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What Are P2P Transfers & How to Use Them

P2P payments, aka peer-to-peer transfers, are a popular tech-powered way to send money to and receive money from other people. With a money transfer app or perhaps one from your financial institution, you can send a friend your half of the dinner bill, gas money, or other payments, quickly and easily from your mobile device. Chances are, you can also buy items (say, on Instagram or a website) using one of these apps.

To move money via P2P, all you need to do is to download a transfer app, like Venmo or PayPal, and connect your bank account, debit card, or credit card to it. Or your financial institution may offer app options you can enable. Either way, once you are set up, you are just a few clicks away from being able to send money.

Key Points

•   P2P (or peer-to-peer) payments are a popular way to send money to and receive money from others.

•   These apps allow for transfers to say, split a dinner bill with a friend or sometimes purchase items.

•   These apps may be almost instantaneous or can take a few days to move money.

•   Depending on the specific transaction, fees may be assessed.

•   Options to P2P apps include cash, checks, money orders, and wire transfers and other transfer services offered by banks.

What Is a P2P Payment?

With a P2P payment, you can send money to a friend with just a few clicks on your mobile device. This replaces the need to get cash at an ATM or write out a personal check, options that aren’t always quick or convenient.

For traditional P2P apps, both parties need to have an account with the transfer service in order to make the transaction. For example, if you want to use Venmo to repay a friend for the salad they bought you at lunchtime, that person would also need to have a Venmo account to receive that payment.

Typically, a P2P account is attached to your online bank account. Some P2P platforms, however, allow customers to link their P2P accounts to a debit card or even a credit card, though it may involve additional fees.

Recommended: How to Transfer Money From One Bank to Another

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Understanding How P2P Transfers Work

Here’s a closer look at what goes on when you use a P2P payment app.

Overview of the P2P Transfer Process

Say that you want to send money P2P to your sister for your mother’s birthday present. Depending on the type of P2P service you use, you’ll follow some variation of these basic steps.

•   Creating a P2P account. You will need to download a P2P app and then sign up for an account. In order to send money to your sister, you’ll both need to have an account with the same money transfer service.

•   Linking your bank account to your P2P account. Some P2P services have the ability to hold funds, but they generally must be linked to a primary bank account (such as your checking account), credit card, or debit card in order to be fully operational. This is how the account will pull any funds needed to make a payment.

To link your checking account, you may need your checking and routing number (which appear at the bottom of a check). Some P2P transfer services may only need your bank log-in information. Others may allow you to set up extra verification measures.

•   Searching for a user to transfer funds to. To send money to your sister, you’ll need to find her on the P2P platform. You can typically search by username, email address, or a phone number. In most cases you will be able to add her account as a contact or “friend” in your account.

•   Initiating a transfer. The next step in how a P2P payment works is getting the money moving. Your sister can request a payment from you, or you can initiate the payment yourself. This requires choosing the option to send funds, entering a dollar amount, and then clicking submit. If you’ve enabled additional security measures on your account, you may need to enter a PIN that gets texted to you as well.

You may be prompted to choose whether you are making a purchase or sending money to a friend or family member. This can impact whether fees get assessed and what kind of protection you receive for the transaction.

You may have the option to add a description or “memo” to your transaction. Some P2P services may require this information so that they can charge a fee for business-related transactions. Others offer the option to act as a personal ledger should you need it in the future.

•   Waiting for the transfer to complete. Now the funds are in motion via a P2P bank transfer. When money is sent from one customer to another, it moves in the form of an electronic package safeguarded with multiple layers of data encryption. This makes it hard for hackers to access the data (like your bank account number) within the transfer while it is in motion. Similarly, data encryption keeps your money and account information safe. Once the data set reaches its destination, it is decoded and deposited as currency.

•   Transferring the funds into the payee’s bank account. When a P2P transfer is completed, the funds may be deposited directly into your sister’s bank account. Or they may go into an account created for her by the P2P service. Funds received into P2P user accounts can then be transferred into a person’s bank accounts at little to no cost. (You are likely to pay a fee if you want the funds transferred ASAP versus in a couple of days.)

Your sister will likely receive some combination of email, text, and/or in-app notifications that the funds have arrived. If she decides to leave the money in her P2P account, she can use that account balance the next time she needs to pay someone or purchase something from a business that accepts P2P transactions.

How Long Do P2P Transfers Take?

The general rule of thumb for P2P transfer services is to allow one to three business days for a transfer to complete (although some seem instantaneous; timing varies). That’s because standard bank transfers use the ACH (or Automated Clearing House) system, which can take a day or two to complete.

When it comes time to move funds from the app to, say, a checking account, some apps may not charge a fee; others may assess a charge of 0.5% to 1.75% of the overall transfer amount.

Are P2P Money Transfers Safe?

You may wonder if mobile payment apps are safe. Any time your bank account, credit, or debit card information is online, there is a chance that someone can get a hold of it, and P2Ps are no different. While all major money transfer companies encrypt your financial information, no P2P system can say it’s totally impervious to hacks and scams.

There are also additional measures you can take to make sure that your account remains secure. For example, you may be able to set up two-factor authentication, which might involve typing in a unique pin number that is texted to your phone for each transaction. Or you might elect to receive notifications each time there’s a transaction posted on your account, enabling you to spot financial fraud right away if it were to happen.

You may also want to take care when you type in a recipient’s email address, phone number, or name. A typo could lead to the money going to the wrong person.

How Do Peer-to-Peer Transfer Companies Make Money?

P2P transactions are largely offered for free to consumers, which may beg the question of how the companies that offer these services stay in business. Here are two major ways that P2P money transfer apps may generate income.

Account Fees

Typically, you can make P2P payments from a linked bank account or straight from the P2P account for free. If you want an instant transfer or you are transferring money using a credit card or from depositing checks into your P2P account, there may be a fee involved.

Business Fees

P2P platforms aren’t just for consumers — they are used by businesses as well. Compared to the free transactions that standard user profiles offer, business profiles are generally subject to a seller transaction fee for each customer purchase made with a P2P money transfer app. Venmo, for instance, charges a fee of 1.9%, plus 10 cents for each transaction.

What Are the Benefits of P2P Money Transfers?

There are three main benefits to using online money transfer services.

•   They’re fast. Depending on the service, P2P money transfers can happen very quickly. They can take anywhere from just a few seconds to a couple of business days.

•   They’re cheap. When exchanging money between friends and family, P2P money transfers are often free. There may be a small fee, however, if you want an instant bank transfer, are using a credit card instead of a bank account, are making a transfer above a certain dollar amount, are conducting a high volume of transfers, or are using the service for a business transaction.

•   They’re easy. P2P transfers eliminate the need to make trips to the ATM or a local bank branch to get cash. They also eliminate the need to get out your checkbook, write a check, and then mail it to someone. For a P2P transfer, all you likely need is a mobile device, the app, and cell service or wifi.

Alternatives to P2P Money Transfers

What if a P2P money transfer isn’t available or doesn’t suit your needs? Try these options instead to move money.

Sending a Check

You can go old-school and write a paper check. You fill out the necessary details and hand or mail the check to the person you are paying. Typically, no fee is involved, although you may have to pay for a new checkbook when you run low and order more checks.

Money Orders

Money orders are in some ways similar to a check, but you don’t write them from a bank account. Instead, you purchase them (essentially pre-paying for the amount you are sending) at the post office, businesses like Western Union or Moneygram, or from certain retailers.

Typically, you will pay a small fee. For example, the United States Post Office will issue domestic money orders up to and including $1,000. Those that are for amounts up to $500 will be assessed a $2.35 fee; for ones that are $500.01 to $1,000, $3.40 will be charged. Once you have a money order, you can either give it to the recipient in person or mail it. You can also typically track a money order to see when it’s cashed.

Using Online Bill Payment Services

Many financial institutions offer ways for their customers to pay bills electronically. A key feature of mobile banking, this service can be a simple way to send funds from your checking account, regardless of where you are or what time it is. You may be able to set up recurring payments as well for bills you receive regularly.

Wire Transfers

Wire transfers are another way to send funds electronically using a network of financial institutions and transfer agencies that operate globally. Typically, you will access a wire transfer via your bank, its website, or its app. You’ll need to have your payee’s banking details and will likely pay a fee to wire money.

For instance, domestic wire transfers can charge a fee of anywhere from $0 to $50 (depending on whether they are incoming or outgoing), and they can often be processed in a few hours or within a day. International wire transfers can cost more (with both the sender and recipient possibly paying fees, typically $35 to $50 for the sender) and can take longer, typically two days. Certain banks may offer free wire transfers, perhaps only for certain types of accounts (such as premium ones), so if this is an important feature for you, it can be worthwhile to do your research.

Recommended: What Is an E-Check (Electronic Check)?

The Takeaway

Peer-to-peer (or P2P) payment apps facilitate mobile money transactions. You can use them in place of cash or writing a check when you want to give friends or family money, whether it’s to cover your portion of a dinner bill or split the cost of a vacation rental. Some businesses also accept this form of payment.

All you need to make a P2P transfer is a mobile device, an internet connection, and your P2P app, which you must link to your credit card or bank account.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, 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, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.80% APY on SoFi Checking and Savings.

FAQ

How much time does a P2P transfer take?

P2P accounts can take just a few seconds or a few days to move funds. Then, if the person who has money in the P2P app wants to transfer their cash to a bank account, that can also take between hours and a couple of days. Often, you may be charged a fee if you want the money moved ASAP.

Is P2P digital money?

P2P, or peer-to-peer-payments, are a digital way of moving funds from one person to another. Once the transfer is complete, the recipient has money they can use to pay for purchases or transfer into a bank account.

What’s an example of a P2P payment?

An example of a P2P payment would be to use a P2P app such as PayPal or Venmo to send funds to a friend you owe money. Or you might send a payment to a service provider or retailer using P2P apps as well.

Do banks use P2P?

Many banks offer their own version of P2P apps. For example, you might be able to almost instantly send funds from your account to a friend, a retailer, or a service provider by using a bank’s app.


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SoFi members with direct deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. 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 (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, 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 Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.

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The Importance of Saving Money

Whether from parents, friends, or financial advisors, you have probably heard plenty of people say that you should be saving money. But did you ever stop and consider why exactly saving money is so important?

Saving money is truly a smart move: It can help you achieve your financial aspirations, prepare for the future, and weather unexpected events. It can even help you earn money without doing anything at all. When you look at it in a big-picture way, saving can also relieve a lot of money stress from your life.

Key Points

•   Saving money can be a valuable habit that helps provide financial security and peace of mind.

•   Saving money can enable the handling of unexpected expenses.

•   When cash is saved, it can facilitate achieving long-term goals like retirement.

•   By saving money, a person could increase wealth through compound interest.

•   Saving money can help offer flexibility and freedom in life choices.

Reasons Why Saving Money is Important

It can be hard to get motivated to save money just because it’s the “responsible” thing to do. But you may see the appeal once you understand the huge advantages that saving offers. Here are a few.

Peace of Mind

If money is tight, you may find yourself worrying how you will pay the rent or other critical bills if an extra unexpected expense were to suddenly come up, as they often do. After all, cars break down, and dental work can crop up. Or what if your kid discovers a passion for soccer and wants to go to a pricey summer camp.

Having savings in the bank (whether that’s an online bank or a traditional one) can provide the sense of security that comes with knowing you can get through these kinds of moments without hardship. You’ll be able to have that back-up money to afford many of life’s expenses that crop up. By saving, you may also worry less about tomorrow, knowing that you have stashed away some cash. That means you can breathe a little easier.

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Avoiding Debt

When you have money in the bank, you can make purchases, planned or not, with the money that’s on deposit. That means you can avoid using high-interest credit cards or potentially taking out a personal loan or a home equity line of credit (HELOC) to pay for things.

That can help you avoid debt, which can help save a significant amount of cash in the long run.

Expanding Your Options

Generally, the more money you have saved, the more control you can have over your life and your financial security.

If you’re unhappy with where you live, for instance, having some savings can open up the possibility of moving to a more desirable location or putting a down payment on a new home.

If you dislike your job, having a cushion of cash in your savings account might afford you the option of leaving that job even before you have another one lined up.

Money certainly does not solve all problems, but having savings can give you a little bit of breathing room and allow you to take positive steps in your life.

Having Financial Freedom

Another benefit of savings is that you are on a program that can give you financial freedom. If you stick to a plan of stashing 10% or 20% into savings, as many financial experts recommend, you can avoid living paycheck to paycheck and have more financial freedom.

For example, with adequate savings, you might be able to take a sabbatical from work and pursue a passion project. You might have enough cash to start your own business or retire early. Or you might plan a luxe anniversary celebration somewhere tropical. Savings can enable your dreams.

Recommended: Guide to Improving Your Money Mindset

Saving for Big Purchases

Having a savings account is a great way to afford big purchases without racking up credit card debt and the high interest that goes along with it or turning to other expensive financing options.

Say you want to take your kids on a Disney vacation or you really need that second car. Or maybe there’s a designer bag that you’re totally in love with. By putting money aside in a savings account and earning interest on those funds, you can be in a position to buy your wish-list item outright, rather than borrowing funds to do so. (To see how your money can grow when in an interest-bearing account, you might use an online savings account interest calculator.)

Saving Money for Emergencies

Here’s another reason why it is important to save money: Life has its twists and turns. One minute, everything is humming along nicely, the next, your car needs $2,000 worth of repairs. Or the hot water-heater conks out or you lose your job. These situations and others can put a real strain on your finances.

That’s why financial experts generally recommend building up an emergency fund of at least three to six months’ worth of living expenses to prepare for any financial surprises.

It can be hard to prioritize this, but saving for an emergency fund is important. To help make it happen, you might set up an automatic transfer from your checking into savings the day after payday. This can painlessly, seamlessly whisk money to your emergency fund so it doesn’t sit in savings, tempting you to spend it. Whether the amount is $15 or $150, just do it. Every bit helps.

Recommended: Emergency Fund Calculator

Earning Interest

Savings accounts come with interest, which is the bank’s way of thanking you for keeping your money with them, where they can use it until you withdraw it.

Here’s an example: That can help your savings along. If you have $5,000 in a savings account with a 3.00% APY earning compound interest monthly, that would give you an extra $152 at the end of the year. Add $20 per month to the account and let it sit for five years, and you’ll have a total of $7,101. Nice! That’s cash in your account for doing absolutely nothing.

Reducing Your Taxes

Here’s the part about how saving money makes you money, beyond interest you’ll earn. If you save money into certain tax-advantaged retirement vehicles, not only do you have that nest egg for later in life, but you can lower your tax liability.

By putting money into your employer’s 401(k), if available, you can lower the income on which taxes are assessed. If you are self-employed, there are various retirement accounts that may allow you to put pretax dollars away for the future.

When you save money this way, you could even challenge yourself to put the tax savings back into a savings account. That’s a way to increase your money in the bank another notch or two.

Giving Back

Another reason why saving money is important is it can enable you to give back to others. When you have a cash cushion and aren’t living paycheck to paycheck, you have the opportunity to help those around you.

That might involve sending a few hundred dollars to a relative who has a big dental bill and is struggling to pay it. Or you might make a charitable donation to a medical research cause, a disaster fund, or a local after-school program that you love. The choice is yours, but having a healthy savings account can make it possible.

Benefiting from Compound Interest

Another big incentive to save, as mentioned above, is the power of compound interest.

Compound interest means you earn a return not just on the amount you originally put away, but also on the interest that accumulates.

Over time, that means you can end up with much more than you started with. And the earlier you start saving, the more your money grows, since compound interest is able to work its magic over a longer time horizon.

You saw an example above that involved putting money into a savings account at a bank. Here’s another example: A person who starts putting $100 per month towards retirement at age 25 will wind up putting $12,000 more of their money into their retirement fund by age 65 than the person who started saving $100 per month at age 35.

But because of compound interest (and assuming a 7.00% annual rate of return), the person who started at 25 will wind up with over $120,000 more at age 65 (way more than the extra $12,000 they deposited).

How to Get Started with Saving

If you’re convinced that saving is the right move, how do you actually do it? The key is to make a budget and make sticking to it easy.

This doesn’t have to be intimidating. The key is to get familiar with what you spend, what you earn, and what your goals are.

Here are some steps you could take to help get started.

Figuring Out What You’re Saving for

Is it a long-term goal, like retirement or your kids’ college tuition? A short-term goal, like an emergency fund? Or a medium-term goal, like a wedding or home renovation? It can help to get a sense of how much you need to stash away and by when.

The point of this is twofold:

•   First, you can divide the amount you need by the months left until your deadline to get a clear picture of how much you’ll need to save each month.

•   Second, you will know where to put your money. If your goal is less than a couple of years away, you may want to keep your savings in an online savings account, a certificate of deposit (CD), or money market account.

These options might help you earn more interest than a standard savings account but still allow you to access your money when you need it.

If your goal is in the distant future, you might consider investing the money in a retirement account, 529 college savings plan, or brokerage account so that it could have the chance to grow over time. All investments, however, come with risk, and growth is not guaranteed.

Sticking to a Budget

You don’t really know where your money is going unless you track it. That’s why for a month or two, you may want to take note of all your daily and monthly expenses.

Next, you’ll want to tally up your net monthly income, meaning what goes into your account after the different types of taxes and deductions are taken out.

The difference between your monthly income and your expenses (everything from rent to student loan payments to food and dining out) is what you have left over to save. If there’s not enough left over, you can work on finding ways to cut spending or increase your income. You might try following the 50/30/20 budget rule to help guide your spending and saving.

Putting Savings on Autopilot

If you’re manually putting cash away every month, it can be easy to fall behind.

For one thing, you may forget to move money into savings regularly amid your busy schedule. And, unless you protect the money in advance by transferring it to a different account, you may accidentally spend it.

One way to avoid this is to set up automated savings through your bank account or retirement plan.

If you’re putting away the amount you identified you need for your goal, you may get there without even thinking about it.

Recommended: The Different Types of Savings Accounts

Common Places to Save Your Money

Where to put your money as you save? Consider these options:

•   Traditional savings account: You could put your money in a savings account at a financial institution, whether at a bank or credit union.

•   High-yield savings account: These accounts are likely to pay a much higher interest rate than a conventional savings account while offering the same convenience and security. They are often found at online banks.

•   CD: A CD gives you a specific rate of interest but you must agree to keep your money in the account (that is, not withdrawing any of it) for a specific term, whether that’s several months or years. Withdrawing earlier could trigger penalties.

•   Investments: There are many options here, such as Treasury bills and bonds. These can earn healthy returns and are typically considered safe places to keep money.

A quick note: While typically it’s a savings account that earns interest, some checking accounts earn a bit of interest, too. This can be especially true if you deposit your money in a checking account at an online bank. While it may not offer a high rate of interest, earning some money on what you keep in your checking account can contribute toward building your wealth.

The Takeaway

It’s important to save money for a variety of reasons. It can provide peace of mind, open up options that improve your quality of life, increase your wealth due to compound interest, and possibly lower your tax liability, and may even allow you to retire early. Many people earn wealth through a combination of working and savvy saving. Having the right banking partner can be part of the process.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, 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, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.80% APY on SoFi Checking and Savings.

FAQ

What are the benefits of saving money?

There are many benefits of saving money: It helps you save for your future, cover unexpected expenses, make major purchases, and have financial freedom. What’s more, the money you save can help make you more money, thanks to compounding interest and lowering your tax bill.

What are common things to save money for?

Common things to save money for are an emergency fund, retirement, a big purchase (like a car, a vacation, or the down payment on a home), and educational expenses, among others.

What happens if you don’t save money?

If you don’t save, you may lack financial security and the ability to meet certain aspirations. For instance, you wouldn’t have a retirement fund and would therefore have to keep working indefinitely. You wouldn’t have money for a big purchase like a car or a home or your child’s education. Plus you wouldn’t be able to handle some expenses, whether planned or unexpected, and might have to take out a loan or use credit cards, which means you are paying for the privilege to borrow funds. That takes away from your earnings.


SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2025 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
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.


SoFi members with direct deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. 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 (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, 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 Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.

*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 Checking & Savings Fee Sheet for details at sofi.com/legal/banking-fees/.
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.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

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.

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

Third Party Trademarks: Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

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How Much Does It Cost to Build a Houseboat?

How Much Does It Cost to Build a Houseboat? Guide to Houseboat Costs

For those of us seeking the appeal of a minimalist life on the water, the cost to build a houseboat will depend as much on how much elbow grease we’re willing to dedicate to the project as it does on the type of materials we decide to use for the job.

A houseboat is a self-propelled vessel with a cabin. There are many styles, giving people wide discretion on how they choose to build their own houseboat.

Let’s break down factors and average costs associated with building a houseboat.

Key Points

•   Building a houseboat costs at least $20,000 and probably closer to $50,000 for a basic 50-foot model, assuming DIY construction.

•   Costs increase significantly with professional labor for electrical and plumbing work.

•   Houseboat kits and plans are available for those preferring a DIY approach.

•   Used houseboats vary widely in price, from a few thousand dollars to over $1 million.

•   Financing options for houseboats include boat loans and personal loans, not traditional mortgages.

Average Cost of Building a Houseboat

How much does it cost to build a houseboat? Just like the cost to build a house, it depends on size, materials, whether it’s a total DIY job, and more.

The cost of building a single-story 50-foot houseboat is at least $20,000 and perhaps closer to $50,000, some sources say. To be clear, that low estimate means doing all the work yourself or with the help of friends.

First-time homebuyers can
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with as little as 3% down.

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Labor costs for professionals like electricians or plumbers will increase your expenses substantially. So understand that you’ll be trading time and know-how for savings.

There are also houseboat kits and plans for sale. Charmingly, some are advertised as DIY pontoon tiny houses.

By contrast, you can choose to purchase a serviceable preowned houseboat that needs some renovations. Used houseboats can go for anywhere from around $20,000 to way over $1 million (or multi-millions) for luxury craft that border on liveaboard yachts. A houseboat in good condition is generally going to cost you around $60,000 to buy used. Shiver me timbers!

Here’s a rough estimate of the cost of building a houseboat vs. buying a used one.

Building From Scratch Cost Preowned Houseboat Cost
$20,000 and up for 50 feet $60,000 and up

Regardless of whether you’re planning to handle the build yourself or you intend to refurbish a used houseboat, you may need financing. How to pay for it? Not with a traditional mortgage. Options include a boat loan and a personal loan.

Homeowners with sufficient home equity may be able to launch their houseboat plans with a home equity line of credit (HELOC), home equity loan, or cash-out refinance.

Recommended: How to Find a Contractor

Factors That Affect the Cost of a Houseboat

Houseboat living has caught on with some retirees, who want to downsize home-wise.

It also could be a choice for minimalists and millennial homebuyers who think outside the box.

Not everyone, of course, will want to be a full-time liveaboard. Some water lovers will be OK with a basic houseboat for cruising and recreation, one that is maybe trailerable. Those are factors that will affect the cost of your preferred houseboat.

Here are factors to consider.

Size

The size of your houseboat will have a major impact on the cost of materials you’ll need. Are you planning to build a single-story or double-decker houseboat? Will this be something that would fit on a standard 50-foot pontoon base, or will you need something more robust to keep it afloat?

Consider the cost of $50,000 to build a basic 50-foot houseboat that will probably end up offering 450-500 square feet of space. That comes out to at least $110 per square foot, assuming you don’t hire anyone to help with construction. Your houseboat project could very well end up costing more than $200 per square foot.

Bear in mind that these figures are a very rough estimate that was calculated across a broad average of houseboats.

Design

The design of your houseboat will have a large effect on your options when it comes to layout, maneuverability, and aesthetics.

Before you begin construction, you’ll need to decide on what type of hull best suits your houseboat. Aluminum pontoons are popular.

Catamaran cruisers are maneuverable and may be cheaper to build, but they often compromise on space. These designs are easily outfitted with motors and may be best suited for owners who intend to take them out occasionally.

Those looking for larger accommodations may prefer a type of house called a floating home, which is actually different from a houseboat. It often has a concrete hull and is meant to stay in one place, permanently attached to utilities. The price, though, will usually be much higher than that of a houseboat.

A few sailors may opt to build a yacht, which offers the ideal combination of maneuverability and living space. You’ll have to have a hefty check at the ready or prepare to borrow a boatload if you’re considering this option.

Materials

The most common materials used to build boats intended for habitation are aluminum and fiberglass, but in some cases steel and wood can be construction materials of choice.

A standard pontoon base can cost between $3,000 and $10,000.

The cost of interior finishes largely depends on your personal tastes. They can be affordable if you’re fine with a no-frills setup but can tack skyward for more luxurious tastes and larger vessels. Stainless steel appliances and granite countertops cost money, regardless of whether they go in a house or a houseboat.

Will you want a staircase and flybridge? Budget accordingly.

Location and Water Depth

The environment you intend to keep your houseboat in will affect how much you’ll have to pay to make it seaworthy.

The price of an inboard motor may start around $8,000 and go up to $25,000. An outboard could start at $1,000 and go up to around $15,000. Depending on how large your vessel is, you may need to pay for a larger motor with more horsepower.

Federal regulations governing recreational craft prohibit the majority of houseboats from sailing in deep ocean waters. However, cruises along the shoreline, or in a lake or river, are acceptable options for capable houseboats.

Weather

Whether you decide to launch or keep your houseboat in freshwater or saltwater and local weather patterns will affect houseboat maintenance.

Saltwater is a tougher environment but has a lower freezing temperature than freshwater, which means that you likely won’t have to worry about ice forming in the water.

By contrast, if your houseboat will primarily be in freshwater, you may have to deal with ice. As water freezes into ice, it expands, which can damage your hull or rudder.

Permits and Regulations

Any recreational vessel must meet federal safety requirements and possibly abide by state regulations.

Average Cost of Living on a Houseboat Year-Round

The average cost of living on a houseboat is $30,000 per year, including a boat or personal loan payment, some sources say. This breaks down to around $2,500 per month. Some frugal houseboat enthusiasts report living on as little as $6,000 per year.

Most of these costs encompass mooring fees, utilities, and insurance, but you’ll also need to budget for repairs and applicable local fees. Some houseboat communities have a homeowners association that allows all residents to distribute community expenses like maintenance of the docks.

Does a houseboat cost less than a home sitting on terra firma? Generally, yes. You can build a houseboat for far less than a comparably sized single-family home. As a future liveaboard, though, you might want to compare moorage and other fees to the costs of maintaining a traditional home.

The IRS says a boat with cooking, sleeping, and toilet facilities can be a main or second home, so interest paid on a loan for your houseboat could be included in the mortgage interest deduction if you itemize.

The Takeaway

How much does it cost to build a houseboat? The cost could start at $20,000 for a DIY build and depends largely on size and materials. Hiring skilled labor will add to that substantially. An alternative to building a houseboat is buying a used one and making it your own. How to pay for these nautical visions? One way, for qualified homeowners, is a HELOC brokered by SoFi.

SoFi now offers flexible HELOCs. Our HELOC options allow you to access up to 90% of your home’s value, or $500,000, at competitively low rates. And the application process is quick and convenient.

Unlock your home’s value with a home equity line of credit brokered by SoFi.

FAQ

How large can a houseboat be?

In most cases, 40 to 50 feet is the average length and 8 to 20 feet the range of width for a houseboat that will be comfortable as a long-term dwelling.

How long does it take to build a houseboat?

A DIY houseboat project could easily take 18 months to complete, but the time frame will depend on whether you’re able to work on the houseboat project full time and whether you enlist any help. Remember to factor in time to obtain necessary permits or inspections for your area.

Where can I get financing to build a houseboat?

You may be able to finance your houseboat build through lenders that focus on marine and RV lending. Other options are a personal loan, a HELOC, a home equity loan, and a cash-out refinance.


Photo credit: iStock/MarkHatfield

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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.


*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

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.

²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945.
All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.
You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.
In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.

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How Many Bank Accounts Should I Have?

There is no one-size-fits-all answer to how many bank accounts you should have. The answer will likely be, “It depends”. Your personal and financial situation and goals will impact whether you have just one or two accounts or several of them with different purposes. For example, a recent college grad who is just entering the workforce will likely need fewer accounts than a self-employed person who is saving for a down payment on a house and their toddler’s future education.

There can indeed be advantages to holding multiple checking accounts or savings accounts, but having more than one or two will definitely require more of your time in terms of money management.

Key Points

•   Multiple bank accounts can be beneficial for managing diverse financial needs and goals.

•   Having just one checking and one savings account simplifies finances and reduces fees.

•   Specific savings goals might require separate accounts to track progress effectively.

•   Business owners and freelancers benefit from separate accounts to manage expenses and taxes.

•   Multiple accounts can aid in budgeting by allocating funds to different spending categories.

How Many Bank Accounts Do Most People Have?

When it comes to managing your money, many adults have, at a minimum, one checking account and one savings account at the same bank. In the journal Consumer Affairs, one landmark study found that the average American had 5.3 accounts.

That said, for most individuals, especially those who are unmarried, opening just one checking account and one savings account usually covers their basic banking needs.

With just one checking account and one savings account, you eliminate confusion and can simplify your finances. If all of your paycheck goes into your checking account using direct deposit, you can set up recurring automatic transfers into savings for the date after your payment hits.

If you automate your finances in this way, money moves into your savings account and leaves what you know you’ll need in checking until your next paycheck.

It’s also wise to keep in mind that some banks, especially the larger traditional banks vs. online banks, may charge monthly fees for checking accounts or require a minimum deposit. If you bank at one of these bricks-and-mortar financial institutions, having only two accounts can reduce the fees you’ll need to pay.

Get up to $300 when you bank with SoFi.

No account or overdraft fees. No minimum balance.

Up to 3.80% APY on savings balances.

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7 Reasons to Open Multiple Bank Accounts

Although two bank accounts may suit some people just fine, there are many people who may prefer or even need to open additional accounts. Among them may be those who are married or starting a family, those who are planning extended foreign travel, military personnel, freelancers, and/or business owners. For these individuals, there may be benefits to having multiple savings accounts or checking accounts for different financial needs.

1. Large Transactions

While couples do not necessarily need to share all of their finances, there are certain benefits to having a joint account for your household and family. This can be helpful, even if you still have a personal account for your own discretionary spending.

For one thing, this pooled account can help cover large monthly payments such as a mortgage, rent, or other household expenses equally.

Plus, rather than individual savings, you might want a shared savings account for emergencies, like a surprise medical bill or car trouble. Each partner might put a small amount into that fund every month, with a goal of having at least three to six months’ worth of basic living expenses covered. (You can use an online emergency fund calculator to determine what your goal amount should be.)

2. Specific Savings Goals

Having dedicated savings accounts (especially high-yield savings accounts) can also be a smart tactic to encourage you to put away money for future goals, whether that’s travel or saving up for a wedding or baby.

Some couples even prefer a shared account for debt payments (such as student loan debt or credit card debt). However, helping to pay off your partner’s debt is an important financial conversation to have before you start a new bank account for that purpose.

3. Saving for College

Saving for college is another reason parents might open an additional bank account. Can you have more than one bank account for this purpose? Of course, especially if you have more than one child.

Also, even an individual who is currently paying for school might see the benefits in having a separate checking account to manage and keep track of spending on books or other school-related costs. This would be distinct from a checking account for spending on food, clothes, and other everyday expenses.

4. Charity Donations or Family Healthcare

Other reasons people might consider opening additional bank accounts would be for charity donations or offering financial assistance to another family member, such as paying for eldercare. While there’s probably no reason why those monthly expenses can’t also be accounted for in your regular checking or savings account, keeping such things separate can improve some people’s money management.

5. Separating Finances

In some situations, partners may want to open additional accounts to keep some of their finances separate. For instance, in a married couple, you might both agree to put the majority of your paycheck into a joint checking account. However, you could each direct some of your earnings to a separate checking account for discretionary spending. For some couples, this can help keep the peace, since there’s no need to explain how much you chose to spend on new shoes or the latest cell phone model.

Or you might decide to open up different types of savings accounts to put some money into for an upcoming friends’ getaway or a similar goal.

What’s more, if one of you is starting a business (say, selling prints of your travel photos online), it would make sense to open a dedicated account for that, to keep your earnings and work-related expense payments in one place.

Recommended: How to Write a Check

6. Creating Accounts for Your Kids

If you have a child you’d like to gain financial literacy, opening an additional account with them can be a wise idea. You can open a shared account and begin teaching your kid how to put money in the bank, withdraw funds saved, and see how interest is earned.

Since those under age 18 typically can’t have their own account, this can be a good way to instill good financial habits at a young age.

7. Budgeting Is Easier

Deciding which budget is right for you can take some trial and error, and some people find that keeping track of their finances is easier with multiple accounts. For instance, if you follow the 50/30/20 budget rule, you are likely putting 50% of your take-home pay towards the “musts” of life, 30% towards the “wants,” and 20% towards savings.

In this situation, you might find it clearer and more convenient to have two checking accounts from which you pay those two types of bills. You might even name one “musts” and one “wants,” if you like.

Recommended: How Much Money Should You Have After Paying Bills?

How Many Checking Accounts Should You Have?

If you’re thinking about whether to have multiple bank accounts, keep this in mind: There’s no single right or wrong answer. While there is no need to open five new savings accounts to plan for your next five vacations, how many bank accounts you should have can depend on your ability to organize your finances.

Some individuals might find they prefer having at least one or two extra savings accounts for savings goals. These savings goals could be anything from an emergency fund, travel fund, or saving up for a car.

That emergency savings account can be critical to have, by the way, to be prepared for whatever may come your way. Whether you want this account to be a separate fund in a different bank account or part of your overall main savings account, however, is really up to you.

Potential Downsides to Having Multiple Bank Accounts

Before you start opening up additional checking and savings accounts, consider these cons:

•   You risk incurring more bank fees. Some banks will charge you account fees for each and every account you open, which can take a bite out of your funds.

•   You will have to keep track of account rules. In some cases, there are minimum balance requirements, limits on the number of withdrawals, and other guidelines that can take up brain space, not to mention involve potential charges.

•   There can be an increased chance of overdrafting. No one is perfect, and the more accounts you have, the more opportunity there is to forget about some autopayments you had set up and wind up with a negative balance. This in turn can trigger overdraft and NSF (non-sufficient funds) fees.

Why Freelancers and Business Owners May Need Separate Bank Accounts

While large businesses inevitably need their own bank accounts, sometimes smaller enterprises or even individuals with side hustles overlook creating a separate business bank account.

Some banks offer small business accounts, which can be used by freelancers, side hustlers, or small business owners. Basically, you want to make it easy on yourself to track personal and business expenses separately, and having different bank accounts helps take care of a lot of the legwork.

An additional account makes it easy to track business expenses and deductions, like shipping costs for your Etsy account or treats purchased for your dog-walking gig. Plus, with all of your business expenses in one place, you are more prepared for an audit and have a better bookkeeping record, rather than sorting through every transaction and trying to remember if that coffee you had six months ago was for a work meeting or not.

A great benefit of having another savings account for your business or freelance work is that you can set aside money specifically for taxes.

Of course, as a business owner or freelancer, it’s also important to save for tax season, which is why opening a separate business savings account can also come into play. A great benefit of having another savings account for your business or freelance work is that you can set aside money specifically for taxes.

Recommended: Business vs Personal Checking Account: What’s the Difference?

Alternate Money Management Options to Consider

Whether you are looking to open a new checking and savings account with a new bank or taking a broader look at what works best for your financial needs, there are a number of reasons to consider making a change.

A new account could offer you better rates or features, lower fees, or greater interest earnings.

Here, some options:

•   Credit unions are banks that are run as financial co-ops, meaning each member has a small stake in the business. Banking with a credit union usually allows more flexibility and lower fees. As nonprofits, they are designed to serve their members, often paying higher interest rates on deposits as well.

•   Online banks typically offer lower (or no) fees than traditional banks because they don’t have to support physical locations. They often have higher annual percentage yields (APYs) on deposits, too.

The Takeaway

There is no one answer to how many bank accounts you have. Typically, having checking and savings accounts is a wise and convenient move, but many people find they have multiple accounts. This might be to separate different income streams, save for various goals, and to differentiate personal from joint finances when, say, getting married.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, 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, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.80% APY on SoFi Checking and Savings.

FAQ

Is it a good idea to have multiple bank accounts?

Whether it’s a good idea to have multiple bank accounts depends upon an individual’s personal and financial situation. A single person with a full-time job may do fine with one checking and one savings account. A married person with a day job and a side hustle, who is saving for a house and putting money aside for a child’s education, may prefer having multiple accounts to help them stay organized.

Is 3 bank accounts too many?

Three bank accounts is not necessarily too many, though it depends on a person’s situation. Having a checking account, a savings account for a down payment on a home, and a savings account for an emergency fund can be a good thing. However, if that number of accounts winds up charging too many fees or risking overdraft for the account holder, then it is possibly too many.

Do too many bank accounts hurt your credit?

Multiple bank accounts should not impact your credit. When you open a bank account, you are not requesting a line of credit, so it should not be reflected on your credit report nor should it lower your credit score.


SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2025 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
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.


SoFi members with direct deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. 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 (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, 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 Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.

*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 Checking & Savings Fee Sheet for details at sofi.com/legal/banking-fees/.
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.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

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

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 Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

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A Complete Guide to Ordering Checks

A Complete Guide to Ordering Checks

Checks may not be used as often as they were in the past, but they’re still a useful financial tool to have around. You may need to write a check when making a large payment, gifting money, making a charitable donation, or even paying rent. A voided check can also come in handy when setting up direct deposit at work.

Often, when you open a checking account, you receive a book of complimentary checks to get you started. Sooner or later, however, you are likely to run out and need some additional checks. When that happens, how do you order a new checkbook? Should you order through your bank? Or is there a faster, cheaper option elsewhere?

Key Points

•   Checks remain a useful financial tool for various transactions, including making payments and setting up direct deposits, despite declining usage in the digital age.

•   Different types of checks exist, including personal, business, cashier’s, and certified checks, each serving specific purposes in financial transactions.

•   Ordering checks through banks can be costly, with prices typically around $30 for a box of 100, but numerous online vendors offer more affordable options.

•   When ordering checks online, it is essential to ensure the vendor’s security measures are in place, and to provide the necessary personal and banking information.

•   Having checks on hand is beneficial for those who may face situations requiring paper payments, despite the increasing prevalence of digital transactions.

What Are the Different Types of Checks?

There isn’t just one kind of check in the world. Get acquainted with these four common options that can play a role in managing your money.

Personal Checks

When people wonder about how to order checks, they are typically referring to personal checks. These are the rectangular documents you usually get when you open a checking account. They allow you to transfer funds from your account to a payee, whether that’s your cousin, your WiFi provider, or your dentist.

When you first open an account, you may get a small number of what are called counter checks, which may not be fully personalized with, say, your name and address.

Later, your fully printed checks are likely to arrive, complete with your name, address, account number, and bank routing number. These checks are not only useful for making payments, but also for setting up direct deposit. A voided check can be used by your employer to route your paycheck to the correct account.

Business Checks

What’s the difference between a business check vs. a personal check? Business checks are similar to personal checks, but are drawn from a business checking account instead of a personal one. If you run your own business, you might use these checks to, say, pay for your office rent or send funds to suppliers.

Cashier’s Checks

Sometimes also called a bank check or official check, this is a secure payment used to make significant purchases.

A cashier’s check requires a teller to withdraw funds from your personal account and then cut a check from the bank to pay the recipient on your behalf.

With these checks, the bank is guaranteeing payment, so there is no chance the check will bounce. There is typically a fee for getting a cashier’s check, often around $10 or $15.

Certified Check

A certified check is a type of personal check that the bank guarantees. When you write the check, the bank verifies you have enough money in your checking account to cover the amount and may place a hold on that money until the check clears.

The bank will typically then stamp or print “certified” on the check. Fees vary depending on which bank you use and the size of the check, but are often in the $15 to $20 range.

Recommended: What Is an Electronic Check (E-Check)?

Reasons Why Checks Are Used Today

In a tap and app world, checks may seem like a byproduct of a past era. Some transactions, however, still require a check. It’s not uncommon, for instance, for some landlords to require a check for a security deposit or for some smaller businesses to prefer cash or check payment.

Here are some of the reasons why checkbooks can still be useful and even a preferred payment form:

•   Checks can protect your money. A transfer can be misdirected with a typo, and cash can get lost or stolen. A check made out to the recipient is challenging to cash if it gets into the wrong hands.

•   If a check is lost, you can stop payment on the check and reissue a new one.

•   A check provides a paper record of payments made.

•   Checks can also be a way to verify identity. A voided check (a check you pull from your checkbook and write VOID so no one can cash it) can be necessary to set up autopay or direct deposit, or as a way to verify your address for certain services. (While you can use a check with an old address, it may cause confusion and can be wise to order a checkbook of new, updated ones.)

Of course, checks have their drawbacks too.

•   There can be a significant delay between the day you write a check and the day it gets processed, which could cause you to accidentally overdraw your account if you don’t keep careful records.

•   Checks can sometimes get lost in transit or stolen. Since a check is good for six months, it can be a smart idea to cancel any checks that don’t get to the intended recipient in a timely fashion.

•   Checks can also come with fees (such as when cashing a check) and other costs (like having to buy checks).

Fortunately, there are ways to cash a check without a fee. And, if you look beyond your bank when it comes to re-ordering checks, you can often pay significantly less.

Where Can I Order Checks?

Many people will order checks through their bank simply because it’s convenient. Traditional banks will often charge $30 or more per box, though they may be less or even free if you are a premium account holder.

However, you don’t have to buy your checks at your bank. There are numerous online vendors, such as Checks In The Mail and Carousel Checks, as well as big box retailers (such as Costco and Walmart) that offer customized personal checks that include the same security features as bank checks.

Prices range from around 10 to 34 cents per check, and minimum orders might be anywhere from 80 to 200 checks.

But how do you order checks from the best vendor? Because you need to input sensitive information, such as your bank account number and the routing information for your bank, it can be a good idea to make sure you choose a vendor that takes security measures seriously and also that the checks you buy are secure.

Some actions that can help maximize security:

•   Making sure the site where you buy checks is secure. A lock image in the address bar of your browser indicates a secure connection and that any information transmitted, such as your bank account info, will be done in a secure manner.

•   Choosing a reputable seller. It can be a good idea to vet any company you are considering buying checks from by taking a look at their Better Business Bureau ratings and reviews.

•   Considering security features. 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 can add to the cost of your checks, but they can make your check payments even more secure.

Get up to $300 when you bank with SoFi.

No account or overdraft fees. No minimum balance.

Up to 3.80% APY on savings balances.

Up to 2-day-early paycheck.

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FDIC insurance.


What You Need for Ordering Checks Online

When you’re wondering “How do I order checks online?” it can be wise to have some key information ready to complete your transaction. This typically includes:

•   Your personal information. This is your name (or the name of your company for business checks) and address.

•   Bank information. This includes the name and address of your bank, which you can find on your existing checks.

•   Your checking account number. You can find this at the bottom of your existing checks or on your bank statement. Of the three listed numbers along the bottom of your check, your account number will be the second number from the left.

•   Your bank routing number. Also known as an ABA number, this number serves as an address so the banking system knows which bank will pay the check. You’ll want to look for the nine-digit number on the bottom left of your checks.

•   Check number. To keep your finances organized, it’s a good idea to have your new checks start with the next number in your checkbook series. For instance, if the last check in your last checkbook is 199, consider starting the new set with check number 200.

When ordering checks, you may want to keep in mind that, depending on the company, production time may take a few weeks. That’s why it can be a good idea to order checks well before you may need them.

Recommended: What Is a Voucher Check?

The Takeaway

If you’re like many Americans, you probably don’t use checks often these days. But checks are still with us, and it can be a good idea to always have checks on hand for those times when you need or want to pay by check.

Buying checks from the bank can be pricey though. Fortunately, it’s fine to search the web for cheaper options, provided you take some security precautions. Another option is to open an account with a bank that doesn’t charge for paper checks.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, 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, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.80% APY on SoFi Checking and Savings.

FAQ

Can you print checks by yourself?

It is possible and legal to print checks at home. However, you will need the tools to do so. This includes: a printer, software to format the checks properly, special paper (known as check stock paper) with security features, a magnetic ink character-recognition font (for the numbers at the bottom of the checks in a way that can be read electronically), and magnetic ink.

How much does it cost to order checkbooks?

When you order additional checkbooks from a bank, a box of 100 may cost $30 or more. Some banks and premium accounts will lower or even eliminate that fee. When you order from check companies or mass merchants, the per-check price can range from ten cents to more than 30 cents per check, with minimum orders typically starting at 80 or 120 checks.

Do I have to order checks through my bank?

You do not have to order checks through your bank. If you want to, you may order from online check companies or merchants like Costco and Walmart.



SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2025 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
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.


SoFi members with direct deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. 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 (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, 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 Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.

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

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

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 Checking & Savings Fee Sheet for details at sofi.com/legal/banking-fees/.
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 Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

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