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Losing your job can be emotionally painful and can throw your finances for a major curveball. How will you pay your bills? How long will this situation last?

Take a deep breath, and arm yourself with knowledge for financially surviving a layoff. Whether you’re going through this situation right now or are worried it might occur, you can likely make adjustments and you can make and tap resources to weather this challenge. It’s a phase to move through but not to define you, so learn the details.

Preparing Financially for a Layoff

Unfortunately, layoffs seem to be a part of modern life. According to a recent report by Challenger, Gray & Christmas, an executive outplacement firm, 946,426 jobs were cut in the year to date as of fall 2025. This represents a 55% increase versus the year prior. That’s not heartening, but it’s a way of saying that if you are laid off, you are not alone, and it can also be wise to prepare financially for a layoff if you are currently employed.

Not having a steady income probably means you’ll have to figure out how to pay your bills when laid off. Until you find another stream of income, it’s important to keep your budget in order and learn to live within your means. Being financially prepared means having a clear understanding of what your expenses are so you can stay on track, especially with debt, if you have it. There are also resources you can access that may help with your cash flow during this difficult time.

Steps to Take to Prepare for a Layoff

Here are some smart moves that can help you be prepared and not panic if you do get laid off.

Start an Emergency Fund

A common strategy is to build up an emergency fund prior to an event like job loss. It’s a way of preparing for a layoff before it happens. An emergency or rainy day fund is typically a savings account that you’ve been adding to on a weekly or monthly basis. A high-yield savings account can be a good interest-bearing but liquid place to keep the funds.

Having roughly three to six months’ (or more) worth of monthly expenses is helpful (you can use an emergency fund calculator to help you do the math). That sum can tide you over at a moment of job loss and give you peace of mind.

•   You may want to automate your savings and have a small amount ($25 can get the ball rolling) transferred from checking to savings every payday. Or have that amount direct-deposited into savings.

•   The emergency fund should only be accessed for emergencies, as its name suggests. (No fair dipping into this kind of savings account when there’s an amazing sale at your favorite store.)

•   If you have the opportunity to contribute more than usual (say, you receive a financial windfall, like a bonus or a tax refund), do boost your emergency savings because you never know when you will need to tap into that account.

Budget, Budget, Budget

If you have an inkling that your company is preparing to lay off some employees or if you lose your job, it’s wise to double-check your weekly budget. This means separating your necessary spending from your discretionary spending.

•   Necessary expenses include things like rent or a mortgage, utilities, food, and health insurance. Don’t forget about minimum debt payments, such as student loan and credit card payments.

•   Discretionary spending may include traveling, dining out, new clothes, and entertainment.

It can be helpful to focus on how much you need to spend each month for necessary expenses (some people refer to this as their monthly “nut.”) Make a list of these basic living expenses and see what they total. Then, pre-layoff, you’ll also see how much you can allocate for activities that you want to do. It’s probably not the best idea to spend every penny each month. You want to have extra money at the end of the month to put toward savings.

If and when a layoff hits, you’ll focus on necessities and minimize your discretionary spending (more details below). You can also tweak your budget when unemployed to, say, cut back on some long-term savings to get you through this moment.

File Unemployment Benefits

If you do lose your job, you may be able to qualify for unemployment benefits. This can get some funds flowing your way to help tide you over.

•   Read the eligibility requirements to see if your situation aligns with the rules for unemployment. The eligibility requirements are likely to vary from state to state and may be determined on a case by case basis; payment amounts will vary as well.

•   If you qualify, filing for unemployment benefits will allow you to receive payments if you are out of a job without cause. (There is a possibility that those who are fired because they don’t meet job qualifications may receive funds as well.)

•   Generally, to qualify for unemployment benefits, you should be able and available for work, as well as be looking for employment. Once you’ve determined your eligibility, you can file on your state’s official government office of unemployment compensation website. The site should give you guidance on when to expect benefits.

Ask About Severance Packages

Severance pay can be provided for employees after they are no longer employed at a company. Severance is based on the duration of employment, but your employer is not required to provide severance upon termination.

If you were terminated through no fault of your own, employers may pay, for example, two weeks of salary for each year of employment. Severance may also include health insurance benefits and even services to help you find a new job. These can be very helpful supports when you’ve lost your job.

Use Credit Cards Only for Emergencies

If you become unemployed, it’s wise to stop using credit cards to make purchases. Paying with your credit card creates debt that comes with high interest rates (currently more than 20%). At such high interest rates, debt can really snowball.

Also, when you are out of work, it can be challenging to pay an existing credit card balance. If you manage to pay the minimum balances of your credit card debt rather than paying in full every month, the credit card debt may cost you more over time since you also have to factor in added interest.

If you find yourself in this kind of a bind with credit card debt, take action. Consider a balance transfer credit card that offers no or very low interest rates for a period of time. Or speak with a debt counselor at a nonprofit organization like the National Foundation for Credit Counseling (NFCC).

Make Sure Emergency Funds Are in Order

Emergency funds, as mentioned above, are an important part of a financial plan and can be a lifesaver for someone who is unemployed. If you are in a situation where you unexpectedly don’t have a stream of income until you find another job, you’ll be more at ease if you have built up an emergency fund over time, as mentioned above.

In this case, you can dip into your emergency fund for mandatory expenses to fulfill your short-term needs. If you don’t have emergency funds, unemployment benefits become that much more important. Borrowing from a close friend or a family member might also be an option.

Practical Tips for Saving Money After a Job Loss

Saving money after a layoff can certainly be difficult. You don’t have the usual cash infusion to pay your bills and buy groceries. That is why you need to proceed with caution and learn how to economize when you lose your job. Here are strategies for making ends meet during this difficult time.

Get Back on LinkedIn and Start Networking

If you’re job-hunting, Linkedin can be a great tool for networking. The platform is set up so you can find and interact with former colleagues, alumni from your college, and professionals at companies you aspire to work for.

•   Start commenting on people’s Linkedin posts and have conversations with existing connections.

•   Build up your profile so recruiters know your job history, your professional skills, and that you are looking for work. This can lead to job opportunities.

Prioritize and Negotiate Any Debts if Needed

Continuing to pay down debt while unemployed should still be a priority. One strategy to pursue is paying off debt that has the highest interest rate. Debt with higher interest rates cost more, so paying this off first will have you saving money in the long-term.

But if you’re wondering how to pay down debt if you don’t have any income, here’s one answer: Try to negotiate your debt. It can be possible to work with your credit card company to negotiate interest rates, payment amounts, and the terms on your credit card debt.

Avoid Luxuries Temporarily

Being unemployed can be a frightening experience. You no longer have a steady flow of income and may not feel financially prepared to weather short-term expenses. To ease this burden, work to eliminate spending on luxuries. Now might be a good moment to downsize streaming services and other subscriptions.

Also eyeball what expenses you have on the horizon: If you had booked a vacation house or a cruise for a few months down the line, it may make good financial sense to investigate getting a refund. That money could be allocated toward your everyday expenses as you job-hunt.

Look at Investments and Retirement

If you are temporarily out of a job, do your best to keep your hands off your retirement funds. You worked hard to save that money, and it’s there to fund a long-term financial goal. That said, some people do tap their retirement accounts as a last resort when unemployed.

When you withdraw from your retirement account before the age of 59 ½, you will incur a penalty tax. However, there are some cases where you may be able to withdraw funds when unemployed without paying this.

You may be able to set up what’s known as a substantially equal periodic payments (SEPP) over five years or until you hit age 59 ½, whichever is greater. However, if you do receive this kind of distribution, it will likely count as income and may therefore lower any unemployment benefits you may be receiving. Talk with your plan administrator to learn more.

Start a Side Hustle

You might consider starting a side hustle to bring in some extra cash while looking for full-time work. There are many ways to earn more money. You could rent out an extra bedroom in your home or apartment, sell unwanted items, drive for Uber or Lyft, or market your professional skills on online service platforms such as Fiverr or Upwork. These are viable avenues to get some money coming in until you lock down a new job.

The Takeaway

Figuring out how to manage your finances when you are in between jobs can be stressful, but there are ways to prepare and then actions that can help you get by. Building and then tapping an emergency fund, accessing unemployment, and budgeting are some actions to take.

Also make sure your banking partner is making it easy and profitable for you to do business with them.

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.

FAQ

How do you manage the emotional impact of getting laid off?

Getting laid off or fired from your job is a tough challenge. You may feel angry and ashamed. Acknowledge those feelings, and remind yourself that millions of others have navigated this situation. You are not alone. Also, taking action can foster feelings of control and personal agency. Updating your resume, networking, reworking your budget, and engaging in self care rituals (like exercise) may also be positive steps.

How do you recover after being laid off?

Recognize the shock and upsetting feelings that you are likely experiencing. Then, take steps to improve your situation: Seek unemployment benefits, apply for jobs, start a side hustle, cut some expenses, and perhaps volunteer to build new skills and fill free time. These moves can help you move forward from your job loss.

Is it better to be fired or laid off?

In both scenarios, you don’t have a job, but if you are fired, it is typically due to a performance issue. With a layoff, you will likely be able to file for unemployment and you may receive severance pay from your employer. When you are fired, you may or may not be able to receive unemployment funds and you will probably not be eligible for severance.

Photo credit: iStock/skynesher

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

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 11/12/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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

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

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

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

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

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

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SOBNK-Q425-022

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

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

What Is a CD Ladder?

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

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

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

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

Example of a CD Ladder

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

Here’s what that might look like:

•   $3,000 to a one-year CD

•   $3,000 to a two-year CD

•   $3,000 to a three-year CD

•   $3,000 to a four-year CD

•   $3,000 to a five-year CD

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

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

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

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

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

How to Build a CD Ladder

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

Gather Your Funds

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

Choose the Length of Time That Will Suit You

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

Research Your Options

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

Buy Your CDs

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

Manage Your CD Ladder

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

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

Recommended: Guide to Catching up on Late Payments

Benefits of CD Laddering

There are several benefits of CD ladders, including:

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

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

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

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

Recommended: Different Ways to Earn Extra Money with Interest

Drawbacks of CD Laddering

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

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

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

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

Alternatives to CD Ladders

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

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

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

Recommended: Savings Account Calculator

The Takeaway

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

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

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

FAQ

Is laddering CDs worth it?

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

Can you lose money in a CD?

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

When would you use a CD ladder?

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

Photo credit: iStock/Antonbr Anton

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

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 11/12/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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

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

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

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

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

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

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

SOBNK-Q425-018

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

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

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

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

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

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

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

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

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

Visit a Bank Branch

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

Use an ATM

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

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

Transfer Money Online

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

Use a Credit Card Convenience Check

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

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

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

Redeem Cash Back Rewards

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

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

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

Pros

First, note the upsides of this kind of transfer:

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

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

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

Cons

Next, familiarize yourself with the downsides of these transfers:

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

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

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

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

Alternative Ways to Transfer Money to Your Bank Account

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

Personal Loan

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

Home Equity Loan or Line of Credit

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

401(k) Loan

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

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

Salary Advance

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

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

The Takeaway

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

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

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

FAQ

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

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

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

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

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

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

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

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

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

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

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

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

Photo credit: iStock/shapecharge

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

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 11/12/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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

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

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

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

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

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

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

SOBNK-Q425-017

A W-2, or Wage and Tax Statement, is a tax form that summarizes an employee’s income from the prior year and the amount of taxes withheld. It also includes information on various employer-provided benefits and voluntary deductions, such as contributions to a 401(k) retirement plan, Health Savings Account (HSA), or dependent care benefits.

All the information on your W-2 impacts your tax picture so it’s important to understand what’s in this form and how to use it to file your taxes.

Parts of a W-2

All W-2 forms require the same information, regardless of the employer and employee. This information includes key employer information, such as business address and employer identification number (EIN). It also includes employee information, such as Social Security number and mailing address. It’s a good idea to assess the form for any errors; if you see an error, contact your employer for a corrected form.

The W-2 has boxes that display various information. On the left side of the form, you’ll see the following:

•   Box A displays the employee’s Social Security number.

•   Box B shows the employer’s identification number, or EIN.

•   Box C contains the employer’s name, address and zip code.

•   Box D is a control number (something some employers use).

•   Box E is the employee’s name.

•   Box F is the employee’s address.

To the right and below the information above, you’ll see these areas:

•   Box 1 reflects earnings: wages, tips and other compensation.

•   Box 2 is federal income tax withheld.

•   Box 3 shows Social Security tax-eligible wages.

•   Box 4 contains Social Security withheld.

•   Box 5 is Medicare tax-eligible wages and tips.

•   Box 6 shows Medicare tax withheld.

•   Box 7 is Social Security tips (meaning discretionary earnings, such as tips, that are subject to Social Security taxation).

•   Box 8 is allocated tips (tips your employer assigned to you beyond those you have reported).

•   Box 9 is blank, a remnant of its previous use for any advance of the Earned Income Credit, which ended in 2010.

•   Box 10 reflects dependent care benefits.

•   Box 11 contains nonqualified plans, meaning money put in a tax-deferred retirement plan sponsored by your employer, which can reduce your taxable income.

•   Boxes 12 may be blank or may be filled in with codes A through HH, which identify miscellaneous forms of income that need to be reported to the IRS.

•   Box 13 shows statutory employee, retirement plans, and third-party sick pay. These will be checked off if you are a statutory employee, meaning an individual contractor who is treated like an employee; if you participate in a qualifying retirement plan; and/or if payments were made by a third party (such as an insurance plan) for disability pay or the like.

•   Box 14 reflects other deductions.

•   Box 15 shows the state and the employer’s state ID.

•   Box 16 contains state wages.

•   Box 17 shows state income tax, if withheld.

•   Box 18 reflects local tax-eligible wages, tips, etc.

•   Box 19 shows any local taxes withheld.

•   Box 20 contains the name of the locality.

Employees receive multiple copies of the same W-2 from each employer, to be filed with a federal tax return, a state tax return, and to be kept for the employee’s records. The IRS recommends keeping copies of W-2s for anywhere from three to seven years, depending on your situation.

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Who Receives a W-2?

If you are an employee and earned at least $600 during a given year, you should receive a W-2. If, however, you are a freelancer (aka an independent contractor) and earned at least $600, you should receive a Form 1099, showing freelance income subject to self-employment taxation, and not a W-2.

Recommended: How Do I Know What Tax Bracket I Am In?

When to Expect a W-2

The IRS requires employers to send out W-2s by January 31st for the prior tax year. This allows employees to prepare for tax season and get their returns in by mid-April. It might take a few days for the mail service to deliver it to you.

The Connection Between a W-2 and a W-4

The forms W-2 and W-4 may sound alike, but they serve different purposes.

A new employee will be asked by their employer to fill out a W-4 form, which is used to assess how much tax to withhold from the employee’s wages. Withholding depends on the employee’s circumstances, including whether they have dependents and what their tax-filing status is, among other things. Employees who do not fill out a W-4 will be taxed as if they were single.

Employees won’t be asked to complete a W-4 form again unless they switch employers. However, it’s a good idea to update your W-4 if your tax circumstances change, such as you get married, have a child, get divorced, or receive taxable income not subject to withholding, such as earning money from a contract or freelance job.

When taxes are filed, the goal for employees is to avoid a tax bill or a large refund, both of which can indicate that your tax payments during the year were off the mark.

While “tax time” is in April each year, taxes are essentially pay-as-you-go, according to the IRS. That means that, in an ideal world, April shouldn’t bring a large tax bill or a large refund. Worth noting:

•   For a single person who has only one employer, filling out a W-4 should be relatively straightforward.

•   Those with multiple income streams, including rental income, investment income, or income from side gigs, may need to take some time and thought when completing their W-4 to ensure their employers without an appropriate amount.

How do you know that your W-4 is accurate? You can assess that based on the refund or bill you receive at tax time. While a refund can feel like a windfall — and people often earmark it to pay off bills or fund a vacation, home improvement project, or other big-ticket purchase — the money represents an overpayment to the IRS.

While getting a big check can be exciting, it may make more sense to have that money available for budgeting purposes throughout the year. Or you could be putting it into a high-yield savings account, an earning interest on that money. Similarly, a large tax bill can throw your budget off track and may subject you to penalties from the IRS for not having enough taxes withheld from your paycheck or not paying quarterly taxes.

💡 Quick Tip: Did you know online banking can help you get paid sooner? Feel the magic of payday up to two days earlier when you set up direct deposit with SoFi.^

Are You an Employer?

You are an employer if you hire someone to perform work (such as cleaning or childcare) and you control what work is done and how it is done. This status comes with specific tax responsibilities, such as paying employment taxes and issuing a W-2 form to your employee.

If you pay a worker who sets their own hours, uses their own tools, and offers their services to multiple clients, they’re likely an independent contractor — and you’re not responsible for withholding and paying their taxes, or issuing a W-2.

Having Your Paperwork in Order

Starting in January, workers will want to keep an eye out for tax-related paperwork, since taxes are due regardless of whether paperwork has made its way to an employee’s mailbox. Missing tax forms can throw a wrench in the most organized person’s plans.

Checking in with an HR department can help make sure nothing falls through the cracks. Having paperwork ready and available can make filing taxes as seamless as possible when the time comes. This may also help you maximize your time if you work with a tax prep professional.

Tips for Filling Out a W-2

If you’re an employee, you don’t need to do anything to your W-2 beyond checking that the information on it is correct.

If, however, you are an employer, you may fill the form out W-2s yourself, via a tax preparer, or by using payroll software to automate this task. You will be responsible for adding your company’s details properly, as well as information specific to each employee, including wages earned, tips and bonuses, and recurring taxes taken out of the employee’s paychecks throughout the year (such as federal income taxes, social security, Medicare and state taxes). You’ll also need to include other compensation, such as retirement benefits paid on behalf of an employee.

The Takeaway

While tax time may be met with eye-rolling and stress, it can also be a moment to set up financial intentions and systems for the year. This can include submitting a new W-4 to your employer, estimating quarterly taxes, and developing a strategy to ensure that your money works for you in the year ahead. Keeping on top of your finances throughout the year can make tax time more manageable, as can visiting the SoFi Tax Center for more tips.

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.

FAQ

What happens if the W-2 that I received is wrong?

If you believe your W-2 is incorrect, contact your employer to discuss. They may be able to explain the discrepancy or, if necessary, reissue the document. If you cannot resolve things quickly and satisfactorily with your employer and believe there’s false information on your W-2, you may want to reach out directly to the IRS by calling 800-829-1040 or making an appointment at an IRS Taxpayer Assistance Center.

How much money do I need to make in order to get a W-2?

If you are an employee who earned $600 or more in a given year, you should receive a W-2, which is usually sent out by January 31st of the following year.

What is the difference between a 1099 and a W-2?

A W-2 is a form that shares information about an employee’s earnings and withholding. A 1099-NEC is a form that independent contractors may receive. Workers who get 1099 forms are responsible for paying their own employment taxes, unlike W-2 employees.

What should I do if I have not received my W-2 yet?

January 31st is the day by which W-2s must be sent out for the previous tax year. If the form was sent by regular mail, you may want to give it another few days to allow for it to arrive. Other steps to deal with this situation include checking online to see if you have a downloadable version and contacting your employer to see what the status is. If you don’t get a W-2 in time to file your taxes, you can use your paycheck stubs to estimate your wages, then complete Form 4852 and attach it to your tax return.

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

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 11/12/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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

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

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

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

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

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
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.

^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.

SOBNK-Q425-023

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

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

What Is a Joint Bank Account?

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

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

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

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

The Case for a Joint Bank Account

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

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

Pros and Cons of Joint Accounts

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

Pros:
First, the benefits of joint accounts:

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

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

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

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

Cons:
Next, the potential disadvantages of joint accounts:

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

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

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

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

The Case for Separate Bank Accounts

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

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

Pros and Cons of Separate Accounts

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

Pros:
These are the benefits of separate accounts:

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

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

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

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

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

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

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

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

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

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

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

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

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

Source: SoFi’s 2024 Love & Money newlywed survey

How to Decide What’s Right for Your Relationship

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

Discuss Your Financial Habits, History, & Current Debt

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

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

Align on Your Short and Long-Term Goals

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

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

Decide How to Handle Bills and Shared Expenses

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

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

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

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

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

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

The Takeaway

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

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

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

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

FAQ

What percentage of married couples have separate bank accounts?

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

How do you split bills with separate accounts?

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

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

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

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

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

Can a joint account impact my credit score?

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

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

Can we open a joint account before we get married?

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

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

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 11/12/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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

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

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

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

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

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

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

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

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