Jun
26
2024
25 Items That Are Worth Saving for

25 Items That Are Worth Saving For

By | Budgeting & Goals, Financial Independence, money | Comments Off on 25 Items That Are Worth Saving For

Each of us has our own agenda in terms of what makes stashing our cash away worthwhile. For some of us, it’s the anticipation of doing something fun or buying something beautiful. For others, it’s all about using our money to secure some quality of life and peace of mind.

Regardless of what gets you saving, whether you’re stashing funds to buy a new computer, a used convertible, a house, or even retirement funds to ensure your future, you’ll be honing your saving skills and likely boosting your financial wellness as well.

Why Saving Is Important

The importance of saving cannot be overstated; it’s a very big part of successful money management. Consistently putting away cash can make a major difference over time, especially in your quality of life. By planning and prioritizing what expenses to fund, you’ll have the means to achieve your goals. It’s incredibly rewarding when you make a plan for your money and then realize it.

To jumpstart your savings, try one or more of these creative strategies.

•   Budget first. The mere mention of the word budget can stress some people out, but a budget is simply a plan for how you will spend your money. Having a strategy in place can really help keep your spending and savings on track. There are a number of methods you can use to budget, including the good old cash envelopes system and the 50/30/20 rule, as well as a number of mobile apps. Research your options online, and find the one that works best for you.

•   Automate savings. One of the easiest ways to ensure you’re saving toward your goal may be to automate your savings. This can take much of the stress out of saving. For instance, you could set up an automatic bank transfer from your checking to your savings account every payday.

•   Save consistently. Once you open a bank account, over time, you have a great chance of meeting your goal. Maybe it’s only $5 or $25 a pop, but contributing to your savings account regularly is vital. Be consistent and trust the process.

•   Save bonuses, tax returns, and other unexpected windfall amounts. These extras can give your savings account a tremendous boost.

•   Match your own purchases. For every amount that you spend on a treat, transfer that same amount into savings.

•   Save every $5 bill. By setting aside every $5 bill you encounter (as change from a purchase, from an ATM, etc.), you can save quite a bit in a year’s time.

•   Use the 30-day rule to control impulse purchases. Write down that shiny new thing you want, whether it’s a pricey new mobile phone or a designer bag, and wait 30 days to see if you still want it. You may find that your urge to spend on it has passed. If so, you can put the money you save this way into savings to fund something that’s on your wishlist.

Recommended: How Much of Your Paycheck Should You Save?

25 Smart Items to Save Up for

Spending money according to your own personal preferences — whether it’s a vacation, a new car, or a comfortable home for your family — should be the driving force behind your saving goals. This is how to make saving fun: Make a list of cool things to save up for. Create a vision board if you prefer; the idea is to entice yourself to perhaps pass up some unnecessary spending (takeout meals, a multitude of streaming services, and so on) and achieve those things you really crave. Not sure what to start saving for? Here are 25 ideas to get you going.

1. Vacations

You may have heard that vacations are good for both your physical and mental health. Even the act of looking forward to a vacation can improve your happiness. Whether the vacation you crave is a week at a nearby beach, a long weekend with your college besties, or a jaunt through Europe, the prospect of travel can be great motivation to save money.

2. Brand New Electronics

Buying new electronics isn’t just a leisure pursuit. New electronics can help with your productivity and ability to earn an income (or a higher one). It may be worth it to you to save for and invest in tools, such as a new laptop or video equipment, that can make your life better.

3. Starting a Business

If starting a business and becoming your own boss is a dream of yours, savings can go a long way toward making it happen. In fact, 82% of small businesses fail because of cash flow problems. Start accumulating capital so you can hopefully avoid becoming part of that statistic.

4. Home Maintenance

Keeping your home in tiptop shape can not only make living in it more enjoyable and enhance its looks and curb appeal, it can be helpful when you decide to sell it. Maintenance can include such things as getting your furnace and air conditioner checked regularly and getting your carpets cleaned, to lawn care, landscaping, and painting.

5. Weddings

This is a popular motivation to save. Most people dreaming of their big day know that it doesn’t come cheap. The average cost of a wedding in 2024 was about $33,000, according to one survey. Saving for this expense means you can celebrate the special day with loved ones, just the way you want to, while minimizing money stress.

6. Pet care

Owning a pet is enjoyable and rewarding, but it can also be expensive: The annual costs of owning a dog can run anywhere from $1,000 to more than $5,000. Pet care costs include, food, treats, veterinary bills, toys, grooming, and supplies such as beds, collars and leashes. Saving up for these expenses can help you enjoy your furry family member without being stressed out about paying for the things they need.

7. Brand New Car

Most people need wheels to get around, but cars aren’t just about function. Maybe you are dreaming of a low-slung sports car or an SUV that’s ready to offroad. When you get the keys to a new car, you’ll likely know that your time and energy spent saving was worth it.

8. Down Payment on a Home

Saving for a home is a top priority for many and for good reason. Home prices will typically rise 18% to 20% in the next five years, based on historical averages, meaning the value of your home will rise and likely continue to do so. Aside from the potential financial benefits, owning your dream home is a major boost to your and your family’s quality of life.

💡 Quick Tip: Want a simple way to save more each month? Grow your personal savings by opening an online savings account. SoFi offers high-interest savings accounts with no account fees. Open your savings account today!

9. Clothing and Shoes

There’s something about fresh clothes and shoes that can give you a psychological boost. For a household, costs averaged $1,434 for apparel for the year. Saving a little toward making yourself look good is one of the fun things you can save up for. It could be a whole wardrobe upgrade or a special splurge piece, but clothes can be excellent saving motivation.

10. Hobbies

If there’s something you enjoy doing in your free time, be sure to save enough money to fully invest yourself in the activity. Do you want a new acoustic guitar or perhaps a pottery wheel? Save for it. You may even be able to monetize your hobby or start a business from it.

Earn up to 4.00% APY with a high-yield savings account from SoFi.

No account or monthly fees. No minimum balance.

9x the national average savings account rate.

Up to $2M of additional FDIC insurance.

Sort savings into Vaults, auto save with Roundups.


11. A Quality Mattress and Mattress Accessories

According to the Centers for Disease Control and Prevention (CDC), one out of three Americans don’t get enough sleep. Being deprived of sleep can have a major impact on how you feel and function. Which is all the more reason to save for the comfiest mattress you can find.

12. Exercise Equipment

The right exercise equipment can help you make your health a priority and work out regularly. It’s not cheap, though. Equipment can cost less than $20 for a kettlebell or thousands for a top-of-the-line rowing machine, exercise bike, or Pilates equipment.

13. Professional Lessons (Sports, Dancing, Cooking, etc.)

Whether you want to dance more smoothly or perfect your golf swing, saving toward developing those skills can bring a lot of joy and satisfaction.

14. College

So many people feel the thrill of pride and achievement when earning a college degree, and it can help fuel a career. But college is expensive. As of 2024, the average cost of college in the U.S. is more than $38,000 per student per year, according to the Education Data Initiative. Saving toward these expenses, whether for yourself or your dependents, can help them get the education they need and dampen the blow of the cost of education.

15. Quality Home Appliances

Maybe you’d like to remove that old eyesore of a dishwasher and replace it with a top-notch new one, or swap out your old washer/dryer for an eco-friendly new model. Or, say, a professional-grade stove is calling to you to live out your gourmet dreams. Once you get the appliance you were dreaming about, you’ll likely feel that saving for it was worthwhile.

16. Home Security

While it may not exactly be a cool thing to save up money for, a home security system can give you peace of mind. As a bonus, you may have fun doorbell footage to look at once you buy your system.

17. Jewelry

If you love shiny baubles, they can certainly be worth saving for. Maybe there’s a dream piece you’ve been pining for. With the cost of some custom jewelry ranging from about $500 to $10,000 or more, you’ll definitely want to have a plan to save for it.

18. Home Furniture

If you value updated and stylish furniture, you’ll want to put it on your list. New furniture can uplift the comfort, function, and look of your home. Not to mention, when (or if) you sell your home, it can possibly help your place fetch a higher sales price.

19. Events & Special Occasions (Concerts, Dinners, Sports Games, etc.)

Many of us look forward to making lifelong memories at special events, from a Taylor Swift concert to the Super Bowl to a local gala. These occasions can both entertain and help you feel connected to the people who accompany you. Indulging in tickets every now and then is an incredibly fun and cool thing to save up for.

20. Home, Car and Health Insurance

Putting money toward insurance premiums may not always be fun, but it may give you peace of mind. It helps you know that you’re covered in case of accidents, unexpected health problems, and natural disasters. Saving up to afford a policy is wise if you are, say, planning to buy a house or car or are prepping for a big live event, like marriage or becoming a parent.

21. Retirement

Saving for retirement is a critical part of your financial health. A Federal Reserve survey found that only 34% of adults felt their retirement savings were on track. If you want to give yourself a healthy cushion for some of the most vulnerable years of your life, you may want to add to your retirement savings. While it doesn’t give you a tangible payoff now, you may rest easier knowing you’re prepared for tomorrow.

22. Anniversaries

Have someone (or something) special you want to celebrate? Put aside some money to do it up right, especially if it’s a nice round number that’s coming up. It’s up to you whether the funds go towards a gift, a trip, or a special night out with friends and family.

23. Repairs and Remodels

Home improvements can make your home more comfortable and functional but they are likely a major expense. With the average remodel topping $41,600 in 2024, it will take quite a chunk of change to make it happen. Saving for this type of cost can help you turn your place into the showplace you know it can be.

24. Birthdays

Celebrating birthdays is a fantastic way to nurture the relationships in your life. Maybe it’s with a candlelit dinner or tickets to a show, but it can be a great excuse to save and then spend some cash.

25. Holidays

Creating holiday memories is important for many of us. Saving up for the holidays and seeing your vision for your family come to life can be incredibly rewarding. Americans spend around $866 each holiday season, according to data from the National Retail Federation; 71% of that goes toward gifts. Stashing some cash in advance can help alleviate stress during the most wonderful time of the year.

Banking With SoFi

Focusing on a wish-list item can give you the motivation and discipline to start saving. Of course, the savings goal will vary with each person. One person may want a trip to Bali, another may need a new car, and a third may be focused on getting a down payment together for a home.

Whatever the goal, opening a bank account and consistently depositing your cash into it to save for an important purchase can be a great way to help build your financial skills, improve your financial foundation, and elevate your quality of life.

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

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.00% APY on SoFi Checking and Savings.

FAQ

How can I develop the mindset to save long-term?

To develop a mindset to save for the long term, be sure to start with a goal. Brainstorm some important, meaningful things to save up for. Then, automate regular transfers to your savings account. If you don’t see that money in your checking account, you likely won’t spend it.

Is saving money long-term hard?

Saving can be hard, and even a small amount stashed regularly can make a big difference in your financial wellness. The Federal Reserve Bank of St Louis reports that the personal savings rate in April 2024 was 3.6%. It may not be a huge amount, but it can be a good start.

How do I make saving money easier?

Saving money is easier when you have a plan in place. Automating money transfers to your savings account when your paycheck hits is one easy way to start saving towards a goal. You can also experiment with different budgeting methods to help “find” more money to put into your savings.

Photo credit: iStock/Borislav

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.

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.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 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.

4.00% APY
SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

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

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

Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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


Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.

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Jun
26
2024

Electronic Check (E-Check): What It Is and How It Works

By | Budgeting & Goals, Family Finances, money | Comments Off on Electronic Check (E-Check): What It Is and How It Works

An electronic check, or eCheck, is an electronic version of a paper check. Instead of writing out a check and handing (or mailing) it to the recipient, you enter your banking information and the payment amount online and authorize a transfer of funds from your bank account to the payee’s bank account.

Electronic checks are a fast, safe, and convenient form of payment, but they do have a few downsides. Here’s what you need to know.

What Is an Electronic Check (eCheck)?

An electronic check, or eCheck, is an electronic money transfer designed to perform the same function as a traditional paper check. You can often use an eCheck to pay bills, shop on an online marketplace, or make other types of payments.

To issue an eCheck, you need to provide your bank account number, bank’s routing number, and payment amount, then authorize the transaction by accepting a website’s terms and conditions. The eCheck is then processed by the Automated Clearing House (ACH), a secure system that facilitates electronic payments and money transfers between banks. Once authorized, the funds leave your checking account and get deposited into the payee’s checking account.

Since an eCheck is in an electronic format, it can be processed in fewer days than a traditional paper check. Electronic checks also generally have more security features than standard checks, including authentication, digital signatures, and encryption.

How Does an eCheck Work?

The process of paying by eCheck involves three basic steps:

•   Authorization: First, you need to fill out your eCheck through an online payment portal. You then click “Submit,” which authorizes the payee to withdraw the payment amount from your checking account. In some cases, you can provide your banking information and authorize an eCheck over the phone.

•   Processing: The business’s payment processor receives the eCheck and sends a payment request to the ACH network. The ACH network confirms that the funds are available in your account.

•   Settlement: Once the transaction is verified and approved by the ACH network, the funds are transferred from your account to the payee’s account.

How Long Does an eCheck Take to Clear?

The time it takes for an eCheck to clear can vary, but it generally takes between three to five business days. The reason for the delay is the ACH network processes payments in batches, not one by one. Once they start processing the eCheck, the network has to verify your bank information and perform security checks, which can take a few days.

Also keep in mind that eChecks aren’t processed on weekends and holidays. So if a you send an eCheck on a Friday, the payee may not receive the funds until the middle or end of the following week

Recommended: Cleared Funds: Definition and Breakdown of Funds Clearing Time

Advantages and Disadvantages of eChecks

EChecks have a number of advantages, but also a few drawbacks. Here are some things to keep in mind.

Advantages

•   Cost-effective: Electronic checks are often more cost-effective than paper checks, since you don’t need to pay for paper checks or stamps. And unlike using a credit card (which may come with a surcharge), eChecks generally don’t trigger a processing fee.

•   Convenience: Electronic checks eliminate the need for physical checks, reducing the time and effort required for writing, mailing, and processing paper checks. They can be easily initiated and authorized online or over the phone.

•   Security: Electronic checks offer enhanced security features, such as encryption and authentication, to protect sensitive financial information. This reduces the risk of fraud and unauthorized transactions.

•   Environmentally friendly: By reducing the need for paper checks, eChecks contribute to environmental sustainability by minimizing paper waste and the resources required for printing and mailing.

Disadvantages

•   Clearing time: Electronic checks can take several days to clear, which may be longer than other electronic payment methods. This can be a drawback for those who require immediate access to funds.

•   Possibility for errors: While eChecks reduce the risk of errors compared to paper checks, there is still a possibility of making a mistake in entering your bank account information or routing numbers. Such errors can delay the transaction process.

•   Limited acceptance: Not all businesses or individuals accept eChecks as a form of payment. This can limit the usability of eChecks in certain situations.

•   Potential for fraud: As with any electronic payment method, eCheck payment may be subject to fraud or unauthorized transactions. You want to be sure to share your bank account information only with trusted merchants.

What’s the Difference Between ACH and eChecks?

The terms ACH and eCheck are often used interchangeably, but they refer to different aspects of the electronic payment process.

ACH (Automated Clearing House): ACH is a network and system used for processing a wide range of electronic payments, including electronic checks. The network facilitates the transfer of funds between banks and ensures the secure processing of transactions.

Electronic check: An eCheck is a specific type of payment that is processed through the ACH network. It is an electronic version of a traditional check and involves the transfer of funds from one bank account to another.

In short, the ACH network is the infrastructure that enables various types of electronic payments, including eChecks. An eCheck is a type of transaction that utilizes the ACH network for processing.

Is Paying by eCheck Safe?

Yes, paying by eCheck is generally considered safe, thanks to several security measures that are in place. Most notably, eChecks use encryption to protect your sensitive financial information during transmission. This ensures that the data is secure and cannot be intercepted by unauthorized parties. Electronic checks also require timestamped digital signatures to help prevent fraud.

Recommended: Are Mobile Payment Apps Safe?

The Takeaway

Electronic checks are essentially the digital version of traditional paper checks. These checks are facilitated by the Automated Clearing House (ACH) network, an electronic network used by U.S. financial institutions. Funds are electronically withdrawn from the payer’s checking account, transferred over the ACH network, and deposited into the recipient’s checking account.

Electronic checks are a safer alternative than paper checks, and also faster to clear and cheaper to issue. However, eChecks take longer to process than paying with a debit or credit card and they aren’t accepted everywhere.

FAQ

How do I pay with an eCheck?

The process of paying with an eCheck mirrors that of writing a traditional check, but in a digital format. If the business you’re paying accepts eChecks, you simply need to enter your bank account number, bank’s routing number, and the payment amount on a secure online payment portal. You then authorize and submit the eCheck.

Does it cost money to send an eCheck?

Not typically. Merchants generally have to pay a small processing fee for accepting eChecks but this cost is not usually passed on to the consumer.

Can you reverse an eCheck?

Yes, but you have to act quickly. To reverse an eCheck, you generally want to notify your bank as soon as you know you need the payment halted, ideally within the same day. Once the payment clears, your bank may not be able to reverse the process.

Photo credit: iStock/kazuma seki

SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

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

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

Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 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.

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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Jun
26
2024
What Would Happen if I Deposited $10,000 Into My Bank Account?

What Would Happen if I Deposited $10,000 Into My Bank Account?

By | Budgeting & Goals, Financial Independence, money | Comments Off on What Would Happen if I Deposited $10,000 Into My Bank Account?

A cash deposit of more than $10,000 into your bank account requires special handling. Your bank must report the deposit to the federal government. That’s because the IRS requires banks and businesses to file Form 8300 and a Currency Transaction Report, if they receive cash payments over $10,000. Depositing more than $10,000 will not result in immediate questioning from authorities, however. The report is done simply to help prevent fraud and money laundering. You have nothing to lose sleep over so long as you are not doing anything illegal.

Key Points

•   Banks are required to report when customers deposit more than $10,000 in cash at once.

•   A Currency Transaction Report must be filled out and sent to the IRS and FinCEN.

•   The Bank Secrecy Act of 1970 and the Patriot Act of 2001 dictate that banks keep records of deposits over $10,000 to help prevent financial crime.

•   Structuring a deposit is when an individual splits up several deposits so that a single deposit of more than $10,000 cash does not happen.

•   Penalties for not filing Form 8300 or filing a fraudulent form include fines and possible prison sentences.

Are Financial Institutions Required to Report Large Deposits?

Banks and credit unions are required to report when a customer deposits cash over $10k. Maximum deposit limits vary by bank, but in this case, anything above $10,000 (even a penny more) is the amount to know.
The Bank Secrecy Act and the Patriot Act dictate that financial institutions create a paper trail of financial activity that could be suspicious. The reasoning is that law enforcement authorities can better control money laundering activities and tax evasion by having a record of these larger deposits. Other malicious activities like terrorism, drug trading, and broad financial crimes might be prevented.

Do You Have to Report Large Deposits?

You might have to report large deposits to your bank account if you own a business. (Performing a small direct deposit typically does not need to be reported.) The IRS rules also apply to financial activities performed by a business or individual involved in the business. You must complete IRS Form 8300 to report any transaction or even a series of related transactions that total $10,000.

About that “series of related transactions” part: Transactions are considered related when they take place within 24 hours of each other or if the person or business simply suspects they are related.

What Is IRS Form 8300?

IRS Form 8300 is used to help regulators prevent financial crime. The form is separate from other banking guidelines like funds availability rules. It is sent to the IRS and the Financial Crimes Enforcement Network (FinCEN). The form is used to report cash payments over $10,000 received in a trade or business.

On IRS Form 8300 , you must identify the individual from whom the cash was received and the person on whose behalf the transaction was conducted. In addition, you need to include a description of the transaction and method of payment. Additional disclosure of information may spell out the business that received the cash and whether multiple parties were involved.

What Happens When Deposits Are Reported?

A paper trail of potentially suspicious deposits is created after Form 8300 is transmitted to the IRS. Depositing cash at an ATM or with a bank teller, so long as it is below the $10K threshold, will usually not be reported. Law enforcement agencies can use the paper trail for future investigations if conditions warrant it.

To understand this in a bit more detail, know that first, when a cash deposit of more than $10,000 is reported, you are identified through your Social Security number (SSN) and other personal information.

What Is the Bank Secrecy Act?

The Bank Secrecy Act of 1970, mentioned above, may sound somewhat intimidating. What it actually does is require that banks keep records of each customer who deposits more than $10,000 in cash at one time in a single account. The paper trail is sent to various law enforcement groups to track where the money moves to. The Bank Secrecy Act includes civil and criminal penalties for entities not complying with the requirements.

Moreover, the 2001 Patriot Act made the Bank Secrecy Act broader; it can now better detect activity related to terrorism. Again, this is nothing to be concerned about as long as you aren’t engaged in any illegal activities like bank fraud.

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Reporting the Deposit

There are several steps involved in reporting a cash deposit over $10,000, whether the deposit is made to a standard or premium checking account or a savings account. There is likely nothing to be concerned about if you are just going about your daily business and not involved in illegal activity.

Banks Must Verify ID and Other Important Information

The Currency Transaction Report is used to verify a depositor’s information. The SSN, name, and address are provided to the FinCEN.

Banks Will Review All Cash Transactions

Financial institutions go through all their channels when a suspicious deposit over $10,000 is made. A series of several smaller amounts that add up to a deposit of more than $10,000 is also treated as a large deposit. Cash put into an account at a teller window or through an ATM can be linked and considered a structured deposit (more on that below). These are much more serious potential events than everyday banking activities, such as making a small cash deposit or ATM withdrawal.

Banks Will Determine If You Are Structuring Deposits

Structuring a deposit is when an individual splits up several deposits so that a single deposit of more than $10,000 cash does not happen. Someone might do this to avoid the bank having to file a Currency Transaction Report to FinCEN and resulting in a paper trail. This suspicious activity raises red flags as it suggests someone is intentionally trying to fly under the regulators’ radar. If a bank determines someone is structuring, then that activity might face additional scrutiny.

All Information Will Go Into a Currency Transaction Report

The personal information and deposit details mentioned earlier go into a Currency Transaction Report within 15 days of the transaction being considered. Reports are kept on file at the bank for five years, too. Once again, however, most people need not be too concerned with this, provided your banking is legal. Rather, it may be better to focus on account basics, like savings account withdrawal fees, not the ramifications of pernicious illegal activity, as long as they are following all the laws.

Penalties for Non-Compliance

You may wonder what happens if an individual tries to skirt the protocols described above. Here are details:

•   Civil penalties for not filing Form 8300 include fines of $250 per return. If this is considered to be intentional disregard, the fine can be the greater of $25,000 or the amount of cash received in the transaction up to $100,000.

•   Criminal penalties for not filing Form 8300 or filing a fraudulent form include a monetary fine of up to $100,000 for individuals and $500,000 for businesses. Prison sentences of up to five years are also a possible penalty for non-compliance.

Are There Any Exemptions to Consider?

A bank can file for an exemption if one of its business customers routinely deposits over $10k. It’s important to know that some businesses cannot get an exemption. For example, law firms, pawn dealers, accounting firms, and trade unions are some corporation types for which the IRS will not grant an exemption.

The Takeaway

You don’t have anything to worry about if you deposit more than $10,000 in cash to your checking account or your savings account, assuming you are doing nothing wrong. A large deposit is simply reported by a bank to regulators to track possible suspicious activity. Businesses must also file IRS Form 8300 within a specific time frame after a $10,000 cash payment.

Structuring deposits (breaking up funds into smaller amounts for deposit, so as to avoid filing a form 8300) is another no-no. Since there are significant penalties for attempting to skirt the law, it’s wise to not attempt such moves.

No matter how much you are (lawfully) depositing, it’s wise to make sure you have the bank account best suited to your needs and financial situation. For instance, you could look for an online high-yield savings account and/or an account that has no or low account fees. Explore the options to see what may be right.

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


Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.00% APY on SoFi Checking and Savings.

FAQ

How much money can I deposit in the bank without being reported?

A deposit over $10,000 is the amount to consider; amounts under that threshold may not have to be reported. There’s a catch, though: If a customer makes several small cash payments or deposits within a 12-month window, filing Form 8300 might have to be done should the payments or deposits exceed $10,000. These are known as “structured” deposits and can raise red flags if not reported.

How often can you deposit $10,000?

You can deposit more than $10,000 whenever you’d like, but just be aware that the receiving financial institution is required to report those funds to the IRS. If you are a business owner and depositing over $10k in cash is a frequent practice, the bank can file an exemption after the first large deposit to avoid filling out future reports to the IRS.

How do you explain a large deposit?

Depositing over $10k only results in an IRS form being filed by the bank. You often won’t have to do anything to explain it unless you are suspected of fraud or money laundering. The money is deposited like any other amount would be.

Photo credit: iStock/TARIK KIZILKAYA

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.

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.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 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.

4.00% APY
SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

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

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

Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

This article is not intended to be legal advice. Please consult an attorney for advice.

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.

*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.

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Guide To Depositing a Check

By | Budgeting & Goals, money, Money & Life | Comments Off on Guide To Depositing a Check

They may seem old-fashioned compared to digital payment methods, but checks are still very much a part of many people’s financial lives. In fact, there are a whopping 14.5 billion checks circulating every year in the U.S.

If you receive checks, you have options in terms of how to deposit them, including in person at a bank, at an ATM, or via a mobile app. Here’s what you need to know about the different methods for depositing a check and the easiest way to get the job done.

How To Deposit a Check in 5 Steps

Typically, depositing a check involves these five simple steps (unless of course you automate the process with direct deposit). Follow these guidelines to successfully get a check into your bank account where you can then use it.

1. Select Your Preferred Method

Your financial institution may have different ways you can deposit a check, including in person, at an ATM, or through their mobile app. The method you choose will affect the specifics of what you need to do to deposit your check. If you choose to go in person, double check the bank’s open hours. For mobile apps, you will need to download the app. Most ATMs will let you deposit a check as long as the machine is in your bank’s network.

2. Gather What You Need

Aside from your paper check, the exact type of documentation you’ll need will depend on how you go about depositing a check:

•   In person: This procedure can vary depending on your financial institution. At some banks, you may be able to use your debit card at a teller’s window to deposit a check, no deposit slip required.

In other cases, you may need to get and fill out a deposit slip. This piece of paper outlines how much you want to deposit and to which account. Information you will need to fill out includes your name, account number, and deposit amount. In many cases, banks may also need to see a government-issued photo ID when you make the deposit.

•   Mobile app: You will need to log into your bank’s mobile app on your device. Be prepared to take a photo of the front and back of the check. Typically taking a photo against a dark background helps the app take a clearer photo.

•   ATM: When heading to the ATM, you’ll need your debit card. Check to see if the ATM accepts check deposits for your financial institution (SoFi, for example, only offers ATM withdrawals at this time). Also, a few ATMs still require that checks be put into envelopes (provided at the machine) for deposit.

3. Endorse Your Check

Endorsing your check means to sign your name on the back of it in the appropriate place (it typically says “Endorse here” or provides a line to sign on). You can write “for deposit only” on the back when making a deposit so that the money can only go to your account.

Some checks also have a box you can tick if you’re making a mobile deposit. Or your bank may request that mobile deposit checks are endorsed with your name and a phrase like, “for electronic deposit at [bank]” or “for mobile deposit at [bank].”

4. Confirm Deposit Amount

If you deposit a check in person, you may need to indicate the amount on the deposit slip. If you’re using your bank’s mobile app, you may have to enter in the payment amount of your check. Same goes if you deposit it at an ATM.

Before confirming your deposit, make sure you have indicated the correct information. Being even one digit off from your account number, for example, could result in delays to access the funds you’ve deposited.

5. Wait for Confirmation

Once you’ve successfully deposited a check in person, the bank teller may give you a confirmation slip reflecting the transaction or you can request one. You can also check your bank’s website or app to see the pending deposit.

With mobile deposits, you may receive a pop-up confirmation message or an email acknowledging receipt of the check. Some banks may show the pending transaction in the app right away.

At an ATM, you usually receive a receipt of the transaction. Hang onto this piece of paper until you confirm that the deposit has indeed been posted to your account.

In terms of how long it will take for the check to deposit and be cleared, that will vary depending on such factors as how you deposited it, the amount, and the bank it’s drawn on. It could take between one and several days.

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💡 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.

Ways of Depositing a Check

When it comes to depositing a check, the method you choose will depend on what your bank offers and what feels most convenient for you.

In Person

Though not always convenient, you can take your check to your local bank and deposit it into your account. (Worth noting: Some banks may allow you to cash checks without an account there, but you may have to pay a fee.)

Mobile App

Many banks and credit unions offer mobile apps for their customers. A popular feature is mobile check deposit, which allows you to snap a photo of the check with your device and deposit it remotely…no trip to a bank or ATM required.

ATM

Traditional and some online-only banks offer the convenience of depositing a check at an ATM, whether to your checking or savings account. Read your account’s fine print or contact customer service to see if this needs to be at an ATM in your bank’s network.

💡 Quick Tip: Want a new checking account that offers more access to your money? With 55,000+ ATMs in the Allpoint network, you can get cash when and where you choose.

Keeping Safety in Mind When Depositing Checks

No matter which method you choose, it’s important to be safe when depositing checks. Keep these safety tips in mind:

•   One key step is to make sure a check is valid and comes from a legitimate source. If you’re not expecting a payment and receive a check in the mail, you’re not wrong to be suspicious. It could be part of a scam. The same holds true for checks you were expecting but that arrive for a higher amount of money than you anticipated.

•   If you want to verify a check, or see if it’s legitimate, hold the check up to the light to see if there are any watermarks (which are a good thing) or if there’s any evidence that it’s been tampered with (a bad thing). In addition, get a feel for the paper the check is printed on; if it feels thin, like the paper you put in a printer, it may be fraudulent.

•   Checks also have a safety feature called an MICR (magnetic ink character recognition) line. Located at the bottom of the check, this usually shows details like the issuing bank’s routing number. The ink should look flat and dull. If it looks shiny when you hold it under the light, it may be a fake check.

Think you have a fake check in hand? Talk to your bank about how to proceed, and you may want to report it to the Federal Trade Commission (FTC) or the Better Business Bureau (BBB), which has a Scam Tracker department.

One last suggestion: You might also keep in mind that mobile deposit and even direct deposit (bypassing checks altogether) are often good options in terms of safety. These techniques can be preferable to looking for a bank branch or ATM that can accept your check, especially at night or in bad weather.

Recommended: Cashier’s Check vs Certified Check

The Takeaway

Depositing a check typically involves five simple steps: Select a deposit method, gather materials, endorse the check, confirm its amount, and be sure that it’s hit your account.

While checks are a common, time-honored way to receive funds, you have plenty of options today to send and receive money. Check out what different banks offer (and how much services cost) to make sure you have the right banking partner for you.

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


Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.00% APY on SoFi Checking and Savings.

FAQ

How do you deposit a check into your account?

You can deposit a check in your account either in person, through your bank’s mobile app, or at an ATM. Once you decide on a method, you gather what you need, endorse the check, confirm its amount, and receive acknowledgement that it’s in your account.

How do you deposit a check at an ATM?

You can deposit a check at an ATM by going to a machine that will accept your deposit — your bank may stipulate which ones are acceptable. Insert your debit card and enter the correct PIN number, then follow the prompts to deposit your check.

How do you deposit a check without going to the bank?

You can deposit a check without going to the bank by doing it through your bank’s mobile app or at an ATM.

Photo credit: iStock/AndreyPopov

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

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

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

Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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

*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.

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25
2024

How to Manage Your Money With a Vault Bank Account

By | Budgeting & Goals, Financial Independence, money | Comments Off on How to Manage Your Money With a Vault Bank Account

Saving money for the future might be a financial priority for you, but putting intention into action can be challenging. Perhaps you have multiple goals: an emergency fund, money for next year’s big vacation, and saving toward the down payment on a house. You may wonder how much to put towards each and how to keep those savings separated but growing steadily.

Enter the vault bank account. This kind of sub-savings account can help you stash cash for different dreams and needs while staying organized. Read on to learn more about vault bank accounts and how they can help you make steady progress toward your money goals.

What Are Vault Bank Accounts?

Also known as a sub-savings account, a vault bank account is a digital banking feature that allows you to safely tuck away money towards multiple goals. This cash is usually tracked separately from your main savings account balance, making it easy to keep tabs on your different savings targets.

However, these accounts are not available at all banks. What’s more, banks that do offer them vary in what they call them, and they may have slightly different nuances in how they function. The main purpose is to provide an easy way to set aside and track funds for your various savings goals. For instance, you could have a general savings account balance, a vault for your emergency fund, and a vault for cash that’s earmarked to buy a new laptop.

With a vault bank account, you can typically name each sub-account. You might call one “Paris trip” and another “Emergency fund.” In many cases, you can set target dates (by when you’ll have accrued a certain amount) and automate savings into the sub-accounts. That means a specific amount can be automatically transferred into the vault at a preset frequency.

The Advantages of Using a Vault Bank Account?

As you might imagine, a number of pluses come with a vault bank account.

•   Easy tracking of savings goals. Instead of having all your savings pooled into a single balance, your vault funds can be tracked separately from your main savings account balance.

For instance, you can create separate vaults for holiday gifts, vacations, home improvements, or to save for a car or home. A vault bank account makes it easy to see exactly how much you’ve saved for each goal. You can tell at a glance how much progress you’ve made by saving.

•   Streamlined savings. Besides making it easy to track your different goals, vault accounts mean you won’t have to open multiple bank accounts — which can be labor-intensive and involve various account fees and requirements.

•   Ability to automate your finances. By using recurring transfers, as noted above, you don’t have to fret about whether you’re steadily saving for that vacation, mountain bike, or wedding fund. Automating your savings keeps you moving right along to achieve your goals as your money grows via additional deposits and interest.

•   A motivation boost. Easily keeping tabs on your progress can keep you motivated to continue saving. When you see how much progress you’ve made after months of saving consistently, you’ll likely feel your sense of financial security soar.

•   Accessibility of your funds. When you’re ready to tap into your funds, a savings vault makes it simple to move the money from your vault to your checking account.

Earn up to 4.00% APY with a high-yield savings account from SoFi.

No account or monthly fees. No minimum balance.

9x the national average savings account rate.

Up to $2M of additional FDIC insurance.

Sort savings into Vaults, auto save with Roundups.


How to Transfer Funds Into and Out of Vaults

While it depends on the financial institution you have a savings vault with, moving money in and out of vaults should be pretty straightforward. Depending on the bank, you usually can transfer funds in and out of your vault to your checking account, main savings account, or external linked account.

For instance, you might first select the vault sub-savings account you’d like to move your funds into, then hit “Transfer,” and choose a linked account. You can typically pick either a one-time or recurring transfer when choosing your transfer. Then, click on “Next” to continue and complete the transaction.

Recommended: How Do Savings Accounts Work?

Are Vault Bank Accounts Secure?

As vault bank accounts are extensions of your savings account, they are protected up to the insured limits, just like with another deposit account, in the very rare instance of a bank failing. If your vault savings account is with a bank, it’s most likely insured by the Federal Deposit Insurance Corporation (FDIC), which covers up to $250,000 per depositor, per account ownership category, per insured institution. Savings vaults with credit unions are typically protected by the National Credit Union Administration (NCUA) up to $250,000 per depositor, per account ownership category, per insured institution.

Vault bank savings accounts are considered sub-accounts or accounts within an account. In turn, all the different funds within your savings are protected as a single account and are insured up to $250,000.

In addition, most banks have advanced, state-of-the-art security measures in place, such as encryption. You will likely be offered two-factor authentication, and it can be wise to use that feature.

Vault Bank Account Fees and Pricing

Pricing and fees for a vault bank savings account depend on the financial institution. Some may charge a monthly account fee and require you to keep a minimum balance in your savings account. There might also be inactivity fees and overdraft fees, among others. However, some vault accounts are free and carry no fees.

Recommended: Best IRAs for Young Adults

The Takeaway

A vault bank account can be a simple, streamlined way to save for different goals. It has sub-accounts you can dedicate funds towards for, say, rainy day expenses, a down payment on a house, or a big purchase, like new furniture. When shopping for a vault account, it’s important to be mindful of potential fees or account balance minimums. By finding one with no or minimal fees, more funds can be put toward your savings. For this reason, SoFi’s savings vaults can be a good option.

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


Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.00% APY on SoFi Checking and Savings.

FAQ

What is a vault bank account?

A vault savings account is one that has sub-accounts you can use to set up separate savings goals. The money in these savings goals is separate from your main savings account balance, and you can typically label them and set target savings dates.

How can I transfer money from my vault to my available balance?

Moving money from your vault to your checking account is usually straightforward and quickly executed. This can easily be done through your mobile banking app.

Are vault bank accounts secure?

While no bank account is 100% secure, vault bank accounts are very safe. They’re usually backed by either FDIC or NCUA insurance, plus the security measures the bank deploys to protect your identity and finances.

Can I have multiple vaults in my bank account?

You can have multiple sub-accounts or vaults in your savings account, if your bank offers this feature. The maximum number of vaults varies by the bank, with some allowing up to 20 active vaults at one time.

Are there any fees for using a vault bank account?

Depending on where you bank, your financial institution might charge such fees as a monthly account fee, among others. Some might require that you keep a minimum balance. However, there are also banks that provide this type of account with no or low fees, so it can be wise to shop around and read the fine print.

Photo credit: iStock/HuiLiu

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

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

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

Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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

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.

*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.

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