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If you’ve ever wondered about the difference between an available balance vs. current balance for your bank account, know that a current balance reflects the amount of money in a checking or savings account at any given moment. The available balance, on the other hand, shows you the current balance, plus or minus any transactions that are pending but have not yet been processed fully. The available figure is what you can actually spend at that moment.

Financial institutions share these two balances with their customers to give as detailed a picture of funds on deposit as possible. While it may be confusing at first glance, once you understand the difference, it can actually help you stay in better control of your cash.

Read on to learn more about current vs. available balances on your bank accounts.

What Is a Current Balance?

The current balance of an account is a reflection of the amount of funds that are moving throughout a checking account or savings account at any given time.

This is a compilation of both credits and debits — incoming and outgoing funds — within an account. It includes transactions that have been completely processed on both ends and posted to an account.

Pending transfers or payments that have been authorized but have not been fully processed yet may be listed in your transaction history but are not included in the tally. So any debit card payments, mobile deposits, or automatic bill payments that haven’t been fully processed will not be calculated into the current balance.

As an example, say Brian’s checking account balance is $200.

•   On Monday, his employer deposits an $800 payment into his account that clears and posts on the same day, raising Brian’s current balance to $1,000.

•   On Wednesday, Brian uses his debit card to pay $100 for dinner, and the restaurant places a hold on his account for the amount. Because the payment is pending and awaiting processing, Brian’s current balance is still $1,000.

•   However, if on Friday the restaurant charge is fully processed and posted onto his account, his current balance would drop to $900.

What Is an Available Balance?

An available balance is the current balance of a checking account or whatever type of savings account you may have, minus any pending payments and deposits. In essence, it takes the total amount of all fully processed and posted credits and debits and subtracts the total amount of any pending payments that have yet to be fully processed. This provides a more accurate reflection of the money in your account that remains available to be spent.

For example, Danielle’s checking account balance is $500. She uses her debit card to pay a $100 internet bill, and her landlord cashes her $300 check for her rent — both payments appear on her account as pending.

Despite her current balance being $500, her available balance is only $100 due to the pending payments. If she were to make other payments totaling more than $100, she will risk an overdraft fee and having a negative bank balance.

Recommended: Savings Account Calculator

What Is the Difference Between Current Balance and Available Balance?

If an account goes a week or two without any activity, its available balance and current balance will likely be in sync. However, once purchases and payments are made with a debit card linked to your checking account, that is when the available balance is likely to fluctuate.

The key difference between a current balance and an available balance is “promised payments.” A current balance is the total amount of money in an account including money that has been promised to other people or businesses. An available balance, on the other hand, is the specific amount of money available that has not been promised to any person or business. While spending the full amount of a current balance with pending payments could result in overdraft or NSF fees, spending the full amount of an available balance should not.

Generally, when a current balance and available balance differ, here’s the likely situation:

•   The available balance is the lower of the two, and it’s nearly always due to a pending payment.

•   In some less common cases, an available balance may appear larger than the current balance. This could be due to receiving a refund from a purchase or the reflection of a bank overdraft protection buffer on an account. Either way, in this case, it would be wise to contact your bank for a better understanding of your current account standing.

How Long Does It Take for a Current Balance to Become an Available Balance?

The amount of time it takes for an available balance to sync back up with a current balance depends on the specific amount of processing time needed to complete each pending transaction.

Those times can vary depending on the type of transaction and how quickly the establishment processes it. The account holder’s ability to refrain from spending with their debit card and adding more pending payments to the account is also a major factor.

As a general rule of thumb, individual pending payments can take as little as 24 hours or as long as five days to be completely processed and posted to an account. The process requires communication and confirmation between the banks of the account owner and the establishment they purchased from. Some transactions, especially international ones, can take longer than others to be completed.

If a transaction remains pending for up to a week, it would be wise to contact the merchant or your bank for clarity.

Which Balance Should I Rely On?

The current balance and available balance each serve their own purpose, and both can be relied upon as an accurate representation of a checking or saving account. However, there are specific instances when it would be better to reference one over the other.

•   If you’re planning on making a purchase or withdrawal, that is an instance where it would be more beneficial to reference the available balance on your account. It’s the best way to know exactly how much money is available to be spent without disrupting any other pending payments.

Checking the available balance will give the most exact account of what is freely available to be spent and will also help you avoid incurring any overdraft fees.

•   If you’re more interested in your account balance as a whole and how much money you have flowing through your account at any given time, that is when you’ll want to reference your current balance. It accounts for every dollar entering and exiting your account at the very moment you check it.

Do keep in mind, however, that the available balance total may change quickly due to pending transactions, therefore it would be wise to check it daily for the most up-to-date tally.

Recommended: How Often Should You Monitor Your Checking Account?

The Takeaway

Your available balance shows how much money is available in your account at a given moment, while the current balance also includes pending transactions that are still being processed. Knowing what your account balances mean and how to interpret them is a basic but important financial skill that can help you manage your money better.

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 are my current and available balance different?

Your available balance shows how much is currently in your account for spending or paying others. The current balance reflects transactions that are still processing, such as a deposit that hasn’t fully cleared yet.

How long does it take for a current balance to become an available balance?

The amount of time it takes for bank transactions to clear can take a matter of hours to several days, depending on the details. For instance, if you are waiting for an international check to clear, it could take around five days.

Can I spend my available balance or my current balance?

Your available balance is what is available for spending, while your current balance shows you the amount that will be in your account once the transactions that are processing are fully cleared.

Photo credit: iStock/fizkes

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 Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

SOBNK-Q325-078

Bank accounts can be frozen for such reasons as your financial institution suspecting fraud or illegal activity, a court order indicating you owe a debt, or government action to recoup unpaid student loans or taxes.

Regardless of the reason, having a bank account locked can be an upsetting situation that makes managing your basic financial life difficult. Read on to take a closer look at this situation and what you can do to get your money unlocked.

What Is a Frozen Bank Account?

When a bank account is frozen it means the bank will no longer let you perform certain transactions. You can still access your account information and monitor your account. You will still be able to make deposits, including manual or direct deposit of your paycheck.

However, you won’t be able to make any withdrawals from the account or transfer money from the account to a different account.

Typically, any previously authorized payments or transfers will not go through either. That means that any bills you have set up on autopay likely won’t get paid.

Why A Bank Would Freeze Your Account

Banks have the authority to freeze or even close a bank account for a range of reasons. These reasons generally fall into the following three categories.

1. Suspected Fraud

A bank’s reputation relies heavily on its ability to keep money safe, so account security is typically taken very seriously.

Banks are familiar with how you tend to spend your money, so an unusually large purchase or cash withdrawal can indicate fraud and trigger an account freeze. In addition, financial institutions know where you typically spend your money. A transaction that occurs in a different city or country can be a red flag that could trigger an account freeze.

It can be a good idea to inform your bank about travel plans both nationally and internationally to help prevent any account freezes during a trip.

If your bank flags suspicious behavior you’re certain you weren’t responsible for, it could be due to identity theft.

2. Unpaid Debts

Missing a single bill payment isn’t generally something that would disrupt access to your bank account, but a longstanding overdue bill might.

Collection agencies that purchase unpaid debts can secure court judgments for those debts, giving them the power to freeze (or “attach”) the bank accounts of debtors until they paid the money they are owed.

Most creditors can not have your account frozen unless they have a judgment against you. However, not all. Government agencies that collect federal and state taxes, child support, and student loans do not need to have a court judgment to attach your account.

Recommended: Debt Buyers vs. Debt Collectors

Any of the following types of outstanding debt could be the cause of a frozen account.

•   Unpaid taxes

•   Student loans

•   Mortgages

•   Car loans

•   Personal loans

•   Civil lawsuits

•   Divorce settlements

•   Child support

3. Illegal Activity

A bank account that is used to conduct criminal activity (or is shared with someone who might be doing so) can lead to the account being frozen.

Banks also work directly with law enforcement agencies and will freeze accounts of individuals that have been convicted of a crime or are under investigation.

Some specific activities that could lead to an account freeze include:

Writing bad checks: A single bounced check isn’t cause for alarm, but knowingly writing multiple checks from a bank account that doesn’t hold the funds to support them is illegal. If a bank observes too many bad check transactions, they may be inclined to freeze the account and alert the police.

Money laundering: This is the process of generating money through illegal activity and attempting to make it appear legal via multiple financial transactions. All banks and financial institutions are required to comply with federal anti-money laundering regulations and report any suspected activity directly to the authorities.

Terrorist financing: Funding or organizing funds for terrorist groups and organizations is an illegal activity that can also result in an account freeze. Banks comply with federal laws that help prevent terrorism by freezing and reporting any accounts that exhibit suspicious activity related to terrorists.

How Long Can A Bank Account Be Frozen?

Banks don’t typically follow any set rules regarding how long an account can be frozen. The length of time generally depends on how long it takes for the account holder to notice the freeze, contact the bank, and can resolve the issue that caused the freeze.

How Does a Frozen Bank Account Affect You?

Having a frozen bank account essentially means not having access to your money, and it can be especially difficult if it is your primary bank account.

•   Frozen funds means not being able to make purchases with a debit card or withdrawals from an ATM. It can also mean that any auto-payments linked to that account will likely not be fulfilled, and any scheduled transfers won’t be completed.

•   Because these payments can bounce, you could also incur a non-sufficient funds fee, which may be deducted from your account.

•   If you don’t have enough in the account to cover it, you could end up with a negative balance, putting you into an overdraft. In this case, you could end up having to pay additional bank fees and interest to cover the shortfall.

Recommended: How to Avoid Overdraft Fees

•   Those with frozen accounts often must resort to using credit cards and can end up accumulating debt in order to cover their expenses while they sort out the issue with their bank.

•   If the bank suspects you’ve been using the account illegally for any reason, it could close your account completely. It can also report your account activity to authorities.

Recommended: Bank Fees You Should Never Pay

How Do You Unfreeze a Bank Account?

It can be a good idea to contact your financial institution as soon as you notice a freeze on your bank account. When discussing the issue, it can help to have a clear account of your most recent locations and transactions, and be prepared to share any information and supplemental documentation that can help clear up the issue.

If you can show that there’s no reason for the freeze, the bank will likely release the suspension and grant you full access to the account again.

If your account is frozen over unpaid debts, it can be a good idea to get the creditor’s contact information from your bank and then reach out to them directly. Once you have a better idea of what’s going on with your account, you may be able to work out a payment arrangement.

The Takeaway

When a bank freezes your account, it can mean there is something wrong with your account or that someone has a judgment against you to collect on an unpaid debt. The government can also request an account freeze for any unpaid taxes or student loans.

Once the bank account is frozen, you cannot make withdrawals but can only put money in your account until the freeze is lifted. If your account is suddenly inaccessible, it can be a good idea to contact your bank immediately to find a resolution.

If you’re on the hunt for a new type of bank account, see what SoFi offers.

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

FAQ

What would cause a bank to freeze an account?

A bank may freeze an account if they suspect illegal activity, if there’s a judgment against the account holder, or if there’s an unpaid debt to be recouped.

Can a bank freeze your account without warning?

Yes, a bank can freeze your account without notifying you first. Bank accounts are typically frozen for serious reasons, such as suspicion of fraud or judgments against the account holder, and a financial institution can step in and immediately block outgoing transactions.

How can I unfreeze my account?

Typically, to unfreeze a bank account, you will need to contact your financial institution and find out why your account was frozen. Then, you may be able to take steps to unfreeze it, such as paying off an outstanding debt.

Photo credit: iStock/happyphoton

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.

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.

This article is not intended to be legal advice. Please consult an attorney for advice.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

SOBNK-Q325-077

In many parts of the country, a $100,000 salary is considered good; maybe even very, very good. It can be more than enough for an individual or even a small family to live comfortably. With $100,000 a year, a person could cover typical expenses, pay down debt, build their savings, contribute toward retirement, invest, and still have enough money for entertainment, hobbies, and vacations. But in large (pricey) cities and for larger families, it could be hard to stretch that income to cover all expenses and financial goals.

Factors to Determine if a $100,000 Salary Is Good

In most cases, a $100,000 salary is considered good. It is well above the poverty line as well as the American median income for individuals. Even in the face of rising inflation, a $100,000 annual income can typically afford a comfortable lifestyle and financial stability.

Here are some factors to determine if $100,000 is a good salary:

•   Location: While $100K can cover expenses in most places across the U.S., it won’t stretch as far in places with a higher cost of living. In some of the most expensive cities in the U.S., a $100K salary might mean spending a significantly higher percentage of your income on housing. For instance, in the summer of 2025, the average rent in Manhattan hit $5,539 a month.

•   Taxes: As an individual, $100K a year puts you in the 22% federal income tax bracket as of 2025 for both single and joint filers. That means that you’d only bring home $78,000 after federal taxes — even less depending on state, city, and school district taxes.

•   Family size: A $100K a year salary can yield comfortable living for most individuals, but the larger a family becomes, the harder it is to make that money stretch. Additional children or other dependents may result in higher grocery bills, utility usage, school costs, and doctor visits.

How Does a $100,000 Salary Compare to the American Median Income?

The American median household income is roughly $78,538, per the latest published U.S. Census results. A $100,000 salary is considerably higher than the American median income.

However, according to the most recent data, the median individual income is $43,289, meaning a $100K salary is more than twice that figure. If you live in what’s known as a DINK household (dual income, no kids) and your domestic partner also brings home a sizable paycheck, you may have even more spending power and more cash in your bank account.

What Percentage of Americans Make Over $100,000 Annually?

According to the U.S. Census Bureau, 41% of American households pull in more than $100,000 annually. A “household” might consist of two or more salaries totaling $100,000.

$100,000 Salary Breakdown

So is making $100K a year good? It’s almost surely easier than living on $20K a year. Let’s look at how it breaks down into monthly, weekly, and even daily pay:

•   Monthly income: $8,333.33

•   Biweekly paycheck: $3,846.15

•   Weekly income: $1,923.08

•   Daily income: $384.62 based on 260 working days per year.

Keep in mind that this salary breakdown uses pretax income. Actual paychecks will likely be lower after taxes and any health insurance premiums and retirement contributions are deducted.

Can You Live Individually on a $100,000 Income?

It is indeed possible to live individually on a $100,000 income. At that salary, many individuals will be able to cover not only basic living expenses but also discretionary expenses, like dining out and traveling.

Individuals making $100K annually often have enough disposable income to pay down debt, contribute to retirement, work toward multiple savings goals (like home ownership and vacations), and even invest.

How Much Rent Can You Afford Living on a $100,000 Income?

The conventional advice on how much of your income to spend on housing is no more than 30%. While economists may need to reevaluate that number given current inflation and soaring housing prices, that would mean an individual could afford $30,000 in rent costs each year, or roughly $2,500 a month, on $100K a year.

However, at $100,000 a year, an individual could consider buying a home instead. Depending on where one lives and their other expenses, a $100K salary could make it easier to save for a down payment and keep up with maintenance expenses, property taxes, and homeowners insurance.

Best Places to Live on a $100,000 Salary

At $100,000 a year, an individual or small family can likely live in most locations. If you want to make your dollars stretch as far as possible, consider what U.S. News has deemed the five cheapest cities to live in 2025-26:

•   Decatur, Illinois

•   Enid, Oklahoma

•   Weirton, West Virginia

•   Springfield, Illinois

•   Mission, Texas

Recommended: Cost of Living by State

Worst Places to Live on a $100,000 Salary

A $100,000 salary can typically afford at least basic living expenses even in America’s most expensive cities. However, living in such places can make it harder to build your savings and invest toward your future.

If you want to live comfortably on $100,000 a year, it may be wise to avoid what have been deemed America’s most expensive cities in 2025-26:

•   Newport Beach, California

•   Westminster, California

•   Daly City, California

•   Spring Valley, New York

•   Huntington Park, California

Is a $100,000 Salary Considered Rich?

Many people may consider a $100,000 salary to be rich. However, “rich” is a relative term with a vague definition, meaning an abundance of wealth and assets. Much of it depends on where you live and how you use the income (spending vs. saving vs. investing).

Also, consider how personal circumstances can differ. If you earn $100K a year and your spouse doesn’t work outside the home and you are supporting three children as well as a relative with medical needs, that high salary may not stretch as far. Add some student loans, a jumbo mortgage, and car payments to the picture, and you realize a person earning $100,000 a year might not qualify as rich in most people’s estimation. They may be barely making ends meet.

Tips for Living off a $100,000 Budget

How can you make the most of a $100,000 salary? Here are a few tips for living off a $100,000 budget:

Getting on a Budget

No matter your salary, it’s a good idea to design a monthly budget. At a minimum, keep track of your monthly expenses vs. your monthly income. After you have accounted for all your mandatory expenses, like your mortgage and your groceries, you can calculate what you have left for discretionary expenses (the “wants” in life), savings, debt repayment, and investments.

Recommended: 50/30/20 Budget Calculator

Saving Your Money

It’s a good idea to have emergency savings at the very least; being able to cover three to six months’ of expenses without any income flowing in is ideal.

Beyond an emergency savings, you may want to allocate money in your budget each month to other savings goals, including a house or car down payment, wedding, vacation, or home renovations. Having a high-interest savings account with automatic savings features can help you get to your goal faster.

Recommended: How to Save Money From Your Salary

Getting Out of Debt

Paying down debt can be a good use of funds when you have room in your budget, especially if you have particularly high-interest credit card debt. You can weigh options like the debt avalanche vs. debt snowball method when you have multiple sources of debt or even consider a credit card debt consolidation loan.

Creating a Retirement Plan

If you’re wondering when you should start saving for retirement, many financial experts would likely say the answer is “yesterday.” The sooner you start saving, the sooner your money can grow via compound interest.

If your employer offers a 401(k) match and you can afford to funnel a percentage of your paycheck into a retirement account, it’s often a wise idea to opt in. But employer-sponsored 401(k) accounts aren’t your only retirement option. Depending on your situation, it may be a good idea to take advantage of a rollover or traditional IRA and other retirement strategies.

Investing Your Money

Investing isn’t only for retirement. If you are earning $100K a year and have extra money after having built up emergency savings and wiped out your debt, you might benefit from investing in the stock market or even real estate.

Learning how to invest can be intimidating; if you’re not sure where to start, it can be a good idea to work with a trusted investment broker.

The Takeaway

For most individuals and small families, $100,000 is a good salary and well above both the median individual and household income. Cost of living and family size can affect how far $100,000 will go, but generally speaking, you can live comfortably on $100,000 a year.

If you are hoping to make the most of your salary, finding the right banking partner can be important.

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

FAQ

What jobs pay over $100,000?

Many jobs pay over $100,000 a year in various fields. These jobs include doctors, lawyers, software engineers, business leaders, pharmacists, psychologists, IT managers, finance managers, and many others. Those in creative fields, from writers to hair stylists, can earn that salary, too.

Is making $100,000 a year common?

Making $100,000 a year is not uncommon in the U.S. According to the U.S. Census Bureau, more than 40% of American households make more than $100,000.

Can you live comfortably on $100K a year?

Most people can live comfortably on $100K a year. If you live in an area with a high cost of living and/or have a large family or very high expenses and/or debt, it may be more difficult to live comfortably on $100K a year. In either case, it is usually not challenging to afford basic living expenses.

What is considered wealthy in the U.S.?

Americans said in one survey that they believe it takes a net worth of $2.3 million to be considered “wealthy.” When calculating net worth, you’ll factor in more than just income; it also includes assets (like a house and retirement account), less any debts and liabilities.

Photo credit: iStock/Inside Creative House

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.

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.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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Many people don’t carry cash these days, preferring to make a purchase by tapping or swiping a debit card or credit card. However, there are times it can actually pay to dip into your wallet and break out the bills. Using cash can be more secure and less costly, among other benefits.

Here, you’ll learn when it can be better to buy with cash and when plastic is preferable.

The Benefits of Cash

Here are some of the pros of using cash:

You May Get a Discount

You may be rewarded for paying cash, like paying a lower price at the gas station or when you get take-out at a restaurant.

Many businesses pay a fee for accepting credit and debit cards, so they may be willing to charge you less if you’ll pay in cash. If you frequently fill up your tank, saving even 10 to 20 cents per gallon can add up to significant savings over time.

It Can Help You Avoid Overspending

When you tap or swipe your credit or debit card, you don’t physically see your money leaving your account. Since there’s no sense of immediacy or consequence, it can be easy to spend more than you originally intended. That can lead to debt and overdraft or NSF charges.

If, on the other hand, you leave home with only the amount of money you need for the day in cash, your spending is likely to be more mindful. That could mean you may have a better chance of sticking to your budget and avoiding overspending.

There Are Fewer Security Risks

Yes, someone could rob you when you are carrying cash. However, there is less risk of identity theft or your information getting stolen when you pay with cash vs. a debit or credit card.

You Can Avoid Fees

Cash is a one-shot deal — the purchase you made won’t end up costing you a penny more. With credit and debit, however, you can end up paying additional charges down the line, from late fees to interest payments on debt.

Recommended: How to Avoid Overdraft Fees

Times When You Should Pay in Cash

Your Tab is $10 or Less

It can be a good idea to carry cash for small purchases. Many retailers have a minimum amount of money you must spend in order to use debit or credit. If your purchase is under, you’ll have to throw in extra things (you probably don’t need) to meet the minimum.

When Shopping at a Small or Local Business

Small businesses often offer discounts for cash payments, since it helps them save on bank fees. This can be an easy way to support your local businesses and save a few dollars at the same time.

You Want to Keep Advertisers at Bay

You may have noticed that after you buy something with a credit or debit card, you often get hit with ads and offers for similar products. That’s because retailers can track their customers’ spending and share their information with a third party, who can then target them with ads.

This can be annoying, and also lead to more spending if you’re enticed by an offer. Using cash makes it much harder for businesses to collect and share your information.

Times When You Shouldn’t Pay With Cash

Next, learn about the times when you should keep your wallet shut and find another, non-cash way to pay.

Buying a House

While not an everyday occurrence, some people may have the option to plunk down cash they’ve stashed in their savings account to buy a property.

While buying a home with cash vs. getting a mortgage may get you the house, it may not be the most prudent move in the long run, especially if it wipes out all of your savings.

A mortgage has tax benefits and timely payments can help you build good credit. Also, there could be better uses for all that cash, like investing in the stock market or elsewhere.

Business Expenses

If you own your own business, have a side gig, or do freelance work, it can be better to use credit (or even a check) to pay for business-related purchases. You’ll likely want a paper trail so you can deduct these expenses on your tax return.

Another potential perk of using credit is that it may offer some purchase protection in event something you buy for your business that breaks or gets stolen soon after you purchase it.

Paying Service Providers

You may think a service provider, whether it’s an electrician or an auto mechanic did a good job, but only time will tell. Using credit can offer you some protection in the event that you experience problems with a service after you’ve already paid for it.

Renting a Car

Often your credit card will provide insurance on car rentals (which can help you save on renting a car), but only if you use that form of payment, as opposed to debit or cash. Using credit for the car rental can help you avoid paying for something you don’t need to purchase.

You’re Looking to Build Credit

If you need to build your credit score, one way to accomplish that is to use your credit card on a regular basis and show that you’re responsible by paying what you owe each month, consistently and on time.

When Buying Electronics

Using your credit card instead of cash for electronics can be a big advantage if your credit card offers extended warranties as a cardmember benefit. This allows you to get peace of mind without having to pony up for the store’s warranty. And, you can simply pay off the balance as soon as the bill comes.

You’re Looking to Track Your Spending

If you’re looking to see where your money is going so you can track your spending and set up a monthly budget, it can be easier if you pay with credit or debit.

Your financial institution may even offer you a pie chart of your spending from your bank account, broken down into categories. Seeing everything in black and white can help you become better at budgeting.

Alternatives to Using Cash

Paying in cash has its pros and cons. If you decide that you want to pay with something other than cash, here are some alternatives.

Cash vs Credit Cards

A credit card can be a good alternative to cash if you are able to pay it off in full every month, and you do. If managed well, credit cards (even secured credit cards) can help you build credit to buy a home or another large purchase in the future.

Cash vs Debit Cards

A debit card can be a good substitute for cash, as long as you know there’s money in the bank. By using a debit card, you’re not incurring any new high-interest debt. As long as you are not incurring any overdraft fees or withdrawing money from ATMs that charge high fees, debit cards can be a simple way to make purchases.

Cash vs Financing or Loans

It can sometimes be better to pay for a major purchase, like a car or a home, with a loan rather than cash if the interest rate is lower than what you could likely earn by investing that money.

However, you’ll also want to keep in mind that there is risk involved in investing in the stock market, so there is always a chance that you could lose money.

Recommended: Leasing vs. Buying a Car: What’s Right for You?

The Takeaway

While there’s a movement toward a cashless society, paying in cash can help you garner discounts at local businesses, stick to your budget, avoid paying overdraft and interest fees, protect against identity theft, and keep advertisers from targeting you.

If you’re looking for a safe place to keep your cash when not spending it, where it can earn some interest and grow, take a closer look at your banking partner.

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

When should you pay with cash?

Cash can be a good option when paying for a small purchase (say, under $10 or $20) or when paying at a small retailer who may add a fee for credit card purchases. Cash can also help you be more mindful about spending and can be good when trying to rein in discretionary expenses.

Is it better to pay in cash?

It can be better to pay in cash if it can help you avoid high interest (which can accrue if you carry a credit card balance) or get a discount on a purchase (say, at a small retailer that offers a discount for cash). However, a person could earn rewards when using a credit card or could enjoy cash advantages when getting a mortgage vs. paying for a property with cash.

Is it smart to keep money in cash?

It can be smart to keep a small sum of money in cash for unexpected and/or pressing expenses, such as tipping a service person for a repair. But cash is usually safest in a financial institution, where it can’t get lost or stolen and in most cases is insured up to the limits of the Federal Deposit Insurance Corporation or National Credit Union Administration.

Photo credit: iStock/towfiqu ahamed

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.

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

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.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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