic ones. But as is often the case, averages don’t tell the whole story. Some financial institutions don’t impose wire transfer fees, even for international transactions.

Still, it’s important to remember that there may be extra fees when dealing with international wire transfers. For instance, there may be a currency conversion fee when sending money between two countries that use different currencies. When sending or receiving money internationally, you’ll need information like an international bank account number (IBAN) or a SWIFT code to move the funds to the right account. Overall, it’s a somewhat more complex transaction than a domestic one.

Why Do Banks Charge Wire Transfer Fees?

Banks charge wire transfer fees because of the work that goes into processing wire transfers. For instance, wire transfers are processed individually as they are received. This differs from automated clearinghouse (ACH) transfers, which are processed in batches.

You also pay a premium for the faster processing speed. Domestic wire transfers can sometimes be completed within a few hours and are usually processed the same day. International wire transfers can be completed within one to two business days.

Another reason banks charge wire transfer fees is their higher transaction limits. Wire transfer limits are usually much higher than bank transfer limits, so they can be worth using if you must send a large amount in a single transaction.

Lastly, the international reach of wire transfers can lead to higher fees. For instance, when large amounts of foreign currency are exchanged, banks charge what is known as a midmarket, or interbank, exchange rate. The bank will often charge a higher markup if that currency must be converted. This results in higher wire transfer fees.

Recommended: How to Earn More Interest on Your Money

Tips to Avoid Wire Transaction Fees

While wire transfer fees are common, they aren’t always a given. Here are some ideas about how to avoid wire transfer fees in some situations:

•   Send money in foreign currency. For outbound international wires, it can be smart to send money in the currency used by the foreign company, if possible. In this scenario, some banks waive wire transaction fees since no currency conversion is necessary.

•   Do it yourself digitally. Some financial institutions allow you to initiate a wire transfer using their website or app, and doing so may reduce the fees or even eliminate them.

•   Look for firms that don’t charge wire transfer fees. Some banks and nonbank providers waive wire transfer fees in some cases, or they don’t charge them at all.

•   Open an account with no wire transaction fees. Shop around: Some of the most popular banks offer accounts that let you wire money with no transaction fees.

Alternative Ways to Send and Receive Money

Some methods of sending money may allow you to reduce or eliminate transaction fees. You can do so by using one of the following methods to conduct the transfer:

•   Use a payment app. Payment apps like Venmo, Zelle, and PayPal generally let you send money electronically to friends and relatives without paying a fee. However, sending money to those who are not “friends and family” may incur fees.

•   Send money with a bank transfer. A bank transfer, or ACH transfer, might be preferable if you send money domestically. In 2022, the same-day transfer limit was increased to $1 million, enabling large funds transfers in a single day.

However, note that limits on single transactions might be lower, and there might be ACH fees.

•   Use a cashier’s check. A cashier’s check is an alternative to wire transfers because it can be suitable for large transactions. This type of check draws the funds from the bank’s reserves rather than your account. However, the check must be delivered to you, so this method can take longer than a wire transfer. In addition, there might still be fees involved.

The Takeaway

Wire transfers can be a quick, secure way to send money domestically or internationally. These transfers have several benefits, such as shorter processing times and larger transaction limits than ACH transfers. But wire transfers can also have significant transaction fees, especially when dealing with international transfers.

If you prefer to avoid costly wire transfer fees, look for firms that don’t charge them or offer accounts that don’t charge for wire transfers. You can also consider alternative methods of sending money, like using a payment app or sending a cashier’s check.

If you’re looking for other ways to save on your banking costs, consider opening an online bank account. With SoFi Checking and Savings, for instance, you won’t pay any account fees, and your money will earn a competitive annual percentage yield (APY), both of which can help your cash grow faster. You’ll also spend and save in one convenient place, have a suite of tools (like Vaults and Roundups) that can amp up your savings, and, for qualifying accounts with direct deposit, you can get paycheck access up to two days early.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.20% APY on SoFi Checking and Savings.

FAQ

Do you pay a fee to receive a wire transfer?

It depends, but most banks do charge a fee for income wire transfers. However, the fee for incoming wires is usually considerably less (maybe 50% lower) than the fee for outgoing wires.

Why are wire transfers so expensive?

Wiring money can be expensive for several reasons, such as their shorter processing times and higher transaction limits than bank transfers. Also, international wire transfers have more processing steps, which can increase their cost.

Do all banks charge wire transfer fees?

The majority of banks charge wire transfer fees in at least some situations. Some waive them in certain situations, while nonbank providers are more likely to waive them entirely.


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SoFi members with direct deposit activity can earn 4.20% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.20% 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 10/31/2024. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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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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Guide to Grad PLUS Loan Credit Score Requirements

Guide to Grad PLUS Loan Credit Score Requirements

According to EducationData.org, the average cost of a master’s degree at a public state college is $48,690, and $64,440 at a private school.

To help pay for this expense, graduate-level students sometimes turn to federal graduate loans for assistance. Grad students no longer qualify for federal Direct Subsidized Loans, but they may be eligible to borrow Direct Unsubsidized Loans or Graduate PLUS Loans.

Unlike most other loans in the Direct Loan Program, Direct PLUS Loans require a credit check. If you’re exploring loans to help fund your graduate program, here’s what to know about Grad PLUS Loan credit score requirements and eligibility.

What Are Grad PLUS Loans?

Grad PLUS Loans are federal student loans available to graduate and professional students to help cover educational expenses not met by other financial aid. Offered by the U.S. Department of Education, Grad PLUS Loans require a credit check, but they do not require a cosigner.

The interest rate is fixed, and repayment begins six months after graduation, leaving school, or dropping below half-time enrollment. Grad PLUS Loans allow for borrowing up to the full cost of attendance, minus any other financial aid received. They also offer flexible repayment options, including income-driven plans and opportunities for deferment or forbearance.

Who Is Eligible for Grad PLUS Loans?

Students don’t have to demonstrate financial need to be eligible for a Grad PLUS Loan. However, in addition to meeting basic federal aid requirements, applicants must be enrolled in a certificate- or degree-issuing program at least half-time, and the program must be at an eligible school.

Upon meeting these academic requirements, graduate applicants must also agree to a credit check. If you don’t satisfy the Department of Education’s credit requirement, you’ll need to meet additional Grad PLUS Loan requirements to receive funding.

Grad PLUS Loan Minimum Credit Score

Unlike a traditional consumer loan through a private lender, the Department of Education doesn’t set a minimum Grad PLUS Loan credit score to qualify. Instead, the program states that borrowers can’t have an adverse credit history.

It determines adverse credit as:

•   Having a 90 or more day delinquent balance of $2,085 across one or more accounts.

•   Having a collection or charge-off in the past two years.

•   Having a foreclosure, repossession, bankruptcy discharge, tax lien, wage garnishment, or default within the past five years.

•   Having a federal student debt charge-off or write-off within five years.

Although primary borrowers with adverse credit aren’t eligible on their own, they might still be approved if they meet extra Grad PLUS Loan requirements.

How to Check Your Credit Score

There are a couple of options for those interested in finding their credit score. First, you can check in with your credit card company or bank, as many financial institutions now offer credit scores to their customers. You can also use a free credit score monitoring service.

Since there is no minimum credit score for a Grad PLUS Loan, you may also want to review your credit history. You can review your credit report from all three credit bureaus: Equifax, Experian, and TransUnion.

Your credit reports include details for every credit account under your name and their payment status.

You can request a copy of each credit report in one sitting through AnnualCreditReport.com, the central website of the national credit bureaus.

You’re entitled to a free credit report from each bureau every 12 months. Additionally, you can request up to six free Equifax credit reports every year until 2026; this can be requested directly on Equifax’s website.

Tips for Maintaining a Good Credit Score

Although there isn’t a minimum credit score for Grad PLUS Loans, maintaining a positive credit profile today can be advantageous if you need loans for future academic years, or decide on a student loan refinance later on.

Some ways to keep your credit in good standing are by:

•   Making payments on time. Payment history accounts for 35% of your FICO® credit score. Make sure to pay at least the minimum payment by the due date every month.

•   Keeping your credit utilization low. If you have revolving credit, like a credit card, avoid using a high percentage of your available credit limit. As much as 30% of your score is based on credit utilization ratio.

•   Reviewing your credit report for mistakes. Although it’s rare, errors may come up on credit reports that can bring your score down. Regularly check your credit report and notify the bureaus of the error if you find one.

•   Keeping your longest credit account in good standing. The age of your credit accounts affect your overall credit score by 15%.

•   Having a mix of credit types. Keeping a mix of credit types could potentially help your credit score by 10%. For example, installment credit (student loan, auto loan, etc.) versus revolving credit (credit cards, home equity lines of credit, etc.).

Recommended: 10 Strategies for Building Credit Over Time

What to Do if You Have Adverse Credit

For students with an adverse credit history, the Grad PLUS Loan program offers two options:

1.    Secure an endorser. This person must not have adverse credit and will be liable to repay the debt if you, as the primary borrower, are unable to do so.

2.    Provide proof of an extenuating circumstance. If your adverse credit history was due to an extenuating circumstance, you can appeal a denied application by providing supporting documentation. Approval isn’t guaranteed.

Regardless of which path you choose, if approved, you’ll also need to undergo PLUS Credit Counseling.

Alternatives to Grad PLUS Loans

Although you have access to apply for Grad PLUS Loans as a graduate or professional student, you’re not guaranteed for approval. For example, if you have adverse credit, but can’t secure an endorser, you might not receive Grad PLUS funding.

Below are some other graduate school loan options and financial aid ideas if you need alternatives.

Grants, Scholarships, and Work-Study

Grants, scholarships, and work-study are financial aid opportunities that can help bridge the gap for your graduate education.

The first step to seeing whether you’re eligible for these programs is completing a Free Application for Federal Student Aid (FAFSA®). If you’re eligible for federal, state, or school-sponsored programs, you’ll be notified through your FAFSA award letter.

You can also apply for need- or merit-based grants and scholarships through private organizations, professional associations, or other nonprofit community groups.

Personal Loans

If you’ve exhausted federal student aid options, a personal loan from a private lender could be an option to consider. Generally, you can use personal loans for nearly any large, upcoming expense, including costs associated with graduate school, like transportation or supplies.

Personal loans are available through private entities, like banks, credit unions, online lenders, and also through community groups and associations.

Recommended: Common Reasons to Apply for a Personal Loan

Private Student Loans

Another financial aid option that operates outside of the federal student loan system are private student loans. Private student loans are specifically for use toward educational expenses, like tuition, fees, and textbooks.

These loans are provided by private banks, credit unions, and financial institutions. Some states and schools also offer private student loan options.

A private student loan is an installment loan, and can have fixed- or variable interest rates. Each lender has its own eligibility requirements and loan terms.

Since these loans aren’t federally owned, they don’t offer the same benefits that federal loans provide, like access to loan forgiveness and extended deferment. For this reason, federal student loans are generally prioritized over private student loan options when evaluating financing options.

Explore Private Student Loan Rates

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.


Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

Can you be denied a Grad PLUS loan?

Yes, you can be denied a Grad PLUS Loan if you don’t meet the Department of Education’s eligibility requirements. You must be a graduate or professional student who’s enrolled in a degree- or certificate-granting program at an eligible school. You also must not have adverse credit, and must meet the general requirements for federal student aid.

Do Grad PLUS loans check your credit score?

Yes, Direct PLUS Loans, which include Grad PLUS Loans, require a credit check. The credit checks reviews a borrower’s credit history for adverse marks. Despite having adverse credit, however, borrowers might still be able to receive Grad PLUS funding by adding a cosigner or by providing proof of extenuating circumstances.

Are cosigners required for Grad PLUS loans?

Cosigners are not required to qualify for a Grad PLUS Loan. However, if the primary borrower has adverse credit, having a cosigner (also known as an endorser), might help the primary borrower qualify.


Photo credit: iStock/aldomurillo

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.


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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.


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.

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 .

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How to Pay for College With No Money Saved

Paying for College With No Money in Your Savings

With the high cost of a college education, affording college with no money set aside might feel impossible. However, there are many forms of financial aid — whether from federal, state, school, or private organizations — that can help you pay for your college degree.

Learning how to pay for college with no money might require approaching your higher education costs from different angles. This includes cutting your college expenses, finding alternate financial aid sources, or both.

Average Cost of College

How much you can expect to pay for college varies, depending on the school you choose, your degree level, whether you’re an in-state resident, and other factors.

According to the College Board, the average tuition and fees for a full-time, in-state undergraduate student attending a public four-year school in 2023-24 is $11,260. Out-of-state students can expect to pay an average of $29,150 in tuition and fees for the same academic year. And students attending a nonprofit four-year private institution are charged an average $41,540 in tuition and fees.

Institution Type

Average Annual Tuition and Fees

Public Four-Year College, In-State Student $11,260
Public Four-Year College, Out-of-State Student $29,150
Private Four-Year College, Nonprofit $41,540

Keep in mind that these figures are exclusively for tuition and fees. This cost doesn’t account for additional expenses that college students often face, like textbooks, school supplies, housing, and transportation.

Ways to Pay for College

The cost of being a college student can seem overwhelming when you don’t have savings available to directly pay for school.

If you want to go to college but have no money or you’re a parent who’s helping your child pay for college, here are a few ideas on how to go to college with no money saved.

Fill Out FAFSA® to See if You Qualify for Financial Aid

The best way to pay for college with no money — and really, the first step you should always take — is submitting a Free Application for Federal Student Aid, also known as the FAFSA®.

The FAFSA is the first step in finding out if you qualify for a federal financial aid program. You can see if you’re eligible for the Pell Grant, federal work-study, and Direct Loans. The information on your FAFSA is also commonly used to determine your eligibility for state, school, and other privately sponsored aid.

Grants

In addition to federal grants, search for grants from your state and school for additional funding. Grant funds generally don’t need to be repaid as long as you meet the grant program’s requirements.

Some organizations — nonprofit and for-profit — also host their own need- or merit-based grant programs for college students.

Recommended: Grants for College

Scholarships

Scholarships are considered gift aid, meaning they typically don’t need to be repaid. There are a plethora of scholarship opportunities that are awarded due to financial need or merit.

You can search for scholarships online from various companies, organizations, community groups, and more. Ask your school’s financial aid office for help finding these advantageous sources of aid.

Negotiate With the College for More Aid

If your financial circumstances have changed since you submitted your FAFSA, request a professional judgment to have your school reevaluate your financial aid package.

Not all schools accept this request, but if yours does, this process gives you a chance to provide additional documentation that’s used to recalculate your financial need.

Start With Community College and Transfer

If you want to go to college but have no money, one option is to attend a community college for the first two years of your college education. According to the same College Board report, the average 2023-24 cost for tuition and fees at a local two-year college is $3,990 for a full-time undergraduate student.

After completing your general education courses at a junior college, you can then transfer to a four-year school.

Choose a Less Expensive University

The type of school you choose can also help you afford college if you don’t have money saved. As mentioned earlier, the cost of college varies widely between a public versus private institution.

Additionally, choosing a public school in your home state generally costs less than attending an out-of-state school. When reviewing cost, be sure to factor in the scholarships and grants you may qualify for.

Live at Home

Room and board is one of the largest expenses facing students. Instead of having to account for costs toward a dorm room or off-campus housing, living at home and commuting to school can help you keep expenses lower.

Talk with your parents about whether living at home while you earn your degree is an option.

Study Abroad

Some students may explore pursuing their degree abroad as one solution to cut expenses. Thanks to government subsidies in some countries, attending university abroad can be less expensive than staying in the U.S. In some cases, American students may even qualify for free tuition.

Work-Study

The federal work-study program allows you to earn financial aid with part-time work through an employer partner.

Federal Student Loans

If you need to borrow money for college, a federal student loan is the first choice for students. The Department of Education offers subsidized and unsubsidized federal loans to students. These loans need to be repaid.

Undergraduate students might be eligible for subsidized federal loans in which the government pays for accrued interest while you’re enrolled in school, during your grace period, and while in deferment. These are awarded based on financial need.

Recommended: Types of Federal Student Loans

Private Student Loans

After exhausting all of your federal student aid opportunities, students may apply for a private student loan if they need additional cash to pay for college.

Private student loan rates and terms differ from federal loans. Generally, private student loans don’t offer borrowers income-driven repayment plans or flexible deferment or forbearance terms when you’re having trouble repaying your loan.

Also, loan details differ between lenders. To find a competitive private student loan, compare rates from a handful of lenders before choosing one.

Working Part-Time

To supplement the financial aid you’ve received, consider working part-time while you’re enrolled in school. Funds from a part-time job can help you pay for day-to-day costs as a student, like groceries, transportation, or general living expenses while you’re studying for your degree.

Borrowing From Family Members

If you have a money gap between the financial aid you’ve received and your college expenses, you could consider asking a close family member if they’re willing to offer you a loan.

Depending on your family’s financial resources and your relationship with your parents or relatives, you might have access to this alternative low-interest financing option. When borrowing money from family, be clear about how much you need, how the funds will be used, and expectations regarding repayment after you leave school.

Is College Right for You?

Attending a degree-granting, four-year college isn’t the only choice you have for furthering your education and career prospects. Enrolling in a trade school or seeking vocational training can help you advance your skills for more job-focused opportunities.

Trade School

A trade school offers programs that teach students the hands-on skills for a technical or labor-based profession.

Vocational Training

Vocational schools provide students with the education to earn a certification or formal training quickly for service-oriented professions.

Recommended: Guide to Student Loans for Certificate Programs

SoFi Private Student Loans

If you’ve decided that a traditional college education is for you, you might still need additional funds, despite exploring alternatives to afford college with no money.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.


Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

Is there any way to go to college entirely for free?

Yes, but financial aid is highly variable and is determined based on your unique situation. Students might be eligible to enroll in college at no cost, depending on their financial need. Similarly, some students might be able to attend college for free based on merit, like with a full academic or athletic scholarship.

Is relying completely on student loans for college a good idea?

No, relying completely on student loans for college isn’t a good idea. To keep your student loan debt out of college as low as possible, it’s generally wise to seek out a mix of financial aid options. Prioritize aid that you don’t have to repay, like grants and scholarships, and use student loans as a last option when funding your college education.

Why is the cost of college so high in the US?

The high cost of college in the U.S. can be attributed to various factors. An increased demand for higher education and unrestrained administrative and facility costs have been cited as reasons for the ongoing rise of college costs.


Photo credit: iStock/Passakorn Prothien

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.


SoFi Loan Products
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.


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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11 Benefits of Being an Entrepreneur

11 Benefits of Being an Entrepreneur

Entrepreneurship is booming in America. According to the U.S. Census Bureau, a record 5.5 million new business applications were filed in 2023. While entrepreneurship is often portrayed as being exhaustingly hard, its many upsides are clearly enticing more and more people to dive in.

What are the benefits of being an entrepreneur? They can range from setting your own hours to having unlimited earning potential to realizing a personal dream. Some people nurture an idea for an innovative product or service for years and then set to work bringing it to life. Others are on a mission to help their community or a specific segment of the population.

Still others set out with the simple goal of making a lot more money than their current 9-to-5 gig pays.

Whatever your motivation, the benefits of becoming an entrepreneur can have a major positive effect on your life. Here, we’ll take a closer look at the perks of starting your own venture. They just may motivate you to take this next giant step in your career and charter your own path.

Read on to learn:

•   What is an entrepreneur?

•   How does entrepreneurship work?

•   What are the benefits of being an entrepreneur?

What Is an Entrepreneur?

An entrepreneur is a person who starts their own business to bring their dreams to life. Whether they envision opening a better coffee bar or developing a fitness app, they invest time and capital in their business ideas and work diligently to make them successful. Entrepreneurs often partner with other investors, employ workers, and take risks as they seek success.

Typically, an entrepreneur is an inherent problem-solver with a can’t stop, won’t stop attitude. In addition, many are brimming with confidence and conviction that their idea is a terrific one. They refuse to stay discouraged and just see the word ‘no’ as a temporary setback at worst.

The U.S. is full of success stories of entrepreneurs, whether that means the likes of Microsoft’s Bill Gates, Amazon’s Jeff Bezos, or any of the folks who win on Shark Tank. Many of these experienced numerous failures and pressure to give up from family, friends, and potential investors but persevered.

While the wealthiest entrepreneurs are popular symbols of accomplishment and can make it look easy, the truth is that most entrepreneurs have spent countless hours and tremendous sweat equity behind the scenes to become successful.

How Does Entrepreneurship Work?

Entrepreneurship is the opposite of 9-5 jobs. Instead of punching a clock or working on a project for a company, you depend on your own efforts to bring in some type of income. The grind can be brutal, especially at first when you probably aren’t making money.

However, entrepreneurship means more than wanting to work for yourself. To live as an entrepreneur, you need an idea for a business, service, or product to focus your efforts. For example, you might see an opportunity to succeed with a superior product or be the first to serve a niche market. Ideally, you’ll start earning money to put in your bank account for savings or to invest back in the business.

As an entrepreneur, you bet on yourself, which means you invest as much of your time and money into your business aspirations as possible. You might leave your job to pursue your dream or put in hours before or after your day job to get your business going. Either way, successful entrepreneurs often reach a point where they grow their company enough that they must dedicate all their time to it, hire others to take on some of the workload, or partner with investors.

In addition, some entrepreneurs even create social change through their business efforts.

Earn up to 4.20% APY with a high-yield savings account from SoFi.

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Benefits of Being an Entrepreneur

Now that you understand how entrepreneurship works, here are some pros of being an entrepreneur.

1. Ability to Work from Anywhere

One of the key benefits of becoming an entrepreneur is you typically have the ability to work from home or anywhere else you may be. Since you can run many types of business online, you often only need a laptop and internet access to work as an entrepreneur. A work-from-home budget can be an economical way to launch your venture. So, whether you prefer your living room, a coffee shop, or a beach (as some digital nomads do), you have the freedom to set up shop wherever you like without necessarily paying rent for a workspace.

2. Having a Flexible Schedule

In addition to working from anywhere, you choose when you’ll work as an entrepreneur. As a result, you make your own hours,which may give you room for family time, exercise, or errands during the day.

Worth noting: Since the “office” never closes, some entrepreneurs are known to toil 16-hour days (or longer) to realize their aspirations. For this reason, setting your own hours can be a double-edged sword that may lead to overwork and burnout for some. Proceed with your eyes wide open, and remember that work-life balance can be valuable.

3. Ability to Make Key Decisions

As an entrepreneur and business owner, the buck stops with you, which is another empowering benefit of being an entrepreneur. You’ll decide how the business runs, the product or service to focus on, and the target market you’re trying to reach. You pick your team, your partners, and your company culture as the business grows.

Recommended: Can I Use a Personal Checking Account for Business?

4. Growth in Leadership

A successful business requires an able leader. In all likelihood, entrepreneurship will give you opportunities to develop as a business owner and manager. You can learn new skills and expand your knowledge.

As a result, as you continue your professional journey, you’ll get the chance to become an effective boss, operations manager, and business development wrangler. All of which are pros of being an entrepreneur.

5. Ability to Give Back to Your Community

Success as an entrepreneur usually means growing your business to the point where you hire employees. As a result, your efforts may contribute to creating wealth and economic opportunities in your community, helping others support their families and accomplish their dreams. Additionally, successful business owners and entrepreneurs can invest in other companies and donate to charity, benefiting those around them. There’s one more way this can be an upside of entrepreneurship Your business mission may be one that uplifts others. Perhaps you’re developing a healthier snack food, for instance, or an app that helps people reduce their stress levels.

6. Choosing Who to Work With

As an entrepreneur, you might start your business slowly (a benefit of side hustles) or go in full tilt right from the start. Regardless of how you get going, you’ll determine who your partners and colleagues are, which can make for a very agreeable work life. Whether you occasionally speak with consultants, hire workers, or bring investors on board, you decide who gets involved with your business. Your independence as an entrepreneur allows you to intentionally create a work culture that fits your preferences. It’s empowering to have the ability to say “no” to working with someone who doesn’t fit your vision.

7. Being an Entrepreneur is Rewarding

One of the many benefits of becoming an entrepreneur is seeing success unfold, thereby proving the validity of your ideas and the impact they can have. Whether you develop a shampoo that people love or a service that helps disadvantaged students, knowing that your endeavor is finding an audience can be hugely rewarding.

In terms of finances, turning a profit on your business can be life-changing. Once you run payroll and address your business costs and responsibilities, the money you’ve earned can go into your bank account.

Whether you want to put money earned back into the business for more growth or use it to get a new car, seeing money roll in from your business can be incredibly satisfying. Instead of having a set salary, you’ll see how your very own efforts can drive your income and net worth.

8. Being Able to See the Fruits of Your Labor

Success as an entrepreneur is multifaceted and fulfilling: You could obtain financial freedom, see your business grow through meeting customers’ needs, mentor employees, and launch related (or unrelated) ventures. That feeling of having created something that clicks with an audience and builds a following is uniquely satisfying and can definitely boost your sense of pride and self-esteem.

Recommended: Common Signs That You Need to Make More Money

9. Creating a Positive Impact

Entrepreneurship goes beyond making an appealing product and profitable business. Your leadership can inspire others to pursue their dreams. Additionally, your company can create economic ripple effects, allowing others to achieve financial success and benefiting your city and beyond.

10. Income Is Decided by You

As an entrepreneur, you manage the money (at least during the start-up period). As your business evolves, you might get to decide whether you want to create jobs with better pay or scale your business quickly. You’ll also allocate funds and determine your own paycheck.

It’s a balancing act that you will be in charge of. For example, you might be less concerned with becoming a millionaire than you are with retaining quality employees for the long haul through robust compensation.

11. Networking Opportunities

Most successful entrepreneurs keep strong connections with others who are also starting their own ventures. For instance, you can learn from those who already had to rent workspace, run payroll, or deal with licensing arrangements. In the future, you might be the one tapped by a newly minted self-starter for that very same kind of information.

You’ll grow professionally through peer, mentor, and mentee relationships. No one knows it all, and tapping your network can be an effective way to solve business problems and find the right people to hire or consult.

The Takeaway

There are a myriad of benefits of being an entrepreneur, such as deciding your own schedule, boosting your earning power, and having the opportunity to impact people around you. However, successful entrepreneurship requires tenacity, willingness to learn from failure, and comfort with risk.

The beauty is that anyone can become an entrepreneur. Whether you start your business as a side hustle or leave your job to take the plunge, you have the power to create your own opportunity. You’ll get the chance to make important decisions, such as determining the location of your business, deciding how many employees to hire, and choosing the right bank account for your earnings. Being an entrepreneur can help you grow professionally, personally, and financially.

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


Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.20% APY on SoFi Checking and Savings.

FAQ

What are the drawbacks of being an entrepreneur?

The drawbacks of being an entrepreneur include not having a guaranteed wage or salary, possibly investing more hours into your business than you would at most jobs, and the real risk that your endeavor may fail. As a result, you might put all your time and money into a business venture only to end up with nothing to show for it.

Can anyone become an entrepreneur?

Anyone can become an entrepreneur; no specific certification or education is necessary. However, in some cases, business experience, a college degree, and professional training programs can increase your chances of being a successful entrepreneur.

How long does it take to become an entrepreneur?

One of the pros of being an entrepreneur is that it’s possible to become one quickly if you have a business idea plus sufficient available hours and capital to start your venture. However, finding success as an entrepreneur usually takes years of hard work.


Photo credit: iStock/PeopleImages

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 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.


4.20% APY
SoFi members with direct deposit activity can earn 4.20% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.20% 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 10/31/2024. There is no minimum balance requirement. Additional information can be found 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.

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.

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What Happens to a Direct Deposit if It Goes to a Closed Account?

If a direct deposit goes to a closed account, it won’t vanish into the ether. This kind of issue can usually be resolved, and the money can get to its intended destination or be reclaimed.

It’s a common enough hiccup when a direct deposit goes to a bank account that is closed. Maybe the account holder shut it or the financial institution did, but either way, the money can be tracked and re-directed.

Key Points

•   Direct deposits to closed accounts are usually returned to the sender.

•   The bank may hold onto the funds and give the account holder time to reopen the closed account.

•   Banks may issue a paper check to the individual who owns the closed account.

•   To avoid a misdirected deposit, it’s important to double-check account numbers and cancel direct deposits before closing a bank account.

What Is a Closed Account?

A closed account refers to a deactivated or terminated account; in other words, it’s no longer open and available for deposits and withdrawals. The account holder, a custodian or the account, or the banking institution can usually close an account.

Why might a bank close an account? This can be what happens when your bank account is negative and you fail to replenish it and/or pay overdraft fees. Or perhaps the bank has seen activity they don’t think is legitimate, among other reasons.

Once this happens, it’s generally not possible to deposit funds by direct deposit or otherwise into the account. Often the term “closed account” refers to a checking or savings account, but it can also refer to a derivative trading, auto loan, brokerage, or credit card account.

What Can Happen to a Direct Deposit if It Is Sent to a Closed Account?

Sometimes, you may have gone to the trouble of setting up direct deposit in the past, but then the account later winds up closed. You might wonder what happens if a direct deposit is sent to a closed account.

Most banks have a standard process they follow when misdirected money is received. Here are a few different situations that can play out.

Direct Deposit Will Be Returned to the Sender

In many cases when someone tries to send money to a closed bank account, the bank will simply return the funds to the sender or decline the transaction. It can take about five to 10 days for funds to be returned to the sender. This timeline can speed up if the account holder to whom the deposit was intended is in good standing with the bank.

Bank Can Possibly Hold Funds

If a deposit is issued to a closed account, the bank may choose to hold onto the funds and may give the account holder time to reopen a closed bank account. Reopening a closed account, however, is only possible in a couple of scenarios. It’s not a sure thing.

Sometimes, a situation arises with what is known as a dormant account. This means there hasn’t been any activity over a period of time except for interest accruing. You may be able to get the account fully up and running again by contacting your financial institution.

In other cases, you might be able to reopen an account that is frozen. In the case of a frozen account, you may not be able to withdraw funds due to the financial institution’s decision (perhaps there is activity that doesn’t seem legitimate) or a court order (that is, a judgment against you). In some of these scenarios, you may be able to fix a frozen account by talking with your bank, or you may need legal assistance.

Banks may be more willing to work with customers if this is the first time a situation like this (meaning a dormant or frozen account) has happened. If a deposit was intended for you and you are able to reopen your account, this issue can resolve quickly—possibly within 24 hours.

Bank May Issue a Paper Check

Some banks choose to issue a paper check to the individual who owns the closed account. Other times, the company or individual with whom you set up direct deposit may get their funds back from the bank and then may make the payment via a paper check.

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When Does a Bank Return a Direct Deposit to the Sender?

If a bank receives a direct deposit for a closed account or for a faulty account number, they may choose to return the direct deposit to the sender or to simply decline the transaction.

Can a Direct Deposit Reopen a Closed Account?

Occasionally, a direct deposit being sent to a closed account can trigger its reopening. A bank may choose to give a customer the chance to reopen their account. They might hold onto the funds until the account is reopened so they can complete the direct deposit.

This happens very much on a case-by-case, bank-by-bank decision. Communication with your financial institution can be very important in this situation.

Recommended: How Long Does a Direct Deposit Take to Go Through?

What Can I Do if My Direct Deposit Was Sent to a Closed Account?

If a direct deposit was sent into a closed account, the best thing to do is to contact the bank the funds were sent to. This can help you resolve the issue as quickly as possible. Every bank has its own processes for handling situations like this. Yours can help you understand what the best next steps may be.

The bank may or may not play a role in getting the funds to you. In some cases, you may need to deal directly with the payor. But in either case, your financial institution should be able to give you guidance.

Also, remember that while it can be stressful when a direct deposit goes to a closed account, the money won’t be lost. You should be able to get your funds back.

Avoiding a Misdirected Direct Deposit

To avoid having a direct deposit sent to a closed account, it’s best to get ahead of the issue. These are some steps you can take to help avoid a misdirected direct deposit.

•   Double-check account numbers on direct deposit forms. Whenever filling out a new direct deposit form, it’s a good idea to double (if not triple) check the account numbers on the form. Likewise, if you are expecting a recurring direct deposit to a closed bank account, it’s important to get it redirected to a current open account and carefully check that the digits are correct.

•   Cancel direct deposits before canceling a bank account. To help avoid any issues with direct deposits, it’s a good idea to cancel or alter any direct deposits before closing a bank account. Then, you can make sure payments are heading to a bank account that can receive the funds. That way, any issues can be resolved before the account closes so the money doesn’t get stuck in limbo.

Recommended: Are You Bad with Money? Here’s How to Get Better

Banking With SoFi

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


Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.20% APY on SoFi Checking and Savings.

FAQ

Can a direct deposit go into a closed account?

If a direct deposit goes to a closed account, there are several outcomes that vary bank to bank. In some cases, the financial institution may hold onto the funds and let the customer reopen their account to claim the money; it might send the funds back to the payer or decline the transaction; or it may choose to issue a paper check to the payee.

How long does it take for a payment to bounce back from a closed account?

If an individual or business issues a direct deposit to a closed account, the bank may choose to either decline the transaction or send the funds back to the payer. If they choose to send the funds back to the payer, it typically takes anywhere from five to 10 days for them to get their money back.

What happens to money refunded to a closed bank account?

A few different scenarios can happen if money is refunded to a closed bank account. The bank can simply decline the transaction or to send the funds back to the payer. Other options include issuing a paper check to the payee or possibly holding onto the funds and giving the payee the option to reopen their closed account.


Photo credit: iStock/MissTuni

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 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 4.20% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.20% 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 10/31/2024. 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.

*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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