A nursing career can be incredibly rewarding professionally and personally. If you’ve decided to attend nursing school to pursue your dream job, you’ll first need to meet certain nursing school prerequisites in order to be eligible. Prerequisites (also called pre reqs for nursing) are required courses or subjects aspiring nurses must take before applying to nursing school.
Learn more about the prerequisites and nursing school requirements you’ll need to be accepted at the college of your choice.
Key Points
• Academic prerequisites for nursing school vary, depending on the type of nursing degree a student wants to earn.
• Common prerequisites include high school biology, chemistry, and two years of college-preparatory math, all with a minimum grade of C.
• Students must also have a certain high school GPA and passing grades on standardized tests like the SAT.
• Once a student is in nursing school, there are ongoing prerequisite courses they will need to fulfill.
• The average annual cost for a Bachelor of Science in Nursing (BSN) degree is approximately $30,884, with financial aid options like scholarships and grants and student loans available to help cover the cost.
Why Nursing School Prerequisites Matter
Nursing school prerequisites prepare students for a career in which they can earn a good salary as a nurse and do work that fulfills them. Whether you’re planning to get an Associate Degree in Nursing (ADN) or a Bachelor of Science in Nursing (BSN), each degree program and school requires specific prerequisites. Nursing pre reqs provide the foundation for the more advanced courses you’ll take while in school.
There are different types of nurses, and the type you’re planning to become helps determine the nursing school requirements you’ll need to fulfill. Knowing how many years you’ll be attending school can also help you with budgeting as a nurse. These are some of the nursing roles you might consider.
• Licensed practical nurse (LPN): LPNs provide basic patient care under the supervision of registered nurses and doctors. They work in hospitals, physicians’ offices, nursing homes, extended care facilities, and in patient’s homes. Rather than a college degree, LPN’s typically attend a vocational or technical school for one year and they must graduate with a license from an accredited institution to practice.
• Registered nurse (RN): RNs care for patients, administer medication, assist in diagnostic testing, and more. RNs usually work in hospitals, doctors’ offices, nursing homes, long-term care facilities, and other locations. They must have an associate degree in nursing or a Bachelor of Science in Nursing.
• Clinical nurse specialist: This is an RN with additional training and education who diagnoses conditions, prescribes medication, and treats patients. These professionals must have a Master of Science in Nursing (MSN).
• Nurse practitioner (NP): Nurse practitioners examine and diagnose patients, prescribe medications, and order tests. They must be licensed RNs and have an MSN or a master’s degree in a specialty role.
• Nursing director: Nursing directors oversee health care facilities. They typically need a Master of Science in Nursing (MSN) or a Doctor of Nursing Practice (DNP).
• Nurse educator: These nurses teach nursing students clinical skills, patient care methods, and collaboration practices. Nurse educators must have an MSN or DNP degree.
Factoring in the Cost of Nursing School
As you consider the nursing school requirements you’ll need to meet, it’s important to think about how you’ll pay for college. The average cost of nursing school is approximately $30,884 annually for a BSN degree, which can be costly over the four-year degree program.
Fortunately, there are options to help students afford their schooling, including federal student loans, scholarships and grants, and private student loans. Explore the different options, and fill out the Free Application for Federal Student Aid (FAFSA) to see what you qualify for.
Also, keep in mind that while the thought of repaying school loans can seem daunting, there are ways to manage your payments including income-driven repayment plans for federal student loans, loan repayment assistance programs offered by various states and organizations, and student loan refinancing.
When you refinance student loans, you replace your current loans with a new loan from a private lender such as a bank, credit union, or online lender. Ideally, the new loan will have a lower interest rate and more favorable loan terms.
No matter what type of nursing degree you want to earn, the most common nursing school prerequisite is earning a high school diploma or its equivalent, a General Equivalency Diploma (GED).
In addition, you will need these nursing pre reqs:
Biology
Nursing students need one year of high school biology with a grade of C or better.
Chemistry
As a nursing pre req, students need one year of high school chemistry with a grade of C or better.
College-Preparatory Math
Nursing school requirements call for two years of college-preparatory math with at least a C grade.
Grade Point Average (GPA)
To qualify for an Associate Degree in Nursing program, students generally need a GPA of at least 2.7. For a Bachelor of Science in Nursing program, they need at least a 3.0 GPA.
Standardized Tests
Passing grades on SATs or TEAS (Test of Essential Academic Skills) are typically required for admission to most nursing schools.
It’s important to note that every college has its own requirements (including GPA requirements), so check with your college’s admissions office to find out what you’ll need specifically to be admitted.
For example, the University of Iowa suggests the following high school prerequisites for nursing:
• Four years of high school English
• One year of biology
• One year of chemistry
• One year of physics
• Four years of the same world language or two years in two different world languages, or two years of the same world language plus required additional coursework
In most cases, you can take high school courses to complete nursing school prerequisites. But if you know what college you’d like to attend for nursing school, check to see what required courses they ask for.
If your high school doesn’t offer certain prerequisite courses, you can typically complete them through a community college, online courses, or the four-year college where you plan to get your nursing degree.
Other Nursing School Prerequisites
Once you’re in nursing school, there are additional prerequisites you’ll need to fulfill. For example, your school may require you to take some basic courses like the ones below before you can take more advanced classes.
• English composition
• Fundamentals of oral communication
• Biomedical ethics
• College algebra
• Microbiology
• Chemistry
• Human growth and development
• College study skills
If you’re already in college and you want to switch your major to nursing, you must also meet specific prerequisites to get into nursing. For example, the University of Iowa requires you to meet these prerequisites with a grade of “C” or higher:
• Natural science, such as chemistry, biology, anatomy, physiology, microbiology, or nutrition courses
• Social science, such as elementary psychology, human development and behavior, or sociology classes
• General education courses, such as arts and cultural perspectives
• Additional prerequisites, such as rhetoric, statistics, and diversity, equity, and inclusion for health professions
• World language
Check with the college or university to see what’s needed for the nursing program you want to attend.
There are a number of prerequisites needed for nursing school, including high school class requirements before you apply to college, and prerequisites needed once you’re enrolled. Keeping on top of them and making sure you fulfill all the requirements for the type of nursing degree you’re working for can help you chart a clear path toward graduation.
Nursing school can be expensive, and many students use federal student loans to help pay for it. They might also fill any funding gaps with private student loans. To better manage your monthly payments after graduation, you can consider refinancing student loans, especially if you can qualify for a lower interest rate and more favorable terms. Just be aware that refinancing federal student loans makes them ineligible for federal programs like income-driven repayment.
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
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FAQs
What are the minimum requirements for nursing school?
The minimum nursing school requirements generally include graduating from high school with a diploma after taking science and math classes (such as chemistry, biology, and college- preparatory math), having a GPA of 2.7 or higher for an Associate Degree in Nursing program and 3.0 or higher for a Bachelor of Science in Nursing program, and passing grades on standardized tests such as the SATs. However, minimum requirements can vary from school to school, so check with each institution you’re applying to.
When do you take nursing school prerequisites?
You take nursing school prerequisites starting in high school with classes like biology, chemistry, and math, as well as standardized tests like the SATs. When you’re in nursing school, you’ll begin by taking foundational prerequisite classes and work your way up to higher-level classes as you work toward your degree.
What if my GPA is too low for nursing school?
There are some possible ways to get into nursing school even if your GPA is too low. While many programs require at least a 3.0 for admission to a Bachelor of Science in Nursing program, some schools are less selective than others. For instance, you could apply to a community college to earn a licensed practical nurse degree (LPN) and then transfer to a four-year college once your grades are higher. Also, consider doing volunteer work in a health care setting — some institutions give more weight than others to nonacademic activities like health-related volunteer work.
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With nearly 40 million residents, California is the most populated state in the U.S. It also boasts a robust economy and a gross domestic product (GDP) that is actually larger than many countries, including France and the United Kingdom. Whether you’re just starting out or looking for a change, California offers a wealth of job opportunities, along with average wages that often run higher than the national numbers. Read on to learn which jobs sit highest on the salary ladder in the Golden State.
Key Points
• California offers some of the highest salaries in the nation.
• Health care professionals top the list of highest earners in the state.
• Anesthesiologists lead with an average salary of $452,930.
• Surgeons and cardiologists have average salaries exceeding $340,000.
• Other professions that make the top 20 include airline pilots, CEOs, IT managers, and lawyers.
Top-Paying Jobs in California
While California offers job opportunities in a wide variety of sectors, health care jobs offer the highest mean (or average) salaries in the state, according to recent data from the U.S. Bureau of Labor Statistics’ State Occupational Employment and Wage Estimates report. Jobs in the airline, business, tech, and legal fields also rank high on the list. If a good salary is important to you, check out this list of the 20 highest-paying jobs in California.
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1. Anesthesiologist
Average salary in California: $452,930
National average salary: $339,470
Educational requirements: To become an anesthesiologist, you need a four-year bachelor’s degree, followed by four years of medical school and a four-year residency program.
Anesthesiologists specialize in administering anesthesia to manage pain and ensure patient safety during surgeries. Their duties include selecting and administering medications, monitoring vital signs of the patient during procedures, and adjusting anesthetics as needed. They also collaborate with other physicians and surgeons and communicate with patients about pain management plans.
2. Cardiologist
Average salary in California: $389,120
National average salary: $423,250
Educational requirements: To become a cardiologist, you need a four-year bachelor’s degree, followed by four years of medical school, a three-year residency, and a three-year fellowship. To specialize further, you may need to complete a one-year advanced practice fellowship.
Cardiologists specialize in treating conditions affecting the heart and blood vessels, such heart disease, arrhythmias, and high blood pressure. To make a diagnosis, they may give physical exams and order tests such as an electrocardiogram (EKG). They also prescribe medicines, advise on diet and lifestyle changes, and can perform nonsurgical procedures (such as implanting a pacemaker or inserting a cardiac catheter).
Educational requirements: To become an orthopedic surgeon, you need a four-year bachelor’s degree, followed by four years of medical school and typically a five-year residency. To specialize in a particular area (such as pediatric orthopedics), you also need to complete a one- to two-year fellowship.
Orthopedic surgeons specialize in diagnosing and treating conditions that affect the musculoskeletal system, which includes joints, bones, ligaments, muscles, and tendons. They treat injuries like fractures and dislocations, manage chronic conditions like arthritis, and perform surgeries such as joint replacements. They also recommend nonsurgical treatments like physical therapy to restore mobility and function.
4. Surgeon
Average salary in California: $340,260
National average salary: $343,990
Educational requirements: To become a surgeon, you need a four-year bachelor’s degree, followed by four years of medical school and a three- to eight-year surgery residency. Surgeons may also opt to complete a one- to three-year fellowship.
Surgeons perform operations on patients with injuries or illnesses. Their duties include reviewing X-rays, discussing procedures with patients, preparing for surgery, and completing surgeries with the help of other medical and surgical professionals. They also monitor and follow-up with patients after the surgery.
5. Ophthalmologist
Average salary in California: $324,270
National average salary: $312,120
Educational requirements: To become an ophthalmologist, you need a four-year bachelor’s degree, followed by four years of medical school and three to eight years of post-graduate training, including an internship and residency in ophthalmology.
Ophthalmologists diagnose and treat conditions that affect the eyes and vision. They perform routine eye exams, prescribe eyeglasses and contact lenses, and prescribe medications to treat eye conditions. They also perform surgeries to correct vision and treat eye conditions such as cataracts and glaucoma.
Educational requirements: To become a dermatologist, you need a four-year bachelor’s degree, followed by four years of medical school and a four-year residency. To specialize in a particular area (such as dermatopathology or pediatric dermatology), you also need to complete a one- to three-year fellowship.
Dermatologists are doctors who specialize in diagnosing and treating skin, hair, and nail conditions. They manage issues like acne, eczema, psoriasis, and skin cancer. They perform skin screenings, prescribe medications, and perform minor surgical procedures on the skin, such as biopsies and mole removal. They may also assist patients with cosmetic issues and concerns.
7. Psychiatrist
Average salary in California: $288,270
National average salary: $256,930
Educational Requirements: To become a psychiatrist, you need a four-year bachelor’s degree, followed by four years of medical school and a four-year residency. To pursue a subspecialty (such as addictions or geriatric psychiatry), you must also complete a one-year fellowship.
Psychiatrists are medical doctors that specialize in diagnosing and treating mental health disorders. They work closely with patients to address a wide range of mental health issues, from anxiety to severe psychiatric conditions. Treatments they offer may include medication, therapy, and behavioral interventions. They also monitor their patients over time, making adjustments to treatment as necessary.
8. Airline Pilot
Average salary in California: $286,040
National average salary: $250,050
Educational Requirements: To become an airline pilot, you typically need a minimum of 1,500 hours of recorded flight time. This includes at least 100 night hours, 500 cross-country hours, and 50 multi-engine hours. You may also have to pass a medical exam to prove they have the strength and stamina demanded by the job. All pilots must also have a Federal Aviation Administration (FAA) license.
An airline pilot flies a commercial aircraft that carries passengers and cargo from one location to another. In addition to operating planes safely, airline pilots have a range of other responsibilities. These include developing flight plans, conducting pre- and post-flight checks, monitoring equipment, communicating with air traffic control, coordinating with flight attendants, and filing status reports after each trip.
9. Obstetrician and Gynecologist (OB-GYN)
Average salary in California: $285,470
National average salary: $278,660
Educational Requirements: To become an OB-GYN, you need a four-year bachelor’s degree, followed by four years of medical school and a four-year residency.
OB-GYNs, also known as obstetrician gynecologists, specialize in female reproductive health. They provide a range of services, including obstetrics (care during pregnancy, childbirth, and postpartum) and gynecology (care for a woman’s reproductive organs and health). They play a key role in promoting women’s health across all life stages.
10. Chief Executive Officer (CEO)
Average salary in California: $281,030
National average salary: $258,900
Educational requirements: To become a CEO, you typically need a four-year bachelor degree. Many aspiring CEOs also pursue a master’s degree in business administration or their desired field, which typically takes two years to complete.
A chief executive officer, or CEO, is the top-ranking executive within an organization and is responsible for leading the company. Their duties include setting strategic goals, overseeing operations, communicating between board members and other company executives, and making key decisions that impact the company’s financial health and success.
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11. Internal Medicine Physician
Average salary in California: $275,110
National average salary: $245,450
Educational requirements: To become an internist, you need a four-year bachelor’s degree, followed by four years of medical school and a three- to four-year residency. To pursue a subspecialty (such as gastroenterology or infectious diseases), you also need to complete a two- to three-year fellowship.
Internists, also known as internal medicine physicians, specialize in providing general medical care for adult patients. Their duties include conducting physical exams, ordering bloodwork and other tests, analyzing data to make diagnoses, and prescribing medications and treatments. Internists also counsel patients about lifestyle changes that can lead to better health.
12. Pathologist
Average salary in California: $264,450
National average salary: $270,560
Educational requirements: To become a pathologist, you need a four-year bachelor’s degree, followed by four years of medical school and a three- to four-year residency. Many pathologists also pursue an additional one- to two-year fellowship in a pathology subspecialty.
Pathologists are doctors who specialize in examining tissue to diagnose diseases and determine how illnesses and injuries occurred. Their duties include collecting specimens, studying samples in the lab, and identifying the particular bacteria or virus that resulted in a patient’s symptoms. They also write reports and communicate their findings to the patient’s physician.
13. Radiologist
Average salary in California: $261,020
National average salary: $353,960
Educational requirements: To become a radiologist, you need a four-year bachelor’s degree, followed by four years of medical school and a four- to five-year residency. To pursue a subspecialty (such as musculoskeletal radiology or neuroradiology), you also need to complete a one- to two-year fellowship.
Radiologists are doctors who read and interpret images from diagnostic imaging procedures, such as X-rays, CT scans, MRIs, and ultrasounds. They use imaging results to diagnose disorders and injuries, and to help determine the best treatment. They communicate their findings to physicians and sometimes to patients and families. Some radiologists also treat conditions with radiation and perform image-guided procedures such as biopsies.
Educational requirements: To become a family medicine physician, you need a four-year bachelor’s degree, followed by four years of medical school and a three-year residency.
Family medicine physicians are generalists who provide comprehensive health care for people of all ages. Also known as primary care doctors, they provide or prescribe treatment, medications, and vaccinations; order and interpret tests; educate patients; and refer patients to specialists when needed for further diagnosis or treatment.
15. Nurse Anesthetist
Average salary in California: $250,920
National average salary: $214,200
Educational requirements: To become a nurse anesthetist, you need a four-year bachelor’s degree, followed by a master’s degree from a nurse anesthesia education program. The program must be accredited by the Council on Accreditation of Nurse Anesthesia Educational Programs (COA) and can take 24 to 51 months to complete.
Nurse anesthetists are registered nurses who specialize in anesthesia and provide care for patients before, during, and after surgical and other procedures. Their duties include preparing patients for anesthesia, administering anesthesia, maintaining anesthesia during surgery, and managing recovery. Nurse anesthetists may work alone or with a team of health care providers.
Educational requirements: To become a physician, you need a four-year bachelor’s degree, followed by four years of medical school and a three- to eight-year residency. Subspecialization requires additional training in a fellowship of one to three years.
Physicians are medical professionals who diagnose and treat injuries and illnesses and help patients maintain their health. They examine patients; take medical histories; prescribe medications; and order, perform, and interpret diagnostic tests. Some also perform surgery, close wounds, and administer other medical procedures. Many also advise patients on diet, lifestyle, and preventive health care.
17. Dentist
Average salary in California: $249,610
National average salary: $244,470
Educational requirements: To become a dentist, you need a four-year bachelor’s degree, followed by four years of dental school to get a Doctorate of Dental Surgery (DDS) or a Doctorate of Dental Medicine (DMD). For some specialties, dentists must receive additional training through a two- to three-year residency program.
Dentists are health care providers who specialize in oral health. They diagnose, treat, and prevent issues related to teeth, gums, and mouth, such as cavities and gum disease. They perform procedures like fillings, extractions, root canals, and may provide cosmetic services like whitening or veneers. They also educate patients on proper oral hygiene to maintain good oral health.
18. Oral and Maxillofacial Surgeon
Average salary in California: $221,820
National average salary: $334,310
Educational requirements: To become an oral and maxillofacial surgeon, you need a four-year bachelor’s degree, followed by four years of dental school and a four-year residency program.
An oral and maxillofacial surgeon is a medical doctor who diagnoses and treats conditions and injuries of the face, mouth, jaw, neck, and head. They use dental, medical, and surgical skills to perform a variety of specialized procedures, including dental implants, facial trauma repair, cosmetic facial enhancements, and cleft lip and palate surgery.
Educational Requirements: To become a computer and information systems manager, you need a four-year bachelor’s degree in a field such as computer science, information systems management or information. You typically also need a master’s degree, which generally takes two years.
A computer and information systems manager, also called an information technology manager (IT manager), oversees an organization’s technology needs. Their role is to make sure the company’s tech systems are secure, efficient, and aligned with business goals. They lead IT teams, manage budgets, evaluate emerging technologies, troubleshoot system issues, and ensure data security.
20. Lawyer
Average salary in California: $213,860
National average salary: $176,470
Educational requirements: To become a lawyer, you need to get a four-year bachelor’s degree followed by three years of law school.
Lawyers provide legal advice and represent clients in legal matters. They interpret laws, draft legal documents, negotiate settlements, and provide guidance on various issues like contracts, disputes, or criminal charges. Some lawyers offer a broad range of legal services, while others specialize in specific areas, such as criminal law, corporate law, or family law.
The Takeaway
California is home to some of the most lucrative career opportunities in the nation, offering competitive salaries across industries like health care, technology, business, and air transportation. While these roles often demand extensive education and training, the rewards can be well worth the investment. Whether you’re drawn to the state for its economic prospects or its vibrant lifestyle, exploring high-paying careers in California can open doors to a fulfilling and financially secure future.
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FAQ
What’s the highest paying job in California?
In California, health care roles consistently rank among the highest-paying jobs. Anesthesiologists, cardiologists, and surgeons are at the top, with anesthesiologists earning an average salary of $452,930. These roles require extensive education and specialized training, reflecting the significant responsibilities and expertise required.
What is a good salary in California?
A “good” salary in California varies depending on location and lifestyle. Given the state’s high cost of living, particularly in metropolitan areas, a salary above the national average is often necessary. Research suggests that, on average, you need to earn just over $143,000 a year to be happy in California.
What are some of the fastest-growing jobs in California?
California is seeing rapid growth in several sectors, especially health care and technology. Jobs like nurse practitioners, physical therapists, medical and health services managers, solar photovoltaic installers, and data scientists are among the fastest-growing jobs in the Golden State.
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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/.
When it comes to managing your finances, hiring a financial advisor can be a wise decision. But with all the different types of financial pros out there, how do you find one that will work for your specific needs?
Asking questions is a good way to learn more about what an advisor does, understand their approach, and determine if they are the best fit for your situation and goals. In fact, it’s a good idea to interview at least two or three different advisors before choosing one you want to work with. These essential questions to ask an advisor can help you find the right fit.
Key Points
• Check a financial advisor’s qualifications by asking about certifications, years in the field, and areas of expertise.
• Ensure that the services offered align with your financial needs, including investment philosophy and client focus.
• Gain clarity on how an advisor will be paid, such as whether they are fee-only, fee-based, or commission-based, plus any extra costs.
• To understand any potential conflicts of interest and ensure unbiased advice, ask about fiduciary status.
• Make sure you’re comfortable with an advisor’s communication style and methods for tracking performance.
Qualifications and Experience
If you plan to trust your finances to an advisor, selecting someone with the right qualifications and relevant experience is important. Here’s what to ask a financial advisor about their professional background.
What Certifications Do You Hold?
Two meaningful credentials are Certified Financial Planner (CFP®) and chartered financial consultant (ChFC). To earn either designation, an advisor must pass a certification exam, complete coursework, and have a certain level of experience in the field. They must also submit to a background check and adhere to a set of ethical standards. An advisor with tax expertise will typically be a certified public accountant (CPA) or personal financial specialists (PFS), which are CPAs who also offer more comprehensive planning.
Do You Have Any Disclosures on Your Record?
It’s important to know if an advisor has faced any regulatory, criminal, or disciplinary actions in the past. You can also verify this information by typing the advisor’s or firm’s name into the Securities and Exchange Commission’s (SEC’s) Investment Adviser Public Disclosure search tool. There, you can find out about the professional’s licenses and any disciplinary history they may have.
💡 Quick Tip: Help your money earn more money! Opening a bank account online often gets you higher-than-average rates.
Services and Approach
Financial advisors vary in terms of the services they offer, the type of clients they work with, and their approach to financial planning. These questions can help you choose a financial advisor who will be a good match for your needs.
What Are Your Areas of Expertise?
Some advisors specialize in retirement planning, tax strategies, or estate planning. Others will help you create a comprehensive financial plan that could cover general money management, the types of accounts you need, the kinds of insurance you should have, and estate and tax planning. You’ll want to make sure that their expertise aligns with your needs and goals.
What Types of Clients Do You Typically Serve?
Certain financial advisors work exclusively with high-net-worth individuals, while others focus on small business owners, pre-retirees, or people in certain professions like physicians or artists. Choosing someone who has experience serving clients similar to you can help ensure they’ll be able to offer the guidance and financial advice you need.
What Is Your Investment Philosophy?
You’ll want to make sure how your money is invested aligns with your preferences, risk tolerance, needs, and financial goals. So when speaking with a potential advisor, you’ll want to get a sense of how they typically balance risk and return, if they concentrate on specific industries or types of investments, whether they prefer active or passive investment strategies, and how they tailor portfolios to client goals.
Fees and Compensation Structure
Financial advisors are compensated in different ways, and it’s important to understand their fee structure to avoid surprises.
How Do You Make Money?
Fee-only advisors charge a flat rate, hourly rate, and/or a percentage of assets managed for their services. Fee-based advisors, on the other hand, charge fees to clients directly for financial planning or portfolio management, while also earning commissions by selling financial products. Commission-based advisors primarily earn income by selling financial products. Fee-only advisors tend to have fewer conflicts of interest (more on that below). Ensure you understand how you will be charged.
Are There Any Extra Costs I Should Be Aware of?
A financial advisor’s fees may not cover all of your expenses. They might, for example, charge one fee for creating a financial plan, but charge more for putting that plan into action. Once your financial plan is in place, you may also have to pay trading, fund, and brokerage fees. Make sure you understand what your all-in costs are going to look like.
Do You Have a Minimum Account Size?
Some advisors work only with clients who have a certain level of assets. This might be a relatively low threshold, like $25,000, but it could be significantly more, such as $500,000 or $1 million, and possibly more. You’ll want to confirm whether this aligns with your financial situation.
Conflicts of interest can be problematic as it can cloud the advice you receive. These questions for financial advisors can help you suss out whether their goals could potentially clash with your goals.
Do You Receive Any Compensation From Third Parties?
As mentioned above, fee-based and commission-based advisors receive payments from sales of specific investment and financial products, such as mutual funds or insurance policies, which could potentially cause a conflict of interest. It’s important to know if their recommendations could potentially be influenced by outside compensation.
Are You a Fiduciary?
Certain professional designations, such as a CFP®, are legally held to the fiduciary standard. As a fiduciary, an advisor is legally and ethically bound to put their clients’ interests ahead of their own (or their firm’s) interests and have a duty to preserve good faith and trust. If an advisor is not a fiduciary, ask how they address potential conflicts.
faith and trust. If an advisor is not a fiduciary, ask how they address potential conflicts.
Performance and Benchmarks
If you’re working with an advisor to grow wealth, you’ll want to have some way to measure your progress. Consider asking these questions about performance tracking and benchmarking.
What Investment Benchmarks Do You Use?
A financial advisor should be able to speak to the benchmarks that they will be reporting to you, as well as how they will measure your progress and determine whether adjustments need to be made in your portfolio. It’s also a good idea to find out if you will be able to track your portfolio’s performance and view financial reports online. Tools like client portals and mobile apps can improve your experience and provide transparency.
How Will You Consider Assets You Aren’t Directly Managing?
Your net worth may include assets that are not managed by a particular finance firm or advisor, such as an employee-sponsored 401(k) or any rental properties you may own. It’s important that a financial advisor look at your full financial picture when advising you on how to diversify, manage risk, and reach your goals.
💡 Quick Tip: If you’re saving for a short-term goal — whether it’s a vacation, a wedding, or the down payment on a house — consider opening a high-yield savings account. The higher APY that you’ll earn will help your money grow faster, but the funds stay liquid, so they are easy to access when you reach your goal.
Communication and Availability
Advisors can approach communication differently and it helps to have realistic expectations going in. Poor communication or misaligned expectations can put a damper on your experience in working with an advisor.
How Often Will We Meet or Communicate?
At the minimum, you’ll want to speak with your financial advisor once a year to review your financial strategies as your life and circumstances change. Some advisors offer quarterly or semiannual meetings, however, which you might prefer. Find out how often you’ll meet, whether it will be virtually or in-person, and if the advisor will be available for phone calls or emails outside of scheduled appointments. Consider if their communication frequency and style meets your expectations.
Will I Work Directly With You or Someone on Your Team?
Some firms assign a primary advisor, while others use a team-based approach. When deciding which financial advisor you want to work with, you’ll want to clarify who your main point of contact will be.
The Takeaway
Choosing a financial advisor is a significant decision that can impact your financial future. By asking the right questions, you can get a good sense of their qualifications, approach, and ability to meet your needs.
Don’t hesitate to interview multiple advisors and compare their answers to ensure you find the best match for your financial goals. A well-chosen advisor can provide valuable guidance, helping you navigate the complexities of financial planning and achieve long-term success.
One smart money move you can take right away (and on your own) is to make sure your bank account offers minimal or no account fees and a competitive interest rate.
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
What should I look for in a financial advisor’s credentials and experience?
When choosing a financial advisor, you might look for credentials such as Certified Financial Planner (CFP®) or chartered financial consultant (ChFC). These designations mean that the advisor has passed a certification exam, has a certain level of experience in the field, and is legally required to adhere to a set of ethical standards. If you’re looking for an advisor with tax expertise, consider a certified public accountant (CPA) or personal financial specialists (PFS), which are CPAs who also offer more comprehensive planning.
What are the different types of financial advisors?
The term “financial advisor” is broad and can refer to any professional who offers financial advice. Common certifications include Certified Financial Planner (CFP®), chartered financial consultant (ChFC), certified public accountant (CPA), and personal financial specialist (PFSs). There are also specialized advisors, such as investment advisors (who focus on portfolio management), retirement planners (who help with retirement strategies), and wealth management advisors (who offer comprehensive services for high-net-worth clients). Robo-advisors provide automated investment solutions at a lower cost.
How can I evaluate the fees and services provided by a financial advisor?
Start by understanding the advisor’s fee structure — whether it’s fee-only, fee-based, or commission-based. Fee-only advisors charge flat fees or percentages and don’t earn commissions. Fee-based advisors charge fees but may also earn commissions on products they recommend. Commission-based advisors primarily earn income by selling financial products. Also ask about the scope of services they provide, such as retirement planning, tax strategies, or investment management, to ensure they align with your needs.
About the author
Rebecca Lake
Rebecca Lake has been a finance writer for nearly a decade, specializing in personal finance, investing, and small business. She is a contributor at Forbes Advisor, SmartAsset, Investopedia, The Balance, MyBankTracker, MoneyRates and CreditCards.com. Read full bio.
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.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at sofi.com/legal/banking-fees/.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Third Party Trademarks: Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.
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.
A zero-waste lifestyle is based on the principle of reduce, reuse, and recycle. The goal is to buy only what you need and minimize the amount of waste you create. The more people who practice a zero-waste lifestyle, the less junk there should be winding up in landfill.
Being conscious about one’s impact on the environment is something that is becoming increasingly prevalent: 87% of Americans support recycling, according to a recent survey by The Harris Poll on behalf of Keep America Beautiful®, and this can be especially important to younger generations. Adopting a zero-waste lifestyle can often save you money in the long term, as you reduce and reuse rather than continually buying new or additional products.
Key Points
• A zero-waste lifestyle emphasizes reducing, reusing, and recycling to minimize waste and environmental impact, leading to financial savings.
• Adopting zero-waste practices, like buying only necessary items and choosing reusable products, saves money over time.
• Simple changes, such as meal planning and bulk buying, reduce food waste and lower grocery bills.
• Transitioning to zero-waste may involve initial costs, but long-term savings and environmental benefits outweigh these expenses.
• Gradual implementation of zero-waste strategies, like using second-hand items and eco-friendly products, makes the lifestyle affordable and sustainable.
Understanding the Zero-Waste Concept
At its core, the concept of a zero-waste lifestyle is minimizing or eliminating the amount of waste that you create. Some dimensions of this include:
• Conserving resources
• Avoiding burning products and packaging or discharging hazardous materials into the land, air or water
• Optimizing reuse of items through repairing or repurposing them
Expanding recycling
• Different people, communities and municipalities define zero-waste in different ways, so you will need to decide what a zero-waste home and lifestyle means for you and how to go zero-waste in your specific situation.
Aside from being an eco-friendly move, reducing the amount of waste you produce and reusing items instead of purchasing new ones can be one of the top tips for saving money. For instance, refurbishing cast-off dining chairs could save you hundreds of dollars vs. buying them new and also keeps them out of landfill.
Living a zero-waste life can actually be a way to help the planet and hold onto more of the money in your checking account.
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Financial Benefits of Going Zero-Waste
Going zero-waste can have some positive effects on your checking and savings account, as noted above.
As an example, consider a situation where you need to buy a new pair of sneakers:
• You could buy the cheapest pair of sneakers that cost $30 but will wear out and need to be replaced in one year, if not sooner. They’ll likely be tossed into landfill, along with many other inexpensive fast-fashion items.
• If you buy a better-made pair of sneakers, they may cost $80 but last at least a few years. They’ll stay out of landfill for longer and cost less when you divide the price by years of use.
If you take a short-term perspective, buying the more inexpensive pair of sneakers is the better financial choice, since $30 is less than $80. But if you take a longer perspective, the better choice may very well be the more expensive shoes.
Or perhaps you buy a set of reusable glass and aluminum containers and then buy many staples (coffee, cereal, beans, pasta) in bulk at a lower price than the prepackaged variety. In this way, you are not only saving money, but reducing your usage of plastic and other forms of single-use packaging. These examples can give you the idea of some of the financial benefits of a zero-waste life. While it may not be among the usual types of budgeting methods, zero-waste living can help you save money.
Getting Started: Easy Zero-Waste Swaps
One important thing to consider if you’re considering starting a zero-waste life is that the best changes are often small and sustainable. Rather than selling your car and committing to walking or taking the bus forever, it’s better to take smaller steps, gradually reducing your waste over time. Here are a few ideas:
Kitchen and Grocery Shopping
One of the biggest generators of waste is food that gets tossed out. The USDA estimates that Americans waste between 30% to 40% of the total food supply each year. If you are trying to purchase groceries on a budget, you might be excited to potentially save 30% to 40% on your total grocery bill by only buying the food that you’re actually going to use.
If saving money on food is on your mind, you can move towards zero-waste status in the kitchen by taking a new approach to how you buy groceries. Planning out your meals and preparing them at home can help you cut down on the waste you produce. If you have a meal plan, you are less likely to buy ingredients that wind up sitting and going bad in the fridge.
Another strategy is considering the types of foods that you buy and the packaging that they come in. Buying more fruits, vegetables and other foods that are often sold without packaging can be a great way to cut down on the waste that you produce. So too can buying staples in bulk, using containers made of glass or aluminum vs. plastic.
Bathroom and Personal Care
Bathroom and personal care items are another area where you can move towards a zero-waste lifestyle. A few switches that you can consider making include:
• Use a bamboo toothbrush vs. one with a plastic handle.
• Use soap or shampoo bars rather than using bottled-in-plastic products.
• Opt for biodegradable dental floss.
• Switch to compostable toilet paper.
• Try a stainless steel razor instead of a disposable razor.
Lowering your energy consumption not only is good for the environment, it can save you money. Since most utilities charge based on how much you use, lowering your consumption can help you lower your utility bills. Another way to reduce waste in the home is by recycling items for money.
Selling unneeded items can help repurpose them as well as add a little extra into their budget. You might also look into ideas for reducing energy usage in your home, whether that means installing smart thermostats or saving to switch to, say, a heat pump from your current system. (You might get a rebate or tax break on the latter, too.)
Going Zero-Waste on a Budget: Affordable Strategies
Here are three affordable strategies to help you live a zero-waste life on a budget:
• Start with what you have: Focus on implementing DIY solutions, refinishing furniture vs. throwing it out.
• Opt for second-hand: When you do need “new” items, think about what you might get from freecycle sites and places like Facebook Marketplace.
• Reduce vs. remove at first: Embrace minimalism and lower consumption instead of trying to completely give up, say, every speck of plastic in your home. Going zero-waste is a process, and it can take patience.
• Invest in eco-friendly solutions over time: Gradually replace disposable items with reusable ones one at a time as your budget allows. Swapping single-use plastic bottles for a reusable water bottle can be a simple first step.
As you work to become zero-waste and save money that way, you might want to take a closer look at what spending and saving trackers reveal about your habits. Many traditional and online banks offer these, or you could evaluate third-party options.
Long-Term Savings and Environmental Impact
There may be an initial expense triggered by moving toward a zero-waste lifestyle, such as buying a set of glass and aluminum refillable canisters for groceries. But these moves can save money in the long term. And if you decide to refinish a dining table vs. buying a new one, that too can require an initial investment in supplies but wind up being both planet-friendly and economical.
One of our best frugal living tips is to consider the total cost of ownership when making financial decisions. And even if you spend more money, it may be offset over time and also minimize your total environmental impact.
While the term zero-waste may mean different things to different people, the general idea involves minimizing or eliminating the amount of waste that you create. A zero-waste home is one that reduces consumption and maximizes items that are reused or recycled. What’s more, following the principles of a zero-waste living may save you money.
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FAQ
How do I handle zero-waste as a family with children?
One of the best strategies for having a zero-waste lifestyle with children is to include your kids in the planning process. Explaining the reasoning behind a zero-waste lifestyle and involving your kids in decisions can help them to get excited about the process. It can also be a good idea to focus on small, manageable changes at first rather than drastically altering your family’s lifestyle. Any steps that you’re able to take to reduce your waste may benefit your budget as well as the environment.
Can a zero-waste lifestyle work in urban areas?
It is possible to have a zero-waste lifestyle in an urban area, but it may take some creativity. City dwellers may have a busier lifestyle or space constraints, but they may also be able to take advantage of easier access to resources or community initiatives.
Are there any potential challenges in maintaining a zero-waste lifestyle?
Like just about everything worth doing, there are some potential challenges that come with living a zero-waste life.You may not have easy access to zero-waste resources like composting or recycling facilities. It may also be challenging to spend the additional time and effort to go zero-waste, and living a zero-waste life may come with higher initial expenses.
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.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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.
This content is provided for informational and educational purposes only and should not be construed as financial advice.
Unemployment benefits can help you get by in the event of job loss, but this money is subject to taxes just like any other source of income. How much your unemployment benefits are taxed depends on your filing status, tax bracket, and state of residence.
In this guide to unemployment benefit taxes, you’ll learn the ins and outs so you can pay Uncle Sam what you owe. Read on to find out:
• Are unemployment benefits taxable?
• How are unemployment benefits taxed?
• What are tips for paying taxes on unemployment benefits?
Do You Have to Pay Taxes on Unemployment Benefits?
Yes, you do have to pay taxes on unemployment benefits. They are taxable like any other income. That means you won’t actually get to keep all the money the government gives you while you’re unemployed. You’ll have to give some of it back, just as you do on many other forms of money you receive. It’s simply part of being a taxpayer.
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How Is Unemployment Taxed?
Now that you’ve learned that unemployment benefits are taxable, consider the details. How much are the taxes, is it just federal or state taxes too, and how do you pay them?
How Much Are Unemployment Benefits Taxed?
No matter which state you live in, your unemployment benefits are taxed at the federal level. That means everyone — including residents of states without income taxes — must pay taxes on unemployment compensation.
How much you owe depends on your filing status and tax bracket. The United States is on a progressive tax system: In general, the higher your adjusted gross income (AGI), the more you’ll pay in taxes.
For the 2024 tax season (filed in 2025), there are seven federal tax brackets, ranging from 10% to 37%.
Before filing your taxes, you’ll receive a Form 1099-G, Certain Government Payments, reflecting your unemployment benefits. This form will indicate how much unemployment compensation you received as well as how much was withheld, if applicable. You’ll need this form, plus any records of quarterly payments (more on those below) when filing your taxes.
Unemployment Benefit Taxes at the State Level
When determining how much unemployment benefits are taxed, don’t forget that federal taxes may not be the only funds due. Depending on where you live, you may have to pay state income taxes on your unemployment compensation, too. Nine states do not have personal income taxes on what are considered wages:
• Alaska
• Florida
• Nevada
• New Hampshire
• South Dakota
• Tennessee
• Texas
• Washington
• Wyoming
If you live in one of those nine states, you don’t have to pay state income taxes on unemployment benefits.
That said, four states that do have a state income tax also don’t tax your unemployment compensation:
• California
• New Jersey
• Pennsylvania
• Virginia
If you live in one of the remaining 37 states (or Washington, D.C.), you’ll have to pay state taxes on any unemployment earnings.
How to Pay Taxes on Unemployment Benefit
Like it or not, you’ll owe taxes (federal and maybe state) on any unemployment compensation. Now that you know how unemployment is taxed, consider how you can pay those taxes. You have two main options:
• Have the taxes withheld like you would from a paycheck
• Estimate and pay the taxes each quarter
Here’s a closer look at each option.
Withholding Taxes
When you initially apply for unemployment, you can ask to have taxes withheld from your payments. However, federal law has established a flat rate of 10% for tax withholding for unemployment benefits.
When you receive income as wages, you can usually specify how much you want to have withheld via filling out Form W-4.
If you expect to be in a higher tax bracket and need to pay more in taxes than what’s being withheld, you can make quarterly estimated payments for the difference.
If you’re currently receiving unemployment compensation and taxes aren’t being withheld, you can submit Form W-4V.PDF File , Voluntary Withholding Request, to initiate the 10% withholding on future benefit distributions.
To avoid owing an underpayment penalty when you file your taxes, you may need to make quarterly estimated payments on your unemployment earnings. You can use Form 1040-ES and send in your payment by mail, or you can pay online or over the phone.
Being unemployed can be stressful, and on top of that, it may be hard to figure out how to properly pay taxes on unemployment benefits you receive. Follow this advice which can help simplify and clarify the process.
• Opting into tax withholding: When you apply for unemployment, you can opt into automatic tax withholding at a flat 10% rate. While it may not be enough to cover your entire tax liability, it’s a good start — and can keep you from overspending your unemployment compensation.
• Setting aside money in a high-yield savings account: If you don’t opt in to withholding (or if 10% is not enough to cover your tax liability), you’ll need to pay quarterly estimated taxes on your unemployment income. To avoid accidentally spending that money before it’s due, it’s a good idea to calculate what you’ll owe and put it in a savings account that pays a competition rate that you won’t touch until it’s time to pay Uncle Sam. Bonus: You’ll be earning interest on the money.
• Keeping track of all your earnings and paperwork: Tax filing can be complicated — there are lots of forms to collect and statements to reference. Keeping clean records of benefit distributions and quarterly payments throughout is crucial to preparing for tax season.
• Using IRS Free File: Because you have to pay taxes on all income, including unemployment, you’ll likely want some help. If your adjusted gross income is $84,000 or less, you can get free guided tax preparation software through IRS Free File . If your AGI is too high but you’re feeling overwhelmed by how complicated your taxes are, it might be a good idea to pay for tax software or hire an accountant.
• Being aware of unemployment fraud: It’s possible for criminals to use your personal information to falsely make unemployment claims in your name. If you receive Form 1099-G for unemployment compensation but did not receive any unemployment benefits, follow the Department of Labor’s steps for reporting unemployment identity fraud .
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The Takeaway
Like other forms of income, unemployment benefits are subject to taxes. If you aren’t having taxes withheld from your unemployment compensation — or if the flat 10% rate is not high enough — the IRS requires that you pay quarterly taxes. Paying what you owe on unemployment benefits is an important and necessary step in correctly filing your tax return.
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FAQ
Do you pay less in taxes when you’re on unemployment?
Your tax rate depends on your adjusted gross income. If you earned less income because you were unemployed — and your unemployment checks are smaller than your paychecks had been — you can expect to pay less in taxes.
Are unemployment benefits taxed in states with no income tax?
Unemployment money is taxed at the federal level no matter which state you live in. However, if you live in a state with no state income taxes, you won’t have to pay state taxes on your unemployment benefits. Four states that levy income taxes also exempt you from paying those state taxes on unemployment compensation: California, New Jersey, Pennsylvania, and Virginia.
Was pandemic unemployment taxed?
Pandemic unemployment was not taxed for the 2020 tax year — to a certain degree. Following the historic job loss associated with the initial wave of COVID-19, the government passed the American Rescue Plan Act of 2021, which made the first $10,200 of unemployment benefits non-taxable.
However, this was a one-time exclusion. Though the pandemic continued beyond the 2020 tax year, unemployment income became completely taxable once again.
Photo credit: iStock/PixelsEffect
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.
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.
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.
