A Complete Guide to Ordering Checks

How to Get a Checkbook From the Bank or Order It Online

Checks may not be used as often as they once were, but they’re still a useful financial tool to have on hand. You may need to write a check when making a large payment, giving money as a gift, making a charitable donation, paying a contractor or small business, or paying rent.

Many banks no longer automatically provide complimentary checks with every checking account. If you need physical checks, you may have to order them through your financial institution or a third-party vendor. The best option will depend on whether you prioritize convenience, cost, or having more choices in check designs.

Here’s what you need to know about the different types of checks, how to get checks from your bank, and what to consider when ordering checks online.

Key Points

•   Although digital payments are increasingly common, personal checks remain a useful and sometimes preferred financial tool.

•   Ordering checks directly through your bank or credit union is often the most convenient method since they already have your account information on file.

•   Reputable third-party check-printing companies are another option that may offer a wider variety of designs and potentially lower prices than your bank.

•   Verify your personal information, routing and account numbers, and starting check number before ordering to prevent processing errors.

•   Alternatives to writing checks include online bill pay, ACH transfers, debit cards, or person-to-person payment services.

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SoFi members interested in ordering physical checks can follow these instructions.

What Are the Different Types of Checks?

There isn’t just one type of check. Personal checks, business checks, cashier’s checks, and certified checks all work somewhat differently and can be useful for different purposes.

Personal Checks

A personal check is a paper payment drawn from your personal checking account. When you write a check, you authorize your bank to pay a specified amount to the person or business named on the check.

Personal checks generally include your name and address, your bank’s routing number, your checking account number, and a check number. You fill in the payee, amount, date, and your signature when you write a check.

When you open a checking account, you may have the option to order a checkbook. Depending on the bank and account, checks may be free or come with a fee. You can also reorder checks later if you run out or want to choose a different design.

Business Checks

Business checks work similarly to personal checks, but the funds are drawn from a business checking account rather than a personal account. They typically include the business name and may include its address, logo, or other identifying information.

Some business checks also include voucher or stub sections that make it easier to record payment details, such as an invoice number or expenses description.

Businesses may use checks to pay vendors, contractors, suppliers, taxes, and other expenses. Using a business checking account for these payments can also help keep business and personal finances separate.

Cashier’s Checks

A cashier’s check is an official bank-issued check that is drawn against the bank’s funds rather than directly against your personal checking account. To obtain one, you generally provide the bank with the amount of the check, plus any applicable fee (often around $10).

Because the bank sets aside or draws the funds when it issues the check, cashier’s checks are often used when a recipient wants a more secure form of payment than a personal check. They may be required for transactions such as certain real estate purchases or large payments.

A cashier’s check is different from a personal check and does not come in a checkbook that you can use for everyday payments. Not all banks offer cashier’s checks.

Certified Check

A certified check is a personal check that the bank has verified and certified. The bank confirms that sufficient funds are available in the account and may place a hold on those funds. The check is then marked as certified.

The main difference between a certified check and a cashier’s check is where the funds come from. A certified check is drawn from the customer’s checking account, while a cashier’s check is issued by the bank and drawn against the bank’s funds.

Getting a certified check typically costs between $10 and $20, depending on the financial institution and the check amount. Note that not all banks offer certified checks.

How to Get a Checkbook From Your Bank

The bank or credit union where you have your checking account is often the simplest place to order checks because it already has all of your account information. Depending on the financial institution, you may be able to order them through online banking, a mobile app, by phone, or at a branch.

The exact process varies by bank. For example, some banks let you select a check design and quantity after signing into your account, while others direct you to a check-printing company that handles orders on the bank’s behalf. Once you place an order, it can take anywhere from a few business days to two weeks for the checks to arrive.

While convenient, your bank may not be the cheapest place to order checks. A traditional bank may charge $30 or more per box, though they may cost less (or be free) if you’re a premium account holder. Some online banks and credit unions do not charge for ordering or reordering checks.

Recommended: How to Endorse a Check

Other Places to Order Checks Online

You don’t have to order your checks directly from your bank. Reputable third-party check-printing companies and some large retailers also sell checks, often with a wider selection of designs and quantities. Prices range from around 5 to 24 cents per check and minimum orders can be anywhere from 80 to 200 checks.

To find a reputable seller, make sure that the checks they issue feature a small padlock icon on the right side of the check — either under the “amount” box or in the righthand border. This tells you that the check’s security features — and the issuing company — meet the requirements of the Check Payment Systems Association (CPSA).

Some check-printing companies offer enhanced security features, including watermarks, hard-to-copy microprint, hologram foil, and thermochromic ink (ink that disappears with heat). These features help protect against alteration or duplication of a check, but can add to the cost.

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*Earn up to 3.80% Annual Percentage Yield (APY) on one SoFi Savings account with a 0.70% APY Boost (added to the 3.10% APY as of 5/28/26) for up to 6 months. Open your first SoFi Checking and Savings account and receive eligible direct deposits OR qualifying deposits of $5,000 every 31 days by 12/31/26. Rates are variable, subject to change. Terms apply at https://www.sofi.com/banking/#2. SoFi Bank, N.A. Member FDIC.

What You Need for Ordering Checks Online

Whether you’re ordering from your bank or a third-party check printer, you’ll typically need to provide:

•   Your personal information. This generally includes the name and address you want printed on the checks. Business checks will typically use the business name and address.

•   Your bank information. You may need to give the name of your bank or credit union and, in some cases, its address.

•   Your checking account number. You can find this on an existing check, bank statement, or through your online bank account.

•   Your bank routing number. This nine-digit number identifies your financial institution and is used for various types of electronic and check transactions. You can find it on a check, bank statement, or through your bank’s website or mobile app.

•   Your starting check number. If you’re reordering checks, you may want to continue the numbering sequence from your previous checkbook. For example, if your last check was numbered 199, you could start the new checks at 200. Keeping the sequence can make it easier to track your payments.

Before submitting your order, carefully check that your name, address, routing number, account number, and starting check number are correct. Errors can result in checks that can’t be processed correctly and may require you to place another order.

Alternatives to Using Paper Checks

Although there are still situations when a paper check makes sense, you may have other ways to make many of the same types of payments.

Online bill pay. Many banks offer online bill pay, which allows you to schedule payments through your checking account. Depending on the recipient, the bank may send the money electronically or, if the payee doesn’t accept electronic payments, mail a paper check on your behalf.

ACH payments. ACH transfers allow you to transfer money online and can be used for many recurring and one-time payments, as well as moving money between bank accounts. They can be a convenient alternative to a check when a recipient accepts electronic payments.

Debit cards. For purchases and payments where payment cards are accepted, using a debit card can eliminate the need to write a check while drawing money directly from your checking account.

Person-to-person (P2P) payment services. Payment apps and services can be useful for sending money to people you know, although availability, fees, transaction limits, and protections vary by service.

Not every payment recipient accepts electronic payments, so keeping a small supply of checks may still be worthwhile if you occasionally need them.

The Takeaway

Checks may no longer be an everyday payment method for many people, but having a few on hand can be useful for rent, large purchases, charitable donations, contractors, and other payments where a paper check is accepted or preferred.

If you need more checks, ordering them through your bank or credit union is usually the simplest option. You can also order from a reputable third-party check printer, which may give you more choices and potentially lower prices. Just make sure to protect your account information and choose checks with appropriate security features.

If you rarely use checks, you may also find that online bill pay, ACH payments, debit cards, or other electronic payment methods can handle many of the payments you once made by check.

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.

Better banking is here with SoFi, named the #1 Bank in the U.S. for the fourth year in a row by Forbes (2026).* Enjoy up to 3.10% APY on SoFi Checking and Savings.

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SoFi members interested in ordering physical checks can follow these instructions.

FAQ

How long does it take to get a checkbook from the bank?

Standard check orders can take a couple of weeks to arrive, although the exact timing varies by bank, check printer, and shipping method. Some financial institutions offer expedited delivery for an additional fee. If you need checks quickly, contact your bank to ask whether it can provide temporary or counter checks while you wait for your regular order.

Can I get a check printed at the bank right away?

Some traditional banks can provide temporary, or counter, checks at a branch while you wait for a regular checkbook. These checks may contain your account information but generally won’t have your name or other customized details printed on them. Availability varies by bank and branch, and there may be a fee. Call ahead to confirm whether your branch offers counter checks.

Are checks free from the bank?

It depends on your bank and checking account. Some accounts include free personal checks, while others charge for check orders or reorders. Banks may also offer discounts or free checks to customers with certain premium or relationship accounts. Check your account’s fee schedule or contact your bank before ordering to find out what you’ll pay.

Is it safe to order checks online?

Ordering checks online can be safe if you use a reputable check printer and take precautions to protect your banking information. Make sure the website uses a secure connection and verify the company before placing an order. It’s also important to check your order carefully to make sure your name, routing number, account number, and starting check number are correct.

What is the difference between a starter check and a regular checkbook?

Starter checks, sometimes called counter checks, are temporary checks that a bank may provide when you first open an account or need checks before a regular order arrives. They typically have basic information and may not include your name or a customized design. A regular checkbook contains personalized checks printed with your name and account information and is ordered through your bank or a check-printing company.


SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2026 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
^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.
Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 5/28/26. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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

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

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

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
We do not charge any account, service, or maintenance fees for SoFi Checking and Savings. We do charge transaction fees for outgoing wire transfers, Instant Transfers, and global remittance transfers. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/. *Awards or rankings from Forbes are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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How Many Bank Accounts Should I Have?

How many bank accounts do you need? For many people, a checking account for everyday expenses and a savings account for emergencies and other goals may be enough. But having multiple accounts can also make it easier to organize your money, separate spending from savings, or take advantage of different account features and interest rates.

The key is finding a setup that fits your finances without making them unnecessarily complicated. While multiple accounts can offer greater flexibility and organization, they can also mean more balances to monitor and account requirements to keep track of. Here’s how to decide how many bank accounts may make sense for you.

Key Points

•   Experts typically recommend having at least a checking account for daily spending and a savings account for future goals.

•   Opening additional accounts can improve your financial organization and help you maximize interest earnings.

•   While you can legally open as many bank accounts as you like, you’ll want to consider the potential for fees and increased management time.

•   Separating personal and business finances or organizing savings goals can provide clarity and help you track your progress more effectively.

•   Automating transfers and monitoring your balances regularly are effective habits for managing multiple accounts successfully.

How Many Bank Accounts Do Most People Have?

Financial experts generally advise having at least two bank accounts: a checking account for everyday spending and a savings account for setting aside money for future expenses. But there are good reasons to expand your banking setup, such as improving financial organization and capitalizing on higher interest rates.

For example, you might want one checking account for fixed bills and another for discretionary (“fun”) spending money. Savers may open multiple savings accounts to organize their goals — perhaps one for an emergency fund, another for a down payment, and a third for an upcoming vacation. Many couples maintain individual accounts, as well as a joint account for shared expenses and goals.

Historical research suggests that the average American has around five bank accounts across institutions. But this may be too many (or too few) for you depending on your needs and situation. Managing multiple bank accounts can be time-consuming and complex and may lead to more fees and tax statements, so it’s important to weigh the pros and cons.

How Many Bank Accounts Can You Have?

You can legally have as many bank accounts as you want. There is no federal or state law that limits the number of checking or savings accounts an individual can open or hold simultaneously. However, financial institutions may have their own internal policies regarding the number of accounts you open, approval criteria, fees, and minimum balance requirements.

Recommended: How to Switch Banks

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with a limited-time APY boost.*


*Earn up to 3.80% Annual Percentage Yield (APY) on one SoFi Savings account with a 0.70% APY Boost (added to the 3.10% APY as of 5/28/26) for up to 6 months. Open your first SoFi Checking and Savings account and receive eligible direct deposits OR qualifying deposits of $5,000 every 31 days by 12/31/26. Rates are variable, subject to change. Terms apply at https://www.sofi.com/banking/#2. SoFi Bank, N.A. Member FDIC.

7 Reasons to Open Multiple Bank Accounts

Opening multiple bank accounts can be a smart way to organize your finances and maximize your earnings. Here are seven reasons to consider spreading your funds across different accounts.

1. Separate Shared and Personal Money

Couples may find it helpful to have separate individual accounts along with a joint checking account. A joint account can be used for shared expenses such as rent or mortgage payments, utilities, groceries, and other household costs, while individual accounts can give each person more flexibility over their personal spending.

Having separate accounts isn’t necessarily a sign that you keep your finances completely separate. Instead, it can provide a way to manage shared financial responsibilities while allowing each partner to maintain some independence over personal money.

2. Track Financial Goals More Easily

Multiple savings accounts can make it easier to organize money according to specific goals. Instead of keeping all of your savings in one account, you could have separate accounts for an emergency fund, a vacation, a home down payment, or another large upcoming expense.

Seeing each balance separately can also make it easier to track your progress. Some banks offer goal-setting or savings features that allow you to organize funds within a single account, such as savings vaults, so you may not need a separate account for every goal.

3. Earn more Interest

Different banks and account types can offer different interest rates. Keeping your checking account at one bank while moving some of your savings to a high-yield savings account at another institution could help you earn more interest on money you don’t need for everyday expenses.

High-yield savings accounts are typically available through online banks, which generally have much lower operating costs compared to traditional banks with physical branches. Online banks typically pass these savings onto customers in the form of higher rates and low (or no) fees.

4. Get More Features and Perks

No single bank necessarily offers every feature you want. One institution may have convenient branch locations for in-person assistance and cash deposits, while another could offer overdraft protection, budgeting tools, or cash-back rewards.

Keeping accounts at different institutions can allow you to choose the features that are most useful to you rather than relying on a single bank for everything. Just make sure the benefits of each additional account outweigh any fees or extra management.

Recommended: Emergency Fund Calculator

5. Maximize FDIC Protection

Spreading money across different FDIC-insured banks can potentially increase the amount of your deposits covered by federal deposit insurance.

The FDIC generally insures deposits up to $250,000 per depositor, per insured bank, for each ownership category (such as single, joint, or trust account) in the unlikely event of bank failure. So if you have more than $250,000 in eligible deposits, dividing your money between separately insured banks may allow more of your deposits to fall within FDIC coverage limits.

6. Better Budgeting:

Multiple bank accounts can also help you separate money based on how you plan to spend it. For example, you could use one checking account for fixed bills such as rent, utilities, and loan payments and another for everyday spending such as groceries, entertainment, and dining out. You could then transfer a set amount into the spending account each pay period.

This approach can make it easier to see how much discretionary money you have available without accidentally spending money that has already been earmarked for bills.

7. Separating Personal and Business Finances

If you freelance, have a side gig, or own a small business, it can be useful to have separate business and personal bank accounts. Keeping business and personal finances separate can provide a clearer picture of how your side gig or business is performing and help prevent personal expenses from becoming mixed with business transactions. It can also make it easier to prepare your taxes.

How Many Checking Accounts Should I Have?

For many people, one checking account is enough. You can use it to receive your paycheck, pay bills, make purchases, and manage other everyday transactions.

However, you may want to consider a second checking account if you have a specific reason for keeping some money separate, such as sharing household expenses with a partner, separating essential vs. discretionary spending, or maintaining separate personal and business finances.

Before opening another checking account, consider whether it will make your finances easier to manage or simply give you another balance to monitor. Also check for monthly fees, minimum balance requirements, ATM access, and other account terms. If your current checking account meets your needs, there’s generally no need to open another one simply for the sake of having multiple accounts.

In other words, the right number of checking accounts is the number that helps you manage your money effectively without creating unneeded financial clutter.

Potential Downsides to Having Multiple Bank Accounts

Although multiple accounts can make your finances easier to organize, there can also be drawbacks. The more accounts you have, the more balances, transactions, statements, and account requirements you may need to monitor.

Potential downsides include:

•   More fees: Some accounts charge monthly maintenance fees or require minimum balances to avoid them.

•   More opportunities for overdrafts: If you don’t keep track of your balances, you could accidentally spend money from the wrong account or overdraw an account.

•   More account management: Multiple accounts mean more statements, passwords, transfers, and transactions to monitor.

•   Minimum balance requirements: Maintaining several accounts may make it harder to meet minimum balance requirements at some banks

•   Less financial visibility: Having too many accounts can make it harder to get a clear picture of how much money you actually have available.

The goal isn’t to have as many accounts as possible. It’s to have enough accounts to make managing your money easier without creating unnecessary complexity.

How to Manage Multiple Bank Accounts

If you decide that multiple bank accounts make sense for you, these simple habits can help you stay organized:

•   Give each account a purpose. Know what each account is for and avoid opening accounts that don’t serve a specific purpose.

•   Automate transfers. Set up recurring transfers to move money into savings or a separate spending account after each paycheck. Automation can help you stay on track without having to remember to make each transfer manually.

•   Monitor your balances. Check your accounts regularly, particularly if you have automatic payments or transfers coming out of them. A budgeting app or your bank’s mobile app may make it easier to see your accounts in one place.

•   Watch for fees and requirements. Review monthly fees, minimum balance requirements, interest rates, and other account terms periodically. If an account no longer provides a meaningful benefit, consider whether you still need it.

•   Keep an overall view of your finances. Even if your money is spread across several accounts, make sure you know your total cash balance and how much is available for spending, saving, and upcoming expenses.

The Takeaway

How many bank accounts you should have depends on your financial goals, spending habits, and how much organization you want. For some people, one checking account and one savings account may be all they need. Others may benefit from additional accounts for specific savings goals, shared expenses, budgeting, or business finances.

Multiple accounts can help you organize your money and take advantage of different account features, but they can also create additional fees and management work. The right setup is one that makes it easier — rather than harder — to manage your money.

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.

Better banking is here with SoFi, named the #1 Bank in the U.S. for the fourth year in a row by Forbes (2026).* Enjoy up to 3.10% APY on SoFi Checking and Savings.

FAQ

Is it a good idea to have multiple bank accounts?

It can be. Multiple bank accounts can help you separate money for bills, everyday spending, emergency savings, and other financial goals. They may also allow you to take advantage of different interest rates or account features. However, having too many accounts can make your finances harder to manage and may result in additional fees. The best approach is to have enough accounts to support your financial goals without creating unnecessary complications.

Is three bank accounts too many?

Not necessarily. Three bank accounts can be a practical setup for many people. For example, you could have one checking account for everyday spending, one savings account for an emergency fund, and another savings account for other goals. The right number depends on your financial situation and how easily you can manage your accounts. If having three accounts helps you organize your money without adding unnecessary fees or complexity, there’s generally no reason to consider it too many.

Do too many bank accounts hurt your credit?

Generally, opening or maintaining bank accounts does not directly affect your credit scores. Checking and savings accounts typically aren’t reported to the three major credit bureaus. However, certain account-related activity, such as unpaid negative balances that are sent to collections, could potentially affect your credit. Opening a bank account may also result in a bank checking your ChexSystems report rather than your traditional credit report.

Can you have multiple checking accounts at the same bank?

Yes, many banks allow customers to have multiple checking accounts at the same institution. You might use separate accounts for bills, discretionary spending, or shared household expenses. However, each bank sets its own rules, including any limits, minimum balance requirements, or monthly fees. Before opening another account, check the bank’s terms to make sure you understand the costs and requirements.

How much money should you keep in your primary checking account?

There’s no set amount that everyone should keep in a primary checking account. A reasonable approach is to keep enough to cover one to two months’ worth of bills and regular spending, plus a small cushion for unexpected expenses or timing differences between deposits and withdrawals. You may want to keep larger savings goals and emergency funds in savings accounts instead. Reviewing your typical monthly expenses can help you determine how much cash you need readily available in checking.


SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2026 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
^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.
Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 5/28/26. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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

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

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

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
We do not charge any account, service, or maintenance fees for SoFi Checking and Savings. We do charge transaction fees for outgoing wire transfers, Instant Transfers, and global remittance transfers. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/. *Awards or rankings from Forbes are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.
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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Debt Buyers vs Debt Collectors

While these two services may sound similar, debt buyers purchase past-due accounts from lenders, whereas debt collectors work on behalf of whoever owns the debt in an attempt to get the borrower to pay.

If you find yourself struggling with debt, it’s important to understand what may happen to it so you can better work through the situation. That’s why it may be worth knowing the difference between a debt buyer and a debt collector. Both of these services are used by lenders, such as banks, to move debts off of their liability balance sheets.

Take a closer look here at how each of these services operates.

Key Points

•   Debt buyers purchase past-due accounts from lenders.

•   Debt collectors work to collect debts for lenders or debt buyers.

•   Debt buyers often pay a fraction of the debt’s face value to the business they purchase the debt from.

•   Debt collectors can report the debtor to credit bureaus.

•   Timely debt repayment can help you avoid collection issues.

When and Why Do Companies Sell Your Debt?

A borrower will likely only ever deal with the company they’re borrowing from, so long as they make payments on their debt regularly and on time. However, if the borrower does not make timely payments, the debt may get sold to a third party, known as a debt buyer.

The lender will sell the debt in an effort to lower their liability. There’s no real timetable for when debt may be sold or go into collections. It can depend on the state you live in, the lender’s policies, and the type of debt it is. Debt collectors can then attempt to collect the debt from the debtor. They operate on behalf of the business that owns the debt, and their goal is to get the debtor to pay what they owe.

What Is a Debt Buyer?

A debt buyer is a company that purchases past-due accounts from a business, such as a bank or a credit card company. They typically purchase the debt for a small percentage of what’s actually due to the original lender. The amount a debt buyer pays for debt can vary, but it’s often just cents on the dollar.

For example, a debt buyer may only pay $100 for a $1,000 debt from the original lender. This means that if the new debt buyer actually collects the debt they purchased, they will make a $900 profit. Debt buyers can generally purchase older debt for even lower amounts because it’s less likely to actually get collected.

Debt buyers don’t usually do this as a one-off purchase. Instead, they’re in the business of purchasing many delinquent debts at once to increase their odds of turning a profit. This strategy has the potential to be quite lucrative. If, for example, a debt buyer purchases 10 different $1,000 debts at $100 apiece, the buyer needs just one person to pay their debt to break even, and just 2 out of the 10 people to pay their debts to turn a profit.

What Is a Debt Collector?

Debt collectors are third-party companies that collect debts on behalf of other companies. They can attempt to collect debts on behalf of the original lenders, or they can attempt to collect debts for debt buyers.

Debt-buying companies may also function as debt collection agencies to collect the debts they’ve purchased. But a debt-buying company can also assign debts to another third-party debt collecting company, paying it a portion of the profit they make when the debt is paid.

To get the debt paid, debt collectors will typically contact the original debtor through letters and phone calls, letting them know what’s owed and attempting to convince them to pay the debt. Collectors will often use the internet to find a person or even go as far as hiring a private investigator. Debt collectors also can look into a person’s other financial information, such as their bank accounts or brokerage accounts, to assess if they’re theoretically able to repay their debts.

However, a debt collector typically cannot seize paychecks. The only way a collector may be able to seize a paycheck or garnish wages is if there is a court order, known as a judgment, requiring the debtor to pay. For this to happen, the debt collector must first take the debtor to court within the debt’s statute of limitations and win the judgment. Still, there could be other negative consequences, such as collectors reporting a debtor to credit agencies, which could affect the debtor’s credit score for some time.

Debt collectors often get a bad reputation for using aggressive tactics. The federal government introduced the Fair Debt Collection Practices Act to protect people from predatory practices. The law dictates certain reasonable limitations under which a debt collector can contact the debtor. If the collection company violates the law, the debtor could bring a lawsuit against it for damages.

How to Avoid Collections and Pay Off Debt

Paying off all debt on time is the best way to avoid encountering either a debt buyer or a debt collector. But if you find yourself in debt, don’t despair. Rather, take a bit of time to plan the best method of repayment for your financial situation, which could entail getting into the nitty gritty of your spending or crunching the numbers with the help of a personal loan calculator.

Here are some of the different strategies to pay off debt that you might consider.

•   Creating a monthly budget: This can help you track spending and identify potential areas to cut back on in order to pay off debts faster. After sitting down and looking through your monthly expenditures, you might be surprised how much fat there is to trim. Then, put all of that extra cash toward paying down your debts.

•   Using the snowball method or avalanche method: The snowball method focuses on paying off your debts in order of the smallest to the largest balances while continuing to pay the minimum due on each debt. With the avalanche method, you target the debt with the highest interest rate first while continuing to make minimum payments on other debt balances. In both methods, after the first debt is paid down, the amount that was going toward that debt is put toward the second debt on the list, and so on, thus helping to pay down each consecutive balance as fast as possible.

•   Consolidating your debts: Another option to try is consolidating debts with a debt consolidation loan, which is one type of personal loan. Typically, a debt consolidation loan offers lower interest rates than credit card interest rates, which can make those debts more affordable and easier to pay off.

That’s why debt consolidation is a common use for personal loans. Plus, with a debt consolidation loan, you’ll only have one monthly payment to stay on top of.

Recommended: Common Uses for Personal Loans

The Takeaway

A debt buyer vs. collector plays a different role when it comes to debt, but both are parties you might encounter if you’re way past due on your payments. Debt buyers purchase debt from lenders, often for pennies on the dollar. Debt collectors, however, can take a number of steps in an effort to collect owed debt on a company’s behalf, including reporting that debt to the credit bureaus. To avoid encountering either of these, consider ways to manage your debt more effectively.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

Want to avoid debt collection? A personal loan with SoFi may help.

FAQ

Do I have to pay debt if it’s been sold?

Yes, you still have to pay debt if it’s been sold. The difference is that you now need to pay the debt collector vs. the original creditor.

What is the 7-in-7 rule for debt collectors?

The 7-in-7 rule is a guideline established by the Consumer Financial Protection Bureau regarding how often a debt collector can contact a debtor in a seven-day period. They cannot call more than seven times in seven days nor any sooner than seven days after having had a conversation with a debtor.

How much do debt buyers pay for debt?

While the exact figure will vary, data indicates that some debt buyers pay as little as four to five cents on the dollar when buying debt from credit card companies. This represents only a fraction of the debt’s face value.


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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.

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

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What Would Happen if I Deposited $10,000 Into My Bank Account?

How Much Cash Can You Deposit In Your Bank Account?

A cash deposit of more than $10,000 into your bank account requires special handling. Your bank must report the deposit to the federal government. That’s because the Internal Revenue Service (IRS) requires banks and businesses to file Form 8300 and a Currency Transaction Report if they receive cash payments over $10,000. Depositing more than $10,000 will not result in immediate questioning from authorities, however. The report is done simply to help prevent fraud and money laundering. You have nothing to lose sleep over as long as you are not doing anything illegal.

Key Points

•   Banks are required to report when customers deposit more than $10,000 in cash at once.

•   A Currency Transaction Report must be filled out and sent to the IRS and the Financial Crimes Enforcement Network (FinCEN).

•   The Bank Secrecy Act of 1970 and the Patriot Act of 2001 dictate that banks keep records of deposits over $10,000 to help prevent financial crime.

•   Structuring a deposit involves splitting up several deposits so that a single deposit of more than $10,000 cash does not occur.

•   Penalties for not filing Form 8300 or filing a fraudulent form include fines and possible prison sentences.

Are Financial Institutions Required to Report Large Deposits?

Banks and credit unions are required to report when a customer deposits cash over $10k. Maximum deposit limits vary by bank, but in this case, anything above $10,000 (even a penny more) is the amount to know.

The Bank Secrecy Act and the Patriot Act dictate that financial institutions create a paper trail of financial activity that could be suspicious. The reason is so that law enforcement authorities can better control money laundering activities and tax evasion by having a record of these larger deposits. Other malicious activities, such as terrorism, drug trading, and broad financial crimes, might also be prevented.

Do You Have to Report Large Deposits?

You might have to report large deposits to your bank account if you own a business. (Performing a small direct deposit typically does not need to be reported.) The IRS rules also apply to financial activities performed by a business or individual involved in the business. You must complete IRS Form 8300 to report any transaction or even a series of related transactions that total $10,000.

Regarding that “series of related transactions” part: Transactions are considered related when they take place within 24 hours of each other or if the person or business simply suspects that they’re related.

What Is IRS Form 8300?

IRS Form 8300 is used to help regulators prevent financial crime. The form is separate from other banking guidelines, such as funds availability rules. It is sent to the IRS and the Financial Crimes Enforcement Network (FinCEN). The form is used to report cash payments over $10,000 received in a trade or business.

On IRS Form 8300, you must identify the individual from whom the cash was received and the person on whose behalf the transaction was conducted. In addition, you need to include a description of the transaction and method of payment. Additional disclosure of information may spell out the business that received the cash and whether multiple parties were involved.

What Happens When Deposits Are Reported?

A paper trail of potentially suspicious deposits is created after Form 8300 is transmitted to the IRS. Depositing cash at an ATM or with a bank teller, so long as it is below the $10K threshold, will usually not be reported. Law enforcement agencies can use the paper trail for future investigations if conditions warrant it.

To understand this in a bit more detail, know that first, when a cash deposit of more than $10,000 is reported, you are identified through your Social Security number (SSN) and other personal information.

What Is the Bank Secrecy Act?

The Bank Secrecy Act of 1970, mentioned above, may sound somewhat intimidating. What it actually does is require that banks keep records of each customer who deposits more than $10,000 in cash at one time in a single account. The paper trail is sent to various law enforcement groups to track where the money moves to. The Bank Secrecy Act includes civil and criminal penalties for entities not complying with the requirements.

Moreover, the 2001 Patriot Act made the Bank Secrecy Act broader. It can now better detect activity related to terrorism. Again, this is nothing to be concerned about as long as you aren’t engaged in any illegal activities such as bank fraud.

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*Earn up to 3.80% Annual Percentage Yield (APY) on one SoFi Savings account with a 0.70% APY Boost (added to the 3.10% APY as of 5/28/26) for up to 6 months. Open your first SoFi Checking and Savings account and receive eligible direct deposits OR qualifying deposits of $5,000 every 31 days by 12/31/26. Rates are variable, subject to change. Terms apply at https://www.sofi.com/banking/#2. SoFi Bank, N.A. Member FDIC.

Reporting the Deposit

There are several steps involved in reporting a cash deposit over $10,000, whether the deposit is made to a standard or premium checking account or a savings account. There is likely nothing to be concerned about if you are just going about your daily business and not involved in illegal activity.

Banks Must Verify ID and Other Important Information

The Currency Transaction Report is used to verify a depositor’s information. The SSN, name, and address are provided to FinCEN.

Banks Will Review All Cash Transactions

Financial institutions go through all their channels when a suspicious deposit over $10,000 is made. A series of several smaller amounts that add up to a deposit of more than $10,000 is also treated as a large deposit. Cash put into an account at a teller window or through an ATM can be linked and considered a structured deposit (more on that below). These are much more serious potential events than everyday banking activities, such as making a small cash deposit or an ATM withdrawal.

Banks Will Determine If You Are Structuring Deposits

Structuring a deposit is when someone splits up several deposits so that a single deposit of more than $10,000 cash does not occur. Someone might do this to avoid the bank having to file a Currency Transaction Report to FinCEN, resulting in a paper trail. This suspicious activity raises red flags, as it suggests that someone is intentionally trying to fly under the regulators’ radar. If a bank determines that someone is structuring, then that activity might face additional scrutiny.

All Information Will Go Into a Currency Transaction Report

The personal information and deposit details mentioned earlier go into a Currency Transaction Report within 15 days of the transaction being considered. Reports are also kept on file at the bank for five years. Once again, most people need not be too concerned with this, provided their banking is legal. Rather, it may be better to focus on account basics, such as savings account withdrawal fees, not the ramifications of pernicious illegal activity, as long as they are following all the laws.

Penalties for Noncompliance

You may wonder what happens if someone tries to skirt the protocols described above. Here are the details:

•   Civil penalties for not filing Form 8300 include fines of $310 per return. If this is considered to be intentional disregard, the fine can be the greater of $31,520 or the amount of cash received in the transaction up to $126,000.

•   Criminal penalties for not filing Form 8300 or filing a fraudulent form include a monetary fine of up to $100,000 for individuals and $500,000 for businesses. Prison sentences of up to five years are also a possible penalty for noncompliance.

Are There Any Exemptions to Consider?

A bank can file for an exemption if one of its business customers routinely deposits over $10k. It’s important to know that some businesses cannot get an exemption. For example, law firms, pawn dealers, accounting firms, and trade unions are some corporation types for which the IRS will not grant an exemption.

The Takeaway

You don’t have anything to worry about if you deposit more than $10,000 in cash to your checking account or your savings account and are doing nothing wrong. A large deposit is simply reported by a bank to regulators to track possible suspicious activity. Businesses must also file IRS Form 8300 within a specific time frame after a $10,000 cash payment.

Structuring deposits (breaking up funds into smaller amounts for deposit so as to avoid filing Form 8300) is another no-no. Since there are significant penalties for attempting to skirt the law, it’s wise not to attempt such moves.

No matter how much you are (lawfully) depositing, it’s a good idea to have a bank account best suited to your needs and financial situation. For instance, you could look for an online high-yield savings account and/or an account that has no or low account fees. Explore the options to see what may be right.

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.

Better banking is here with SoFi, named the #1 Bank in the U.S. for the fourth year in a row by Forbes (2026).* Enjoy up to 3.10% APY on SoFi Checking and Savings.

FAQ

How much money can I deposit in the bank without being reported?

A deposit over $10,000 is the amount to consider — amounts under that threshold may not have to be reported. There’s a catch, though: If a customer makes several small cash payments or deposits within a 12-month window, filing Form 8300 might have to be done should the payments or deposits exceed $10,000. These are known as structured deposits and can raise red flags if not reported.

How often can you deposit $10,000?

You can deposit more than $10,000 whenever you’d like, but just be aware that the receiving financial institution is required to report those funds to the Internal Revenue Service (IRS). If you are a business owner and depositing over $10k in cash is a frequent practice, the bank can file an exemption with the Financial Crimes Enforcement Network (FinCEN) within 30 days of the first exemptible transaction.

How do you explain a large deposit?

Depositing over $10k only results in an Internal Revenue Service (IRS) form being filed by the bank. You often won’t have to do anything to explain it unless you are suspected of fraud or money laundering. The money is deposited like any other amount would be.


Photo credit: iStock/TARIK KIZILKAYA

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2026 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 5/28/26. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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

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

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

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

We do not charge any account, service, or maintenance fees for SoFi Checking and Savings. We do charge transaction fees for outgoing wire transfers, Instant Transfers, and global remittance transfers. 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.

*Awards or rankings from Forbes are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.


1SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per depositor per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $3M through participation in the program. See full terms at SoFi.com/banking/fdic/sidpterms. See list of participating banks at SoFi.com/banking/fdic/participatingbanks.

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.

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

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

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A purple graphic of a depository institution surrounded by gold coins over a purple background.

Guide to Depository Institutions

A depository institution is a financial institution into which consumers can deposit funds and where they will be safely held. Banks and credit unions are typical examples of these institutions.

Learning about how these institutions work and their pros and cons can build your financial literacy.

Key Points

•   A depository institution is a financial organization, such as a bank or credit union, that accepts deposits and keeps customers’ money and assets secure.

•   These institutions allow consumers and businesses to deposit funds through methods such as cash, checks, direct deposits, ATMs, and electronic transfers.

•   Depository institutions protect deposits through government-backed insurance programs such as the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA).

•   Common types of depository institutions include commercial banks, credit unions, and savings institutions, each offering different ownership structures and financial services.

•   Depository institutions help provide safe storage and interest-earning opportunities for funds, but they may also charge fees and generally offer lower growth potential than investment products.

What Is a Depository Institution?

A depository institution is a place or entity, such as a bank, that allows consumers and businesses to deposit money, securities, and/or other types of assets. There, the deposit is kept safely and may earn interest.

To share a bit more detail, depository institutions are financial institutions that:

•   Engage in banking activities

•   Are recognized as a bank by either the bank supervisory or monetary authorities of the country in which it is incorporated

•   Receive substantial deposits as a part of their regular course of business

•   Can accept demand deposits

In the U.S., federally insured offices of the following are considered to be depository institutions:

•   Commercial banks

•   Mutual and stock savings banks

•   Savings or building and loan associations

•   Cooperative banks

•   Credit unions

•   International banking facilities of domestic depository institutions

How Do Depository Institutions Work?

A depository can receive funds from consumers and businesses via such means as:

•   Cash deposits

•   Direct deposit

•   Teller or ATM deposits

•   Check deposits

•   Electronic fund transfers,

The depository institution holds these funds, and they are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per depositor, per account ownership category, per insured bank. If the institution is a credit union, funds will be similarly protected by the National Credit Union Administration, or NCUA vs. FDIC.

Funds are accessible on demand (i.e., demand deposits rather than time deposits), and depository institutions are required to maintain sufficient reserves, including cash in their vault and/or balances at the Federal Reserve, to ensure they have funds available for clients.

Customers are able to earn interest on some types of deposits. The depository institution also earns interest: It’s one of the ways financial institutions make money. It does so by lending money from deposited funds to customers in the form of different types of loans. For instance, some of the money on deposit might earn the account holder 2.00% interest, while the bank then uses the funds for a mortgage that charges 6.00% interest. This creates a positive interest spread for the depository institution.

Recommended: What Is a Community Development Financial Institution?

Types of Depository Institutions

To better understand the purpose depository institutions serve, let’s look at some examples.

Credit Unions

Credit unions may offer many of the same services as banks, but they are owned by account holders, who are also sometimes called members. These institutions are not-for-profit financial cooperatives. The earnings that a credit union generates are returned to members in the form of dividends or are reinvested into the credit union. To put it another way, the depositors are partial owners of the credit union. You often need to live in a certain area or work in a certain profession to keep your money at a credit union.

Commercial Banks

Commercial banks are what many of us visualize when we hear the term “bank,” whether we are thinking of a major bank with hundreds of brick-and-mortar branches or an online-only entity. They are usually owned by private investors and are for-profit organizations.

Commercial banks tend to offer a greater diversity of services compared with other depository institutions, from personal banking to global banking services, such as foreign exchange-related services, money management, and investment banking. The offerings may depend on how large the institution is and which customer segments it serves (say, consumers and different types of businesses).

Savings Institutions

Savings institutions are financial institutions that often serve local communities and focus on consumer lending. Consumers deposit their money in these institutions, and in return, they can access credit cards, consumer loans, mortgages, and small business loans.

It’s possible to set up a savings institution as a corporation or as a financial cooperative. The latter makes it possible for depositors to have an ownership share in the savings institution.

Recommended: What Is an Intermediary Bank?

Depository Institutions vs Repositories

Repositories and depositories are two different things despite the fact that their names sound similar. Here are some of the key differences.

•   Depositories hold cash and other assets, while repositories hold information such as knowledge, files, and data.

•   Depositories are usually credit unions, banks, and savings institutions, while repositories are typically libraries, data-storage facilities, and information-based websites.

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*Earn up to 3.80% Annual Percentage Yield (APY) on one SoFi Savings account with a 0.70% APY Boost (added to the 3.10% APY as of 5/28/26) for up to 6 months. Open your first SoFi Checking and Savings account and receive eligible direct deposits OR qualifying deposits of $5,000 every 31 days by 12/31/26. Rates are variable, subject to change. Terms apply at https://www.sofi.com/banking/#2. SoFi Bank, N.A. Member FDIC.

Depository Institutions vs Nondepositories

Unlike depository institutions, nondepository institutions don’t accept demand deposits. These are some of the differences between these two types of institutions:

•   Depository institutions accept deposits and store them for safekeeping. Nondepository institutions, on the other hand, provide financial services but can’t accept demand deposits for safekeeping.

•   Depository institutions are FDIC- or NCUA-insured, while nondepository institutions may be Securities Investor Protection Corporation (SIPC)-protected or have other types of regulatory protection.

•   Credit unions and banks are commonly depository institutions. Nondepository institutions are often brokerage firms and insurance companies.

Pros of Depository Institutions

Depository institutions have a few benefits to note:

•   Money is safe and FDIC- or NCUA-insured.

•   Accounts can earn interest on time deposits such as certificates of deposit (CDs) and possibly other deposits.

•   They help keep the economy healthy by allowing depository institutions to lend out deposits and earn interest.

•   Assets have a reduced risk of being lost or stolen.

Cons of Depository Institutions

There are a few downsides to depository institutions. Consider these points:

•   Deposited funds have limited growth potential compared to investments, money market accounts, and CDs.

•   Banks, credit unions, and savings institutions may charge fees for holding funds.

•   A minimum account balance may be required for some accounts.

Tips for Choosing a Depository Institution

When it comes time to choose a depository institution, it can help to keep the following things in mind when comparing different options.

•   Type: Carefully consider if a credit union, savings institution, or commercial bank is the right fit. Some commercial banks have brick-and-mortar locations, while others offer all of their services online. Online banks usually pay higher interest rates on savings and charge fewer and/or lower fees since they don’t have the overhead associated with operating branch locations. Credit unions also tend to offer higher interest rates and lower fees, as they are not-for-profit, whereas commercial banks are for-profit.

•   Features: Look for a depository institution that offers perks and services that suit your needs. Special features may include high interest rates, early access to direct-deposit paychecks, cash back deals, no-surcharge ATMs, and complimentary access to credit scores.

•   Fees: Shop around to see which depository institution has the lowest and/or fewest fees, such as account maintenance fees and overdraft fees. As noted above, credit unions tend to charge lower and/or fewer fees than commercial banks, as do online banks.

•   Convenience: If you like to bank locally and know your bank tellers and officers, choosing an institution that has branches in your neighborhood is a wise move. If you prefer the seamlessness of banking 24/7 by app, however, you might opt to open an online savings account.

The Takeaway

Commercial banks, credit unions, and savings institutions are all examples of depository institutions. Depository institutions can be places to safely store funds that can then be readily accessed. Funds will typically be insured by either the FDIC or NCUA up to their usual limits of $250,000 per depositor, per account ownership category, per insured institution.

Looking for a bank to deposit your money in that pays a great APY?

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.

Better banking is here with SoFi, named the #1 Bank in the U.S. for the fourth year in a row by Forbes (2026).* Enjoy up to 3.10% APY on SoFi Checking and Savings.

FAQ

What is the difference between a bank and a depository?

There is no difference between a bank and a depository. A bank is a type of depository institution. Credit unions and savings institutions can also be depositories.

What are the types of depository institutions?

There are three main types of depository institutions. Commercial banks, credit unions, and savings institutions are all types of depository institutions.

Are commercial banks depositories?

Yes. Commercial banks are one kind of depository institution where consumers can securely stash their money.


Photo credit: iStock/Mikhail Bogdanov

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2026 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 5/28/26. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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

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

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

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
We do not charge any account, service, or maintenance fees for SoFi Checking and Savings. We do charge transaction fees for outgoing wire transfers, Instant Transfers, and global remittance transfers. 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.
*Awards or rankings from Forbes are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

1SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per depositor per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $3M through participation in the program. See full terms at SoFi.com/banking/fdic/sidpterms. See list of participating banks at SoFi.com/banking/fdic/participatingbanks.
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