What is green investing — and how can it help make the world a better place (while making investors money)? Here’s what investors need to know.
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If you finance a home, the lender will have you sign either a deed of trust or a mortgage. A mortgage is an agreement between you and the lender, but a deed of trust adds a neutral third party that holds title to the real estate.
Many states allow either choice. Thanks to an easier foreclosure process, many lenders prefer a deed of trust to a mortgage, so it is important for borrowers to grasp the nuances of these documents.
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To understand the difference between a deed of trust and a mortgage, it helps to first know some mortgage basics. A mortgage is a loan that’s used to purchase a piece of real estate. First, the borrower applies for a loan from among the different mortgage types. Once approved, they sign a mortgage note, promising to pay the lender back over a specified time with agreed-upon terms. The real estate serves as collateral for the loan.
Note: SoFi does not offer a Deed of Trust at this time.
You may hear a mortgage note referred to as a promissory note. In any case, it’s a legally binding document.
A mortgage transfer takes place when a borrower assigns what is typically an assumable mortgage to another person. Most mortgage loans are non-transferable. That said, in the case of marital separation, divorce, death, or other unusual circumstance, a mortgage transfer is sometimes permitted.
FHA, VA, and USDA loans, insured by the government and issued by private lenders, are assumable if the buyer qualifies.
When a borrower defaults on making mortgage loan payments as agreed upon, the lender may start legal proceedings to take ownership of the property and resell it to recover funds owed to the financial institution.
A mortgage foreclosure can take place when a borrower doesn’t meet other terms of the agreement, but failing to make payments is the most common reason. A variety of mortgage relief programs help borrowers stave off foreclosure.
Some states incorporate a deed of trust into their home loan process, while financial institutions in other states can choose to do so or not. A deed of trust is an agreement that’s signed at a home’s closing that states how a neutral third party — typically the title company — will hold legal title to the home until the borrower pays the loan off. (It is not the same thing as the deed to the house.)
Terms to know include the following:
• Trustor: the borrower
• Beneficiary: the financial institution loaning the money
• Trustee: a third party that will legally hold the title until the loan is paid off
If the borrower pays off the mortgage loan, the third-party trustee dissolves the trust involved and transfers the title of the real estate to the borrower.
If the borrower sells the home before the balance owed is paid in full, the trustee takes the sales proceeds and pays the lender what is still owed and gives the borrower/trustor the rest of the money.
As with a mortgage, there are clauses in the deed of trust agreement that will trigger foreclosure proceedings. In this case, the trustee will sell the property and distribute the funds appropriately.
Both a mortgage and a deed of trust are used when someone buys a home and takes out a loan to complete the purchase. Under each structure, the lender has the option to foreclose on the home if terms and conditions agreed upon by the buyer are not met.
In states where either option is allowed, the lender will decide which one to use.
Here’s the big one: ease of foreclosure by a private trust company when a deed of trust is in place. But let’s look at how all the differences line up, below.
| Mortgage | Deed of Trust | |
|---|---|---|
| Number of parties | Two: borrower and lender | Three: trustor (borrower), beneficiary (lender), trustee |
| Transfers | Uncommon | Part of the transaction when loan is paid off |
| Foreclosure | Typically involves court | Typically handled outside court system, which is usually faster and less costly |
Although deed of trust versus mortgage differences may seem reasonably small, it can make sense to be clear about which one you have. Look at a mortgage statement to find your loan servicer and ask.
A longer route: Mortgages and deeds of trust are publicly filed documents, so you could seek out the local government agency that manages these kinds of records and get a copy.
A deed of trust and a mortgage are the two main systems for securing home loans. One key difference is the presence of a neutral third party in deeds of trust. The trustee holds legal rights over the real estate securing the loan. It’s easy to get lost in the forest of mortgage matters. A mortgage help center can lend a hand.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
On a deed of trust, all three parties are listed: the trustor (borrower), beneficiary (lender), and trustee (third party that holds the title until the loan is paid in full). With a mortgage, there is no third party involved.
A deed of trust will be filed and recorded in public records in the county where the house exists. A similar process takes place for mortgage deed recordings. The recorded documents could be located at a county clerk’s office, a public recorder’s office, or an office of public records.
Yes. A title is a concept rather than a physical document like a deed of trust or a mortgage note, and it refers to a person’s legal ownership of a home or other property. When a property is sold, the title is transferred from the current owner to the buyer.
No. Deeds of trust require a trustee, but a mortgage does not.
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In the financial world, you’ll often hear the terms “bull market” and “bear market” in reference to market conditions, and these terms refer to extended periods of ups and downs in the financial markets. Because market conditions directly affect investors’ portfolios, it’s important to understand their differences.
As such, knowing the basics of bull and bear markets, and potentially maintaining or adjusting your investment strategy accordingly, may help you make wiser investing decisions, or at least provide some mental clarity.
A bull market is a period of time in the financial markets where asset prices are rising, and optimism is high. A bull market is seen as a good thing for most investors because stock prices are on the upswing and the economy is booming. In other words, the market is charging ahead, and portfolios are rising in value. The designation is a bit vague, as there’s no specific amount of time or level of increase that defines a bull market.
Recommended: What Does Bullish and Bearish Mean in Investing and Crypto?
The term “bull market” has an interesting history, and was actually coined in response to the development of the term “bear market” (more on that in a minute). The short of it is that “bears” became associated with speculation. In the 1700s, “bull” was used to describe someone making a speculative investment hoping that prices would rise, and thus, itself became the mascot for upward-trending markets.
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Investors and market watchers generally define a bear market as a drop of 20% or more from market highs. When investors refer to a bear market, it usually means that multiple broad market indexes, such as the Standard & Poors 500 Index (S&P 500) or Dow Jones Industrial Average (DJIA), fell by 20% or more over at least two months.
As noted, the term “bear” has a long history. It can be traced back to an old proverb, warning that it isn’t wise to “sell the bear’s skin before one has caught the bear.” “Bear’s skin” became simply “bear” over the years, and the term started to be used to describe speculators in the markets. Those speculators were often betting or hoping that prices would decline so that they could generate returns, and from there, “bears” became associated with downward-trending markets.
The most stark and obvious difference between bull and bear markets is that one is associated with a downward-trending market, and the other, with an upward-trending market. But there are other differences as well.
For instance, bull markets tend to last longer than bear markets – although there’s no guarantee that any bull market will last longer than any particular bear market. The average bull market, for instance, lasts between six and seven years, while the average bear market lasts less than one-and-a-half years.
Typical gains and losses are lopsided between the two, as well. The average gain over the course of a bull market is almost 340%, while the average cumulative loss during bear markets is less than 40%.
|
Bull vs Bear Market: Key Differences |
|
|---|---|
| Bull Market | Bear Market |
| Upward-trending market | Downward, or declining market |
| Have an average duration of 6.6 years | Have an average duration of 1.3 years |
| Average cumulative gains amount to ~340% | Average cumulative losses amount to 38% |
Depending on the individual investor, investing can be different during different types of markets. For some people, their investing habits may not change at all – but for others, their entire strategy may shift. A lot of it has to do with your personal risk tolerance and whether you’re letting your emotions get the best of you.
You may want to think of it this way: Just like encountering a grizzly on a hike, a bear market can be terrifying. Falling stock prices likely mean that the value of your retirement account or other investment portfolios are plummeting.
Unrealized losses during a bear market can be psychologically brutal, and if your investments don’t have time to recover, they can seriously affect your life.
Assuming, that is, that those unrealized losses become realized – if an investor does nothing during a bear market, allowing the market to recover (which, historically, it always has), then they’ve effectively lost nothing.
That can be important to keep in mind because markets are cyclical, meaning that bear markets are a fact of life; they tend to occur every three to four years. But what makes them nerve-wracking is that it’s difficult to see them coming. Some signs that a bear market may be looming include a slowing economy, increasing unemployment, declining profits for corporations, and decreasing consumer confidence, among other things.
Conversely, many investors may find it psychologically easier to invest during a bull market, when assets are appreciating (generally), and they can see an immediate unrealized return in their portfolio. Again, each investor will react differently to different market conditions, but the psychological weight of prevailing markets can be heavy on many investors.
As noted, investors choose to adopt different investment strategies depending on whether we’re experiencing a bull or bear market.
During a bull market, some might suggest holding off on the urge to sell stocks even after you’ve had gains, since you could miss out on even higher prices if the bull market charges forward. However, no one knows when a peak will arrive, so this buy-and-hold strategy could lead to investors, who sell later, missing out on potential gains.
It may be a good idea to try and keep your confidence in check during a bull market, too. Because investors have seen their holdings gaining value, they might think they’re better at picking stocks than they actually are, and could feel tempted to make riskier moves.
Another common mistake is believing that the gains will continue in perpetuity; in reality, it’s often hard to predict a downswing, and stock market timing is challenging for even professional investors.
A great way to prepare for a bear market is to try and remember that the market will, at some point, see a downturn. And, accordingly, to try and be prepared for it.
One way to do so could be to make sure your assets aren’t allocated in a way that’s riskier than you’re comfortable with — for example, by being overly invested in stocks in one company, industry, or region — when times are good. In other words, make sure your portfolio contains some degree of diversification.
Buying stock during a bear market can be advantageous since investors might be getting a better deal on stocks that could rise in value once the market recovers, which is also known as buying the dip. However, there can be obvious risks associated with predicting when certain stocks will hit bottom and buying them with the expectation of future gains.
No one knows what the future holds, so there’s always a chance the price will keep plummeting. Another tactic investors might be able to use is dollar-cost averaging — which is investing a fixed amount of money over time — so that chances of buying at high or low points are spread out over time.
Recommended: The Pros and Cons of a Defensive Investment Strategy
Once the bear market arrives, investors make a common mistake: getting spooked and selling off all their stocks. But selling when prices are low means they could be likely to suffer losses and may miss the subsequent rebound.
In general, as long as investors are comfortable with their portfolio mix and are investing for the long haul, it may be a good idea to stick with your predetermined strategy, no matter what’s happening in the markets in the short-term. Again, it’s worth remembering that market cycles are normal, and the same dynamism responsible for downturns allows investors to experience gains at other times.
As discussed, bear markets are fairly common. In fact, dating back to 1929, the S&P 500 has experienced a decline of 20% or more 27 times – and the good news for investors, as of late, is that more recent bear markets have tended to be shorter in duration, and fewer and further between.
The most recent bear market was during 2022, and lasted 282 days, with a market decline of more than 25%. The market has, since then, bounced back to reach record-highs. Before that, there was a bear market in February and March 2020, when the pandemic initially hit the U.S., which saw the markets fall more than 33% – but the bear market itself lasted only 33 days.
Going back even further, there was a relatively severe bear market in the early 1970s which lasted 630 days, and saw the market decline 48%. Again, that makes more recent downturns look fairly tame in comparison.
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Bull and bear markets refer to either rising or declining markets, with bear markets notable as they represent declines of at least 20% in the market. Both bull and bear markets can have psychological effects on investors, and it’s important to understand what they are to try and adjust (or stick to) your strategy, accordingly.
If you’re investing for decades down the road, once you have an investment mix that is diversified and matches your comfort with risk, it’s often wisest to leave it alone regardless of what the market is doing. It may also be a good idea to speak with a financial professional for guidance.
Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).
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A variable-rate certificate of deposit (CD) is a financial product that locks up your money for a set period of time (or term) and has a fluctuating interest rate. This varying rate of return is what sets it apart from traditional CDs, which pay a fixed rate, meaning you know exactly how much money your money will earn.
When interest rates are high, a variable-rate CD can help pump up your returns, but the opposite holds true, too. Depending on your financial goals, style, and comfort level, a variable-rate CD may or may not be a good option for you.
A variable-rate certificate of deposit, or CD, is a financial product that you can purchase from a banking institution, broker, or credit union. All types of CDs are a savings account that have fixed investing terms. That means they hold your money for a certain amount of time, be it six months or several years.
You pick a term that suits you best. During that time, your money earns interest, but you are not supposed to withdraw any funds early or you are likely to be assessed a penalty fee. (No-penalty CDs are sometimes available but usually with lower interest rates.) When the term ends, your CD is said to have matured, and you may withdraw the funds plus interest or roll them over into a new CD. Usually the total amount of interest is also received at the end of the investment term.
More specifically:
• Traditional CDs pay a consistent rate of interest that you are informed of at the start of the term.
• With variable-rate CDs, however, the interest rate fluctuates throughout the term.
This means, you, the investor can potentially earn more on your deposit when interest rates go up. Or you could earn less if interest rates go down. Several market factors influence interest rates. These include the prime rate, treasury bills, a market index, and the consumer price index (CPI).
One last note: CDs are insured. Certificates of deposit are time deposits protected by the Federal Deposit Insurance Corporation (FDIC). If the bank holding the CD were to fail, you’d be insured up to $250,000 per depositor, per account ownership category (such as single, joint, or a trust account), per insured institution.
Here are a few key things to consider when looking into investing in variable-rate CDs. This type of CD is generally most profitable if purchased when interest rates are low, because it’s more likely that the interest rate will increase during the investment term. For this reason, there is a higher demand for these CDs when interest rates are low.
There are four main factors that influence interest rates. These are:
• Consumer Price Index (CPI): The federal government uses the Consumer Price Index to calculate changes in the amount that consumers pay for certain products and services. Whatever the current CPI is can affect how interest rates fluctuate.
• Market Index Levels: Another factor that affects interest rates is the performance of investment portfolios, such as major market indices. Some indices that are often analyzed include the S&P 500, the Dow Jones Industrial Average, and the Nasdaq Composite Index.
• Prime Rate: The prime rate is the interest rate that banks charge customers who have the highest credit ratings. These customers are the least likely to default on loans, so they get the best interest rates.
• Treasury Bill Yields: The U.S. Treasury sells Treasury bonds in order to raise money, and they also pay interest on those bonds. The interest rate associated with Treasury bonds depends on the amount and time period of the bond.
It’s worth noting that, during times of high inflation, CDs may not be your best option. If inflation surges, even a variable-rate CD may not be able to keep pace. At the end of your term, you may find that your investment has lost ground versus inflation.
Another factor to consider before you lock in on a variable-rate CD is the fee for early withdrawals. Some variable-rate CDs have higher fees than others. If there’s a good chance you may end up withdrawing funds early, before a CD’s maturity date, you should check those penalties and make sure they aren’t too steep.
All CDs are known to be very safe investments since they are federally insured up to $250,000, as noted above. In addition to that security, there are several benefits to investing in variable-rate CDs.
Variable-rate CDs are secure, insured accounts that can provide a higher rate of return than other types of savings accounts. For instance, when you buy a fixed-rate CD, you might miss out on the opportunity to earn a higher interest rate if the market ticks upward. Variable-rate CDs, however, can respond to market conditions. If you buy a variable-rate CD when interest rates are low, you can potentially earn more as rates increase.
When interest rates are low, demand for variable-rate CDs increases, as does the profit potential. That’s because it is more likely that interest rates will increase after you purchase one. The interest rate can tick upwards and earn you more money on your money.
Generally, variable-rate CDs come with lower penalties on early withdrawals than other types of CDs.
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While there are several reasons variable-rate CDs make good investments, they do come with a few downsides to consider before you invest.
Although a variable-rate CD provides the opportunity to snag higher interest rates, it also creates a significant risk of earning a lower rate if market rates go down. If you buy a variable-rate CD when interest rates are low with the hopes that they will increase, there is no guarantee that this will happen. This means they will continue to earn a low interest rate for some or all of the duration of the CD term. In this case, you may have lost out on the possibility of earning a higher return elsewhere.
Although interest rates can increase or decrease with most variable-rate CDs, there are some that have a “bump-up” feature. This allows for a one-time rate boost (or possibly a few rate hikes) during the CD’s term, but you may well have to pay extra for this “bump-up.” This is because the initial interest rate is typically lower than it would be on a fixed-rate CD.
There is a chance that inflation will increase during the term of a variable-rate CD, as noted above. If this happens, inflation could end up being higher than the interest rate you’re earning. That could effectively cancel out your earnings.
All this talk of varying interest rates can be hard to get a handle on without a concrete example. So consider the following:
• A CD that has a three-year term and a guaranteed repayment of the principal deposit.
• The starting rate is 4.00%.
• During the term of the investment, the rate drops from 4.00% down to 2.00%.
• To determine the amount of interest you’d receive, you’d take the difference between the initial rate and the final rate, which is 2.00%.
• So at the end of the term, the investor would receive their initial deposit plus 2.00% interest. That’s half what it was when you started.
Obviously, you, the CD account owner, would be happier if the reverse were true, which it could be!
Most CDs have fees for early withdrawal; these typically involve losing interest that’s been earned and occasionally a bit of the principal. (Generally speaking, you don’t receive earned interest until a CD matures.)
However, some variable-rate CDs do offer early withdrawals with no penalties for fees. These CDs usually have a lower interest rate, so you are paying for this flexibility.
Recommended: How Can I Invest in CDs?
CDs provide a safe place for your money to grow for a specific period of time. Most of them have fixed interest rates, but variable-rate ones are also often available. These can come with some risks. Time things right, and you could earn a healthy return on your investment. But if rates don’t head in a positive direction, you may not even be able to keep up with inflation.
CDs aren’t the only game in town for earning interest. Also consider the kind of interest you can earn from checking and savings accounts.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
Variable-rate CDs are not issued by the government, but the FDIC, an independent agency of the federal government, insures them up to $250,000 per depositor, per account ownership category, per insured institution.
Several factors can affect the interest rate of variable-rate CDs. These include the prime rate, market indices, treasury bills, and the consumer price index.
Many CDs have fixed interest rates, but variable-rate CDs have interest rates that fluctuate throughout their term. It’s up to you which type you invest in.
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Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.
Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.
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An ACH debit block is a fraud protection tool: Companies can opt into it to prevent any ACH debits and credits from their bank account. If you suspect that your business is a victim of fraud, an ACH debit block is an easy way to protect your money until you’ve resolved the issue. It can also be a good general practice to discourage unauthorized debits.
Learn more about ACH debit blocks, how they work, and their alternatives.
First, understand some of the basic concepts related to this process, such as the ACH system in general and debit blocks.
ACH (Automated Clearing House) is a common payment method that works like a digital check, transferring money from one bank account into another. A common example of an ACH transfer is a direct deposit from an employer into an employee’s checking account.
As an individual consumer, you may also make ACH payments. For example, you might be using ACH when you utilize peer-to-peer payment apps like Venmo, pay your bills online, digitally file and pay your income taxes, or transfer money over to an investment account.
Businesses use ACH payments as well, to collect funds and pay expenses. But these can be a target for criminal activity. Scammers can try to pull funds out of your bank account without your approval. If you want to prevent money from leaving a business account via ACH because of this potential risk, an ACH debit block might be a good move.
When enabled, a debit block would impede your company from being able to use the funds in the account in all ACH use cases. It’s important to understand the ramifications of a debit block — and only request one from your bank if your company has alternative methods (or accounts) for making payments.
An ACH debit block is very straightforward. When this bank fraud management tool is implemented on a bank account, no one will be able to withdraw funds from a business account via ACH.
If you have a debit block on a business account and need to make an ACH payment from that account, you’ll need to take action to make sure it goes through. It’s important to contact your bank to authorize that specific payment before the payment recipient begins the ACH debit process. Otherwise, you will need to make all future payments with paper or electronic checks, debit cards, credit cards, cash, or wire transfers.
Here’s a closer look at the advantages of using an ACH debit block.
One reason to enact an ACH block on a business account is if you suspect your account has been compromised. An ACH debit block can prevent fraudsters from being able to debit money electronically from an account.
Individual consumers who are victims of identity theft can contact their bank, file a police report, report the fraud to the FTC, notify the consumer credit bureaus, and contact their creditors.
Debit blocks are sometimes a reactive solution. That is, once a business suspects fraud, they can contact their bank to implement an ACH debit block on the account.
However, some companies — those that don’t need to make electronic payments from a specific business account — may prefer to proactively set up a debit block as an additional security layer.
If you do so, just understand that you’ll need to contact your bank every time you want to authorize an electronic payment from your account.
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Setting up an ACH debit block is easier than setting up direct deposit. Just call your bank, provide your credentials, and request that they set up a debit block immediately. If you are doing this in response to fraudulent account activity, mention that on the call to determine what additional steps you should take.
Removing the debit block or authorizing a one-time payment will follow the same process. Contact your bank over the phone and explain exactly what you need.
While an ACH debit block can be a good way to protect your business checking account, it does have its drawbacks. As an alternative, you may be able to implement positive pay.
Positive pay is an automated service but focused on businesses, not consumers. It’s an ACH filter that allows you to create a list of payees or vendors that will be automatically approved when they initiate an ACH debit from your company’s account. Certain criteria for these funds transfers can also be established. For example, you might put a cap on how much they can debit in a single transaction.
If any other individuals or businesses attempt an ACH withdrawal from your account, you will receive an alert. You can then review the request and approve or deny the ACH transfer.
Worth noting: Because each bank’s offering is different, there might sometimes be an overlap between a debit block and positive pay. Some banks, for example, allow you to review and approve vendor payments when you have an ACH debit block enabled.
Recommended: Understanding ACH Fees
ACH debit blocks are a secure way to prevent fraudulent electronic transfers from your company’s bank account. If you suspect that your bank account information has been compromised, contact your bank to initiate an ACH debit block and ask what other fraud prevention resources they can provide.
When thinking about your bank’s security, don’t forget about your personal accounts. SoFi is one great option to keep your money safe.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
A business can block ACH payments with a feature called ACH debit block. This prevents anyone from electronically withdrawing money from its bank account. You may also be able to set up positive pay, which allows you to approve a list of electronic payments and review all other ACH requests.
You can set up an ACH debit block (typically, this is for business accounts) to prevent any electronic withdrawals from an account. If you want to allow expected ACH payments to process uninterrupted, set up positive pay, allowing only approved payments to go through. For your personal accounts, you may be able to set up alerts every time an ACH debit occurs in your account. If you notice any unauthorized activity, report it to your bank immediately.
If the initial ACH transfer is not processed, some companies may attempt it a second time. Ultimately, if the ACH debit from your personal account fails, the business expecting the funds can hold you responsible for additional fees, such as late fees. If a bill continues to go unpaid, the company may send it to a collection agency, which will likely have a negative impact on your credit score.
ACH payments are not immediate. While they can take up to three or four business days to clear, many banks have moved to next-day ACH transactions, which could mean funds are transferred in just one or two business days.
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Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet
Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.
Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.
Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.
See additional details at https://www.sofi.com/legal/banking-rate-sheet.
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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