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Both co-ops and condos give a resident the right to use certain common areas, such as pools, gyms, roof decks, and courtyards. But there are big differences when it comes to what you actually own when you purchase a condo vs a co-op.

It’s easy to get confused about the difference between the two properties. If you pulled up pictures of co-ops and condos during a home search, they might seem exactly the same. But if you’re in the market for a home — especially in a large city where both housing types are popular — you’ll learn quickly that the terms are not interchangeable.

You might have wondered if you’d prefer a house or a condo. But if you’re moving in the direction of co-op vs. condo, it’s important to understand their many distinct features. You’ve done the work of budgeting for a home. Now, before you spend that budget, let’s get a handle on the difference between a condo and a co-op.

What Is a Condo?

With a condominium, you own your home, but you don’t solely own anything outside your unit — not even the exterior walls. Common areas of the complex are owned and shared by all the condo owners collectively.

Buying a condo is not all that different from securing any other type of real estate. Typically, the complex will be managed by an association that is responsible for maintaining the property and enforcing any covenants, conditions, and restrictions that govern property usage. The association sets the regular fees owners pay to cover repairs, landscaping, other services, and insurance for the shared parts of the property. Special assessments also might be levied to pay for unexpected repairs and needed improvements that aren’t in the normal operating budget.

What Is a Co-op?

In the co-op vs. condo debate, it’s key to know that with a housing cooperative, residents don’t own their units. Instead, they hold shares in a nonprofit corporation that has the title to the property and grants proprietary leases to residents. The lease grants you the right to live in your specific unit and use the common elements of the co-op according to its bylaws and regulations. A co-op manager usually collects monthly maintenance fees; enforces covenants, conditions and restrictions; and makes sure the property is well kept.

As a shareholder, you become a voting manager of the building, and as such have a say in how the co-op is run and maintained. Residents generally vote on any decision that affects the building. Should a resident wish to sell their shares, members of the board of directors will have to approve the new buyer. They will be much more involved than would be the case with a condo. That can make it a lengthy process.

Co-ops and condos are both common-interest communities, but their governing documents have different legal mechanisms that determine how they operate and can affect residents’ costs, control over their units, and even the feeling of community. (If you’re curious about another option, there’s always a townhouse, so read up on the difference between a condo and a townhouse as well.)


💡 Quick Tip: Your parents or grandparents probably got mortgages for 30 years. But these days, you can get them for 20, 15, or 10 years — and pay less interest over the life of the loan.

Some Pros & Cons of Co-Ops vs. Condos

Financing

It’s important to drill down on the details of buying an apartment. Because you aren’t actually buying any real estate with a co-op, the price per square foot is usually lower than it would be for a condo. Eligibility for a home loan may depend on credit score, down payment, minimum square footage of a unit, and more.

However, it might be somewhat harder to get a mortgage for a co-op than a condo, even if the bottom-line price is less. It might not have all that much to do with you. Some lenders are reluctant to underwrite a loan for shares in a corporation vs. real property. Most condo associations don’t restrict lending or financing in the building. If you can get a mortgage loan, the condo association will usually let you buy a place.

Fees

Because a co-op’s monthly fee can include payments for the building’s underlying mortgage and property taxes as well as amenities, maintenance, security, and utilities, it’s usually higher than the monthly fee for a condo. Either way, though, generally the more perks that come with your unit, the more there is to maintain and in turn, the more you’re likely to pay.

If you’re concerned about an increase in fees, you might want to ask the association or board about any improvements that may lead to an increase in the future — and what the rules are for those who do not pay their assessed dues. All of these factors are important to weigh when you’re making a home-buying checklist, which includes figuring out how much money you’ll need and the best financing strategy.

Taxes

If you itemize on your income tax return, you may be able to deduct the portion of a co-op’s monthly fee that goes to property taxes and mortgage interest. However, none of a condo’s monthly maintenance fee is tax deductible. You might want to consult a tax professional about these nuances before moving forward with a co-op or condo purchase.

Privacy vs. Community

If you’ve ever lived in one of those neighborhoods where the only time you saw your fellow residents was just before they pulled their cars into their garages, it could take you a while to adjust to cooperative or association living. Because you share ownership with your neighbors, you may be more likely to see them at meetings and other events. And you can trust that they’ll know who you are.

Co-op boards often require prospective buyers — who are potential shareholders — to provide substantial personal information before a purchase is approved, including personal tax returns, personal and business references. Many require in-person interviews. You may find that you like the sense of community and that everyone knows and looks out for each other. Or you may not. Again, you might want to ask some questions about socialization and privacy while checking out a particular co-op or an active condo community.

Restrictions

In a co-op, you might run into more rules regarding how you can renovate or even decorate your unit. And don’t forget: You’ll also have to deal with that rigorous application approval process if you ever decide to sell.

Both condos and co-ops frequently have restrictions on renting out extra rooms (or renting the entire unit), as well as on how many people can stay overnight or park in the parking lot, the type of pets you can have and their size, and more. Before you look at a unit, you may want to ask your agent about covenants, conditions, and restrictions that could be difficult to handle.

The Takeaway

Whether you end up buying a co-op or a condo, ownership offers many benefits you won’t find in a rental. When you’re ready to start a serious search, take the time to look for a lender that will work with you on whatever type of loan you might require. In the co-op vs. condo terrain, there are specialists for both sides.

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.

FAQ

Is a co-op better than a condo?

A co-op isn’t better than a condo. Which is best really depends on your lifestyle and needs. Co-ops can be a little harder to finance, and board approval of a prospective co-op buyer is often needed. But a plus for co-ops is that the portion of your maintenance fee that goes toward property taxes may be tax deductible.

What’s the downside to owning a co-op?

Some co-op owners who are selling their unit find that the screening of a prospective buyer by the co-ops management board can slow down the sale process. Co-ops may also be less flexible when it comes to decorating or renovating the unit.

Is a co-op the same as a condo?

Both co-ops and condos are often apartments, but that’s where the similarity ends. When you purchase a co-op, you technically aren’t buying the apartment itself, but rather shares in the corporation that owns the building. When you buy a condo, you are buying your unit and you share ownership of the common areas of the building with your neighbors. Co-ops usually involve a screening process in which buyers are reviewed and approved by their prospective neighbors. Condos don’t usually require this.

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SOHL-Q425-166

Staying on top of student loans and other financial obligations can be challenging. If you’re having trouble making monthly payments, or you’re concerned about how you’ll repay your loans down the road, you might be wondering what happens if you don’t pay your debt.

While you cannot be arrested or put in jail just for failing to pay your student loans, there are repercussions for missing student loan payments, including damage to your credit and wage garnishment.

Here’s a look at the potential legal and financial consequences of not paying debt, as well as tips for tackling student loan debt after you graduate.

Going to Jail for Debt

No matter how much or what type of outstanding debt you have, a debt collector cannot threaten to or have you arrested for that unpaid debt. Doing so is a violation of the Fair Debt Collection Practices Act and would be considered harassment.

A lender can, however, file a lawsuit against you to collect on an outstanding debt. If the court orders you to appear or to provide certain information, but you don’t comply, a judge may issue a warrant for your arrest. A judge can also issue a warrant for your arrest if you don’t comply with a court-ordered installment plan (such as child support).

Bottom line: You never want to ignore a court order, since doing could result in an arrest and, potentially, jail time.


💡 Quick Tip: Pay down your student loans faster with SoFi reward points you earn along the way.

Can You Go to Jail for Not Paying Student Loans?

No, you can’t be arrested or put in prison for not making payments on student loan debt. The police won’t come after you if you miss a payment. While you can be sued over defaulted student loans, this would be a civil case — not a criminal one. As a result, you don’t have to worry about doing any jail time if you lose.

As mentioned above, however, ignoring an order to appear in court could result in an arrest. And unless you want to deal with a long, messy legal process and added expenses on top of your debt (in the form of attorney and court fees), it’s in your best interest to do whatever you can to avoid defaulting on your student loans.

Statute of Limitations on Debt

In terms of debt collection, the statute of limitations refers to the amount of time that creditors have to sue borrowers for debt that’s past due.

Federal student loans don’t have a statute of limitations. This means that federal loan servicers can pursue collection of defaulted federal student loans indefinitely. Keep in mind that the federal government doesn’t have to sue you to start garnishing wages, tax refunds, and Social Security checks.

For other types of debt, including private student loans, many states have statutes of limitations between three and six years, while some are longer. The timeframe can vary based on the type of debt and the state law named in your credit agreement.

If you’re sued by a debt collector and the debt is too old, you may have a defense to the lawsuit. You may also have a claim against the collector for violating the Fair Debt Collection Practices Act, which prohibits suing or threatening to sue for a debt that is past the statute of limitations.

Recommended: Private Student Loans vs Federal Student Loans

What Are the Consequences of Not Paying Off Student Loan Debt?

The consequences of not paying your student loan debt differ depending on what type of student loans you have.

Federal Student Loans

Typically, with federal student loans, the loan becomes delinquent the first day after a payment is missed. If you don’t make a payment within 90 days, your loan servicer will report the delinquency to the three national credit bureaus.

If you don’t make a payment for 270 days (roughly nine months), the loan will typically go into default. A default can cause long-term damage to your credit score. You may also see your federal tax refund withheld or some of your wages garnished.

Once your federal student loan is in default, you can no longer receive deferment or forbearance or any additional federal student aid. Plus, you’re no longer eligible for an income-driven repayment plan, and your loan servicer can sue you for the money you owe.

Private Student Loans

If you don’t pay private student loans, the consequences will depend on the lender. Generally, however, this is what happens: As soon as you miss a payment, your loan will be considered delinquent. You’ll likely get hit with a late fee and, after 30 days, your lender can report your delinquency to major credit agencies.

After 90 days, your loan will typically go into default. At that point, your loan may be sold to a collections company. Your (and any cosigner’s) credit score will also take a hit. In addition, your lender can sue you for the money you owe. They may also be able to get a court order to garnish your wages. However, they can’t take any money from your tax refunds or Social Security checks.

Tips for Getting Out of Student Loan Debt

You won’t go to jail for not paying back your student loans, but you can still face some significant consequences for missing payments. Here are some ways to stay (or get back) on track.

1. Set up a Budget

It can be hard to manage your finances without a plan. Creating a monthly budget is a helpful way to keep your spending in check and make sure you have enough money for your loan payments. Once you write down everything you’re spending on each month, you may find some easy places to cut back, such as getting rid of streaming services you rarely watch or spending less on takeout and afternoon coffees. Any money you free up can then go towards loan repayment.

2. Increase Cash Flow

Reining in your spending with a budget is a good place to start, but it may not be enough for getting out of debt. Having some extra cash on hand can help manage debt payments and offer some breathing room within your monthly budget.

To boost your income, you might consider taking on more hours at your current job, getting some freelance work, or picking up a side gig (such as food delivery, dog walking, or babysitting). You don’t have to do this forever — just until your student debt is paid off, or at least well under control.

Recommended: Student Loan Debt Guide

3. Create a Debt Reduction Plan

If you have multiple debts, it’s a good idea to take an inventory of everything you owe and then set up a comprehensive debt reduction plan.

A popular system is the avalanche method, which calls for putting any extra cash toward the debt with the highest interest rate while making minimum payments on other balances. When that debt is paid off, you put your extra money towards the debt with the next-highest interest rate, and so on.

Another option is the snowball method, which focuses on ticking off debts in order of size, starting with the smallest debt balance, while still taking care of minimum payments on other debt.

4. Apply for an Income-Based Repayment Plan

If you have federal student loans, there are currently three income-driven repayment (IDR) plans you can apply for to make your monthly payments more manageable. These include:

•   Saving on a Valuable Education Plan (SAVE; replacing Revised Pay As You Earn)

•   Pay As You Earn

•   Income-Based Repayment Plan

•   Income-Contingent Repayment Plan

Monthly payments are a percentage of your discretionary income, usually 10% or 20%. What’s more, all plans forgive any remaining balance at the end of the 20- or 25-year repayment period. Note that the current IDR program will sunset for new borrowers starting July 1, 2026, as a result of changes to federal legislation.

Starting July 1, 2026, new federal student loan borrowers will only have access to the new Repayment Assistance Plan (RAP), which requires payment amounts of 1-10% of your annual adjusted gross income and offers forgiveness after 30 years.

5. Find Another Repayment Plan

Besides income-based repayment, current borrowers can explore a variety of other federal repayment plans to help pay off debt. For example, the graduated repayment plan helps recent college grads find their financial footing by setting smaller monthly payments at first before increasing every two years. (Note: Borrowers who take on a new loan after July 1, 2026 will only be eligible for a standard repayment plan or the RAP plan.)

Some private lenders also offer a choice of different repayment options.

6. Look Into Forgiveness Programs

The federal government offers student loan forgiveness to borrowers who meet certain eligibility criteria, such as working in a certain profession, having a permanent disability, or after making payments for a certain amount of time on an income-driven repayment plan. Similar programs are available at the state-level across the country, and generally base eligibility on specific professions or financial hardship. It’s worth contacting your state’s higher education department to see if you might qualify for a repayment assistance program.

The Rural Iowa Primary Care Loan Repayment Program, for instance, provides up to $200,000 toward repaying eligible student loans for doctors who commit to working five years in designated locations.

The NYS Get on Your Feet Loan Forgiveness Program, on the other hand, offers up to 24 months of debt relief to recent graduates in New York who are participating in a federal income-driven repayment plan.

7. Ask About Employer Tuition Reimbursement Programs

Besides health insurance and a 401(k), your employer may provide other benefits, including tuition reimbursement programs, to support and retain their employees.

Often, these programs are focused on annual tuition expenses that employees incur while studying and working concurrently. Still, employers may offer to contribute to student loan payments as well.


💡 Quick Tip: Master’s degree or graduate certificate? Private or federal student loans can smooth the path to either goal.

8. Explore Refinancing Your Student Loans

Student loan refinancing could help you save interest and make your monthly payments easier to manage. Generally, though, refinancing only makes sense if you can qualify for a lower interest rate.

Refinancing involves taking out a new loan with a private lender and using it to pay off your existing federal or private student loans. You can often shop around and “browse rates” without any impact to your credit scores (prequalifying typically involves a soft credit check). Just keep in mind that refinancing federal loans with a private lender means losing access to government protections like income-driven repayment, student loan forgiveness programs, and deferment and forbearance.

Also know that lenders typically require your loans to be in good standing before approving a refinance. That means you generally can’t refinance a student loan in default. You can, however, consider refinancing after recovering from a student loan default.

The Takeaway

Although you won’t go to jail for failing to pay your student loans, there are a number of negative consequences, like late fees, a damaged credit score, wage garnishment, and even being taken to court.

Whatever type of student loan you have, you can help the road to repayment go smoothly by setting up a budget that makes room for monthly loan payments, picking a repayment plan that fits your needs and budget, and investigating forgiveness options.

Finding a student loan with a competitive interest rate and flexible repayment terms can help avoid the stress and repercussions of not paying student loans down the line.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

FAQ

Do student loans go away after 7 years?

No, student loans won’t disappear after seven years. Negative information about your student loans (such as late payments or defaulting on a loan) will be removed from your credit report after seven years, but that doesn’t remove your responsibility for paying back the loans. You’ll still owe the debt until you pay it back, it’s forgiven, or, in the case of private student loans, the statute of limitations runs out.

How long before student loans are forgiven?

The Public Service Forgiveness Program requires making the equivalent of 120 qualifying monthly payments under an accepted repayment plan (while working full-time for an eligible employer) for student loan forgiveness. With the currently offered federal income-based repayment plans, you need to make payments for 20 to 25 years to have the remaining balance forgiven. State programs may offer more rapid repayment assistance and forgiveness.

Can student loan lenders seize bank accounts?

Yes, but not right away. If you have federal student loans, your wages or bank accounts can be garnished only if you have officially defaulted on your loans (i.e., you haven’t made a payment for at least 270 days). The government does not need a court order or judgment to garnish your wages.

If you default on a private student loan, your creditor must first sue you to obtain a judgment and submit a court order to your employer before your wages can be garnished.

Photo credit: iStock/shadrin_andrey

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Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

SoFi Bank, N.A. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.

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.

SOISL-Q425-017

An interest checking account is, as the name suggests, a checking account that earns interest. Typically, checking accounts haven’t offered this feature, while savings accounts did. However, there are a number of interest-bearing checking accounts now available that can help your cash on deposit grow.

Typically more flexible than savings accounts, interest checking can give you a financial boost if they’re a good fit for you. In some cases, however, they may have minimum requirements and other aspects that may not sync up with your money style.

An interest checking account is, as the name suggests, a checking account that earns interest. Typically, checking accounts haven’t offered this feature, while savings accounts did. However, there are a number of interest-bearing checking accounts now available that can help your cash on deposit grow.

Typically more flexible than savings accounts, interest checking can give you a financial boost if they’re a good fit for you. In some cases, however, they may have minimum requirements and other aspects that may not sync up with your money style.

Here’s a closer look at these interest-bearing checking accounts, so you can decide if one might be right for you.

What Is an Interest Checking Account?

Whether it’s called an interest-bearing checking account, interest checking account, or high-yield checking, this is a type of checking account where the account holder can earn interest. The interest rate may not be amazingly high. According to the Federal Deposit Insurance Corporation (FDIC) as of October 2025, the rate averaged 0.07% APY, or annual percentage yield, which is the real rate one earns when compounding interest kicks in. (Occasionally, APYs of 1.00% to a few percentage points may pop up, sometimes on a promotional basis.) Even at the lower range, the interest accrued is better than nothing. Honestly, who doesn’t want to earn more interest?

There may, however, be a catch:

•   Although the account will pay an APY, account holders may be required to pay monthly maintenance fees or maintain a certain account balance (say, $500 or more).

•   In addition, you may be required to receive a certain number of or dollar amount of direct deposits per month or meet other criteria, such as relating to debit card usage.

•   You might also have to pay a monthly account fee; again, it depends on the bank you choose. Recent research found that checking accounts had an average monthly fee of $10.95 to $16.35; where an interest account will fall can vary with the financial institution.

•   One more point: In many cases, interest checking accounts earn less interest compared to savings accounts.Yes, a checking account has added flexibility that may be beneficial (say, unlimited transactions and debit-card and check-writing features), but it’s worth noting. You might consider a combined checking and savings account to get the best of both worlds.

How Do Interest-Bearing Checking Accounts Work?

These types of accounts work in a similar way to other kinds of checking accounts. Account holders can make deposits at ATMs, online, by direct deposit, or at branch locations depending on the financial institution.

As for withdrawals, account holders can make bank transfers, withdraw cash from an ATM, write a check, use bill pay, or pay for purchases with a debit card. The only difference is that, instead of earning no money on your balance, you will accrue some interest, usually on a monthly basis.

How Are Interest Checking Accounts Different Than Other Checking Accounts?

The truth is, checking account interest rates will vary depending on the type of account and the financial institution. On average, as noted above, banks offer an APY of 0.07%. There are high-yield checking accounts that could pay more, but these rates are generally still lower than what you could earn with a savings account. That said, with a little research, you might find an interest checking APY of 0.50% to 1.00% or higher at this time, especially at online banks. Those couple of extra points of interest may well be worthwhile as part of your plan to grow your wealth.

Just be sure to note the account requirements, as mentioned above. If you have to keep more money in the account that is comfortable for your budget and cash flow, you could wind up incurring late fees elsewhere in your financial life.

Here’s an example:

•   Perhaps you decide to pay your credit card bill late because you didn’t want your checking account balance to dip below the minimum to earn interest.

•   You opt to wait for your next paycheck to hit before you send your payment to your card issuer.

•   The credit card fee for the late payment is likely more than the interest you’re earning on the money in your checking account.

So in this situation, keeping your money in an interest checking account might not be a win-win for you.

Common Account Requirements for Interest Checking Accounts

When it comes to opening an interest-bearing checking account, there may be some requirements to wrangle. Keep the following factors in mind:

•   Minimum-balance and other account requirements: When you open an account, some financial institutions may require a minimum initial deposit. Current offers for interest-bearing checking range from zero dollars to $500 and occasionally significantly higher amounts as a minimum deposit. Shop around to find the right account for your needs.

   Plus, as mentioned above, you may need to maintain a certain balance in order to avoid fees. There may also be other rules such as the amount of transactions you can make on your debit card.

•   Fees: Some interest checking accounts may charge monthly fees, as described earlier in this article, which could eat into the interest you earn. You may have to keep a higher balance in your account to avoid fees. Other fees to consider are overdraft fees, and whether you’ll need to pay third-party network fees to access certain ATMs.

•   Application requirements: Depending on the financial institution, you may be required to submit documents such as your Social Security number, proof of address, and government-issued photo ID. If you want to open a checking account with a credit union, you’ll most likely need to become a member.

Advantages and Disadvantages of Interest Checking Accounts

An interest checking account may not be the best option for you. Consider the following advantages and disadvantages before opening an account.

Advantages of Interest Checking Accounts

Here, the upsides of interest checking:

•   You’ll earn interest Most traditional checking accounts won’t pay you any interest, but with an interest-bearing one, you’ll earn high interest. That means your money will help you earn some money while it’s sitting in the account. Typical APYs can range from 0.50% to 3.00% or higher.

•   You’ll have more flexibility Checking accounts tend not to have transaction limits as you may with savings accounts or money market accounts. Plus, you can use checks and a debit card, offering you more flexibility to access your money.

Disadvantages of Interest Checking Accounts

Next, the downsides:

•   You may have to meet certain requirements Though there are some interest checking accounts that don’t have minimum balance requirements or monthly fees, some do. That means you could be on the hook for a monthly fee if you can’t meet account requirements. In some cases, these fees could negate the amount you earn in interest.

•   You may not get a high interest rate The interest you earn on a checking account tends to be lower compared to ones you earn from a high-yield savings account or money market account. But there are definitely exceptions to the rule: Some banks have offered as much as 3.00% APY or higher on interest checking accounts, so it can truly pay to shop around and see if you can snag one of those deals.

Where Can I Get an Interest Checking Account?

You can open an interest checking account at most financial institutions, including traditional and online banks, as well as credit unions. As mentioned before, you may be required to become a member of the credit union you want to open a checking account with.

When shopping around, look beyond interest rates. Other equally important factors to consider are:

•   Account features (access to your funds, for instance; when the interest accrues)

•   Account-holder benefits (are there other perks to being an account-holder, such as a sign-up bonus?)

•   ATM, overdraft, and other fees

•   Minimum opening deposit and account balance requirements to earn interest.

Is It Worth It to Get an Interest Checking Account?

Thinking carefully about your financial situation and goals should help you determine whether it’s worth getting an interest bearing checking account.

•   For those who want to keep a decent amount of money in a checking account to ensure bills and daily transactions are taken care of, it might be worth considering. Why not earn a bit of interest if you can find an account that doesn’t charge fees?

•   However, if you’re interested in having a stash of cash available for short-term or medium-term savings goals — as in, you’re not planning on making frequent withdrawals — then a high-yield savings or a checking and savings account might be the better choice.

•   If your goal is to save for long-term goals like retirement or a college fund for your child, then an investment account could be the way to go.

Recommended: Savings Calculator

The Takeaway

An interest-bearing checking account may be a good fit if you’re looking for an account for daily transactions that can grow your money a bit. It’s important to check the fine print to see if there are any minimum balance requirements and what the fees are. Comparing the potential interest to be earned with any fees that may be charged is a vital step before applying for an interest checking account.

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

FAQ

How does an interest-based checking account work?

Interest-based checking accounts, or interest checking accounts, work like standard checking accounts and provide a good way to deposit and spend money. They offer some interest earnings, typically a fairly low percentage, which is a way to help your money on deposit grow.

Why am I getting interest on my checking account?

Not all financial institutions offer interest on checking accounts; many offer none at all. If your bank offers interest, it is a way to incentivize you to keep money on deposit with them. You might think of it as a reward, and you may typically find this perk at online banks.

What are the cons of interest accounts?

Interest accounts can have downsides as well as upsides. Disadvantages can include fluctuating interest rates and possible account requirements, such as a minimum initial balance or ongoing balance threshold to earn interest.

Photo credit: iStock/FG Trade

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

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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

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

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

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

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

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

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

SOBNK-Q425-016

You may think of your income as being your paycheck or your freelance earnings, but there are actually many different types of income. If you have stocks that are generating dividends, that’s income, as is interest you earn on any savings accounts. Do you own a rental property that has rent payments flowing your way? That’s income, too.

Here, you’ll learn about seven common types of income and how they may affect your financial life.

What Is Income?

Simply put, income is money that a person or business earns in return for labor, providing a product or service, or returns on investments. Individuals also often receive income from a pension, a government benefit, or a gift. Most income is taxable, but some is exempt from federal or state taxes.

Another way to think about income types is whether it is active (or earned) or passive (or unearned).

•  Active or earned income is just what it sounds like: money that you work for, whether you are providing goods or a service.

•  Passive or unearned income is money you receive even though you are not actively doing anything to get it. For instance, if you have a high-yield savings account that earns you interest, that is passive income. Government benefits, capital gains, rental income, royalties, and more are also considered passive income. (We’ll go through these variations in more detail in a minute.)

People who are paid a salary may tend to think that their annual paycheck earnings are their income, but in truth, it’s common for people to have multiple income streams. Granted, your salary may be by far the largest stream of income, but when considering your overall financial picture, don’t forget to think about the other ways that money comes to you.

Different Types of Income

Here’s a look at seven common types of income.

1. Earned Income

Earned income is the money you earn for work you do, either in a job or self-employed. Earned income includes wages, salaries, tips, and bonuses.

Earnings are taxed at varying rates by the federal and state governments. Taxes may be withheld by your employer. Self-employed workers often pay quarterly and annual taxes directly to the government. Lower-income workers may be eligible for the earned income tax credit.

2. Business Income

Business income is a term often used in tax reporting; you may sometimes also hear it referred to as profit income. It basically means income received for any products or services your business provides. It is usually considered ordinary income for tax purposes.

Expenses and losses associated with the business can be used to offset business income. Business income can be taxed under different rules, depending on what type of business structure is used, such as sole proprietorship, partnership, corporation, etc.

3. Interest Income

When you put money into various types of interest-bearing financial vehicles, the return is considered interest income. Retirees often rely on interest income to help fund their retirement. You can earn interest from a variety of sources including:

•  Certificates of deposit (CDs)

•  Government bonds

•  Treasury bonds and notes

•  Treasury bills (T-bills)

•  Corporate bonds

•  Interest-bearing checking accounts

•  Savings accounts

Interest income is typically taxed as ordinary income, though some types of interest are tax-exempt.

4. Dividend Income

Some companies pay stockholders dividends as a way of sharing profits. These are usually regular cash payments that investors can take as income or reinvest in the stock. Dividends from stocks held in a taxable brokerage account are considered taxable income. These funds may be taxed at your regular income-tax rate or at a lower long-term capital gains rate, depending on whether they are classified as “ordinary” or “qualified”.

5. Rental Income

Just as it sounds, rental income is income earned from rental payments on property you own. This could be as straightforward as renting a room in your house or as complicated as owning a multi-unit building with several tenants.

Rental income can provide a steady stream of passive vs. active income. It may enhance your livelihood or even be your main income. When your rental property increases in value, you may also gain from that appreciation and increase in equity. In addition, rental income qualifies for several tax advantages, including taking depreciation and some expense write-offs.

But there are downsides. Owning a rental property isn’t for the faint of heart. Unreliable tenants, decreasing property values, the cost of maintaining and repairing properties, as well as fees for rental property managers can all take a bite out of your rental income stream.

6. Capital Gains

Another important income stream can come from capital gains. You incur a capital gain when you sell an asset for more than what you originally paid for it. For the purposes of capital gains, an asset usually means an investment security such as a stock or bond. But it can also encompass possessions such as real estate, vehicles, or boats. You calculate a capital gain by subtracting the price you paid from the sale price.

There are two types of capital gains — short-term and long-term.

•  Short-term capital gains are realized on assets you’ve held for one year or less.

•  Long-term capital gains are earned on assets held for more than a year.

The tax consequences are different for each type of capital gain. Short-term gains are taxed as ordinary income, while long-term capital gains may be taxed at a lower rate.

Keep in mind, however, that capital losses can happen too. That’s when a capital asset is sold for less than its original purchase price. While it’s never pleasant to experience losses, there can be a small silver lining in this case. You may be able to claim a capital loss deduction from your annual capital gains.

7. Royalty Income

Royalty income comes from an agreement allowing someone to use your property. These payments can come from the use of patents, copyrighted work, franchises, and more.

Some examples: Inventors who license their creations to a third party may receive royalties on the revenue their inventions generate. Celebrities often allow their name to be used to promote a product for royalty payments. Oil and gas companies may pay landowners royalties to extract natural resources from their property. Musicians may earn royalties from music streaming services.

Royalty payments are often a percentage of the revenues earned from the other party using the property. Many things impact how much royalty is paid, including exclusivity, the competition, and market demand. How royalty payments are taxed can also vary, depending on the type of agreement.

Recommended: 10 Personal Finance Basics

The Takeaway

Understanding the seven general income streams (such as earned, dividend, and rental income) can help you make the most of your financial planning. Earning income from any of these sources can provide stability and help you achieve long-term goals, such as saving for retirement. Because some types of income have unique tax implications, it can be important to check with your tax advisor about any tax consequences that may exist.

Aside from earned income, interest is a type of income many people receive. And seeking out the best possible interest rate can be a solid way to enhance your earnings; looking for a high-yield bank account may be a good place to start.

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

FAQ

What are the seven common types of income?

The seven common types of income are: earned income (money earned for work); business income (money received for products or services sold); interest income (returns from interest-bearing financial accounts); dividend income (payments from companies to stockholders as a share of profits); rental income (income earned from rental payments on property owned); capital gains (profit incurred when selling an asset for more than its purchase price); and royalty income (payments from licensing property like patents or copyrighted work).

What are the three main types of income?

The three main types of income include: active income (earned from performing a service like a job), passive income (generated from ventures like rental properties where you are not actively involved) and portfolio income (derived from investments such as stocks and bonds). These categories are distinguished by how the money is generated and how the income is taxed.

What are the four main income categories?

From a personal finance perspective, the four main income categories are: active income (money earned directly from a job or services rendered), passive income (recurring income from ventures in which you are not actively involved), portfolio income (earnings from investments like stocks, bonds, and mutual funds), and government income assistance (financial aid from the government for those who qualify).

Photo credit: iStock/Selcuk1

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

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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

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

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

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

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/.
^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.

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

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

SOBNK-Q425-028

Renting a car with a debit card is possible at certain car rental agencies, but you may have to jump through a few additional hoops, such as paying a large deposit or undergoing a credit check. Agencies may also impose certain restrictions, such as being over age 25 and having a debit card with a Visa or Mastercard logo.

Here are key things to know about renting a car with a debit card, including which companies accept debit cards, the pros and cons of using debit vs. credit, and alternatives ways to pay for a rental car.

Is It Possible to Rent a Car With a Debit Card?

So, can you use a debit card to rent a car? Yes! You’ve just got to find rental car agencies that accept debit cards. Though company policies can change, and also vary by location, these are among the agencies that typically allow drivers to rent a car without a credit card:

•   Alamo

•   Avis

•   Budget

•   Dollar

•   Enterprise

•   Hertz

•   Thrifty

Keep in mind that rental car companies that accept debit cards often have additional requirements and restrictions for customers who choose to pay this way.

For example, the company might require a large security deposit and run a credit check on you. You may also have to provide multiple forms of identification, be at least 25 years old, and/or have a debit card with a common logo, like Mastercard, Visa, American Express, or Discover. Airport rental agencies may have additional requirements for renting a car with a debit card, such as proof of return travel.

In addition, the rental company will likely place a debit card hold (equivalent to the total estimated cost of the rental, plus some extra funds for security), which will limit the funds available in your checking account. The hold on the account will be removed after the car is returned and all fees are paid.

It’s a good idea to call the specific location where you hope to rent a car using a debit card. You can then make sure you understand what requirements must be met in order to reserve and pay for the car. In some cases, a rental agency will allow you to use your debit card to pay your final rental bill after you return the car, but require a credit card to make the car reservation.

Recommended: Cheapest Ways to Rent a Car

Why Do Many Car Rental Companies Require a Credit Card?

While many rental car companies will let you rent a car with a debit card, they generally prefer that you use a credit card. The reason is that credit cards offer multiple types of assurances to a rental car agency. For starters, a credit card signals to them that you are trustworthy and responsible — two traits that a company might value before lending you a $25,000+ piece of heavy machinery.

Credit cards also enable rental car companies to collect money for any repairs, tickets, tolls, and other fees. Because of the open line of credit on the card, the rental agency knows it can charge you for incidentals as necessary — without requiring a large security deposit from you up front.

Recommended: Can You Use a Debit Card Online?

Pros of Renting a Car With a Debit Card

Renting a car with a credit card certainly seems easier, but are there advantages to using a debit card? Definitely. Here are some of the pros of using a debit card to rent a car:

•   No credit card necessary: The biggest advantage is also the most obvious. If you can’t qualify for a credit card or simply don’t want one, using a debit card allows you to rent a car without needing a line of credit.

•   No credit card interest: If you pay your credit card off in full each month, you probably aren’t worried about credit card interest. But if you suddenly have a major charge for a car rental, you might be tempted to just make your minimum payment on your credit card — and rack up interest. By paying with a debit card, you don’t risk accruing credit card interest.

•   No impact on credit utilization: High credit utilization can drive down your credit score. By using a debit card, you won’t tap into any of your available credit. However, if the agency runs a credit check for debit card users, the hard inquiry could impact your credit score temporarily.

Cons of Renting a Car With a Debit Card

Though it’s possible to rent a car with a debit card, this payment method can have drawbacks. Here are some of the biggest downsides of renting a car with a debit card:

•   Fewer perks: By swiping your debit card, you may be missing out on credit card travel insurance offered to cardmembers. If you have a rewards credit card that earns cash back or points for every purchase, you may also be leaving money on the table by using a debit card.

•   Security deposit: When using a debit card, you’ll often have to pay the full cost of the rental up front. On top of that, an agency may hold additional funds as a security deposit. This could reduce the cash you have available to spend while on your travels.

•   Credit check: Without a credit card, the rental car agency may perform a credit check before handing over the keys. This can result in a hard inquiry on your credit report.

•   More hoops to jump through: In addition, rental agencies may require multiple forms of ID, might have age requirements, and may even need to see proof of scheduled return travel to allow you to pay with a debit card.

Is It Better to Rent a Car With a Debit or Credit Card?

Do you need a credit card to rent a car? Not necessarily. If you cannot qualify for a credit card or do not want one, renting with a debit card may be the right choice for you.

That said, using a credit card can offer some perks. Doing so is likely the better approach for many drivers since it won’t require putting a large hold on the funds in your bank account, may have built-in car insurance, and won’t necessitate a credit check by the agency.

Is It Safer to Rent a Car With a Debit or Credit Card?

Renting a car with a credit card is generally safer than renting a car with a debit card. One reason is that it can be more challenging to dispute charges with a debit card compared to a credit card. In addition, your credit card may also offer rental car insurance as part of its perks, meaning extra protection on the road.

Alternatives to Car Rentals With Debit Cards

While you can use a debit card to rent a car, here are some alternative payment options you may want to consider:

•   Using a credit card: The main alternative is paying for a car rental with a credit card. In fact, this is usually the better option for the driver and the rental agency.

•   Riding with another driver: If someone else in your party has a credit or debit card and is willing to pay for the rental, let them get behind the wheel. Many companies allow customers to add additional drivers to the rental contract, though it may involve a fee.

•   Paying with a prepaid card or cash: While rental car agencies will likely require a credit or debit card to secure the rental, some agencies may allow you to pay with a prepaid card, money order, or even cash at the end of the rental agreement — once the car has successfully been returned.

Recommended: Common Misconceptions About Money

Ways to Protect Yourself While Renting a Car

Renting a car can be stressful, but it also enables you freedom to travel, allows you to put miles on a car that isn’t yours during road trips, and may come in handy when your vehicle is being worked on. Here’s how you can protect yourself when renting a car:

•   Research the car before driving it: Once you know the year, make, model, and trim of your rental, you can research it online to understand any nuances to how it works, especially if you aren’t accustomed to newer safety technologies. The owner’s manual should be in the glove compartment and is worth reviewing if you’re uncomfortable driving an unfamiliar vehicle.

•   Carry insurance: Before renting a car, it’s a good idea to check with your car insurance agent and your credit card company to see what coverage you have. If you don’t have coverage for the rental through any other means, make sure you opt in for the insurance offered by the rental agency.

•   Follow the rules of the road: You should always abide by traffic laws, but they’re especially important when you’re learning a new vehicle. If you’re traveling in a foreign country, it’s a good idea to study their laws and traffic signs at home before your trip.

The Takeaway

Renting a car with a debit card is possible, but you’ll miss out on some of the perks of paying with a credit card — like potential cashback rewards and car insurance. Plus, rental agencies may require you to fulfill more requirements to get behind the wheel, like paying a security deposit or agreeing to a credit check.

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

FAQ

Which rental car companies allow you to use a debit card?

Alamo, Avis, Budget, Dollar, Enterprise, Hertz, and Thrifty are just some of the rental car companies that allow you to pay with a debit card. However, these and other rental car companies may have stricter rules and requirements for renting a car with a debit card vs. a credit card, such as requiring a credit check or a larger security deposit.

Are there any restrictions when renting a car with a debit card?

Each rental car company may have its own restrictions when you rent a car with your debit card. For example, they may require you to be 25 or older, pay a large security deposit, and/or agree to a credit check. It’s a good idea to call the specific agency before arriving to understand what you’ll need in order to rent a car with a debit card.

What is the process of renting a car with a debit card?

Rental agencies have varying processes for renting a car with a debit card. It’s a good idea to check online and even to call the specific agency to understand the process ahead of time. In general, companies may require full payment plus a security deposit up front, they may run a credit check, and they might want to see multiple forms of identification. If you’re renting at an airport, they may also require you to provide proof of a return plane ticket.

Photo credit: iStock/Khaosai Wongnatthakan

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

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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

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

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

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

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/.
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-Q325-020