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Tax Day appears dependably every year and, ideally, you don’t end up owing the IRS money. Or if you do, hopefully you can easily pay your taxes. But that’s not always the case. If you do end up owing money to the IRS after filing your taxes, you may have options. Of course, you can dip into your emergency fund, but if you don’t have one yet, there are other options available for borrowing money when you’re in a pinch.

Everyone’s financial situation is different, so there’s not one right answer for covering your tax bill. We’ll go through the pros and cons of using a credit card, an IRS payment plan, or even a personal loan to pay your tax bill.

We should, of course, mention that this article is a broad overview of this matter. It’s always a good idea to consult a licensed tax professional for questions and help with tax-related matters.

Can I Get a Loan to Pay Taxes?

You may be able to get a loan for taxes you owe as long as you can qualify for a loan with the lender you choose. If you can qualify for a loan, you may want to consider whether it’s the right choice for your financial situation or if there may be a different option that works better for you.


💡 Quick Tip: Before choosing a personal loan, ask about the lender’s fees: origination, prepayment, late fees, etc. SoFi personal loans come with no-fee options, and no surprises.

What Is a Tax Loan?

A loan for taxes is a personal loan that is used to pay taxes owed to the IRS. The borrower receives the funds in a lump sum and spends the personal loan funds to pay their tax debt.

When looking for a lender that does tax loans, you might consider traditional banks, credit unions, or online lenders, among other financial institutions.

Recommended: How to Apply for a Personal Loan

How Does a Tax Loan Work?

If a taxpayer does not have the funds to pay the taxes they owe the IRS, one option to pay the debt is to borrow money to do so. Often, this is in the form of a personal loan, which can be either secured or unsecured. After receiving the loan proceeds, the borrower pays the IRS and begins making regular installment payments to the lender.

How to Qualify for Tax Loan

Qualifying for a tax loan is like qualifying for a personal loan intended to pay for any other expense.

Lenders will look at an applicant’s credit score, employment history, income, other debt, and possibly other lender-specific criteria. Generally, the more creditworthy an applicant is, the more favorable their loan terms and interest rate.

There are a variety of lenders who offer personal loans, so if you don’t qualify at one, you might consider looking at other places to get a personal loan.

Reasons For Tax Refund Loans

If you’re getting a tax refund, you might want the money sooner than the IRS sends it to you. For that reason, you might consider getting a tax refund loan. Also called a refund advance loan (RAL), this type of loan is a short-term loan based on the amount of tax refund you are expecting.

RALs are often offered by your tax preparation service right after you file. Similar to other loans, the interest and fees for a tax refund loan will vary by provider.

Reasons Against Tax Refund Loans

The key word in “tax refund loan” is loan — a debt. There are considerable reasons not to use this option to get an anticipated tax refund amount quickly.

•   While some tax preparers will offer tax refund loans without any interest or fees, these loans often come with costs.

•   Even if your tax refund is smaller than expected, you still have to repay the full loan amount, including any interest and fees charged by the lender.

•   If the IRS denies, delays, or garnishes your tax refund to pay another debt, you still owe the RAL — including any interest and any fees charged by the lender.

•   Interest rates on RALs offered by payday lenders tend to be high, with APRs sometimes 10 times higher than average credit card interest rates.

Filing your taxes electronically and getting your tax refund, if you’re getting one, via direct deposit generally results in you getting your money faster, often in less than 21 days.

What Happens if You Can’t Pay Your Taxes?

If you owe taxes, you may not have enough cash on hand to make that payment to the IRS, particularly if it’s a large amount. Paying a tax debt in full is ideal, but there are options if you cannot do that.

Options to Pay Tax Debt

IRS Payment Plans

The IRS offers payment plans and the potential for an “offer in compromise,” which may allow you to settle your debt for less than you owe if paying in full would create financial hardship. In some instances, you may also be able to temporarily delay collection until your financial situation improves. Depending on your situation, there can also be set-up fees, application fees, interest, and penalties that continue to accrue, increasing the amount you owe until it’s paid in full.

Credit Cards

Another option is to charge your tax expense to a credit card. The IRS charges a processing fee , which varies depending on the payment system you choose, if you pay with a credit card.

If you fail to pay off your credit card balance when it’s due, interest will accrue until the balance is paid in full. If you qualify for a credit card with a zero-percent introductory period and pay the full amount before the promotional period ends, you could pay your taxes with a credit card without incurring any interest charges.

Loved Ones

Asking a friend or family member for a loan for taxes is an option some people consider. Borrowing from someone you know generally means you won’t have to undergo a credit check. So if you don’t have great credit but are able to repay a loan, this may be an acceptable option. A close friend or family member who is confident you’ll repay the loan may not charge you interest, or charge a lower percentage rate than you might qualify for with a bank or other lender.

If you do choose to borrow money from friends or family, be clear about expectations from the beginning. For example, setting up a repayment plan could lessen the chance for miscommunication and hurt feelings.

Payday Loans

Payday loans are high-cost, short-term loans for small amounts that are often made to people who have bad or nonexistent credit. Unfortunately, this borrowing option often works in the best interest of the lender, not the borrower.

Interest rates on payday loans are much higher than other types of loans, sometimes up to 400% APR. Even using a credit card, with their relatively high-interest rates, is generally a better option than a payday loan.

The repayment term for a payday loan is small — typically, the loan needs to be repaid with the borrower’s next payday. If your tax bill is too large to pay by the time the payday loan is due, the loan may need to be renewed, adding additional fees and accruing more interest on the initial loan balance. This strategy could lead to a cycle of debt that is difficult to break.

Lines of Equity or Credit

Whereas a loan lets you borrow a set amount of money in one lump sum, a line of credit (LOC) gives you a maximum amount of credit from which you can borrow, repay, and borrow again, up to the credit limit. You make at least a minimum payment each month toward your balance due. LOCs can be secured or unsecured — a home equity line of credit (HELOC) is an example of a secured LOC, using your home as collateral.

One advantage to a LOC is the typically lower interest rates they offer compared to credit cards. However, interest rates on a LOC are often variable and can rise over the life of the loan. A drawback to a HELOC is that if you can’t repay the loan, you could lose your home.

Personal Loans

You can apply for either a secured or unsecured personal loan, the former requiring collateral to back the loan. A secured loan may have a lower interest rate because the lender can seize the collateralized asset if you default on the loan. Essentially, this lowers the lender’s perceived risk.

It’s a good idea to compare the interest rates on personal loans. They tend to start out lower than credit cards, but they can vary widely depending on your creditworthiness. The average personal loan interest rate was 11.91% as of Feb. 14, 2024. However, the rate can range anywhere from 6.40% to 35.99% depending on the lender and your unique financial circumstances.


💡 Quick Tip: Generally, the larger the personal loan, the bigger the risk for the lender — and the higher the interest rate. So one way to lower your interest rate is to try downsizing your loan amount.

Pros and Cons of Using a Personal Loan To Pay Taxes

Using a personal loan to pay taxes comes with both advantages and disadvantages. Here’s a look at how they stack up.

Pros of Paying Taxes With a Personal Loan	Cons of Paying Taxes With a Personal Loan
Typically unsecured, so no risk of losing an asset such as a car or home	Some lenders may not lend small amounts
Potentially low interest rates if you have good credit	Interest rate may be higher than an IRS repayment plan’s interest rate
With a fixed interest rate, monthly payments will be the same over the life of the loan	Some lenders may not allow a personal loan for taxes

Recommended: Paying Tax on Personal Loans

The Takeaway

When Tax Day rolls around and you discover that you owe taxes to the IRS, it’s a good idea to consider multiple options to settle the bill. If you don’t have enough money in your bank account to pay your tax bill, you might turn to an IRS repayment plan, your credit cards, a loan from a loved one, or a personal loan.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

SoFi’s Personal Loan was named NerdWallet’s 2024 winner for Best Personal Loan overall.

FAQ

Can I get a loan to pay taxes?

Yes, a personal loan can be used to pay taxes in most cases. Applicants must meet qualification requirements like any other personal loan, which typically include a credit check, employment and income verification, and other criteria.

What is a tax loan?

A tax loan is a personal loan used to pay taxes owed.

How does a tax loan work?

Tax loans are personal loans, either secured or unsecured. The borrower uses the loan proceeds to pay the IRS and then makes loan payments to the lender.

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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.

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 .

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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.

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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Not all wills are alike; there are actually four main kinds and one of them is right for you. Sure, writing a will can be an easy task to put off until “someday.” But what if the worst were to happen before “someday?” That could mean a complicated and emotionally draining legal process for your loved ones. Creating a will not only can provide peace of mind for your loved ones after you die, but it can also provide peace of mind for you right now.

The simple definition of a will is a document that states your final wishes. This alone was sufficient a century ago, when many people had limited property to pass down. But in the modern era, when “property” encompasses everything from the contents of your long-forgotten storage unit to the crypto you decided to buy on a whim, a simple will may not encompass your complex life.

Not only that, but a will is a document that only takes effect after you die. But what if you were medically unable to make decisions? Modern end-of-life documents encompass your wishes if you were medically or otherwise unable to make decisions on your own. Among these documents is one that also has the world “will” in its name.

4 Kinds of Wills

As you begin estate planning, you’ll likely come across four common types of wills. These are:

•   A simple will

•   A joint will

•   A testamentary trust will

•   A living will

Let’s look at each type of will more closely.

What Is a Simple Will?

Like the name, a simple will may be the type of will that pops into your mind when you hear the word “will.” This will can:

•   State how you want your property bequeathed upon death

•   Provide guardianship specifications for minors

Upon death, a simple will is likely to go through a legal process known as probate to divide assets. Sometimes, in the case of high-net worth individuals, probate can be expensive. (For those with complex situations and a positive net worth, a trust can help handle those what-ifs. It can transfer assets out of your estate and into the trust, which can be advantageous in terms of taxes.) But in many situations, a simple will can provide peace of mind for people in good health. Later, these individuals may want to take on more complex estate planning, but a will provides a good foundation when it comes to making sure guardians are named and property is divided according to your wishes.

A simple will can be created through online templates, and the cost can be zero dollars to several hundred dollars. More expensive online options may come with support from an attorney who can help answer simple questions. Once created, a will then needs to be made legal according to state laws. This may include signing the will in front of witnesses. You may also want to have it notarized. Having a hard copy of the will, as well as people who know how to access it in case of your death, can ensure the will is found in a timely manner if you were to die.


💡 Quick Tip: We all know it’s good to have a will in place, but who has the time? These days, you can create a complete and customized estate plan online in as little as 15 minutes.

What Is a Joint Will?

A joint will functions in much the same way as a simple will, except it is a will created by two people, usually who are married to each other. It merges their wishes into a single legal document. In many cases, this kind of will dictates that property will be left entirely to the surviving partner. Here’s the catch, though: Upon death, property will be distributed in the manner dictated by the will — the surviving person does not have the ability or authority to make changes to what the will says once the initial spouse has died.

This can sound streamlined, especially if couples were planning to leave everything to each other anyway. But this type of will can cause headaches. For example, if the surviving spouse has more children or gets remarried, it can be almost impossible to provide for additional people not named in the initial, joint will.

There could be problems even if the surviving spouse does not remarry. For example, if the marital home is considered an asset to be given to the couple’s children upon the death of both of the will’s creators, it may be impossible for the surviving spouse to sell a home to downsize.

One alternative that may suit married couples is to create two individual wills. This may provide a greater degree of flexibility and better achieve the desired effect without ruling out all of life’s what-ifs.

What Is a Testamentary Trust Will?

A testamentary trust will is usually part of big-picture estate planning. It is a document that creates a trust that goes into effect when you die. This trust can outline how certain types of property will be divided. A testamentary trust can have certain stipulations (for example, someone only inherits X piece of property when they reach Y age). This can also be used for people with minors or dependents to help ensure that wishes are followed.

What’s more, a testamentary trust can also help provide for pets. Because a pet can’t own property, naming your “fur baby” within a will can set up a legal headache. But a testamentary trust can ensure that your pet will be provided for according to your wishes.

It’s worth noting that a testamentary trust will go through the probate process, and it may not have the same tax benefits for recipients as other types of trusts. Weighing the pros and cons of different trust options can be helpful before settling on the best one for your situation.

What Is a Living Will?

This is a hard topic to think about, but what if you were in an accident and were knocked unconscious? What if you were undergoing treatment for a serious medical condition and couldn’t fully grasp the options offered to you? There’s a way to put a trusted relative or friend in the decision-making role. A living will, which is also known as an advance directive, specifies your wishes if you were medically incapacitated or unable to make or communicate decisions about your medical care. It also stipulates who your healthcare proxy, also known as a medical power of attorney, would be to make medical decisions on your behalf.

If you are creating a living will, you may also want to create a power of attorney document as well. This designates a person, who may or may not be the same person as your healthcare proxy, who has the right to make financial decisions on your behalf. Having a living will can cover unexpected situations that may occur before death and can be an integral part of end of life planning.


💡 Quick Tip: It’s recommended that you update your will every 3-5 years, and after any major life event. With online estate planning, changes can be made in just a few minutes — no attorney required.

The Takeaway

While end of life planning can be a challenging or sad endeavor, it’s an important step in making sure your assets are directed where you want them to go and that other important wishes are executed as you want. There are four main types of wills to help you legally record your plans. You’ll have options; more than one may suit your needs. And you can decide to use online services or work in person with an attorney.

In either case, making a will can give you peace of mind right now — and help smooth things along for your loved ones in the future during a difficult time.

When you want to make things easier on your loved ones in the future, SoFi can help. We partnered with Trust & Will, the leading online estate planning platform, to give our members 15% off their trust, will, or guardianship. The forms are fast, secure, and easy to use.

Create a complete and customized estate plan in as little as 15 minutes.

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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.

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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A $200,000 mortgage might cost you more than twice that amount over the course of the loan’s lifetime. That’s thanks in part to the way banks amortize, or parse out the balance of interest to principal in each payment. Of course, how much your specific $200,000 mortgage will cost is a more complicated equation, since personal financial factors like your credit score and debt level will affect your interest rate. And your interest rate, in turn, will affect your total mortgage cost.

Read on for a peek into the mortgage payment on $200K, including sample amortization tables, how much your monthly payment might cost, where to find a loan, and more.

Here’s What a $200,000 Mortgage Costs

When you take out a loan of any kind, the lending institution — often a bank — charges you for the service of giving you the money you need up front. When you repay a loan, you’re repaying both principal (the money you borrowed) and interest (the money the loan servicer is charging you).

Interest is expressed as a rate in the form of a percentage. Higher interest means you’re paying more for the loan — and lower interest, of course, means you’ll pay less. The lowest interest rates are reserved for buyers with the best financial profiles, which may include factors like robust and steady income, a good or excellent credit score, and a low level of existing debt (another factor lenders express in the form of a percentage: DTI, or your debt-to-income ratio).

With all that said, let’s say you take out a $200,000 mortgage to pay for a house that costs $275,000. In this example, you’d have made a down payment of $75,000, or just over 27%. Over the course of a 30-year mortgage term, with a fixed interest rate of 6%, you’d pay almost $232,000 in interest — along with the principal repayment, of course, bringing your total amount paid to almost $432,000. You’ll notice that figure is more than double the original $200,000 you borrowed, and this example doesn’t even include additional fees like property tax or homeowners insurance.

However, interest rates are very powerful here, and even a small decrease in interest can have a big effect on the overall loan cost. For example, imagine everything we’ve just described above remains the same, but your interest rate is 4% rather than 6%. In that scenario, your total interest would be about $143,000, representing a savings of around $90,000. (Insert shocked emoji.)

As you can see, finding the most favorable interest rates possible is really worthwhile for homebuyers. If this is your first time in the home market, a home loan help center can educate you about the buying process.


💡 Quick Tip: You deserve a more zen mortgage. Look for a mortgage lender who’s dedicated to closing your loan on time.

How Much Are Monthly Payments for a $200,000 Mortgage?

Maybe you’re less concerned about how much your $200,000 mortgage will cost you over the long term but are curious about the monthly payment on a $200K mortgage. Again, interest rates have a big effect on monthly mortgage payments, as does the loan’s term (how long you have to repay it). Still, we can offer a few examples.

For a 30-year $200,000 mortgage at a fixed interest rate of 7%, your monthly payments would be about $1,330 (though this figure doesn’t include property taxes or homeowners insurance, which could push your payment hundreds of dollars upward).

For a 15-year $200,000 mortgage with the same interest rate, your monthly payments would be about $1,797 (again, without additional costs included).

You can get more specific figures customized to your circumstances using a mortgage calculator or home affordability calculator online.

Where You Can Get a $200,000 Mortgage

There are ways to get a $200,000 mortgage if you’re sure you’re ready for one. Private banks, credit unions, and lenders who specialize in mortgages are all available to meet your request. You can usually do most of the application online.

One caveat: As we’ve seen above, interest rates can make a huge difference when it comes to the cost of your mortgage over time. Although market factors have a big influence on interest rates, your personal markers also matter, so getting your financial ducks in a row as possible before applying could help you save money in the long run. (So can finding an affordable place to live in the first place.) Additionally, you may want to ask for prequalification quotes from a variety of lenders to see who can give you the best deal.

Recommended: Tips to Qualify for a Mortgage

What to Consider Before Getting a $200,000 Mortgage: Amortization

Remember how we were talking about amortization above? In most cases, lenders amortize loans in such a way that, toward the beginning of the loan, the bulk of your payments are going toward interest. (Although your fixed monthly payments never change, the proportion of how much of that amount goes toward interest versus principal can.)

To understand how this can impact your ability to build equity, we’ve included the following sample amortization schedules for two different types of mortgage loans below. As you’ll see, the remaining principal balance goes down far more slowly than the amount you pay in. For example, in the chart below, although you’d pay a total of almost $16,000 toward your mortgage, the principal only reduces by about $2,000 because nearly $14,000 of your payments go toward interest.

Amortization Schedule, 30-year, 7% Fixed

Years Since Purchase	Beginning Balance	Monthly Payment	Total Interest Paid	Total Principal Paid	Remaining Balance
1	$200,000	$1,330.60	$13,935.64	$2,031.62	$197,968.38
3	$195,789.89	$1,330.60	$13,631.29	$2,335.97	$193,453.93
5	$190,949.09	$1,330.60	$13,281.35	$2,685.91	$188,263.18
10	$175,432.38	$1,330.60	$12,159.65	$3,807.61	$171,624.77
15	$153,435.50	$1,330.60	$10,933.39	$5,033.87	$153,435.50
20	$129,388.32	$1,330.60	$8,831.12	$7,136.14	$122,252.17
30	$15,377.96	$1,330.60	$589.30	$15,377.96	$0.00

As you can see, even 20 years into the loan’s 30-year lifespan, you’ll still be paying more toward interest than principal (though the proportion will be much closer to 50/50 than at the beginning of the term).

Next, let’s look at what happens when the home mortgage loan term is reduced to 15 years.

Amortization Schedule, 15-year, 7% Fixed

Years Since Purchase	Beginning Balance	Monthly Payment	Total Interest Paid	Total Principal Paid	Remaining Balance
1	$200,000	$1,797.66	$13,752.28	$7,819.60	$192,180.40
3	$183,795.53	$1,797.66	$12,580.86	$8,991.02	$174,804.51
5	$165,163.53	$1,797.66	$11,233.95	$10,337.93	$154,825.60
7	$143,740.35	$1,797.66	$9,685.27	$11,886.61	$131,853.74
10	$105,440.55	$1,797.66	$6,916.57	$14,655.31	$90,785.24
12	$75,070.50	$1,797.66	$4,721.12	$16,850.76	$58,219.74
15	$20,775.73	$1,797.66	$796.15	$20,775.73	$0.00

As this chart shows, a mortgage loan with a shorter term can help you build equity more quickly: Notice how principal and interest payments are much closer to equal just five years in, or a third of the way through the loan. Keep in mind that this ability comes at the cost of a higher monthly payment, though, so it may not be possible for all — especially first-time homebuyers who may struggle to meet higher mortgage payments.


💡 Quick Tip: If you refinance your mortgage and shorten your loan term, you could save a substantial amount in interest over the lifetime of the loan.

How Do I Get a $200,000 Mortgage?

Taking out a $200,000 mortgage is a fairly simple process these days. In most cases, your lender can pre-qualify you online or over the phone. While applying for your official approval will take a few more steps, including providing documentation like income verification and tax returns, you can still be approved in as little as a business day—and ready to take over the keys to your dream home.

To get started, reach out to the lender you’ve chosen to learn more about their process. They may make it simple to start your application online. Just don’t forget that interest adds up, and amortization can make it more difficult to build equity quickly. It’s worth checking in to ensure your lender doesn’t charge an early repayment penalty, and that they make it simple to pay additional principal if you’re able.

Recommended: The Cost of Living By State

The Takeaway

Because of interest, a $200,000 mortgage might cost more than $200,000 on top of the principal you borrow. It all depends on your loan term as well as your specific rate — which in turn depends on your financial standing.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

How much does a $200K mortgage cost each month?

With a fixed rate of 7%, a 30-year $200,000 mortgage will cost about $1,330 per month before additional fees, and a 15-year $200,000 mortgage at the same rate will cost closer to $1,800. If your down payment is less than 20% you will likely have to pay for mortgage insurance as well, not to mention property taxes and insurance.

How much income is required to qualify for a $200,000 mortgage?

An income of around $65,000 is in the right ballpark to qualify for a $200,000 mortgage. Income is far from the only important factor lenders consider when qualifying you for a loan, however, and even those who make substantial income may not qualify if they have high levels of debt or other negative factors.

How much is the down payment for a $200,000 mortgage?

Down payment amounts can vary substantially. Some loans allow you to put down as little as 3.5%, which, for a $200,000 home would be $7,000. To avoid having to pay for mortgage insurance, you’d want to put down at least 20%, which is $40,000.

Can I afford a $200K house with a salary of $70K?

What you can and can’t afford is a complex calculation that depends on your lifestyle, where you live, and more. That said, $70,000 is within the feasible range to take out a $200,000 mortgage, particularly if you choose a longer loan term.

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SoFi Loan Products
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.

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Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

*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.

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.

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If you miss the annual deadline for filing your income taxes, you don’t necessarily need to panic. Missing that tax filing deadline may not mean a big penalty, and you may have more options than you think. However, it can be wise to take steps to remedy the situation as soon as possible.

For 2023 tax returns, the deadline is set for April 15, 2024. If you’re wondering what might happen if you miss that date, read on. You’ll gain insights and steps to take, including:

•   Reasons why someone may miss the tax-filing deadline

•   What are the penalties for missing the tax-filing due date

•   How tax extensions work

•   What deadlines mean if you’re owed money

•   How to get your taxes in on time

•   How to file a late tax return

When Is the Tax Filing Deadline?

Usually, the tax-filing deadline is April 15 for the prior year. So if you are filing your return for tax year 2023, April 15 of 2024 would be the due date.

Worth noting: If April 15 falls on a weekend or holiday, the next business day is used. In the case of 2023, April 15 fell on a Saturday, but on Monday, April 17, the Emancipation Day holiday was observed in Washington, D.C. For this reason, the federal tax-filing date was actually on Tuesday, April 18, that year.

Reasons Why Someone Might Miss the Tax Filing Deadline

Turning in school papers, paying your credit card bill, applying for rebates: Life is full of deadlines that sometimes are missed. Missing the deadline for taxes is no exception. Here are some common reasons why people don’t file on time:

•   You think you don’t owe any money and figure, why bother to file?

•   You think you do owe money but can’t afford to pay your tax bill, so you avoid it entirely.

•   You are missing tax documents and didn’t have time to hunt for them or know where to find them.

•   You ran out of time to get organized and file or simply procrastinated.

•   You had trouble understanding taxes, got stressed out by the process, and didn’t get it finished.

•   You couldn’t afford a tax preparer but realized you didn’t know how to file on your own.

•   You got sick or injured or had a family emergency that interfered with filing.

•   You had a change in status (i.e., were in the middle of a divorce or became widowed) and didn’t know how to file in those new circumstances.

Recommended: How to Wire Money

Are There Penalties for Missed Tax-Filing Deadlines?

“What happens if I miss the tax deadline?” you may wonder. The answer is: It can cost you. For individuals, the IRS can levy penalties for a few infractions related to the annual tax filing deadline. Here’s a closer look:

The most common punishment for this offense is a late payment penalty that’s equal to 0.5% of the money owed. But it’s important to be aware of these finer points:

•   The IRS can penalize a taxpayer for “failure to file,” which occurs when a person fails to file their tax return by the appropriate April date or by the date specified if the person requests and receives an extension. The IRS can levy a penalty of 5% of the taxes owed per month for each month that the taxes are owed after the April filing deadline passes if you didn’t get an extension. This hits a cap of 25% after five months and can’t go any higher.

•   Another infraction when missing the tax deadline is “failure to pay.” This occurs when a taxpayer doesn’t pay the money they owe on their tax return, even if they file on time. The most common punishment for this offense is a late payment penalty that’s equal to 0.5% of the money owed. That may not sound like much, but it’s due every single month, until the tax is paid in full. And that penalty can be as much as 25% of the overdue taxes.

•   What if both “failure to pay” and “failure to file” penalties are applied in the same month? In this case, the “failure to file” penalty will be lowered by the sum of the “failure to pay” penalty applied that month.

•   The IRS can also penalize taxpayers for failure to pay estimated taxes over the course of a year. The penalty will be calculated based on the amount of the underpayment, how long the taxes were left unpaid, and the interest rate the IRS charges.

•   Another reason the IRS may charge a penalty is if your check to the government bounces. You will likely be assessed an additional 2% on the amount owed to the government.

One last note: You may wonder what happens if you file just a day or two late. It does matter! Even a single day late counts against you; the IRS takes deadlines very seriously.

Recommended: Tax-Deductible or Not? A Guide to Year-End Donations

How Do Extensions Work?

There are years when completing your taxes by the April deadline is just too much to accomplish. Preparing for tax season and completing a return isn’t always simple. As a taxpayer’s financial life evolves, filing can become quite complex and time-consuming. And even if you use a professional tax-preparer, April can be an extremely hectic time for them, and they may not be able to fit you in before the big deadline.

So what happens if you’re missing the tax deadline? Don’t just sit back. This is when an extension may come in handy.

•   The way to get one is to file an IRS Form 4868 , which is an application for permission to take an extra six months (until October) to file your taxes. Taxpayers, however, can’t be late when requesting the extension. You have to submit the form by the April deadline.

•   You can file for an extension online or by mail.

•   An extension only applies to filing your return. It’s important to note that you still have to send the IRS a check for your estimated taxes by April 15 or whatever the due date is in a given year.

•   If you take, say, another month to file the complete return and you owe more than you estimated on Form 4868 in April, you may face penalties for the shortfall.

•   Those penalties will typically grow with each month you take to file, even with the extension.

•   If you overestimate the taxes you owe and pay too much by the April deadline, then you’ll receive a refund after you eventually file.

What Deadlines Mean If You’re Owed Money

All of this discussion about deadlines and penalties ignores one issue: What does all of this mean if you expect to get money back from the government in the form of a tax refund?

A tax refund happens if you overpay your taxes over the course of a year, whether through your regular paycheck deductions, quarterly payments, or other means. When you file your return, it’s a chance to get that money back. Tax refunds are quite common — in terms of 2022 returns filed in 2023, the IRS issued 237.8 million refunds to individuals, totaling about $512 billion.

All of the deadlines and penalties described so far apply to anyone who owes money to the IRS in a given year. For taxpayers who are owed money by the government, the rules are different. Some specifics:

•   There is no late-filing fee for taxpayers who file returns requesting a refund from prior years.

•   The annual tax filing deadlines have a different significance for people who will receive a refund check from the IRS. For these taxpayers, there’s a real incentive to file taxes ahead of the deadline. The sooner you file, the sooner you’re likely to receive your refund. The IRS says it issues roughly 90% of its refunds in under three weeks, though it warns that some returns require additional review and may take longer as a result.

•   After a return is three years overdue, the IRS will no longer pay that money. The good news is that there is no late-filing fee for taxpayers who file returns requesting a refund from prior years.

It may seem unlikely that people would leave money unclaimed, but consider this: The IRS announced that it had more than $1.5 billion in unclaimed income tax refunds due to individual taxpayers who never got around to filing their federal income tax returns in 2019. Those unclaimed funds eventually become property of the U.S. Treasury.

So, as you see, it could definitely pay to file that return.

Tips for Filing a Late Tax Return

If you missed the tax filing deadline or know that’s going to happen, here’s advice:

•   You can file the IRS Form 4868 requesting an extension by the tax filing deadline. Even if you do file for a tax extension, however, know that any funds owed are still due by the April date, but you may be able to send in the actual return later.

•   Always file your return as soon as possible. You may want to contact a tax professional to assist you with this, or you can reach out to the IRS for help. You might want to call the IRS Tax Help Line at 1-800-829-1040 or visit your local IRS office.

•   If you owe money but can’t pay it all at once, pay as much as you can, as soon as you can, and look into available options, such as payment plans with the IRS. These can give you an extended timeframe in which to pay what you owe. You may want to consult the IRS’ online Payment Plan tool.

Tips for Getting Your Taxes in on Time

Now that you’ve read about how complicated it can be if you miss the tax filing deadline, here are a few tips to help you get those returns in on time:

•   Get organized early. Gather all the records you’ll need to file (such as a W-2) as they become available.

•   Check against last year’s return to see if there were any forms you had then (say, a Form 1099 reflecting interest on a bank account) that you don’t have now. Track down anything that’s missing.

•   Create or log into an account at IRS.gov to make tracking your progress easier. You can make payments there, too.

•   Make sure you’ve withheld enough money so that you don’t owe too much when you file. If you do wind up having to pay a significant amount, develop a plan early to pay it on time or as close to on time as possible.

•   Know your banking details or open a bank account so that you can use direct deposit, which is usually the fastest way to get a refund.

The Takeaway

Life happens: Sometimes, despite your best intentions, deadlines get missed. When that happens with tax filing, though, there can be some very real financial penalties involved. That’s why it’s important to know when your tax returns are due and then do everything in your power to file on time.

If you can’t get your return finished by Tax Day in mid-April, know the right moves to request an extension and possibly look into a payment plan for money owed that you can’t pay all at once. Having your bank account information handy, especially when you are due a refund, can be valuable.

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 4.60% APY on SoFi Checking and Savings.

FAQ

When is the tax deadline?

The deadline for tax-filing is usually April 15 for the previous year’s taxes. However, if that date falls on a weekend or holiday, it will move forward by up to a few days.

How long are the tax extensions given if I miss the tax deadline?

The usual tax extension is six months. However, this is a longer timeline to file your return. Funds owed are still due in April. It can be wise to pay as much as possible towards your total debt to the IRS by Tax Day, and then send the remainder as soon as possible, perhaps via a payment plan with the IRS.

What happens if you miss the tax deadline by one day?

The IRS takes deadlines seriously. For every month that you are late filing your return, you will be assessed a penalty on the total amount owed. That wording of “a month” does not mean the first 30 days after the deadline are a kind of freebie during which you can send in your return and any payment due without penalty. Rather, being even a single day late puts you into that “one month” late category.

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Situations can crop up all the time where you want to send money to someone you know. Perhaps your coworker brought you back a cold brew (nice) or you need to pay your roommate for your share of the utility bill. Fortunately, there are plenty of ways to move cash from your account to theirs, from using mobile payment apps to traditional money transfer services like Western Union.

Which method you choose to transfer funds will depend on to whom you are sending the money, where the recipient is located, how much money you need to send, and how fast the money needs to get there.

Read on to learn all about several safe, quick, and easy ways to send someone money. You’ll discover:

•   How to send money instantly

•   How the different money-transfer methods compare

•   What are ways to send money online internationally

•   How to stay safe when sending money online

1. Money Transfer Services

Money transfer companies have been around for decades, and some — like Western Union and MoneyGram — still have locations all around the world where you can send money to a person so they can go and pick it up. In some cases, you may be able to send money directly into a person’s bank account or mobile wallet.

•   What you need: The recipient’s full name, phone number, address, bank name and account details for electronic transfers to them. For a recipient who will pick up the money in person, you may just need the person’s full name and address.

•   Fees: The fees for money transfer services can vary based on how you’re paying (with a credit or debit card, or directly from your bank account), where you’re sending the money, and how much you’re sending.

•   Timing: Depending on the delivery and payment methods, the money may arrive within a few minutes or in a few days.

•   Reach: Unlike many other money transfer options, these services typically offer both domestic and international transfers. Western Union, for example, specializes in the ability to send or receive cash quickly overseas.

Worth noting about these services: Since they allow you to send money via money orders and other methods, they can be a good way to transfer funds to or from someone without a bank account.

💡 Quick Tip: Help your money earn more money! Opening a bank account online often gets you higher-than-average rates.

2. Bank-to-Bank Transfers

Knowing how to transfer money from one bank to another can be valuable when you want to move funds.

•   What you need: You will likely need the routing number and account number where you are sending funds to, and you may have to verify your identity before completing the transfer.

•   Fees: Many banks allow you to click on their transfer feature and send money to a bank account at another bank, often with no fees involved.

•   Timing: It usually takes just a day or two to move the funds.

•   Reach: These are typically done domestically. If you want to send funds internationally, you may need to complete an international wire transfer.

3. Send a Check Via Your Bank

Although they may not be as popular as they once were, checks are still a reliable way to send money to someone.

•   What you need: You will need the name of the person receiving the check (the payee) and possibly their mailing address if you are sending a check.

•   Fees: Checks are typically included at no charge when you open a bank account. If you don’t have any checks handy, you can order checks from your bank or retailers. This can be done online, and check prices can range from five cents to more than 20 cents per check.

•   Timing: Once deposited, the money should move into the recipient’s bank account and be available in a couple of days or possibly up to a week, depending on such factors as when it is deposited and how.

•   Reach: In the US, it should be no problem to deposit a check (even if it’s from an international account). However, if you are planning to mail a check to someone in a foreign country, you may want to check with them to make sure they can deposit it at their bank without any issues.

4. Wire Transfers

Wire transfers offer another way to send money to someone. They can be a good option for sending a large amount of money that is needed extremely quickly, for both domestic and international transactions.

•   What you need: In terms of how to wire money, you can call, visit, or go online with your bank or a wire transfer company. For a domestic transfer, you will need the recipient’s name, address, and bank account and routing number.

For international transfers, you will also need the bank’s SWIFT code plus possibly the International Payments System Routing Code.

•   Fees: Domestic wire transfers may be free for some banking customers, but the median charges tend to be $25 for outgoing wire transfers and $15 for incoming wire transfers (meaning your recipient may be assessed a fee for receiving funds this way).

Internationally, the figures are a median of $15 for incoming international wire transfers and $45 for outgoing international wire transfers.

•   Timing: Typically, domestic wire transfers can be completed in one day (perhaps even within hours or sooner), and international ones can take up to a few days.

•   Reach: Bank policies vary; some may offer only domestic wire transfers, others also do international transfers, and some offer neither service.

5. Third Party Person-to-Person (P2P) Apps

A growing number of P2P services (also known as person-to-person or peer-to-peer services) allow customers to use an app or website to send money from a bank account, a credit card, or a debit card to someone else.

You are probably familiar with these apps. If you went out with friends for dinner but didn’t have money on you, your pal might pay for the whole meal. You could then pay your friend without cash by using Zelle or another app to send them what you owe. These services can possibly provide an answer to the questions, “How to send money instantly to a friend or family member?”

The set-up, services, and transaction times can vary somewhat from one app to the next. Generally, however, they’re easy to use and are typically free, although there may be fees involved (say, to expedite the transfer of funds to a bank account, or when paying using a linked credit card).

Some, though not all, providers may require both the sender and receiver to set up an account within the same transfer service.

Here are some popular P2P providers to consider:

Zelle

You can make a money transfer using the Zelle app or, if your financial institution partners with Zelle (and many do), you can use your mobile banking app or your bank’s website.

•   Zelle works with traditional and online banks, as well as credit unions.

•   Money moves directly from your bank account to your recipient’s bank account. So, if you’re both already registered with Zelle, the company says it takes just minutes to complete a transfer. That’s one path to instantly send money to a person or retailer.

•   Zelle doesn’t charge any fees to send or receive money. However, you may want to check with your financial institution to be sure it doesn’t add a fee for the service.

•   You can’t cancel or reverse a payment made in error.

PayPal

PayPal is the grandaddy of money transferring apps. It remains popular because it’s so ubiquitous, tends to be easy to use, and offers a variety of payment methods.

•   It’s free to register for an account, and when you send money to another PayPal account holder, the money can be transferred to that person’s bank account as soon as the next day.

•   Sending money to someone in the US through a PayPal account balance or linked bank account is free, but there may be extra costs if you use a credit or a debit card, or if the money is going overseas.

Cash App

Cash App is another P2P money transfer app that’s used in the US and the United Kingdom.

•   Both parties involved in a transaction must download the app and log in.

•   There are no extra charges to send funds, although your bank might assess a fee if you move money internationally, and you’ll be assessed a fee if you use a credit card to fund your transaction.

•   There are limits to how much you can send at first: $250 during the first seven days after you sign up, but after a month, you can send up to $1,000 at a time.

Venmo

Venmo is a subsidiary of PayPal, and the process and costs for sending money to someone work in much the same way.

•   There’s also a social aspect to Venmo that has made it popular. You can add friends, share posts, and use emojis. Or you can change your settings to keep things a bit more private.

•   Transfers between Venmo accounts are instantaneous.

•   If you realize you made a mistake, the transfer cannot be undone.

Recommended: How to Transfer Money from Your Credit Card to Your Bank Account

Facebook

Facebook allows users to send and receive money free of charge through both the Messenger app and Meta Pay (previously known as Facebook Pay).

•   Both the person sending and the person receiving the money need to live in the U.S. and link a debit card or PayPal account to Facebook or Messenger.

•   Meta Pay works similarly to Messenger, but unlike Messenger, it allows users to send and receive money across its platforms (Facebook, Messenger, Instagram, and WhatsApp).

•   Meta Pay also enables users to purchase things, such as games and items for sale on Facebook Marketplace and Instagram, and to link a major credit card, in addition to a debit card or PayPal account.

•   As with other services listed here, you can’t cancel a payment after you send it.

Apple Cash

Apple Cash is a digital card that is built into the wallet of iPhones. It allows you to spend in stores and online and in apps with Apple Pay.

•   You can load the card with cash and use it where Apple Pay (the technology behind it) is accepted.

•   You can send and receive Apple Cash from friends and family with iPhones through Messages or your Apple Wallet.

•   You can use Siri to send money using spoken instructions.

•   Within a seven-day period, you can send or receive a maximum of $10,000.

•   Children with iPhones can send and receive cash this way.

•   There’s no fee to send, receive, or request funds with Apple Cash.

•   You may be able to cancel an Apple Cash transaction if the recipient hasn’t yet accepted the payment.

Google Pay

Google Pay is another service you can use to send money. You’ll need either the Google Pay or Google Wallet app, plus at least one form of payment, such as a debit card or a credit card. Not all cards are compatible yet with Google Pay so do a bit of research to see if yours are.

•   You can use Google Pay in stores and online.

•   Within a seven-day period, you can send up to $5,000 if you’re verified (or $500 if your identity hasn’t been verified).

•   It’s a free service to pay for goods and services.

•   Google Wallet is currently available in dozens of locations globally.

•   It may be possible to cancel some Google Pay transactions.

Is It Safe to Transfer Money Online?

You may wonder, “Are mobile payment apps safe?” Overall yes, but remember: Any time your personal information is online, the possibility exists that someone could access it and use it to steal your money.

So even though banks and other major money transfer networks are taking state-of-the-art steps to prevent hacking and cybertheft, no financial site or mobile app is entirely without risk. Bank account fraud and similar crimes can happen when scammers get a hold of your financial details.

Fortunately, there are some simple steps you can take to help safeguard your money:

Only Do Business with a Secure Network

If you’re making a transfer using a website, it’s a good idea to make sure the URL starts with (https://) and there’s a little padlock in front of the web address in the search bar. This shows that the site is secure and the data you enter will be encrypted.

If you don’t see these signs of a secure transaction, there is a chance that your personal and banking details could be visible to others during the transaction. This can in turn lead to fraud and identity theft.

Make Sure Your Device Is Protected

Even if you believe you’re dealing with a secure site, it’s wise to make sure you have the most up-to-date antivirus and antimalware programs enabled on your devices and run regular scans.

Yes, this may seem like a hassle, but the trouble caused by malware can be devastating. Malware can be downloaded onto your device, say, when you plug in to charge your phone at an airport or other public venue or when you click on a fraudulent link. It can then pull highly personal data off your phone and lead to you having to report identity theft.

Don’t Download Any App You Haven’t Vetted

Before you download a financial app, make sure that it’s the one intended. There are plenty of lookalike, sound-alike apps out there.

Then, make sure that you feel confident in the security protocols it has in place. Most financial apps list their security measures somewhere on their description in the app store (it might be under the privacy policy). You’ll also find reviews there.

Use a Strong Password

Here’s another important security protocol for financial apps or any app that involves your personal information. It’s a good idea to make your password as long and complicated as possible. Consider using a mix of numbers, upper- and lowercase letters, and throw in a symbol or two. Don’t use the obvious “password123” option, nor your birthdate, which could easily be available on social media sites.

Also, it’s best not to use the same password for every account you have. Use a well-reviewed password manager if you could use some help handling your passwords.

Vet People and Companies Before You Send Them Money

Do your research before hitting “send.” On some payment apps, you can friend people before you send any funds. This can help you make sure that you are sending money to the person you intend to vs. someone else with a very similar name or handle.

Also, because it’s so easy to transfer money to someone, it’s also easy to get scammed. And often there’s no going back on a transfer once the money is in the other person’s account. So be wary when using these apps to make purchases online.

Double-check All Your Info

Making sure you have the right name, address, account information, and other details for the person you’re sending money to. That can help keep your money from going to the wrong place. It’s easy to make a typo on mobile devices (and actually anytime you’re typing), especially when multitasking or transferring funds while on the go.

If you’re sending a large sum, you may want to send a small test amount first to confirm you have everything correct.

Keep a Record of the Transaction

Consider holding onto the proof of transfer until your recipient confirms that he or she has access to the money. The transfer might take a few minutes or a few days.

Typically, with wire transfers, you have hard copies from a brick-and-mortar bank or downloaded receipts via your banking app or website that you can keep on hand. With checks, the canceled check (or an image of it) can serve as proof that funds were accessed.

Recommended: Guide to ACH Routing Numbers

The Takeaway

Transferring funds to another person has become increasingly quick and easy as technology and financial services have evolved, with such alternatives as a payment app, a wire transfer, a bank transfer, or money transfer service. Depending on the particulars of your transaction, whether you’re repaying a friend for the sushi they got you or making a purchase, there’s likely an affordable and reliable option or two.

Having the right banking partner can help make money transfers as well as all your other everyday financial transactions fast, simple, and safe.

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 4.60% APY on SoFi Checking and Savings.

FAQ

Can someone send me money if I don’t have a bank account?

If you don’t have a bank account, you can still receive money via services like Western Union (which can give you cash), and Cash App, PayPal, and Venmo (which can likely give you prepaid debit cards).

Can you send money by text?

Apple Cash and Google Pay (and possibly other services) make it possible to send money by text.

What is the fastest way to send money electronically?

If you want to start sending money instantly online, services like Zelle and Google Pay can be very quick ways to transfer money electronically. The money can be delivered within minutes. Wire transfers are also regarded as a fast way to move large sums or make international transfers.

How can I send money to someone instantly with routing and account numbers?

You can likely use your financial institution’s transfer feature as a way to transfer money to another account if you have the routing and account numbers. However, you will usually also need the recipient’s name and address, as well as their bank’s name.

How can I send money to someone instantly without a bank account?

If you don’t have a bank account, you can use a money transfer service (such as Western Union or Moneygram) and pay in cash. The funds will be then forwarded as you direct them. Services like Venmo and Cash App may be another good way to move money; you can link them to a prepaid debit card or a credit card.

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SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government 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, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% 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 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 4.60% 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.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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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