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College is a great place to make lifelong friends. In college, students bond over shared interests, have fun times together, and help each other through some challenging times, cementing bonds that can last for years after graduation.

When you first arrive on campus, however, making friends in college can seem intimidating. Exactly where and how do you meet people? It can feel especially challenging if you go to a large school or you’re in unfamiliar territory, like a college that’s far away from home.

Don’t stress. Making friends in college can be easy, and you don’t necessarily need a lot of them or to make them the very first week. The key is to get involved early on, put yourself out there, and always try to be your true self. Here are some ways you can go about making friends in college.

Hang Out With Your Roommates

Whether you chose your roommate or went with a random pairing, you may or may not have a lot in common with this individual, at least from the outside. Nevertheless, it can be a good idea to try to forge a connection with your roommate. This will not only make your living situation more enjoyable, but you’ll be able to turn to your roommate when you need support.

You can bond with your roommate by cooking meals, watching favorite shows, and studying together. It can also help to be considerate and respectful of your roommate by not making too much noise late at night or early in the morning, cleaning up after yourself, and chipping in for shared supplies. By respecting your roommate’s boundaries and establishing ground rules for the room, you’ll be more likely to have a good relationship, and perhaps even become good friends, with your roommate.


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Join a Fraternity or Sorority

You might consider whether to join a fraternity or a sorority. This could provide the opportunity to make a lot of new friends. While some fraternities and sororities may have bad reputations because of their hazing practices and emphasis on parties, many focus on philanthropy and building friendships instead.

Just keep in mind that joining Greek life can cost $200 to $1,000 per semester, since you are generally required to pay fees or dues. The cost will vary depending on the school and chapter you join, and there may also be additional fees for membership.

You’ll also need to apply to get into a sorority or fraternity and go through a recruitment process to ensure it’s going to be a good fit. Then, if you’re accepted, you will typically live with your fraternity or sorority in a house on campus and socialize and volunteer with them on a regular basis.

Recommended: 11 Strategies for Paying for College and Other Expenses

Get Involved in Clubs

Another easy way to make friends in college is to join a club and get involved on campus. At the beginning of the school year, colleges will typically have club fairs, where club leaders set up booths and give information about their clubs to incoming freshmen and transfer students. This is where you can learn more and sign up for an initial meeting.

Some of the various types of clubs you can join include religious, political, academic, cultural, media, and community service clubs. For instance, students can join the school paper, radio or TV station, participate in math and science groups, join an on-campus religious group, find the school’s Republican and Democrat clubs, and volunteer at local animal rescue organizations or homeless shelters.

If you can’t find clubs you’re interested in, you may be able to start one of your own. You’ll likely have to go to the proper office on campus and follow the guidelines for establishing a new club.

Find Study Buddies in Your Classes

Another avenue for making friends in college is through your classes. You might start or sign up for a study group, which allows students in the same class to do homework and study for tests together. If you make a connection with another student in a college study group, you might suggest hanging out after the group is over or meeting up for a coffee or meal on campus another time.

Sign Up for Sports

One of the ways that many students go about making friends in college is by joining a sports team or an intramural sports club on campus. The sports teams are for athletes who are interested in playing on schools’ official teams, while intramural sports clubs are just for fun. Schools offer a variety of different sports like basketball, football, soccer, golf, tennis, and swimming. You can check out the campus life and sports section of your school’s website and look into the options.

Also, if you see a couple of students tossing a Frisbee around on the grass, there’s no harm in asking to join. Those kinds of casual meet-ups can be a good way to get to know new people.

Audition for the School Play

Theater clubs or the theater department on campus may hold auditions for school plays. You might consider auditioning for a part and making friends with the cast and crew members during rehearsal. Putting on a play can be a strong bonding experience, allowing you to cultivate lasting friendships.

Recommended: 10 Ways to Prepare for College

Go to Campus Events

Schools are always putting on events. This might include concerts, talent shows, guest speaker series, music festivals, stand-up comedy, and more. You might ask acquaintances to go to an event and/or meet new friends there. If the event is crowded, you might need to be a little more outgoing and start up conversations with the people nearby in order to (hopefully) make friends.

Connect With Other Student Workers

If you have a work-study job, internship, or other gig on campus, you might try to strike up conversations with your colleagues, as long as it doesn’t interfere with your work. Some places students may work on campus include the college’s admissions office, the endowment office, the dining hall, the coffee shop, the art museum, and the library.

Go to Social Gatherings

If your roommates or friends are holding a social gathering or going off campus to check out a local movie theater or restaurant, consider tagging along. This can be a great way to strengthen the bonds you already have, as well as meet new people. Just keep in mind that while parties can be fun, they can also distract from schoolwork and you could end up with lower grades if you are partying too often.

Ask People to Hang Out One-on-One

Whenever you meet potential new friends in classes or through clubs, consider inviting them to hang out one-on-one to get to know them better. For example, you might ask them out for coffee or a meal, to an on-campus concert or show, to work out at the gym, or to a sports game. While this involves putting yourself out there, the rewards of making a new friend can be well worth the risk that they’ll say “no.”

The Importance of Being Yourself When Making Friends in College

Although you may be worried about making new friends in college, you generally don’t want to change your personality or hide who you really are in order to fit in. It may be a little tough at first, but by joining clubs you’re interested in and finding people who accept you for who you are, you could make lifelong friends. It can take some time and might not always happen within the first semester. However, you’ll want to keep trying to meet and connect with new people throughout your four years at college.


💡 Quick Tip: Even if you don’t think you qualify for financial aid, you should fill out the FAFSA form. Many schools require it for merit-based scholarships, too.

Affording College

College is where you can set yourself up for professional success as well as make wonderful new friends. However, if you don’t know how you’ll pay for it, you might feel even more anxiety before embarking on this exciting next step in your life.

Fortunately, there are a number of ways to cover the cost of attending college, including grants, scholarships, work-study programs (which are also great for making friends), and subsidized and unsubsidized federal loans. If you get your financial aid letter and still have gaps in funding, you might also consider a private student loan.

Private loans are available through banks, credit unions, and online lenders. Unlike federal student loans, they require a credit check. However, if you have solid credit (or can recruit a cosigner who does), you may be able to qualify for a competitive interest rate. Just keep in mind that private loans may not offer the same protections that come with federal loans, such as income-driven repayment plans and forgiveness programs.

The Takeaway

Making friends and finding your social group can be a key part of the college experience. For many people, it yields lifelong connections. To get started making friends, you might look for a study group, join a sports team, get involved in campus activities, like the drama club, and attend campus events. It can be a valuable part of your time at college.

Affording your education can take some energy, too, with options like federal and private student loans.

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.

FAQ

Is it normal to be a loner in college?

Being a loner in college can be more common than you may think, despite the media images of everyone on campus having a pack of friends. Some students prefer to have just a few contacts and focus on their studies, and others find it hard to discover their network. Joining campus activities and study groups can help break the ice.

How to make friends in college when shy?

To make friends in college when you’re shy can be done by finding low-pressure situations. Examples are joining study groups and finding clubs that build on your interests whether that’s gaming, painting, running, cooking, or speaking a foreign language.

How can you make friends quickly in college?

Some ways to make friends quickly in college include introducing yourself around the dorm, joining a club or organization that interests you, studying in a social space vs. at your desk, and eating meals with your fellow students. You might also attend campus events, whether that means a football game, performance, or other gathering.

About the author

Julia Califano

Julia Califano is an award-winning journalist who covers banking, small business, personal loans, student loans, and other money issues for SoFi. She has over 20 years of experience writing about personal finance and lifestyle topics. Read full bio.

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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.

SOISL-Q325-098

If you no longer want to continue with your coverage, you may be wondering, Can you cancel life insurance? Or maybe you’re currently investigating how to cancel life insurance policies in case you decide to stop yours in the future.

Whatever your reason, this post will guide you through the cancellation processes for both term life and whole life insurance policies. We’ll also provide some alternatives to canceling your policy.

First, Can You Cancel a Life Insurance Policy?

You can usually cancel your life insurance policy at any time if you decide that you no longer want or need the life insurance coverage it provides. How that’s done will vary, based on how long you’ve had the policy (meaning, if it’s brand new or not) and whether it’s term life or whole life insurance policy.

How to Cancel Life Insurance

In each state, there’s a “free look period,” during which you can cancel a life insurance policy for any reason by appropriately informing the insurer. You can find timelines of the free look period in your policy. A typical period will last 30 days from when your policy begins, but it can be as short as 10 days, depending upon the state in which you live.

If you cancel during this timeframe, you’re entitled to a refund of your first premium payment without penalty. After the free look period ends, how you cancel your life insurance policy will depend on what type of life insurance it is.

Though there are other types of life, we’ll focus on term and whole life insurance here.

Canceling Your Term Life Insurance Policy

Term life insurance guarantees payment of a predefined death benefit when the policy owner dies during a specified term. After the term ends — perhaps after 10 or 20 years — the policyholder might renew the life insurance for another term, decide to let the policy end, or convert it to a whole life policy. Or, before the policy’s term ends, you can cancel the policy. Here’s how.

Inform the Insurer

Check the insurance company’s website to see if they have a termination form, or write them a letter to let them know you are canceling your policy. You could also call your provider to get the process started. It’s really that simple when it comes to communicating your desire to cancel with the insurer.

Stop Making Your Payments

If you’re having the payment automatically deducted from an account, check to see how much notice you have to give the financial institution to stop the next payment. The Consumer Financial Protection Bureau offers advice on stopping automatic payments.

It’s true that, if you simply stop making your premium payments, the insurer will void your policy. How long that would take would depend upon the policy’s conditions. Although this may be the easiest route to take, informing the insurance company ties up loose ends.

Canceling Your Whole Life Insurance Policy

A whole life insurance policy lasts for the policyholder’s lifetime — as long as the premiums are paid. Policyholders typically pay a higher premium, with a portion of the amount being invested. The invested funds can then be drawn upon by the policy owner. Because of this, you actually surrender a whole life policy when you want it to stop rather than cancel the policy.

Consider the Cash Value

As you pay into this policy, you’ll gradually build up cash value. It may take 10 years or so for that to happen but, when it does, surrendering (canceling) your policy may mean that you’ll get a check from the insurer for the cash value built up in the policy.

Investigate Collateral Approach

If a whole life policy has a reasonable amount of cash value, then the policy may be able to be used as collateral for a loan instead of surrendering it. If the loan isn’t repaid, then the outstanding balance and interest owed would be deducted before the death benefit was paid out to beneficiaries.

Modify Your Policy

Your insurance company may allow you to reduce your whole life premiums or even stop paying them while still maintaining some or all of the death benefits for your beneficiaries. In those cases, the premiums would be paid out of the cash value in the policy. Talk to your agent first, though, to make sure this is doable.

Do You Get Money Back if You Cancel Life Insurance?

With a term life insurance policy, when you cancel, it’s unlikely that the insurer will refund any premiums made and the death benefit to beneficiaries no longer exists. So, with term life, the answer is “no.”

With a whole life policy, though, if you’ve built up cash value, that will be provided to you after you surrender the policy, although any surrender fee is typically taken out first. When you cancel a whole life policy, ask how much money will be refunded as well as when and how you’ll get any funds back.

When Should You Cancel a Life Insurance Policy?

People cancel their policies for a variety of reasons. Here are some examples of when it may make sense to cancel your life insurance policy:

You no longer need it: Some people simply may feel they no longer need the policy — perhaps because the dependents listed as beneficiaries are no longer in need of this money, or because they, the policyholders, no longer have debt that would need to be paid off.

Your premiums are straining your budget: Other times, the premiums are too much for the person’s budget, so they decide to cancel. Perhaps, through this action, they can also collect on the policy’s cash value for needed funds.

You can qualify for a better rate on a new policy: A policyholder may have made lifestyle changes (for example, stopped smoking) or their health may have improved — and so they can now qualify for a better rate on a new life insurance policy. Keep in mind that, depending on how old you are, the premium may be the same or higher than the lower-rated policy.

You want to invest your premiums in another way: As another reason, some people cancel a whole life insurance policy and then invest the premiums paid — and any cash value refunded to them — in another way where they hope to earn more money.

Alternatives to Canceling Life Insurance

Talk to your insurer to see what options exist if you plan to cancel your life insurance policy. One possibility already mentioned is to see if you can have your whole life premiums paid out of your cash value in part or in full.

Or, if you think you still need life insurance but the premiums are too high for your budget, you can consider ways to adjust your budget to keep making your payments. For example, there may be subscriptions for streaming services or online tools that you automatically pay for but seldom use. You could consider canceling those services and continuing to make your life insurance premiums with those newly available funds.

Another possibility, if you’d like to cancel a life insurance policy and then buy another policy that’s better for you, is to consider looking into what’s called a tax-free 1035 exchange. This can allow you to make the switch without tax consequences.

Also, check your policy to see if life settlements are permitted. In that situation, the policy is transferred to a new owner, and you could receive cash in a lump sum. Just make sure to explore tax consequences if this option appeals to you.

The Takeaway

You can cancel a life insurance policy, and it’s pretty easy to do. Whether or not you’ll get money back depends on the type of policy you have. With a term life insurance policy, there isn’t any cash value and so you wouldn’t typically get any refund. With a whole life insurance policy, if you’ve paid enough into the policy to have cash value, then you would usually get some money back after surrendering the policy. Reasons why someone cancels a policy vary and there are alternatives to canceling.

SoFi has partnered with Ladder to offer competitive term life insurance policies that are quick to set up and easy to understand. Apply in just minutes and get an instant decision. As your circumstances change, you can update or cancel your policy with no fees and no hassles.

Photo credit: iStock/PeopleImages

Coverage and pricing is subject to eligibility and underwriting criteria.
Ladder Insurance Services, LLC (CA license # OK22568; AR license # 3000140372) distributes term life insurance products issued by multiple insurers- for further details see ladderlife.com. All insurance products are governed by the terms set forth in the applicable insurance policy. Each insurer has financial responsibility for its own products.
Ladder, SoFi and SoFi Agency are separate, independent entities and are not responsible for the financial condition, business, or legal obligations of the other, SoFi Technologies, Inc. (SoFi) and SoFi Insurance Agency, LLC (SoFi Agency) do not issue, underwrite insurance or pay claims under LadderlifeTM policies. SoFi is compensated by Ladder for each issued term life policy.
Ladder offers coverage to people who are between the ages of 20 and 60 as of their nearest birthday. Your current age plus the term length cannot exceed 70 years.
All services from Ladder Insurance Services, LLC are their own. Once you reach Ladder, SoFi is not involved and has no control over the products or services involved. The Ladder service is limited to documents and does not provide legal advice. Individual circumstances are unique and using documents provided is not a substitute for obtaining legal advice.

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

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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.

SOPRO-Q225-024

Living on your own can be expensive, especially these days, thanks to inflation and a scarcity of housing. Add to that the fact that when we’re younger, we tend to have lower incomes, and it can be a major financial challenge to afford living on your own.

That said, it is certainly possible to afford moving out of your parents’ place. The key is to start planning and saving well in advance of your intended move. As a general rule, you want to have at least six months’ worth of living expenses saved up before setting off on your own. That may sound like a tall order, but these tips and strategies can help you get there.

How to Financially Prepare to Live on Your Own

One of the most important first steps in getting ready to move out is determining how much it’s going to cost. Once you come up with a ballpark figure, you can determine a realistic timeline, then start setting aside a portion of every paycheck into a savings account that pays a competitive rate (such as a high-yield savings account) earmarked for your move.

Upfront Costs and Regular Bills

Let’s say a friend clues you in on a great deal on an apartment rental and says to hurry and get an application in. Just a minute, please! Before you can move out, you need to make sure you can truly afford to do so.

Start your research by tallying up all upfront costs and regular bills you’ll need to pay such as rent, auto and renters insurance, utilities, cell phone service, health insurance, transportation, and groceries. After calculating all necessary expenses, see how much room is left in your budget for extras like dining out or traveling.

Also consider the one-time hits your finances will take when you head out on your own: There may be broker’s fees, moving expenses (more on that in a minute), and other charges, as well as the price of buying furniture and other items for your home.

By looking at your budget this way, you can get an idea of whether you can comfortably afford to move out or if you need to wait a little bit longer to make a move work financially. You want there to be some breathing room in your budget so you don’t wind up putting necessities on your credit card and racking up debt.

12 Steps to Afford Moving Out

Now that you have an overview of costs and expenses, it’s time to take the next step and drill down on understanding what you can afford, when you’re ready to move out, and how to navigate a move more easily.

These steps can help you get your own place without going broke.

1. Assess How Much Rent You Can Afford

As you plan this big step in adulting, you are likely most focused on how much rent you can pay. You’ll want to come up with a range of how much rent you can take on while still managing your other necessary bills, such as student loans, health insurance, and car payments.

It’s a good idea to tally up all your expenses and subtract that from your monthly after-tax income to see how much room is left in your budget and if the amount you can afford to pay is doable in your area. If you’re feeling as if you can’t quite come up with the necessary rent, you may want to consider how to move to another state or a nearby city that’s more affordable.

2. Consider Getting a Roommate

If it’s too hard to afford rent all on your own, you can think about having a roommate to help share the expenses with. Having a roommate can also make moving out for the first time feel less lonely.

3. Research Homes and Locations

Speaking of rent: Whether you plan to rent or buy when you move out, you’ll want to do some research on different housing opportunities in different areas. That way, you can see where you can get the most bang for your buck while still meeting your personal goals.

For instance, if you really value having a short commute, you might search for a studio instead of a one-bedroom apartment in the neighborhood you are targeting, if one-bedroom units are pricey. Or, if you’re hoping to rent a house, see what kind of prices you find in a neighborhood that’s adjacent to the one you are targeting or choose to go farther afield. You might find better deals due to more housing supply.

Recommended: Tax Breaks for Young People

4. Research the Cost of Movers

If you have a fair amount of things to move, it’s important to budget for the cost of movers. Yes, a friend with a van may be able to help with some smaller items, but things like a queen-size bed typically require movers.

Depending on how much you have to move and how far the move is (25 miles? 250?), your costs could be a few hundred or thousands. Ideally, you’ll want to get a couple of estimates from companies that come and actually eyeball how much you have.

Also, be sure to find out whether moving materials are included as you create your moving checklist. You may well be charged for boxes, wardrobes, tape, and moving blankets. In addition, it’s a good idea to inquire about “drive time” to and from your locations, which you may be billed for.

5. Don’t Make Any Excuses

It’s easy to think, “I can’t afford to move out” or “Rentals are hopelessly expensive” and give up (or at least procrastinate for a good long time). But if there’s a will, there’s usually a way. Finding your motivation and patience can be crucial to taking this step and getting your own place.

It’s common to get complacent when moving forward feels hard. If you do have to remain living with your parents or another family member while you save up to move out, keep your eye on the prize. Set up alerts for new home listings, put the word out that you are hunting for a home of your own, and keep saving and making career progress so you can attain your goal of moving out.

You might chat with friends or friends of friends to get their best advice on making your independent living dreams come true. They may have valuable hacks for you, too.

6. Have an Emergency Fund Saved Up

One way to lessen the financial stress of moving out is to have an emergency fund ready and waiting. That way, when you do move out on your own and hit an unexpected (and major) expense, you will have a financial cushion available to help you out.

How much should you have in an emergency fund? Experts advise having three to six months’ worth of basic living expenses stashed away (a high-yield savings account can work well). Figure out what that amount would be with the housing costs you expect to pay, and begin saving. Even $25 or $100 a month is a good start to get that layer of protection going.

7. Track Your Spending

When you are considering moving out for the first time, it’s wise to track your spending for a month or two. This will give you an idea of how much you tend to pay out each month, which can help you get a better idea of how much rent you can afford. For instance, how much do you typically spend on gas? On your WiFi provider? On eating out? As you look at these costs, you may be better prepared to know your budget once you are also paying housing costs.

Looking at your outflow of cash can also help you cut back on nonessential spending. For instance, you might realize you are spending over $100 a month on those iced coffees to go.

8. Budget for Home Needs

Figuring out how to move out with low income can be tricky. One hidden expense that is easy to forget about when budgeting for a move is home needs. Cleaning supplies, furniture, and appliances are expenses mom or dad may have taken care of in the past. Soon, they will be your responsibility. Consider how much that will cost and budget for it.

Also, if you are planning to buy a home instead of rent, budget for property taxes, home maintenance, and repairs.

9. Look for Cheaper Options on Furniture

When you are first starting out, you don’t need to splurge on expensive furniture. Thrift stores, garage sales, and inexpensive retailers can all get the job done. Freecycle and other similar sites (or Facebook and Nextdoor groups) can yield free or low-cost furnishings, too.

Over time, it’s likely to become easier to swap those inexpensive finds out for higher-quality pieces of furniture.

10. Manage Your Finances

To make moving out possible financially, it’s a good idea to keep a close eye on the money coming in and out each month. You’ll want to take some time to get all finances in order and to create a budget for this new chapter. Learning to manage money is a big step towards independence. It will have you that much more prepared for on-your-own living.

Your bank may well have an app that can help you track your incoming funds and your spending, which can help with this endeavor.

11. Set a Moving Timeline

Once it’s clear that a move is affordable, create a final timeline for finding a place to rent or buy and then moving in. Block out weekends for home hunting, and note how long before your move you want to get quotes from moving companies.

If you still need to save a bit more money, you can extend this timeline to include saving for a few months.

12. Be Realistic

It can take time to build the life you dream of, so don’t sweat it if your first home isn’t all that glamorous. Part of the fun of life is figuring things out and evolving over time. Many people have had first apartments that they still fondly look back on, despite how tiny, dark, or inconveniently located they may have been.

The best things in life often take time to fall into place, so be patient as you pursue your financial and lifestyle goals.

Prioritizing Financial Independence Over Savings

Many young people feel stuck at their parents’ because the finances of this situation make it possible to save on rent. They worry about moving out and not being able to save as much as they used to.

While there’s some truth to that point of view, understand that, yes, money is likely to be tight at first, but that is part of this rite of passage. Granted, you may not be able to save as you were before, but you can likely sock away a bit of money in savings (through your employer and/or into an emergency fund, perhaps) and begin to build your credit history, too.

It’s a big leap, but remember that your income will probably rise over time and help you save. Plus, living away from your parents can help you build your budgeting skills and financial savvy.

Banking With SoFi

Saving up for a major expense like a move? SoFi can help. 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. Qualifying accounts can even access their paycheck up to two days early.

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

FAQ

How much money should you have saved before moving out?

How much money you’ll need to move out varies from person to person. One rule of thumb is to save up at least six months’ worth of living expenses before moving out of a parent’s or family member’s home.

How do you move out when you can’t afford it?

It’s important for your financial health to not move out until you can afford to do so. To get to that point as quickly as possible, consider saving some of every paycheck and putting it in a savings account earmarked for your move. You might also want to look into sharing expenses with a roommate or perhaps taking on a temporary side hustle to earn extra income.

How do I know if I’m ready to move out?

You can get an idea of whether or not you’re ready to leave your parents’ place by calculating how much it will cost to live on your own. Sometimes, it’s just a matter of having a sufficient amount of income and savings. If you can afford to pay for rent and other necessities, plus have some fun (such as the occasional movie or dinner out), and you’ve built up some emergency savings, then you may be ready.

About the author

Jacqueline DeMarco

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

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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.
We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
^Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.

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

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

What Is a Micro Savings Account?

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

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

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

Benefits of Micro Savings Accounts

The following benefits are typically associated with micro savings accounts:

•   Low-risk savings account that can earn interest

•   Little to no upfront costs

•   No credit checks required for new account holders

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

•   Lower or fewer fees or no fees at all

•   No minimum account balance requirements

•   More flexible withdrawal limits

Disadvantages of Micro Savings Accounts

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

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

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

What Are Micro Savings Accounts Used For?

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

Creating a Regular Savings Habit

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

Saving Money Consistently in Smaller Amounts

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

Keeping Savings Separate

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

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

Managing Money Through a Mobile App

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

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

Alternatives to Micro Savings Accounts

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

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

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

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

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

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

Recommended: A Guide to High-Yield Savings Accounts

The Takeaway

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

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

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

FAQ

How do I create a micro savings account?

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

What are the advantages of micro savings?

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

Are micro savings apps worth it?

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

About the author

Jacqueline DeMarco

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

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

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

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

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

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

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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Spending money is typically fun, while saving money is hard — all that temptation to buy cool new things or try the latest restaurant. Which is why we can all use a little extra motivation to stash away some cash, and a savings club can play a role in that process.

Basically, savings clubs are a type of bank account in which the account holder contributes to the account over time to meet a specific goal. It can be a valuable option vs. breaking out your plastic and running up credit card debt.

What Is a Savings Club?

So, what is a savings club? A basic savings club definition is that it’s a bank account that the account holder uses to hold funds to meet a specific savings goal. For example, some people set up what are known as “Christmas clubs” in which they make regular contributions throughout the year to save for holiday gifts, travel, decor, and parties. By saving gradually in advance, they may be able to avoid the wallop of that major end-of-year credit-card bill.

Usually, savings clubs accounts that can be opened at a bank or credit union. They can be a good idea in terms of where to put short-term savings, as they typically earn interest. Often these savings clubs have other incentives attached to them to encourage account holders to follow through on their savings goals. There can also be penalties associated with savings clubs — such as forfeiting earned interest for withdrawing funds from the account early — to help motivate people to keep saving.

Recommended: How Much Money Should I Save a Month?

How Do Savings Clubs Work?

Usually, savings clubs create a schedule the depositor can follow to make regular deposits of a certain amount. So, say you open a savings club account to gather cash for a vacation next summer. If you want to save $1,200 over one year, the club would guide you through depositing $100 a month to meet that goal. Typically, the end date associated with a savings club aligns with your goal, whether that’s heading to Hawaii, getting married, or celebrating the holidays.

Deposits for savings clubs can be drawn from the account holder’s paycheck, which can make it easier to steadily progress towards meeting a savings goal. Automatic savings transfers can be a real helping hand because you don’t see the money in your checking, as if it’s available to be spent.

Some savings clubs allow multiple people to contribute to it — similar to another type of savings account, the joint account — so they can work together towards a savings goal. While usually only couples share a bank account, friends, or family members can choose to contribute to a savings club together to save up for a group vacation, present, or family reunion. Or some financial institutions will allow parents to help a child open a holiday savings account. In all cases, this can be a good strategy, since savings club accounts may offer higher interest than a typical savings account, though there can be penalties for early withdrawal.

Benefits of a Savings Club

There are quite a few benefits attached to savings clubs, including:

•   Saving on a schedule towards a specific goal

•   Offering saving incentives

•   Creating discipline in a savings routine

•   Teaching children about financial literacy and the value of saving

•   Paying higher interest rates than typical savings accounts

Recommended: How Do You Calculate Interest on a Savings Account?

Drawbacks of a Savings Club

There are also some downsides associated with savings clubs worth being aware of:

•   Withdrawing funds early can lead to penalties

•   Not contributing on schedule can lead to penalties

•   Some savings clubs can be banking scams if not hosted by a financial institution such as a bank or credit union (beware “money board” and “circle game” schemes)

•   Investing money elsewhere may lead to more growth

Savings Club vs Savings Account: What’s the Difference?

There are many reasons why you would put money in a savings account, and savings clubs offer a specific financial product to serve a specific goal. Let’s look at some differences between these two account types.

Savings Clubs Can Offer Higher Interest Than a Traditional Savings Account

One of the reasons savings clubs can be so motivating is because they often offer a higher interest rate than traditional savings accounts do. Knowing your money can grow faster can be an exciting prospect.

Savings Clubs Have Penalties for Premature Withdrawal

There are no penalties when someone withdraws money from a standard savings account. Nor is there a set period of time they have to keep their money in the account.

With a savings club, however, there can be penalties (such as losing the interest accrued) for actions such as withdrawing funds before the predetermined end date or for not making a contribution according to the savings club schedule. These penalties can be an incentive to save, but they can also create a challenging savings environment.

Savings Clubs Often Require a Minimum Deposit and Term Lengths

While basic savings accounts don’t usually have strict requirements attached to them, savings clubs often have minimum deposit requirements. These requirements may be as low as $1 or can be much higher. Savings clubs can also come with predetermined term lengths — usually six months to a year — and may require automatic weekly or bi-weekly deposits. Some people don’t like feeling “locked in” in this way.

Recommended: How Do Savings Accounts Work?

Starting a Savings Club

In most cases, you’ll start a savings club that’s hosted at a bank or credit union, review the terms, make an initial deposit, and continue funding the account.

Some people may choose to set up social savings clubs with friends and/or relatives by taking the following steps.

•   Define a savings goal for the club

•   Find people to join the savings club

•   Create savings club rules and structure

•   Commit to the planned schedule and follow through

Where the funds are actually kept can be decided by the group; an interest-bearing savings account will offer the nice perk of having your money earn money.

Banking With SoFi

Savings clubs can offer a motivating way to stockpile cash, thanks to their usually higher interest rates (compared to traditional savings accounts) and their structured schedule.

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

FAQ

Why would someone join a savings club?

Savings clubs can help you efficiently save towards a specific short-term goal, like accumulating money for the holidays or for a vacation. Benefits of saving this way include a motivating format and often a higher interest rate vs. traditional savings accounts do. Also, the potential penalties associated with not sticking to the schedule can also motivate people to save.

Should I have a savings club or savings account?

Whether or not you should have a savings club vs. a standard savings account depends on your personal goals and preferences. If you benefit from having a savings schedule and are offered a good interest rate, it may be a great fit. If, on the other hand, you want the ability to withdraw funds from your account penalty-free, it may not be the right move.

Can I use a savings club for long-term savings?

Savings clubs are usually designed to meet short-term goals, not long-term savings goals. They typically last for six months to a year. Those looking for long-term growth may find that investing money elsewhere can lead to more growth than a savings club can offer.

About the author

Jacqueline DeMarco

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

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

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

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

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

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

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