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Fundraiser bank accounts offer a way to hold funds that will be used for those in need. They can keep funds safe until they are transferred to, say, a neighbor rebuilding a flooded house or paying medical bills when facing a tough diagnosis.

If you are planning to raise money on someone else’s (or a cause’s) behalf, opening a fundraising bank account could be a good option. But how you do so will depend on what the account is for. Here’s a closer look at what a fundraising bank account is and how it operates.

What Is a Fundraising Bank Account?

A fundraiser bank account is one set up specifically to hold donations. For most of us, that means donations to a small cause, be it ourselves, another individual, or a small group of people. A fundraising bank account sets aside the money specifically for the beneficiary (or beneficiaries), though it may not be opened by the individual who will benefit. Some points to consider:

•  Keep in mind that opening a bank account for fundraising is different from donating to a charity. These are bank accounts people set up to hold donations to an individual or family as opposed to starting a full-on charity of their own.

•  A fundraising bank account is not the only way to capture donations. Most major crowdfunding platforms make it easy to accept donations through the platform itself, or you may also be able to take donations via peer-to-peer transfer services. The money could then be transferred directly to an individual’s personal checking or savings account.

•  Unless you’re offering something in return for the money or the total donations, it’s not considered taxable income, though the crowdfunding platform may report the transactions to the IRS, or Internal Revenue Service. The IRS website provides guidance on how to handle money raised as part of crowdfunding and possible tax implications.

Opening a fundraising bank account can still be the best option for some situations. It can provide more formal protections for beneficiaries and assure the donated monies are separate from other funds.

What Is Needed to Set Up a Fundraising Account?

What you need to set up a fundraising bank account will vary depending on the bank you choose and even the local laws in your area. A good first step: Explain the purpose of your account to the bank when you open it. This way, they will have a full picture of what your goal is and be able to guide you.

Your Identification Information

Just like when you open a new bank account, you’ll need identifying information such as a Social Security number, name, and address — but whose identifying information you need will vary. If the fundraising account is for donations to you as an individual, your own information will be needed.

The Beneficiaries’ Identification Information

But if you’re opening an account for a someone else to benefit from, it may make more sense to open the account with their credentials. In fact, if you can, bring them to the bank with you and have them open the account in their own name. A bank may or may not allow you to open an account for another person if they’re not present or haven’t provided signed and notarized forms.

If the beneficiary doesn’t have a Social Security number or you’re opening the account for multiple beneficiaries, you may need to obtain an Employer Identification Number, or EIN, from the IRS for the account. (This is simply a way for the IRS, or Internal Revenue Service, to keep tabs on the money for tax-reporting purposes — it doesn’t, in this case, have anything to do with being someone’s employer.)

What to Do With the Money While It Is Being Raised

When you are gathering funds to support a charity or help a person in need, it’s vital to keep it safe. A smart way to do that: Make sure that money gets into the bank account ASAP. Depositing it directly will protect it from possible loss. As other deposits come in, the balance will grow until the happy day you are able to distribute it to the individual or charity that will benefit from your kindness.

Recommended: How to Make Money Fast

Things to Consider With a Fundraising Bank Account

There are some complications that can arise when opening a bank account for fundraising. Some examples:

Fundraising Accounts for Deceased Beneficiaries

In some cases, you may be raising money to pay for a deceased person’s funeral costs or to provide living expenses for loved ones left behind. Of course, if someone has passed away, you can’t use their Social Security number to open an account — so you’ll need to obtain an EIN, as mentioned above, and again, let the bank know explicitly the purpose of the account.

Fundraising Accounts for Minor Beneficiaries

Perhaps you want to help collect money for a child who needs cash for medical or educational expenses. Be forewarned that raising money for minors can come with a variety of complications — including the problem of ensuring the minor uses the money for what it’s being set aside for.

•   Establishing the account by or for the child’s legal guardian is a good way of safeguarding the funds and making sure they’re being used for the intended purpose.

•   If that option is unavailable, you might consider setting up a trust fund — which involves putting the legal responsibility for the money into a third party’s hands, with the added option of specifying certain ways the money can be used. An attorney can guide you through the process of setting up a trust.

Tax Consequences

As mentioned above, gift funds received in a fundraising bank account may not be taxable as income — although there are exceptions, and you should always consult a tax professional to be sure you understand the tax liabilities of your planned actions. For example, if the account the donations are being held in earns interest, taxes may be assessed on those earnings.

In addition, keep in mind that these kinds of donations are not considered charitable donations, and so will not be tax deductible for the donor.

Can the Bank Be Held Liable If Funds Are Misused?

Unfortunately, scammers do exist — and it’s possible that some people who set up fundraising bank accounts may end up using the monies for a purpose other than what was promised to the donors. If you’re setting up an account in good faith for someone else’s use, it’s worth checking with the bank about who’d be liable if the beneficiary misused the funds.

It’s not unheard of for banks to request that they be indemnified if this should happen and the money isn’t used according to the fund’s original intention.

Recommended: Ways to Manage Money

Are There Safeguards in Case of Fraud?

It’s upsetting to think about, but yes, fraud does happen. People have been known to take advantage of the compassion of do-gooders and use the money raised to pay for things other than to fund’s intention.

•   Setting up a formal trust is one way to ensure the funds can only be used within the proper parameters.

•   You can also check with the bank to learn if there are any other safeguards in place in case of bank fraud.

The Takeaway

Opening a fundraising bank account is one way to set aside money being gathered for an individual or small group. The funds will be protected and can accumulate to help the beneficiary. When acting on good intentions, though, it’s important for the account’s creator to understand how these accounts function, what’s required to open one, and that they don’t afford any tax deductions for donors. With these steps taken, you can be well on your way to helping those in need or a cause that moves you.

On the topic of bank accounts, how are your own accounts doing?

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 set up a charity account?

To set up a fundraising bank account, you’ll need to explain to the bank the purpose of your account and ensure you have all the information they need, likely including the beneficiary’s Social Security number.

Do I need a tax ID for a fundraiser?

Depending on the type of account you set up and whether or not the beneficiary’s Social Security number can be used, you may need to get a tax ID number (such as an Employer Identification Number, or EIN) in order to open the account.

How do you account for donations?

All donations should be tracked for tax reporting purposes — and keeping them in a separate account makes it easy to see which funds are personal and which are gifts.

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.

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.

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.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

SOBNK-Q425-019

A CD ladder, or certificate of deposit ladder, is a financial strategy that involves purchasing certificates of deposit with staggered maturity dates. It allows you to access the best aspects of CDs (namely, a relatively high yield at a relatively low risk rate) while avoiding the main downside of CDs (having your money locked away for a long period of time). It can help you access cash when and if needed without paying early withdrawal penalties.

Setting up a CD ladder up can require a bit of strategizing and shopping around to get the right arrangement for needs. Learn the details here.

What Is a CD Ladder?

In order to fully understand CD ladders, first know that a certificate of deposit, or CD, is a kind of savings vehicle. You put down a lump sum — such as $500 or $5,000 — for a set amount of time (typically between six months and a few years) in exchange for a guaranteed growth rate (i.e., interest). These accounts are typically insured by the FDIC or NCUA up to $250,000 per depositor, per account ownership category, per insured institution.

Generally speaking, the highest interest rates require large deposits put down for a long period of time. Your money gets locked up, and you’ll usually pay a penalty for early withdrawal.

That’s where a CD ladder comes in. It can help you feel secure that you can access your money when needed, without having to pay a penalty. You invest your money in a variety of CDs with different maturity dates. Generally, each rung, or individual CD, will mature one year later than the previous one.

Then, as each CD matures and you’re able to access your money (plus the interest you’ve earned), you can reinvest it in another CD with the longest of the terms you’ve chosen. This means you’ll continue to earn money on your investment for double the term of the longest-term CD you took out initially.

Example of a CD Ladder

Let’s say you have $15,000 to invest. You decide to set up a CD ladder with five rungs.

Here’s what that might look like:

•   $3,000 to a one-year CD

•   $3,000 to a two-year CD

•   $3,000 to a three-year CD

•   $3,000 to a four-year CD

•   $3,000 to a five-year CD

Once the one-year CD comes to fruition, you’d reinvest that $3,000, plus whatever interest it earned, into a new five-year CD — and follow the pattern for each CD as it comes due. In this way, you can continue the ladder for a grand total of 10 years, reaping and reinvesting once annually.

Of course, if rates shift or your financial situation changes and you need cash, you have a built-in backup plan. By creating a ladder, you know at least once a year, you will have the opportunity to invest your money in a different vehicle or use it for, say, an emergency or a goal you’ve been saving towards.

Keep in mind, too, that you don’t have to equally distribute your full investment among the rungs. You could invest different amounts at each level if that better suited your needs.

And you don’t need to open all of your CDs at the same bank, either. You can shop around among banks and credit unions to find the best interest rates at different levels and thereby maximize your yield.

All in all, CD ladders offer investors additional flexibility in their approach while still creating a low-risk earning strategy. Win-win!

How to Build a CD Ladder

Building a CD ladder is pretty easy. Here are the key steps:

Gather Your Funds

Save up a chunk of money that you can afford to have locked up for at least a few months or a year. If you already have the money set aside, you’re ready to move onto the next step.

Choose the Length of Time That Will Suit You

As noted above, you might decide to buy CDs with different maturity terms, or you might prefer to buy a number of ones with the same term over time, as you accrue more savings.

Research Your Options

Shop around for the best rates and terms at financial institutions you feel comfortable with. Remember, you don’t have to stick with one bank. You could buy a six-month CD from one bank offering a great rate, and a one-year one from a different bank that has a terrific APY.

Buy Your CDs

You’re now ready to distribute your savings among a series of CD ladder “rungs,” starting with a short-term maturity date and ending with a long-term maturity rate. (Many investors use five rungs, but you could use more or less if you wanted to.)

Manage Your CD Ladder

As the CDs mature, you can determine whether to withdraw the funds or invest again.

Here’s an example of what a CD ladder might look like as of October 2025:
:

Recommended: Guide to Catching up on Late Payments

Benefits of CD Laddering

There are several benefits of CD ladders, including:

•   They allow you to make the most of your CD investment without locking away all the money for a long term.

•   They increase investor flexibility since you get to decide what amount you put in each CD and how long each term along the ladder is.

•   You may be able to take advantage of better interest rates since you’ll be reinvesting on a yearly basis, as opposed to having your money locked away at a certain rate for the long term.

•   Overall, CDs are a safe, FDIC-insured investment strategy, though their earning potential is also relatively low.

Recommended: Different Ways to Earn Extra Money with Interest

Drawbacks of CD Laddering

On the other hand, there are some downsides to CD laddering that are worth mentioning:

•   Even the best CDs have relatively low interest rates — so low that they may not even keep up with inflation.

•   You may be missing out on an opportunity to invest your money into the stock market, where it could stand to earn exponentially more than it would in a CD — though, of course, the stock market is a much riskier investment strategy.

•   If rates fall during the course of your CD ladder, you might wind up reinvesting your money into a CD with an even lower rate.

Alternatives to CD Ladders

Is CD laddering not sounding quite right for your needs? Here are some alternatives that might better suit your needs.

•   Putting your money into a high-yield savings account, which may offer a similar (though potentially slightly less lucrative) low-risk growth potential. The upside here: It doesn’t keep your money locked up for a long period of time.

•   Investing your money in the stock market, which is considerably riskier but may offer higher returns than CDs over the long run.

Recommended: Savings Account Calculator

The Takeaway

CD laddering is one useful strategy for investing your money over time, allowing you to take advantage of the best parts of CDs while avoiding some of their biggest downsides (like locking away your money for years). The laddering effect, which involves staggering the CDs’ maturity dates, can give you access to some of your money every year and allow you to possibly reap a higher interest rate if the market is rising.

That said, CD ladders aren’t for everyone. High-yield bank accounts are another option to consider.

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

Is laddering CDs worth it?

As with any financial decision, only you can decide if laddering CDs is the right approach for your needs. If you have a lower risk tolerance and a decent amount of money to invest, it may be a strategy worth considering to earn steady interest and have regularly scheduled access to your funds.

Can you lose money in a CD?

CDs are a very low-risk investment vehicle. The funds in them are FDIC-insured up to the standard $250,000 per depositor, per account ownership category, per insured institution, which means the FDIC will refund your money up to that amount should the bank you opened the CD with fail. That said, there are some kinds of CDs which are not FDIC-insured, so you’ll want to make sure to double-check before you sign any paperwork.

When would you use a CD ladder?

A CD ladder can be a good investment strategy when you have a nice sum of money available (say, $500 to a few thousand or more), have a low risk tolerance, and can afford to lock up your money for a period of time, from six months to several years. It is best used when rates are relatively high, especially since you can shop around for the best rate at each “rung” on your ladder.

Photo credit: iStock/Antonbr Anton

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.

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.

SOBNK-Q425-018

If you’re in need of cash, you might wonder if it’s possible to transfer money from a credit card to a bank account. It can be done, but it’s important to understand the costs and interest rates involved. You’ll also want to consider the potential impact on your credit score and how you’ll pay the money back.

Read on to learn the nuts and bolts of how to transfer money from a credit card to bank account, the pros and cons of using your credit card to access cash, and a list of alternatives that may help you get the money you need.

How Do Transfers From a Credit Card to a Bank Account Work?

When you transfer money from a credit card to a bank account, it’s considered a cash advance. This means that instead of using your credit card to pay for a purchase, you’re tapping your credit line for a lump sum of cash. Once the money is transferred to the bank, you can spend it as you wish or transfer it to another bank account.

The amount of cash you can access through a cash advance can’t exceed the current available balance on the credit card. Often, you can only access up to your cash advance credit limit, which is typically significantly lower than the full credit limit on the card.

Unlike purchases you make with your credit card, interest on a cash advance starts accumulating right away — there’s no grace period for a cash advance. You may also be charged a cash advance fee for using the service. This might be a flat fee or it could be a certain percentage of the amount you transfer to your bank (often around 3% to 5% of the amount being transferred, according to Experian, one of the major credit bureaus).

If you’re thinking about getting a credit card advance as a way of racking up cash back or travel points, you’ll want to think twice: Cash advances typically don’t qualify for credit card rewards.

5 Ways to Transfer Money From a Credit Card to a Bank

If you’re wondering how to transfer money from a credit card to a bank account, you actually have a few different options. Here are some to consider.

Visit a Bank Branch

If you have a credit card issued by a bank, you can visit a local branch of that bank and ask a teller to withdraw funds from your credit card using the cash advance feature. If you have a checking or savings account at that same bank, the teller can deposit those funds into your account. If not, you may need to bring the withdrawn cash to the other bank to deposit the funds.

Use an ATM

You can get a cash advance at an ATM but you’ll need a PIN. If you’re not sure what your PIN is, you can call the number on the back of the card.

Once you have a PIN, you can make the transfer by inserting the card into the ATM, choosing the cash advance option, and entering the amount you want to withdraw. You’ll need to accept any associated fees, then complete the transaction. If you have a credit card and a bank account with the same bank, you may be able to have the cash deposited directly into your bank account. If not, cash will be dispensed and you’ll need to deposit the money into your account.

Transfer Money Online

If your credit card and bank account are with the same institution, you may be able to do the transfer online or through your bank’s mobile app. To do this, you simply need to sign into your account and select Transfer. Choose the credit card for Pay From and the bank account you want the money transferred to for Pay To. Finally, you’ll need to select the amount you want advanced and approve the cash advance. After a few minutes, you can check your bank account to make sure the money was transferred.

Use a Credit Card Convenience Check

If your credit card originally came with convenience checks, you can use one of those checks to transfer money from a credit card account to any type of bank account. If you don’t have checks, you may be able to order them.

To use a convenience check to transfer money from your credit card to your bank account, you simply write the check out to yourself and then deposit it in your bank account.

Keep in mind that these checks work in the same way as a cash advance at an ATM. Typically, they require paying the same cash advance fee and cash advance APR, and the grace period may not apply.

Redeem Cash Back Rewards

If you have a rewards credit card and you have racked up a good amount of points, you may be able to transfer them into your checking account as cash. This is not a cash advance and, as a result, doesn’t involve interest, fees, or the need to repay the sum. However, not all cash back credit cards allow this. And some credit cards only allow you to transfer rewards as cash to a bank account if the bank account is at the same bank that issued the credit card.

Pros and Cons of Transferring Money From Your Credit Card to Your Bank Account

There are advantages to using a credit card to transfer cash to a bank account but also some considerable downsides. Here’s a closer look.

Pros

First, note the upsides of this kind of transfer:

•   Quick access to funds: Depending on the method you use, transferring money from your credit card to your bank account can take less than 30 minutes. You don’t need to spend time seeking a loan or awaiting approval.

•   Can be helpful in an emergency: If you’re in a temporary financial bind and don’t have an emergency fund, a transfer from your credit card to your bank account can be a reasonable solution, provided you’ll be able to repay the advance quickly.

•   Better option than a payday loan: Transferring money to your bank account via a credit card cash advance isn’t an ideal way to access credit, but can be preferable to a payday loan. Payday loans typically come with sky-high interest rates and fast (often two-week) repayment periods. If you can’t repay on time, you get hit with another round of fees, sinking you deeper into debt.

Cons

Next, familiarize yourself with the downsides of these transfers:

•   High interest rates: Cash advance interest rates are sometimes higher than credit card purchase APRs. Plus, interest starts accumulating as soon as you transfer the money. Unlike making purchases with your credit card, there is usually no grace period.

•   Additional fees: Cash advances also come with fees, which may be 3% to 5% of the amount you’re borrowing, adding to the total cost.

•   Potential damage to credit: Your credit scores typically won’t be impacted if you repay the money from the cash advance promptly. But cash advances can affect your credit utilization ratio, which is the amount of credit you’re using versus your total available credit. If the added balance of a cash advance goes unpaid for a while, it could hurt your credit.

•   There are more affordable ways to borrow money: Getting a personal loan, a home equity loan, or a home equity line of credit (HELOC) will typically cost less than a cash advance transfer from your credit card to your bank account.

Alternative Ways to Transfer Money to Your Bank Account

Thanks to high interest rates and fees, a credit cash advance generally should not be your go-to for borrowing money. If you’re in need of extra cash, here are some other options to consider.

Personal Loan

A personal loan is a type of loan that allows flexible use, short- to moderate-term repayment options, and relatively quick funding. Available through banks, credit unions, and online lenders, these loans typically come with fixed interest rates and predictable monthly payments. Most personal loans are unsecured (meaning no collateral is required). However, secured personal loans, which are easier to qualify for, may also be worth considering.

Home Equity Loan or Line of Credit

If you own your home and have built up equity in it, you might be able to borrow against that equity to access the money that you need. A home equity loan is disbursed in one lump sum that you pay back in equal monthly installments over a fixed term (typically five to 30 years) at a fixed interest rate. A home equity line of credit (HELOC) gives you access to a credit line that you can tap as needed. You only pay interest on what you use.

401(k) Loan

If you have money saved for retirement in a 401(k) account, it may be possible to borrow against it, provided your employer allows this type of program.

With a 401k loan (also called a retirement loan), you take money from your retirement account with the understanding that you will make regular payments, with interest, back into your account. The fees involved will vary depending on your plan administrator. You usually have five years to repay a retirement loan.

Salary Advance

Rather than transferring money from your credit card to your checking account bank account, you might be able to receive a portion of your paycheck early. Whether or not this is an option will depend on your employer’s policies. Some employers offer salary advance programs or will consider a salary advance on a case-by-case basis.

Depending on the program, you might repay the advance a little at a time or all at once. While there may be administrative fees and other costs, some programs don’t cost anything, making this a reasonable alternative to a high-interest credit card advance.

The Takeaway

It’s possible to transfer money from your credit card to your bank account using the cash advance feature. However, you generally only want to do this in the event of an emergency. Cash advance fees and interest rates make this an expensive borrowing option that could lead to a dangerous cycle of credit card debt.

While SoFi does not allow for transfers from credit card to bank account, we do offer bank accounts with many benefits.

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

Will transferring money from my credit card to my bank account hurt my credit score?

Your credit scores likely won’t be impacted if you repay the money from the cash advance promptly. However, cash advances can affect your credit utilization ratio, which is the amount of credit you’re using versus your total available credit. A high credit utilization ratio (typically anything above 30%) can have a negative impact on your credit scores since it implies you rely heavily on borrowed money.

If the added balance of a cash advance transfer to your bank account goes unpaid for a while, it could adversely affect your credit scores.

Is it a good idea to transfer money from a credit card?

A credit card cash advance can be a quick and easy way to get cash fast, but these transfers come at a high cost. Cash advance annual percentage rates (APRs) are often higher than credit card purchase APRs. Not only that, the interest begins to accrue the day you can get the cash. This can lead to a dangerous cycle of debt that can be hard to break. Cash advances also usually come with fees, adding to the cost.

How much does it cost to transfer money using my credit card?

The cost will depend on the credit card issuer. Transferring money to your bank account using your credit card’s cash advance feature usually requires a 3% to 5% fee. You’ll also pay interest on the advance, starting the day you get the transfer. The annual percentage rate (APR) on a cash advance will vary by card issuer but is generally higher than the APR for purchases.

What is the best way to transfer money from credit card to bank?

To transfer money from a credit card to a bank account, you typically need to use your card’s cash advance feature. If your credit card and bank account are with the same institution, you may be able to do the transfer online or through your bank’s mobile app. You can also access a cash advance by going to an ATM or using your credit card’s convenience checks.

Keep in mind, though, that a cash advance usually comes with fees, and interest begins to accrue on the money right away.

How can I get money from my credit card to my bank account without a fee?

You typically can’t get a cash advance from your credit card without paying fees and interest. However, there may be one workaround: If you have a rewards credit card and you have racked up a good amount of points, you may be able to transfer them into your checking account as cash without paying any fees or interest (since it is not a loan).

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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.
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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.

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SOBNK-Q425-017

If you’re newly married — or about to tie the knot — you may be debating whether to combine your finances in a joint account or keep them separate. Both approaches have their benefits: Sharing an account can make it easier to pay bills and save for the things you’re working toward together. Keeping separate accounts, on the other hand, gives each of you more independence and privacy, and could help avoid arguments if your spending styles don’t match. So what’s the best setup?

The answer depends on your relationship, financial habits, and future goals. Here’s a closer look at the pros and cons of joint vs separate accounts to help you figure out what makes the most sense for you both.

What Is a Joint Bank Account?

A joint bank account is a checking or savings account owned by two or more people. Each owner can view balances, deposit money, withdraw funds, write checks, or use a debit card linked to the account.

Joint accounts are often used to simplify shared financial responsibilities. For example, couples might deposit their paychecks into one checking account and use it to pay rent, utilities, groceries, and other bills. Since both partners can see account activity, it also provides full transparency into how money is being managed.

While joint accounts can symbolize partnership and trust, they also require open communication and mutual agreement about spending habits. Without that, combining bank accounts may lead to conflict rather than convenience.

Curious about how many couples have joint bank accounts? According to the U.S. Census Bureau’s most recent data, almost a quarter of couples don’t have joint accounts vs. 15% not having them in 1996.

The Case for a Joint Bank Account

For many couples, opening a joint account feels like a natural step, especially after marriage. In SoFi’s 2024 Love & Money survey (which included 600 adults who have been married less than one year), a full 62% of newlyweds said they share a joint bank account.

When used effectively, joint accounts can streamline budgeting, improve accountability, and reduce stress about dividing bills. Pooling resources also reinforces the idea of working as a team toward shared financial goals. But like any financial tool, joint bank accounts aren’t without risks.

Pros and Cons of Joint Accounts

Here’s a look at the upsides and downsides of shared accounts.

Pros:
First, the benefits of joint accounts:

•   Simplified bill paying: Instead of juggling multiple transfers or splitting costs manually, a joint account allows both partners to contribute to household expenses from one central place. A 2024 SoFi survey of couples who live together (and plan to wed in the next three years) found that 28% share a joint bank account before marriage.

•   Transparency and trust: Since both partners are able to see deposits and withdrawals, joint accounts offer transparency in a couple’s shared financial life. This openness can strengthen trust.

•   Team-oriented money management: If you open and both contribute to an interest-earning joint savings account, you can work towards shared goals — like buying a home, starting a family, or saving for vacations — as a team. You can also track progress together.

•   Emergency flexibility: If one partner becomes ill, incapacitated, or passes away, the other has immediate access to the funds.

Cons:
Next, the potential disadvantages of joint accounts:

•   Loss of independence: Some people may feel less autonomy when every transaction is visible to their partner, especially for personal purchases.

•   Potential for conflict: Transparency in spending and saving could lead to conflict if both partners don’t agree on budgeting and spending priorities. If one person is a saver and the other is a spender, tension may rise.

•   Liability issues: If one partner mismanages money, the other suffers the consequences. For example, if one account owner overdraws the account or writes a bad check, both owners are equally responsible for the fees and resolving any overdrafts.

•   Complexity in breakups: If the relationship ends, dividing money in a joint account can become emotionally and legally complicated.

The Case for Separate Bank Accounts

Some couples prefer financial independence and autonomy, choosing to keep their money separate even while sharing household expenses. In this setup, each partner maintains their own checking and savings accounts, with no joint ownership. In SoFi’s newlywed survey, 35% of couples said they only maintain separate bank accounts and choose not to pool any funds.

This approach can be especially appealing to couples with very different incomes, spending habits, or debt histories. By separating finances, each partner retains control over their money and avoids potential resentment over differences in how it’s managed.

Pros and Cons of Separate Accounts

Keeping accounts separate could be an option for couples. Here are the upsides and downsides of doing so.

Pros:
These are the benefits of separate accounts:

•   Financial independence: Each partner can make purchases without oversight or judgment, giving them a sense of autonomy.

•   Protection from debt: If you live in a community property state and one spouse has debt, a creditor can go after joint funds. Keeping accounts separate can shield the other spouse from liability.

•   Reduced conflict over spending: Since each person manages their own money, having separate accounts can minimize disagreements about discretionary purchases.

•   Flexibility in contributions: Couples can contribute proportionally to shared expenses based on income rather than splitting everything 50/50.

Cons:
Here are the disadvantages of separate accounts for couples:

•   Less transparency: With separate accounts, it can be harder to track how money is being managed. There is also potential for secrecy and mistrust.

•   More work to manage shared expenses: Couples need a system for splitting monthly bills, whether through regular transfers, payment apps, or rotating responsibility.

•   Missed opportunities for unity: Keeping money entirely separate may feel at odds with building a shared financial life, especially for couples working toward joint goals.

•   Challenges in emergencies: If one partner becomes incapacitated, the other may struggle to access needed funds.

The Hybrid Option: A “Yours, Mine, and Ours” Approach

For many couples, the best solution is a hybrid system that includes both joint and separate accounts. In SoFi’s newlywed survey, 42% of married couples reported having a mix of joint and individual accounts.

This “yours, mine, and ours” method involves maintaining a joint account for shared expenses while also keeping individual accounts for personal spending. For example, both partners might deposit a set amount or percentage of their income into the joint account each month to cover housing, utilities, groceries, and savings goals. The rest of their income remains in separate accounts for discretionary purchases, hobbies, or personal financial goals.

This approach provides the transparency and teamwork benefits of a joint account while also allowing for financial independence. It can also reduce arguments over personal spending since each person retains their own discretionary funds.

Source: SoFi’s 2024 Love & Money newlywed survey

How to Decide What’s Right for Your Relationship

Deciding between joint, separate, or hybrid accounts isn’t about following a one-size-fits-all rule. The “right” choice depends on your financial history, habits, values, and long-term goals. Here are some key conversations to have before making a decision:

Discuss Your Financial Habits, History, & Current Debt

Start by sharing your financial background openly. Do you have student loans, credit card debt, or a history of overdrafts? Are you a natural saver, or do you prefer to spend on experiences? Ask your partner to answer the same questions. Honest discussions about past mistakes, strengths, and weaknesses can help set realistic expectations.

If one partner carries significant debt, a joint account might create tension or unfair responsibility. In such cases, separate or hybrid accounts may work better until debts are under control.

Align on Your Short and Long-Term Goals

Next, talk about what you’re working toward together. Are you saving for a house or family? Do you want to retire early or prioritize travel? Your financial goals will influence whether pooling money makes sense.

Couples with highly aligned goals often find joint accounts useful, while those with divergent goals may prefer more independence. Even in a hybrid setup, it’s important to agree on how much money goes toward shared versus personal objectives.

Decide How to Handle Bills and Shared Expenses

Finally, you’ll want to discuss the practical side of managing day-to-day expenses. Options include:

•   Full joint account: Both paychecks go into a joint account, and all bills come out of it.

•   Separate accounts: Each partner pays specific bills from their own accounts.

•   Hybrid approach with a 50/50 split: Each partner keeps their own account and contributes an equal amount to a joint fund for shared expenses.

•   Hybrid approach with proportional contributions: Partners maintain separate accounts and contribute to a joint account based on income percentage. For instance, if one earns 60% of the household income and the other earns 40%, contributions can be split accordingly.

Agreeing on a fair system can prevent resentment and help ensure both partners feel invested in household responsibilities.

The Takeaway

There’s no universal answer to whether couples should choose joint or separate bank accounts or take a hybrid approach. What matters most is that your financial arrangement reflects your relationship values, encourages transparency, and minimizes stress.

If you and your partner choose to pool at least some of your funds in a joint account, see what SoFi has to offer.

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

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 percentage of married couples have separate bank accounts?

According to SoFi’s 2024 Love & Money Survey (which included 600 adults who have been married less than one year), 82% of newlyweds maintain separate bank accounts, either exclusively or alongside a joint account. Many couples choose to maintain separate accounts to avoid conflicts over spending and/or maintain autonomy while still contributing to shared goals. However, others prefer joint accounts for ease of bill payments and household expenses, and will often blend the two approaches for balance and flexibility.

How do you split bills with separate accounts?

Couples with separate accounts typically split bills in a way that feels fair and manageable. Common methods include dividing expenses 50/50, assigning specific bills to each partner, or splitting costs based on income percentage (e.g., one pays 60% and the other 40%). Many use apps or spreadsheets to track shared spending and transfers.

Another option is to maintain a joint account for household expenses, while keeping personal accounts for individual purchases. This provides transparency as well as some financial independence.

What happens to a joint account if one person passes away?

In most cases, joint bank accounts are set up with rights of survivorship. This means the money bypasses probate and the surviving account holder automatically becomes the sole owner of the funds.

When a joint account holder passes away, the surviving account holder typically needs to present a death certificate to the bank. They may then have the opportunity to remove the deceased account owner from the account or close the joint account and open a new individual account.

Can a joint account impact my credit score?

A joint bank account itself does not directly affect your credit score, since checking and savings accounts aren’t reported to credit bureaus. However, lenders will often use information about your checking, savings, and assets to determine whether you have the capacity to take on more debt.

In addition, bounced checks, involuntary account closures, and other problems with bank accounts are reported to ChexSystems, a consumer reporting agency for banking. If you end up with negative information on your ChexSystems report due to a problem with a joint account, you may have difficulty opening new accounts.

Can we open a joint account before we get married?

Yes, you can open a joint account before marriage, as banks generally don’t require couples to be legally married. Both account holders must provide valid identification and agree to equal access to the funds. This option is popular for engaged or cohabiting couples who want to manage shared expenses like rent, utilities, or travel. However, since both parties have full access to the funds in a joint account, trust and clear communication are crucial. It’s wise for partners to discuss expectations before opening an account together.

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.

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.

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-Q425-015

When you’re married and are each other’s beneficiaries, it makes sense to create a single joint will, right? Not necessarily. Even if you plan to leave everything to your significant other upon death, creating this kind of legal document may lead to complications down the line.

Let’s take a closer look at the different kinds of wills married couples can create so you can decide what’s best for you.

What Is a Joint Will?

A joint will is a single shared legal document, signed by two or more people. It is relatively uncommon today, and many attorneys recommend against them. One of the motivations for a joint will is that, when one person dies, it’s nearly impossible for a surviving spouse to change the terms of the will. This can be problematic because circumstances change over time. What if the person mentioned to inherit property in the will has passed away?

That said, a joint will for a couple can seem desirable precisely because it’s not flexible. This can ensure that a child from a previous marriage, for example, inherits what is outlined in the will even if their parent dies before their new spouse does. But these sort of permanent clauses can be handled in a trust, a customized estate planning tool that can allow for complex, shifting situations.

How Do Joint Wills Work?

A joint will for a married couple is a single document, signed by two partners. When you’re both alive, changes can be made as long as you both agree. But once a partner dies, the will becomes binding.

For this reason, a joint will for a married couple can be binding, restrictive, and not necessarily optimal for the complexity of modern-day life.

Say that the will stipulates that the house the couple owns will be inherited by their three children upon the death of both spouses. But what if the surviving spouse has a financial emergency and wants to sell the house? Or simply wants to downsize to a smaller living space? Because of the will, they could be stuck in a difficult scenario.

Also consider that a joint will doesn’t always cover the what-ifs that can come up during life. From remarriage to family disputes to having more children, a joint will can lock assets in time, making it tough for the surviving spouse to move on.

How Do Mutual Wills Work?

Fortunately, there are options for those who worry about a joint will being too rigid. A more common option that offers flexibility is what’s known as a mutual will, or mirror will. In this case, two documents are created, one for each spouse. They may be identical, but because they are two documents, separately signed, the surviving spouse can then modify their own individual will when their partner passes away.

But what if you are concerned that you might die first and your surviving spouse could, say, omit a child or other loved one from their inheritance? (Yes, that may sound odd, but life contains many complicated family situations!) In this case, lawyers may recommend a trust as an option to ensure that your own personal wishes are carried out when it comes to your property. The trust can also make sure that your directives are followed when it comes to joint property mutually owned, like real estate.

Recommended: Important Estate Planning Documents to Know

Joint Will vs Individual Will: Pros and Cons

So, what are the pros and cons of joint wills versus individual (separate) wills? In general, the biggest con against a joint will may be the lack of flexibility. But for some people with relatively simple estates, this can seem like a positive.

Pros of a joint will:

•   Simplicity. It’s a one-and-done proposition!

•   Clarity. It ensures that both partners’ wishes, as written, will be respected, even after death.

Cons of a joint will:

•   Rigidity. If a partner gets remarried or has more children, it will be complicated if not impossible to change the original will.

Pros of an individual will:

•   Flexibility. Yes, this is a double-edged sword. These wills aren’t carved in stone, which can be a good or bad thing. But with individual wills, the wishes of the partner who dies first may not be fully honored. These concerns may be solved by the creation of a trust.

•   Simplicity. You can create one document and each sign it separately. Each individual is then free to amend their own will.

Cons of an individual will:

•   Flexibility. Yes, this is a double-edged sword. These wills aren’t “carved in stone” which can be a good or bad thing. Here’s the latter: With individual wills, the wishes of the partner who dies first may not be fully honored. These concerns may be solved by the creation of a trust.

•   Maintenance-intensive. A surviving partner may want to rewrite their will over time as their life circumstances change.

Do Husbands and Wives Need Individual Wills?

In most cases, yes, it’s beneficial if spouses have separate wills. The wills can be identical, but having two distinct documents that are individually signed can help protect against what-ifs in the future. Having individual wills can give the surviving spouse flexibility.

Let’s say that a joint will stipulates that a house owned jointly by a married couple will go to children upon the death of both spouses. That means if one spouse dies, the other spouse may not be able to sell the house that he or she lives in, even in the case of financial hardship. A joint will can lock a surviving spouse in time, despite evolving circumstances.

Instead, a couple may prefer individual wills. These can mirror each other, but the surviving spouse retains flexibility in case their needs or circumstances change after the spouse dies.

Worth noting: For some, the lack of flexibility of a joint will may be seen as positive. For example, some couples may want a joint will to ensure their children receive an inheritance, even if the surviving spouse remarries. However, some legal experts believe this goal can better be achieved through the creation of a trust.

As you think about making your will, it can be helpful to consider the pros and cons of a joint will. Getting an expert opinion can also be a smart move.

What Happens to a Joint Will When Someone Dies?

A joint will is essentially frozen in time when someone dies. The will becomes “irrevocable,” and property must be divided according to the terms of the will. If it says all assets are to be inherited by the surviving spouse, then the surviving spouse will inherit assets. But confusion may occur if and when both spouses pass away. A joint will then makes it hard, if not impossible, to reallocate property.

Let’s consider another scenario to see why a joint will can be problematic. Perhaps a joint will specifies that a certain sum of money is to go to a charity upon death. If the charity no longer exists after one spouse passes away, this may lead to complications and a legal headache.

In short: A joint will is similar to a time capsule. While its contents may make sense now, it can be helpful to consider what-ifs that may happen ten, 20, or 50 years in the future. This can lead some couples to decide that individual wills will work better.

Recommended: Life Insurance Guide

Can You Make a Joint Will Online?

It is possible to make a joint will online. But because not every state recognizes a joint will, it’s important to make sure you live in a state that does before you move forward.

The Takeaway

End-of-life planning is an important way to express your wishes and protect those closest to you. A will is one key component of that, but married couples have an important choice to make when deciding whether to have joint or individual wills. Even if you and your spouse are the ultimate joined-at-the-hip lovebirds, having separate wills may be a good idea. It can often provide more flexibility and family peace in the years ahead.

When you want to make things easier on your loved ones in the future, SoFi can help. We partnered with Trust & Will, the leading online estate planning platform, to give our members 20% off their trust, will, or guardianship. The forms are fast, secure, and easy to use.

Photo credit: iStock/fizkes

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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.

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