Sep
13
2023
Understanding Funds Availability Rules

Understanding Funds Availability Rules

By | Budgeting & Goals, Financial Independence, money | Comments Off on Understanding Funds Availability Rules

When you deposit money into your bank account, you can’t always use the money right away. Your financial institution may put a hold on a portion of your funds as they process them and make sure they clear. Whether or not all your cash is available can depend on a variety of factors, such as the form of the deposit (say, electronic or a check); the amount of money involved; and when and where the deposit was made (in person? After business hours?). Your money might be ready to use almost immediately, or it could take a few days or even longer.

Federal regulations determine how long banks can take to make deposits available to their clients. And banks and credit unions may have their own internal guidelines as well about processing deposits. It can be a good move to check with your financial institution about their guidelines for clearing deposits so you don’t wind up accidentally overdrawing your account.

That said, here are some important guidelines about when banks typically make funds available to help you manage your money even better.

Why Do Banks Put a Hold on Deposits?

Banks hold deposits to protect themselves, as well as their customers, from losing money. If a check you deposit bounces or some other complication arises, the bank will have an opportunity to fix the problem before you have the opportunity to spend the funds.

While a delay in being able to access your own money may seem like a nuisance, holds can actually help protect you from fraud and fees.

If your bank allows you to spend funds from a check that later bounces, you would have to repay the bank the amount that they gave you, and likely also get hit with a hefty overdraft fee. This is the case regardless of who is at fault.

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

How Long Can a Bank Hold a Deposit?

The amount of time it takes for funds to become available can depend on a number of factors, including how long you’ve held your account, your financial history, the type of deposit (e.g., cash, check, direct deposit), and the amount of the deposit.

•   Generally, a bank or credit union has until at least the next business day (a business day is a weekday that is not a holiday) to make most deposits available.

•   Electronic deposits are typically available on the same day. So, one way to make sure your paycheck is available to you quickly is to sign up for direct deposit.

•   Cash deposits may clear immediately or the next business day.

•   The longest a bank can hold funds is usually five business days for money deposited at an ATM of a different bank.

•   While each bank or credit union has its own rules as to when it will let you access the money you deposit, federal law establishes the maximum length of time a bank or credit union can make you wait.

The amount of money deposited can also matter. Here are the rules set by the Federal Reserve.

• Direct Deposit: Day of Deposit

• Wire Transfer: Next Business Day

• First $225 of any non-”next-day” check deposited: Next Business Day

• Cash*: Next Business Day

• U.S. Treasury Check: Next Business Day

• U.S. Postal Service Money Order*: Next Business Day

• State or Local Government Check*: Next Business Day

• Casher’s, Certified, or Teller’s Check*: Next Business Day

• Checks and Money Orders Drawn on Another Account at the Same Financial Institution: Next Business Day

• Federal Reserve Bank and Federal Home Loan Bank Checks*: Next Business Day

• Any Other Checks or Non-U.S. Postal Service Money Orders: Second Business Day After the Day of Deposit

• Deposits of Items Noted by “*” at an ATM Owned by the Customer’s Financial Institutions: Second Business Day After the Day of Deposit

• Deposits Made at an ATM Not Owned by the Customer’s Financial Institution: Fifth Business Day After the Day of Deposit

* Deposited in person

You may want to keep in mind that the hold times listed above are the maximum allowed. It’s possible that your funds will be available sooner.

You can typically find specifics about your bank’s funds availability policy in the account agreement you received when you opened your account, or you can ask the bank for a copy of their holding policies.

💡 Quick Tip: The myth about online accounts is that it’s hard to access your cash. Not so! When you open the right online checking account, you’ll have ATM access at thousands of locations.

Understanding Cut-Off Times

When you deposit a check, you may think you did it “today.” However, you may have missed the cut-off for starting the deposit process on that calendar day.

If you make a deposit after the cut-off time, your financial institution can treat your deposit as if it was made on the next business day. If the deposit was made late in the day on a Friday, it could actually take three or more days for the money to show up in your account.

By law, a bank or credit union’s cut-off time for receiving deposits is generally no earlier than 2:00 p.m. at physical locations and no earlier than noon at an ATM or elsewhere. Sometimes banks have later deposit times for mobile deposits (made via the bank’s phone app), such as 5 pm.

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Deposits That May Take Longer to Become Available

There are certain circumstances under which banks are allowed to hold deposited funds for longer than the times listed above.

When these exceptions apply, there isn’t always a clearly defined limit to the amount of time the bank can hold funds. The bank can generally hold funds for a “reasonable” amount of time.

Exceptions to standard holding times include:

Large Deposits

If a customer deposits more than $5,000, the bank will typically need to make the first $5,000 of the funds available on the second business day, but they are allowed to put a longer hold on the remaining amount.

Redeposited Checks

If a check bounces and then is redeposited, banks may hold the funds for longer than one business day. (You may want to be cautious about accepting future checks from a person or business that has already bounced a check.)

Accounts That Have Been Repeatedly Overdrawn

If a customer has a history of overdrawing their account, the bank may go beyond charging overdraft fees and also hold funds for more time before making them available for use.

Repeatedly overdrawn means that the account has had a negative balance on at least six business days within the past six months, or the account was $5,000 overdrawn more than twice within the past six months. (One note: If you are in this situation, you may want to consider the pros and cons of overdraft protection.)

Reasonable Doubt

If a customer deposits a check that seems suspicious, the bank may hold funds for a longer period of time. A check may seem suspicious if it’s postdated or it’s more than 60 days old. (Typically, how long a check is good for is about 6 months, but it may cause concern after two months has passed.)

New Bank Accounts

If you recently opened a bank account and your account is less than 30 days old, you may experience hold times of up to nine days. Official checks and electronic payments, however, may be partially available the next day.

Emergency Conditions

If there is a communications outage, a natural disaster, or another circumstance that impedes normal bank functions, banks can hold funds until they are able to provide the funds.

The Takeaway

When you deposit a check, you naturally expect the money to show up in your bank account. But there may be a delay between the time you deposit money and the time that those funds are actually available for you to spend.

Banks generally make funds available on the business day after you make a deposit, but there are exceptions.

Direct deposits are typically available sooner, and some checks, such as those larger than $5,000 or older than 60 days, can take longer to clear.

Knowing your financial institution’s policies about holding times can help ensure that you’re able to pay your bills on time, have access to cash when you need it, and don’t get hit with overdraft fees.

Leveraging Technology

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

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.80% APY on SoFi Checking and Savings.

Photo credit: iStock/solidcolours

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2025 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi members with Eligible Direct Deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. 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 during a 30-day Evaluation Period (as defined below).

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 3.80% APY, we encourage you to check your APY Details page the day after your Eligible Direct Deposit arrives. If your APY is not showing as 3.80%, 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 3.80% APY from the date you contact SoFi for the rest of the current 30-day Evaluation Period. You will also be eligible for 3.80% APY 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, 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 members with Eligible Direct Deposit are eligible for other SoFi Plus benefits.

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

SoFi Bank shall, in its sole discretion, assess each account holder’s Eligible 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 an Eligible Direct Deposit or receipt of $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Eligible 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 Eligible 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 Eligible 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 Eligible Direct Deposit or Qualifying Deposits until SoFi Bank recognizes Eligible Direct Deposit activity or receives $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Eligible Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Eligible Direct Deposit.

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

Members without either Eligible Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, or who do not enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days, will earn 1.00% 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 1/24/25. There is no minimum balance requirement. Additional information can be found at http://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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Sep
12
2023
What Credit Score Do You Need to Lease a Car?

What Credit Score Is Needed to Lease a Car?

By | Budgeting & Goals, Financial Independence, money | Comments Off on What Credit Score Is Needed to Lease a Car?

If you are thinking about getting a car, you likely are deciding between buying or leasing. And if leasing seems like the right option for your finances and lifestyle, then you probably want to know what is needed to seal that deal.

Leasing a car typically requires both some cash and a solid credit score. If you have a high credit score, you may snag the best possible (meaning lowest) interest rate. If your credit history is not solid, then you may face higher rates or have difficulty getting approved.

Here, you can learn about:

•  What are car lease requirements?

•  Can you lease a car with a credit score under 680?

•  Can you build your credit?

•  Can leasing help or hurt your credit score?

What Are Car Lease Requirements?

It’s a good idea to know your credit score before you start shopping around; your credit score is an important factor influencing the final lease amount. If you have poor credit and only have $300 a month to spend on the lease and insurance, a lot of that amount might be going to the higher interest rate a lender could potentially offer you.

If, on the other hand, you have good credit and $300 a month to spend on the lease and insurance, you may be able to lease a better quality car. Here’s why: Not as much money will be going to interest payments. (It’s always a good idea to weigh the pros and cons of leasing vs. buying a car before pulling the trigger on either financial decision.)

A couple of points to consider:

•  When you’re wondering, “Do you need good credit to lease a car,” the answer is typically yes. Having good credit may make it easier to lease a car because a leasing company may not see you as financially risky as someone who has poor credit. Not all leasing companies will necessarily approve a car lease for someone who has a low credit score.

•  You might also need to prove that you have a job with a certain income when you’re leasing a car, show recent bank statements, or that you have a cosigner with a good credit history.

What Credit Score Do You Need to Lease a Car?

As you may know, credit scores typically go from 300 to 850, with five credit score ranges:

•  Poor credit score, 300-579

•  Fair credit score, 580-669

•  Good credit score, 670-739

•  Very good credit score, 740-799

•  Exceptional credit score, 800-850.

That said, what credit score do you need to lease a car? The average credit score of people who leased cars in late 2022 was 736 — generally at the high end of the good credit score range. If you have excellent credit, the upfront costs of leasing a car might be lower than if your credit isn’t so great.

Typically, leasing a car might require the first month’s payment, a security deposit, taxes, registration, and an acquisition fee. Someone whose credit score is in the low 600s might need to put money down on the lease in addition. Keep reading to find out more about how different credit scores affect leasing a car.

💡 Quick Tip: Make money easy. Enjoy the convenience of managing bills, deposits, and transfers from one online bank account with SoFi.

Leasing With a Credit Score Above 680

The credit score to lease a car and get favorable rates is one that’s considered a “prime” or “good” credit score, meaning between 670 and 739, or higher. Having good credit typically makes it more justifiable for lenders to approve you for the lease because it’s less of a risk to them.

Just as with any type of financing, applicants who have good credit may be offered lower interest rates on auto leases. Having an above-average credit score could give you more negotiating power over the rates and terms of the car lease.

Leasing With a Credit Score Lower Than 680

Having a lower credit score means you’ll likely have difficulty finding a company willing to lease to you or you’ll pay more to lease a car. Leasing companies may see you as a risk-based on your credit history. You might find that having a trustworthy cosigner on the lease could help you get a lower interest rate or better terms than if you’re applying on your own.

If your credit score is lower than 680, you might want to work on building it before leasing a car so you get a better deal. A good place to start is by checking your credit report which you can do for free once a year at Annual Credit Report.

It’s important to check your report for accuracy — if there are any errors, contact the credit bureau that issued the report. Factors that affect your credit score are your payment history, length of your credit history, how much you owe compared to how much available credit you have, types of credit you have, and any new applications for credit that show up on your credit report. (You’ll learn more about these below.)

💡 Quick Tip: Want a simple way to save more everyday? When you turn on Roundups, all of your debit card purchases are automatically rounded up to the next dollar and deposited into your online savings account.

Building Your Credit Before Leasing

There are several ways to build your credit before leasing a car. Two of the most important to consider:

•  Pay down debt. This will lower your credit utilization ratio or rate, meaning the percentage of your credit limit you are using. The lower that ratio (preferably no more than 10%), the better your credit can look.

•  Pay on time. Be meticulous about paying your bills on time or even early. Just one or two late payments can cause your credit score to dip.

Can Leasing a Car Build Credit?

Any time you apply for credit, you have the opportunity to build your credit. A car lease is credit, just as a car loan would be credit.

How you manage your lease payments affects your credit report just as a loan would. Making regular, on-time monthly payments will affect your credit in a positive way. In other words, yes, leasing a car can help build your credit.

Can Leasing a Car Affect Your Credit Score?

As just mentioned, paying a car lease on time can be a positive thing. However, missing payments or being late with payments will hurt your credit and may negatively affect your credit score.

You may also see a small drop in your credit score when the lease begins because your credit report will show a new account is open. You may see a similar small drop when the lease is terminated because the account is closed. Both of these credit events — opening and closing a credit account — can affect your credit score.

If you’re shopping around at different leasing companies over the course of a few weeks and apply for leases at those places, there will be inquiries into your credit history by the leasing companies. However, those multiple inquiries may show up as just one query on your credit report and minimally affect your credit score.

Recommended: Should You Buy a New or Used Car?

5 Things That Impact Your Credit Score

Here are factors that can influence your score:

1. Your Payment History

The single biggest factor in your credit score is your payment history, which can boil down to making payments on time, month after month. That can help build your credit score. Paying late or not at all can trigger your score to drop.

2. The Amount Owed

It can reflect positively on your credit score if you have a low credit utilization rate or ratio. This means that you are using little of your credit limit. Using 10% or less of your credit limit can benefit your score; using 30% or more can have a negative impact.

3. The Length of Your Credit History

Having a longer credit history and having managed lines of credit well for years can benefit your credit score. It shows that you can successfully borrow and pay back money.

4. Your Credit Mix

Having more than one kind of credit account can show that you manage borrowed funds well. For instance, it could be helpful if you have handled both installment debt (student loans and car loans are examples of this) and revolving accounts (such as credit cards) well.

5. New Credit

If you apply for a number of new lines of credit and have what are known as hard credit pulls vs. soft pulls done as part of this, your credit score could suffer. It can look as if you are applying for new debt and could then wind up financially overextended.

The Takeaway

It’s important you know your credit score to lease a car before you go car shopping. Checking your credit reports in advance will uncover any surprises before you’re at the dealership. Knowing your credit score and working to build it as much as possible before applying for a car lease may help you save money on your car lease and give you more negotiating power.

The less you have to spend on interest and fees, the farther your money can go while leasing. Successfully managing leases, loans, and credit in general is part of good financial habits. Having the right banking partner can also enhance how well you handle your cash.

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


Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.80% APY on SoFi Checking and Savings.

FAQ

Can you lease a car with a 600 credit score?

You may wonder what does your credit score have to be to lease a car. While it’s not impossible to lease a car with a 600 credit score, it will likely take more time and energy to find an offer. You will also probably pay a higher interest rate than those with a higher credit score (680+), meaning you will pay more over the long term.

Does leasing a car hurt your credit?

When you apply for a car lease and the leasing company pulls your credit file, you may see a dip in your credit score in the short term. After that, whether the lease hurts your credit depends on how well you manage the account. If you pay late or miss payments, your credit score could suffer.

Is it better to lease or finance a car?

Whether it’s better to lease or finance a car will depend on your particular financial situation and aspirations. When you finance a car, you can eventually own it outright. It’s similar to buying a home with a mortgage. Leasing, on the other hand, is similar to renting. You never own the car or have it as an asset, but then again, you might like “trading up” every few years.

Photo credit: iStock/dusanpetkovic

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2025 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi members with Eligible Direct Deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. 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 during a 30-day Evaluation Period (as defined below).

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 3.80% APY, we encourage you to check your APY Details page the day after your Eligible Direct Deposit arrives. If your APY is not showing as 3.80%, 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 3.80% APY from the date you contact SoFi for the rest of the current 30-day Evaluation Period. You will also be eligible for 3.80% APY 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, 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 members with Eligible Direct Deposit are eligible for other SoFi Plus benefits.

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

SoFi Bank shall, in its sole discretion, assess each account holder’s Eligible 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 an Eligible Direct Deposit or receipt of $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Eligible 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 Eligible 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 Eligible 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 Eligible Direct Deposit or Qualifying Deposits until SoFi Bank recognizes Eligible Direct Deposit activity or receives $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Eligible Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Eligible Direct Deposit.

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

Members without either Eligible Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, or who do not enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days, will earn 1.00% 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 1/24/25. There is no minimum balance requirement. Additional information can be found at http://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.

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 .


External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

SOBK0723046

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Sep
12
2023
How to Have a Baby Shower on a Budget

How to Have a Baby Shower on a Budget

By | Budgeting & Goals, Financial Independence, money | Comments Off on How to Have a Baby Shower on a Budget

Congratulations! Someone close to you is going to be a parent, and you have the honor of throwing the baby shower. You are probably excited to come up with some great ideas for the food, the decor, the party favors, and more, and need to sort out the guest list. But along with these organizing responsibilities can come a steep price tag.

The truth is, though, with a bit of planning and creativity, you can host a very fun, very memorable party for the parents-to-be, their friends, and their family without breaking the bank. You might be able to find a venue that’s totally free, create the centerpieces yourself, and otherwise keep costs under control and on budget.

Read on for some inspiration.

Tips for Throwing a Great Baby Shower on a Budget

These inexpensive baby shower ideas can help you throw a memorable celebration for a mom-to-be and help her become better financially prepared for a baby.

Coming up with a Baby Shower Budget

Before you begin the planning process, it can help to determine the total you can spend on the event and then create a budget. You may also want to find out if family members from either side are willing to chip in financially or by offering to help make something for the party. When setting up your baby shower budget, you’ll likely want to include: the venue, invitations, decorations, food and drinks, entertainment and/or games, prizes and party favors.

💡 Quick Tip: Don’t think too hard about your money. Automate your budgeting, saving, and spending with SoFi’s seamless and secure mobile banking app.

Finding a Free (or Low-Cost) Venue

A baby shower doesn’t have to be at a fancy restaurant, hotel, or banquet hall to be festive. It could take place at your, or someone else’s, home. If you’re hosting a baby shower in warm weather. You might consider having it outdoors, such as in your backyard. You could even host a more casual shower with an outdoor barbeque or even a poolside party.

Other low-cost locales options include: a nearby park, the clubhouse of your (or someone else’s) apartment complex, or the meeting room at someone’s place of business.

Recommended: How to Save Money Daily

Limiting the Baby Shower Guest List

Generally, the more people you invite to the shower, the more money you will spend. To keep costs in check, you may want to consider limiting the invite list to the parent-to-be’s closest family and friends.

A smaller group not only cuts down on costs, but can also help to create a more intimate gathering that allows the guest of honor to spend time with each guest. It can be a good idea, however, to run the invite list by the expectant mom to be sure that you don’t exclude any important people.

Going Digital With Invitations

You can save money on baby shower invitations by using a digital service, such as Evite, Punchbowl, or Paperless Post. These sites and apps typically allow you to choose from a range of free baby shower invitation templates or, for a small fee, upgrade to a more elaborate design.

These sites also make it easy to keep track of responses. And, guests will likely appreciate the ability to RSVP with the click of a button. You may, however, want to send paper invites to older guests, particularly if they don’t use an email address often.

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Ditching the Caterer

Feeding guests typically takes up the biggest portion of a baby shower budget. One way to help keep the cost of food down is to forgo the caterer and head to your local warehouse club (like Costco or Sam’s Club). You’ll likely be able to create a delicious spread of appetizers, finger foods, and desserts for a lot less than ordering trays from a catering company or restaurant.

Timing It Right

You can also cut down on food costs by not holding the shower right at lunch or dinner time. That way, guests won’t arrive expecting a full meal, and you’ll be able to serve a lighter menu that includes simple appetizers and snacks. A late-morning party can be particularly wallet-friendly. You might simply offer coffee, juice, fruit, and pastries. Or, you might opt for an afternoon tea and serve sweets and finger sandwiches.

Keeping the Cake Simple

Here’s another way to save money on food: A gourmet bakery cake can look beautiful, but it could easily bust your budget. To cut costs without sacrificing on taste, you might consider ordering a cake at your local grocery store’s bakery or the bakery at a wholesale club, then having it personalized (which the store will often do free of charge).

DIYing Centerpieces

It’s a basic rule of personal finance that you’ll pay more when you farm tasks out versus doing them yourself, whether that means doing car maintenance or decorating for a party.

Fresh flowers look lovely, but they can get expensive if you order arrangements from a professional florist. Instead, you may want to head to your local farmers market, grocery store, or warehouse club to find flowers at reasonable prices that fit your color scheme, then make your own centerpieces.

A simple way to get great results is to use flowers in the same color family (like shades of pink or all white). You can pick up vases at the dollar store, or go with Mason jars, which look trendy and can be used for other purposes after the shower is over.

Printing Decor and Games for Free

Instead of racking up a big bill at the party store, you may want to comb the web for free baby shower printables. You can likely find food signs, games (like baby shower bingo), decorations, and favor tags that you can simply print right from your computer.

Making Edible Favors

Another baby shower budgeting tip for beginners: Sweets can make great favors, and you can easily bake them yourself without spending a lot. You may also find that there is a family member who would be delighted to take on this task. Edible favors can be as simple as iced sugar cookies (in your color scheme) or as elaborate as cake pops that look like baby rattles.

Recommended: Passive Income Ideas

Considering a Virtual Baby Shower

If the guest of honor’s family and friends are spread out all over the country, having a virtual baby shower is one way to include everyone that’s important, and also keep costs down. You can set a celebratory mood by choosing a Zoom background that fits the theme of your shower, and also include a link so guests can download the background as well.

Friends and family can watch the mom-to-be open gifts that were sent to her ahead of time. (In fact, you might save so much by doing a virtual shower that you can be more lavish with gifts. That might help your guests of honor save for the new baby.)

You can also organize games throughout the virtual baby shower and create a digital guest book that attendees can sign and share their words of wisdom for the expecting parents.

The Takeaway

You can plan a memorable baby shower even on a limited budget. And, spending less doesn’t mean the event will be any less special.

Some easy ways to trim the cost of having a baby shower include: hosting the shower in your home or backyard, heading to your local warehouse club (for food, flowers, and even the cake), using free printables for decor and games, and giving homemade sweets as favors.

You can also make a baby shower more affordable by setting a budget and saving up enough money to cover it in advance (so you don’t end up relying on credit cards). Looking for a good place to build your party fund? Look for a bank account with low or no fees and a high interest rate.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.80% APY on SoFi Checking and Savings.

Photo credit: iStock/vejaa

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2025 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi members with Eligible Direct Deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. 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 during a 30-day Evaluation Period (as defined below).

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 3.80% APY, we encourage you to check your APY Details page the day after your Eligible Direct Deposit arrives. If your APY is not showing as 3.80%, 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 3.80% APY from the date you contact SoFi for the rest of the current 30-day Evaluation Period. You will also be eligible for 3.80% APY 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, 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 members with Eligible Direct Deposit are eligible for other SoFi Plus benefits.

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

SoFi Bank shall, in its sole discretion, assess each account holder’s Eligible 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 an Eligible Direct Deposit or receipt of $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Eligible 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 Eligible 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 Eligible 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 Eligible Direct Deposit or Qualifying Deposits until SoFi Bank recognizes Eligible Direct Deposit activity or receives $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Eligible Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Eligible Direct Deposit.

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

Members without either Eligible Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, or who do not enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days, will earn 1.00% 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 1/24/25. There is no minimum balance requirement. Additional information can be found at http://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.


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

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Sep
11
2023
Is a Rewards Checking Account Right for Me?

Is a Rewards Checking Account Right for Me?

By | Budgeting & Goals, Financial Independence, money | Comments Off on Is a Rewards Checking Account Right for Me?

Checking accounts provide a useful foundation for many people’s daily financial lives, and some offer additional perks beyond the basics. Called rewards checking accounts, these financial vehicles can benefit customers in a variety of ways. Your money might earn interest, cashback, points, airline miles, or other bonuses (or even a combination of these).

For some, this kind of incentive is a good reason to stash their money at a particular financial institution versus another. However, some rewards checking accounts can involve fees and/or minimum balance requirements which may make them less enticing.

To help decide if a rewards checking account is right for you, read on for such information as:

•   What are rewards checking accounts?

•   How does a rewards checking account work?

•   How do you qualify for a rewards checking account?

•   What are reward checking accounts’ pros and cons?

🛈 Currently, SoFi does not provide a rewards checking account.

What Is a Rewards Checking Account?

Simply put, a rewards checking account is one that rewards a person for opening and using the account. Those bonuses can take a variety of forms. Consider this:

•   A standard, no-frills checking account may have no monthly fees, minimum balance requirements, or minimum opening deposits. However, the perks are generally equally basic: a nonexistent or nominal annual percentage yield (APY), if any no ATM surcharge reimbursements, and often no signup bonus.

•   This kind of standard checking account can be attractive for some, but those seeking to earn money for their banking loyalty might prefer a rewards checking account instead.

•   Though the specific perks vary by account, you can typically find a checking rewards account that offers a higher interest rate or cash back. You might also be offered airline miles, a signup bonus, free identity theft protection, cell phone insurance, and reimbursement for ATM fees.

How Does a Rewards Checking Account Work?

Some checking accounts with rewards have criteria for earning perks each month. For instance, a bank may require you to:

•   Use your debit card for a minimum number of transactions each month

•   Maintain an average minimum account balance

•   Receive a set number of direct deposits equal to a specified value

•   Enroll in services like e-statements or online bill pay

If the reward is a higher APY, you will likely earn that in the form of monthly interest on your bank’s payment schedule, deposited directly into the account. If the checking reward is cash back, the bank may offer multiple ways to redeem the cash within the mobile app. Similar to cashback credit cards, you can often convert points into airline miles or other perks — or just receive cash in your account.

Perks of a Rewards Checking Account

The perks of a rewards checking account will vary by bank but might include:

Cash Back

Cash back is usually expressed as a percentage of the transactions made with a debit card; this might also be structured as points or even airline miles.

Interest

A rewards account may be an interest-bearing checking account. If so, it will offer an APY that is higher than the zero or the very low rate usually offered by most checking accounts.

Signup Bonus

A rewards checking account may pay a one-time bonus for signing up for a new checking account and meeting specific criteria.

ATM Fee Reimbursement

A rewards account may offer refunds for expenses incurred for using out-of-network ATMs.

Other Perks

Among the other rewards you may see offered are ways to earn airline miles, shopping discounts, cell phone insurance, and identity theft protection, among other options.

Some rewards checking accounts may offer a combination of these perks.

Who Should Use a Rewards Checking Account?

A rewards checking account can be a good option if you regularly use your debit card for purchases and keep a substantial amount of money in your checking account. If you do not have a rewards credit card, a rewards checking account can serve as an alternative way to earn money for spending money.

As mentioned, some banks have special requirements for members to earn rewards. Read terms and conditions carefully. If you cannot meet account requirements for the reward, the account might not be right for you, especially if there are monthly maintenance fees.

How to Qualify for a Rewards Checking Account

Qualifying for a rewards checking account may vary depending on the bank, but, as mentioned above, there tend to be common core requirements for earning rewards, such as:

•   A minimum number of debit card transactions in a month

•   An average daily minimum account balance

•   A minimum number (or value) of monthly direct deposits

If an account comes with a signup bonus, the bank likely has a set of requirements you’ll need to meet to snag that cash. This may include enrolling in direct deposit to get you started.

When considering a rewards checking account, it’s wise to read the fine print before opening to ensure you fully understand the requirements. Opening a checking account is typically a simple process, but you do want to make sure you understand the details before you sign up.

Pros of Rewards Checking Accounts

Here are some of the benefits of a rewards checking account, though perks will vary by program:

•   Earning potential: Whether through a higher-than-average APY or through cash back on debit card purchases, the main draw of a rewards checking account is often earning money (or more money) for doing the banking you would do anyway.

•   Tax implications: In general, the Internal Revenue Service (IRS) sees cash back as a rebate for or discount on something you purchased, so you won’t have to pay taxes on that money. Not a bad deal at all! However, if the reward for the account is a high interest rate or a signup bonus, you should expect to receive an IRS Form 1099 from your bank for that income.

•   Fees: Some rewards checking accounts charge monthly fees (some of which might be waivable), but other rewards checking accounts are noteworthy for being fee-free.

Recommended: Pros and Cons of No Interest Credit Cards

Cons of Rewards Checking Accounts

Depending on the individual and their financial style and goals, there may be some downsides to a rewards checking account:

•   Limits on rewards: Some bank programs cap the rewards at a set amount each month, meaning there could be a limit to the amount of cash back you can earn.

•   Better rewards elsewhere: Rewards credit cards may offer more cash back than a rewards checking account. However, these cards often have credit score requirements that make it more difficult to qualify. You probably need a credit score in the good to excellent range, meaning 670 or above.

•   Minimum balance requirements: Some banks have minimum balance requirements to earn the reward. If you cannot meet the requirement or do not wish to keep that much money in a checking account, the account might not be the right fit.

•   Fees: While some rewards checking accounts have no fees, others do charge monthly maintenance fees that can make the rewards less attractive or possibly even negate them.

Cashback Checking Accounts vs Credit Cards

You may be wondering whether a cashback checking account or credit card is the better fit for you. See how they stack up here:

Cashback Checking Account

 Cashback Credit Cards
Provides a secure hub for daily finances Provides a line of credit for purchases
May charge fees Charges interest
Earn cashback typically through debit card use Earn cashback typically through spending with credit card

Is a Rewards Checking Account Worth It?

A rewards checking account with cash back can be a good fit if the conditions to earn the perks are no problem for you.

•   You might already be in the habit of swiping your debit card for everyday purchases or this prospect doesn’t faze you. If so, then a rewards checking account with cash back might be worth it. It can be easy to manage a checking account like this and make your money work harder for you.

•   If you like to keep a large sum of funds in your checking account to cover automatic bill payments, you might enjoy the earning potential provided by a high-interest checking account even if it has a higher-than-usual balance requirement.

Is a Rewards Checking Account Right for You?

Each person has a unique financial situation and goals. Here are some considerations that may help you decide if a rewards checking account is right for you:

•   If you want to earn interest (or more interest) on cash you have sitting in your checking account, a rewards account might be a good choice for you.

•   If there are perks that you could reap for behaviors you engage in (swiping your debit card, receiving direct deposit) or don’t mind adopting, this kind of account could work well for you.

•   Not a person who has a rewards credit card? A rewards checking account could give you some of the same perks.

FAQ

What are rewards in banking?

Rewards in banking refer to incentives and perks that account holders receive. They might be a signup bonus for a new account, a higher-than-average interest rate, or checking account cash back in the form of points, miles, or actual cash that can be deposited into your account or, for a credit card, applied toward your statement.

Why do banks offer points or rewards?

Banks offer points or rewards to entice consumers to choose their accounts or cards over competitors. Once you become a member, rewards ensure you continue to engage with the bank’s product, either by depositing more funds into your account or using your debit or credit card for more daily purchases.

Are bank rewards interest?

Bank rewards can come in the form of higher interest. For example, the current national average interest rate for a checking account is 0.43%, while rewards checking accounts may offer a higher than average interest rate, often 1.00% to 3.00% or higher. The interest that you earn is taxable, while cash back typically is not (it’s considered a rebate).

Can you earn points on a checking account?

Some checking accounts do allow you to receive points as a reward. For instance, you might receive one point for every dollar or two you spend with your debit card.

Are bank rewards worth it?

Whether or not bank rewards are worth it depends on your financial situation and preferences. Do you meet the criteria for a rewards checking account (such as swiping your debit card often enough or receiving a certain dollar amount of direct deposits)? Can you handle any requirements such as monthly minimum balance or account fees, if assessed? If so, earning interest or receiving other perks could be a smart, money-wise move.

Photo credit: iStock/Feodora Chiosea

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2025 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi members with Eligible Direct Deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. 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 during a 30-day Evaluation Period (as defined below).

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 3.80% APY, we encourage you to check your APY Details page the day after your Eligible Direct Deposit arrives. If your APY is not showing as 3.80%, 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 3.80% APY from the date you contact SoFi for the rest of the current 30-day Evaluation Period. You will also be eligible for 3.80% APY 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, 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 members with Eligible Direct Deposit are eligible for other SoFi Plus benefits.

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

SoFi Bank shall, in its sole discretion, assess each account holder’s Eligible 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 an Eligible Direct Deposit or receipt of $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Eligible 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 Eligible 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 Eligible 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 Eligible Direct Deposit or Qualifying Deposits until SoFi Bank recognizes Eligible Direct Deposit activity or receives $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Eligible Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Eligible Direct Deposit.

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

Members without either Eligible Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, or who do not enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days, will earn 1.00% 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 1/24/25. There is no minimum balance requirement. Additional information can be found at http://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.


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.

SOBK0723047

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Sep
10
2023
cash in woman's pocket

What Is FOMO Spending?

By | Budgeting & Goals, Financial Independence | No Comments

FOMO spending stands for “fear of missing out,” meaning you are dropping dollars to keep up with what others are doing. That might mean anything from trying the skincare product a favorite celeb swears by to dining at the super-pricey new omakase place all your friends are raving about or even signing your toddler up for an enrichment class because your neighbor says it’s a fab headstart.

The fear of missing out can change how many people relate to their cash. It can trigger impulsive and compulsive spending and lead to “splashing out” on things they never had any intention of purchasing. In other words, it can motivate them to live (too) large and wind up with pricey credit card debt and little progress towards their savings goals.

If you’re wondering how to stop FOMO spending, know this: It doesn’t mean subsisting on ramen and never traveling. It does mean being mindful and meaningful so you don’t get caught up in trying to match what your free-spending friends may do. Here, you’ll learn more about FOMO spending and how not to overdo it.

Wait, Back Up—What Is FOMO?

FOMO, or Fear Of Missing Out, is a feeling of anxiety someone might experience about not being part of an event that is happening, usually triggered these days by seeing social media posts from friends enjoying an activity (from a Taylor Swift concert to a holiday in Croatia) and wishing you were part of the fun. While it’s certainly true that businesses employ FOMO tactics to get you to buy things, it’s not just a sales strategy.

Nick Hobson Ph.D., says “While the fear of missing out has always been there, the explosion of social media has launched our young people headfirst into the FOMO experience.”

For many people, social media can be their main community lifeline, and having the impression that you are not part of the “in” group is enough to trigger a stress response like FOMO.

FOMO Spending Definition

So how is FOMO spending defined? It’s when a fear of missing out propels you to spend money (perhaps too much money) to feel as if you are part of the crowd and keeping up with your peers.

Examples could be feeling as if two far-flung vacations a year are must-haves because that’s what your coworkers do. Or perhaps it means plunking down four figures on a designer bag because all your friends have one. At a smaller scale, it could mean joining the other moms every morning after drop-off for a fancy latte. It’s all part of feeling as if you’re on the same level as your peers…and it all can add up.

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FOMO Spending to Keep Up with Peers

How widespread is FOMO spending? One recent study found that almost 40% of more than 1,000 Americans ages 18 to 34 said they have gone into debt just to keep up with their friends’ lifestyles. This is FOMO taken the financial extreme.

People may try to overcome FOMO by spending more than they have on things like travel, clothes, food, and going out. Whether it’s bigger “once-in-a-lifetime” experiences you can’t miss out on like trips, music festivals, or weddings, or even smaller events like dinner and drinks, FOMO spending can impact your finances and ability to build wealth over time.

•  FOMO spending often stems from peer pressure to buy something you can’t afford so that you can still participate in a group.

•  It could stem from feelings of insecurity; you want to show others that you fit in and do so by spending more than you might otherwise.

Unfortunately, this can add up to extra spending, money stress, and debt.

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How Many People FOMO Spend?

As noted above, one recent study found that 40% of people admit to FOMO spending. And those are the ones willing to admit to it. The figure could be considerably higher.

One study found almost twice that percentage of people admitted to going into debt to keep up with their friends’ spending. That’s a startling figure and shows just how common FOMO spending can be.

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4 Tips to Avoid FOMO Spending

Reining in FOMO spending can be hard, especially if your friends are truly living at a different income level than you. But odds are, some of your friend group might be in the same situation and are overspending in an effort to impress. You can avoid FOMO shopping or at least cut back on spending by trying these tips:

1. Suggest Free Alternatives

The first way to conquer FOMO spending is to simply stop spending! While it’s of course easier said than done, why not come up with a free alternative when a friend suggests plans?

Meeting for up for a $10 bubble tea at a cafe could just as easily turn into sitting on your couch with a homemade cup of joe. Friends want to go out to the movies or the mall? Suggest visiting a museum on a day they offer free admission instead.

2. Limit Your Card Usage and Carry Cash

Limiting your spending on credit or even debit cards and making the majority of your purchases with cash will drastically impact how often you impulse-spend on something when the feeling of FOMO creeps in.

If you only withdraw a certain amount before heading out to dinner or the bar, you’ll already have a pre-set budget that you know you feel comfortable spending. So maybe you only have one pricey cocktail or skip coffee and dessert: You can still have a great experience going out.

3. Create a Budget and Stick to It

Along the same lines, creating a monthly or even weekly budget may also help you cut down on FOMO spending. Your budget can and should include money for savings or big-ticket items like travel you know you have coming up. Having a budget can give you guardrails and help you focus on the big-picture rather than getting caught up in the FOMO moment.

By putting some money towards future goals and then calculating how much “fun” money you have left over after bills, you’ll know exactly when you’ve reached your limit. While making a budget might not help you eliminate FOMO spending altogether, you’ll at least give yourself more constraints if you limit yourself to a specific spending amount.

4. Lower Your Social Media Exposure

Ready for another way to stop spending so much? The endless scrolling on platforms like Facebook, TikTok, and Instagram offer some instant gratification, but social media is one of the main contributing factors of FOMO.

Targeted ads, influencers touting products, and even your own friends’ posts can all conspire to budget you toward spending too much. Seeing all the wonderful shiny things and exciting experiences out there can lead you to splurge (and often).

Many people find their guard is especially down at night, and that’s when they are likely to snap up skincare products, a new watch, or a hotel room overlooking the beach. If you can relate, trade in your laptop or phone time before bed for a good old-fashioned book or movie. You won’t wake up the next morning with that guilt about spending money.

If You Must Spend, Still Plan Ahead

You won’t be able to avoid FOMO spending all of the time, so it’s also important to have a strategy in place for making the best use of your time and money if the feeling kicks in.

Some people consider their fixed vs. variable expenses and build in a little extra spending money as part of their discretionary spending. If you know you have, say, a cash cushion of $100 or $200 a month, this can help with those moments when you decide you want to “keep up with the Joneses.” You can decide if this is the moment to splurge or not.

Delayed Gratification

If you have a sudden urge to buy something because of FOMO, try instead to write the item down, whether in a Notes app on your phone or even just a physical piece of paper, and come back to it 24 hours later.

This will help you avoid impulse purchases just because something is on sale, for instance, or your friend just bought it. You can evaluate in a day if it’s something you still really need. Some people even stretch that 24 hours out to a full month with what’s known as the 30-day spending rule.

Buying in Person

Nothing crushes the FOMO spending feeling more than forcing yourself to trek to an actual physical store to make a purchase.

Too many times, FOMO spending happens when you are online shopping and the ease of delivery right to your door doesn’t make you think twice about your purchase.

Making that easy impulse purchase into a chore can be a buzzkill that helps you save big-time.

Introducing SoFi Checking and Savings

Managing your money well can mean recognizing FOMO spending and seeing when it may fit with your budget and your money goals. It can take wisdom and discipline, but it can keep you out of debt and help you build wealth.

This is where the right banking partner comes in; one who can help you see the big picture on your spending and keep tabs on your cash flow. Like SoFi.

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.


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FAQ

How do you deal with FOMO buying?

Recognizing FOMO buying is the first step to minimizing it. You might avoid social media apps that trigger this kind of spending; find free alternatives to pricey outings your friends suggest; or tweak your budget to allow for small splurges and stick within those spending limits.

How can you stop being affected by FOMO?

Avoiding FOMO is a very personal thing. Some people avoid or even delete social media apps that trigger overspending; others have honest talks with their friend group about their financial limits; still others decide to sidestep certain outings with friends that they know will bust their budget and join them for low-cost get-togethers instead.

What is FOMO spending?

FOMO spending is when you buy an item or experience because you don’t want to miss out on something “everyone else is doing.” Some people may think of it as responding to peer pressure. You purchase, say, a status watch or take a pricey vacation not because you can comfortably afford it but because you want to “keep up with the Joneses.”


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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 3.80% APY, we encourage you to check your APY Details page the day after your Eligible Direct Deposit arrives. If your APY is not showing as 3.80%, 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 3.80% APY from the date you contact SoFi for the rest of the current 30-day Evaluation Period. You will also be eligible for 3.80% APY 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, 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 members with Eligible Direct Deposit are eligible for other SoFi Plus benefits.

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SoFi Bank shall, in its sole discretion, assess each account holder’s Eligible 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 an Eligible Direct Deposit or receipt of $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Eligible 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 Eligible 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 Eligible 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 Eligible Direct Deposit or Qualifying Deposits until SoFi Bank recognizes Eligible Direct Deposit activity or receives $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Eligible Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Eligible Direct Deposit.

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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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