2023 Wedding Cost Calculator Table with Examples

2025 Wedding Cost Calculator with Examples

The question was popped, the answer was yes, and now you’re ready to plan your dream wedding. Which means it’s probably time to set up a meet-and-greet between your vision board and your bank account.

Wedding costs can add up quickly, and if you’re just winging it, it’s easy to get carried away. Using a wedding cost calculator as you work through the planning process can help you manage your money better and create a more realistic budget.

Read on for a breakdown of the costs you can expect as you prepare for your big day.

Key Points

•   The wedding cost calculator helps estimate the total cost of a wedding based on various factors.

•   It takes into account factors such as location, guest count, venue, catering, attire, and other expenses.

•   The calculator provides an itemized breakdown of costs and allows for customization based on personal preferences.

•   A calculator can help couples create a realistic budget and make informed decisions about their wedding expenses.

•   Using the wedding cost calculator can help reduce stress and ensure financial preparedness for the big day.

How Much Will My Wedding Cost?

The cost of a wedding depends on several factors, including where you live, your wedding date, and the size of your guest list. If you go all-out with a big bridal party, designer duds, and a reception for 200-plus, your bill could be significantly more than the current median of $10,000. If you decide to go with a simple ceremony at City Hall, on the other hand, followed by a modest dinner with a few friends, your total spend will likely fall way below the typical wedding cost.

Check your score with SoFi

Track your credit score for free. Sign up and get $10.*


What Does the Average Wedding Cost?

The most recent SoFi survey found that the median wedding cost is $10,000. But again, that number can vary widely.

The popular wedding website The Knot says couples who live in the South typically spend a bit less on their wedding, while those who live in bigger cities, particularly in the Northeast, can expect higher costs. Trying to match or exceed the standards set by others in your social group can also affect your bottom line.

Recommended: Is It Smart to Finance a Wedding?

What Goes into a Wedding Cost Calculator?

A wedding cost calculator uses average wedding costs to help couples break down the expenses they can expect to encounter as they plan their wedding. This budgeting tool can assist couples and their families in prioritizing how they want to spend their money. (Is a designer dress a must? Is a buffet or sit-down dinner a better choice? How many guests can you really afford?)

You also can use a wedding calculator/budget as a checklist to ensure you’ve covered all the details, so there aren’t any surprises (or unexpected wedding expenses) as you close in on the big day.

Recommended: 52-Week Savings Challenge

How to Calculate Wedding Costs

To keep things in perspective and set reasonable priorities, you may want to start by designating a certain percentage of your overall budget for each cost category. A $2,000 dress, for example, would be 10% of a $20,000 budget. A $10,000 reception (venue, catering, music, etc.) would take up 50%. That would leave you 40%, or $8,000, for the rest of your costs (the tux, flowers, photography, etc.).

Knowing the average costs for various categories can also help you fine-tune your budget and save for your wedding. Here’s a look at some of the most common wedding expenditures.

Before the Big Day

You can count on racking up some wedding bills long before you hear wedding bells. (Which is why it can be helpful to use a spending app as soon as you start planning.) Here are some costs you may incur early on in your preparations:

Save the Date Cards: If you want to let your guests know waaay ahead that your big day is coming up, sending “save-the-date” alerts can help. Postcards can cost $1 each, not including postage. (Costs per item typically go down when you order more.)

Invitations: Two major factors will affect the cost of sending out wedding invitations: An elaborate invitation or one that’s designed just for you will cost more than a standard design. And, of course, you’ll pay more for invitations and postage if you have a large guest list. (Don’t forget to put stamps on the RSVP cards included in each invite.) You could end up paying from $256 to $312 for 100 to 150 invitations, but costs can go higher for more intricate or customized designs.

Wedding Planner: How much would you be willing to pay to hand over some of the stress of planning your wedding to a professional? U.S. couples spend an average of $2,100 for their wedding planner’s services, but your price may vary depending on your planner’s expertise and level of involvement, and the size of your wedding.

Marriage Ceremony

Though it’s what the big day is all about, and the reason friends and family have gathered, it can be easy to overlook the actual wedding ceremony when budgeting. Here are some costs to keep in mind:

Marriage License: This document, which authorizes a couple to marry, can cost anywhere from $20 to $110. You can get your exact cost by calling the issuance office in the county where you plan to marry. In some states, you may be able to lower the cost by taking a marriage preparation course.

Officiant Fee: The officiant is the person who is legally authorized to perform your ceremony. It can be the minister at your church or someone who performs weddings as a full-time or side gig. Officiant fees can vary from about $100 to $1,000, with most professionals charging between $500 and $800.

Ceremony Venue: Unless you exchange vows at the same location as your reception, you’ll likely have to budget a separate amount for this venue, whether it’s your church, the beach, a private garden, or a public park. The cost will depend on the location and how long you use the space. (Even if it’s a public place, you may have to pay for a permit to hold your ceremony there, or a by-the-hour rental fee.)

Churches typically ask for a “donation,” which can be a mandatory amount or pay-what-you-wish deal. Unless you’re headed to the courthouse, be prepared to pay between $300 to $1,000-plus to use a house of worship for a ceremony venue. One recent survey by the Knot found private venues averaging $12,800, which is more than the median cost of some weddings.

Decorations: The cost of decorating for your ceremony will depend on how elaborate you want to get — and what your venue will allow. For example, flowers alone can cost an average of $2,800 for a wedding, and if you want other decor, it will add to the tab.

Ceremony Music: You’ll likely want to have some kind of live music at your ceremony — maybe a soloist, the church organist, a quartet, or a band. The cost for music can vary significantly depending on how big you go, and can range from $300 to $700, depending on whether a soloist or band and the length of time they play.

Reception

The reception is typically the largest wedding expense and can include several subcategories — from food and entertainment to decorations and, of course, the cost of renting the venue where guests will gather to celebrate.

Some all-inclusive venues charge one price for catering, decorations, and more. If you have to hire multiple vendors, though, you’ll need to keep these separate costs in mind:

Venue: Depending on the size and location of the hall, country club, restaurant, etc., you can expect to pay $2,500 to $7,500 just to rent the space for your party.

Catering: The cost of feeding your guests will depend on what you serve (appetizers or a full meal) and how it’s served (buffet or by a waitstaff). Costs can range from $70 to $150 per person at high-end venues, though taking a simpler or potluck approach can bring costs down significantly. You may have to pay extra to rent serving equipment or pay waitstaff at some venues.

Drinks: If you decide to offer an open bar with unlimited alcoholic beverages, you can expect to pay $20 to $30 per person, or more.

Entertainment: Couples often argue over whether to hire a DJ or band — and cost can be the deciding factor. A DJ might charge up to $1,000 or more, depending on their popularity, equipment, and how long they’re expected to keep the party going. A live band generally charges more, often running from $1,000 to $5,000. (You may have to pay more if you have to rent sound or lighting equipment.)

Decorations: If you decide to add decorations to the venue (with ribbons, confetti, balloons, etc.), you will likely have to pay extra — from $100 to $1,000 or more. A floral centerpiece for each table might incur a separate cost, so it’s important to be clear about what’s included in your package.

Recommended: Wedding Gift Etiquette

Wedding Cake

The cake you choose for your wedding is about much more than dessert. Cutting the cake is a fun tradition and it can be a great photo opp. Design, size, the number of tiers, and delivery can all impact the cost, but plan to spend on average $500 for a wedding cake, according to 2024 data.

Photographer/Videographer

If you’re hoping to capture the best moments of your wedding, you may want to make the photographer, and maybe videographer, one of your budget priorities. Depending on the package you choose, you can expect to pay from $1,500 to $3,000 for wedding photos, though the Knot found couples spending an average of $2,900. A videographer can cost in a similar price range.

Flowers

We covered the cost of using flowers to decorate for the ceremony and reception above. Here are some other costs to consider:

Bridal Bouquet: The bride’s flowers are in the spotlight throughout the day — in photos, during the ceremony, and even at the reception. For the bouquet of your dreams, you can expect to pay an average of $250.

Boutonnieres for the Guys: If the groom will be wearing a suit or tux, a boutonniere is almost a must, and it will run from $10 to $30. Multiply that price by the number of men in the wedding party if Dad and the other guys will get them, too.

Bridesmaids Bouquets: These smaller bouquets typically cost about $80 each.

Corsages: Corsages, which can be a nice way to recognize special family members and friends, may cost $20 to $40 each.

Petals for Flower Girl: A bundle of rose petals for the flower girl to scatter can cost $20 to $25.

Bride’s Wedding Outfit

The bride’s outfit — the dress, veil, shoes, jewelry, and more — often takes up a significant amount of the wedding budget. The bride’s wedding dress alone can cost, on average, $1,800 to $2,400, though more expensive options are definitely out there. And that’s before alterations, which can add a couple of hundred dollars.

Groom’s Wedding Outfit

The groom’s gear generally reflects the formality of the wedding, but most men still wear a tux or suit. Purchasing a new tux can cost $200 to $500 or more. And tailoring may cost extra. Renting a tux can cost $100 to $200 or more.

Wedding Party Costs

Traditionally, members of the wedding party pay for their own outfits, but there may be other expenses you decide to cover if you want to help out with the cost of being in the wedding.

For example, if you’re hiring someone to do the bride’s hair and makeup (average cost: $300), and you choose to include the bridesmaids, you can expect to pay about $150 per person. As with most wedding-day costs, however, you’ll likely encounter a wide range of prices.

Transportation

If you and your wedding party hope to travel in style on your wedding day, you want to look into renting a limo, horse-drawn carriage, party bus, or some other type of transportation. Couples spend an average of $750 for wedding day transportation for a small event, but costs will vary based on location, how many vehicles you need, and how many hours you need them.

Wedding Insurance

Once you start budgeting for your wedding, you may decide it makes sense to purchase insurance to protect your investment. Wedding insurance can cover you for several worse-case scenarios. The cost of this type of special-event coverage depends on what you decide to include in your policy. The average cost of a wedding insurance policy is $75 to $550, depending on the type of coverage and cost of the event.

Total Wedding Cost Example

Until you start making calls and getting price quotes, it will be challenging to get even a rough estimate of how much your wedding will cost in total. But the sooner you start filling in some of the blanks on your budget, the sooner you’ll be able to prioritize where you want your money to go — and get a better idea of what the final bill will be.

Here’s an example of what a couple trying to determine a budget between about $14,000 and $24,000 and a guest list of 50 might come up with.

Cost

Percent of Budget

Invitations $420 3%
Ceremony: $560 4%
Ceremony Venue $310
Officiant Fee $250
Reception: $6,020 43%
Venue with Wine Bar $3,000
Buffet Dinner $2,220
DJ with Equipment $800
Bride’s Costs: $1,820 13%
Dress $1,070
Alterations $100
Shoes $200
Jewelry $200
Hair & Makeup $250
Groom’s Tuxedo Rental with Shoes & Tie $420 3%
Cake $560 4%
Flowers: $2,100 15%
Bride’s Bouquet $300
Bridesmaids’ Bouquets (2) $200
Boutonnieres for Wedding Party (5) $100
Corsages for Family (6) $200
Flowers for Ceremony & Reception $1,300
Photos $1,540 11%
Limo Rental $560 4%

How to Save Money on Your Wedding

How can you keep your dream wedding from totaling up to a nightmare cost? Here are a few ways to lower the bottom line:

Ask Friends and Family for Help

Do you know someone who’s great at taking photos? Is your cousin an amazing singer? What about a friend who’s a talented baker and cake decorator? If you can find people you trust to take the place of pricier pros, you may be able to reduce some costs — or avoid them entirely.

Eliminate Some of the Extras

If you can do your own hair and makeup, get yourself to the wedding, and/or design and print your own invitations (or go paperless), you may be able to cut some costs without asking for help.

Downsize the Guest List

This can be a tough one, but trimming your guest list is a sure way to trim costs. Consider asking your friends to leave their kids at home, or gently telling your guests that you’re keeping the plus-ones to a minimum.

Go Off the Beaten Path

Choosing an off-peak wedding date; an unusual (and therefore more affordable) wedding venue; or a wedding dress from a department store or consignment shop can save you big bucks.

Recommended: Free Credit Score Monitoring

The Takeaway

A wedding is a cause for celebration, but the costs can quickly get out of hand, so it’s a good idea to start your planning with a realistic budget. Median costs have recently been found to be $10,000 or so, but some gatherings cost multiples of that. Once a budget is set, though, as you go through the planning process, you can use your budget tracker to stay on top of your actual costs — and stay in sync with your other financial goals. In our example above, wedding costs totaled between $14,000 and $24,000 for an event with 50 guests, depending on the extras the couple decided to opt into.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

SoFi helps you stay on top of your finances.

FAQ

What is a realistic budget for a wedding?

A realistic wedding budget will be different for every couple. A wedding might cost $10,000 or several multiples of that, depending on the size of the wedding, the location, and other factors.

Is $10,000 a reasonable wedding budget?

You may have to be pickier about splurges than a couple with more to spend, but by setting your priorities early and using a budget tracker, you can get a strong start on sticking to your $10,000 wedding goal.

How do I pay for a wedding I can’t afford?

There are a few different ways you can pay for a wedding if you don’t have enough cash in the bank. One popular option is to take out a personal loan to pay for wedding expenses. Another is to apply for a credit card with a 0% introductory interest rate, which will allow you to pay off the balance interest-free for up to 18 months. Or you might consider waiting until you’ve saved enough to pay all your costs without borrowing.


Photo credit: iStock/Arisara_Tongdonnoi

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

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.

This content is provided for informational and educational purposes only and should not be construed as financial advice.


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.

SORL-Q125-010

Read more
How Does a Joint Credit Card Impact Your Credit?

How Does a Joint Credit Card Impact Your Credit?

A joint credit card can impact each cardholder’s credit positively or negatively, depending on how the account is managed.

Opening a joint credit card with someone you trust — meaning a spouse, partner, trusted friend, or family member — can seem like a good idea, but it’s important to be aware that you’re both 100% financially responsible for paying off the balance on the card. Plus, you both share privileges of making changes to the account, earning rewards, and using the card much the way you would as a primary cardholder of a solo account.

Learn more about joint credit cards and their pros and cons.

Key Points

•   Joint credit card accounts involve shared responsibility and privileges.

•   Usage determines if each cardholder’s credit is positively or negatively impacted.

•   If credit is managed responsibly, a joint card can build credit.

•   Sharing a credit card can cause personal conflicts over financial issues.

•   Trust and financial reliability of the co-account holders are crucial before opening a joint account.

What Are Joint Credit Cards?

Just as the name suggests, a joint credit card is one that permits two users to share a single credit line. In turn, as primary cardholders, each individual is able to make purchases on the card, as well as update and manage account information. Plus, they’re each 100% responsible for paying off the card balance.

When applying for such a card, both individuals’ credit scores, and credit histories are reviewed. So if you both have strong credit scores, it could boost your odds of getting approved for a credit card with higher credit limits and favorable rates, terms, and perks.

But what might happen when one of you has a lower credit score? In that case, it could potentially hurt the odds of your getting approved for a credit card. Or it might lead to your being offered less favorable rates, terms, and lower credit limits. However, it could benefit the person with the lower score, as they’re piggybacking off the co-applicant’s higher credit score.

How Do Joint Accounts Work for Credit Cards?

As mentioned, both people will need to apply for a credit card. This means that the credit card issuer will review your respective credit scores and profiles. You both are equally responsible for paying off the balance on the card, and you each also have full rights to manage and make changes to the account. Plus, you can each make credit card charges, swiping or tapping at will.

A common misconception is that if you share a joint credit card account, your credit histories and scores will be merged. Not at all: Credit scores will always be looked at on an individual basis. In other words, the credit card payments on joint accounts will be reported to the credit bureaus, and this will be reflected on each user’s credit history.

Recommended: Credit Card Network vs Issuer: What’s the Difference?

How to Manage a Joint Credit Card Account

How you manage a joint credit card account is largely up to you and the co-owner on the account. While you both have full privileges to the account and can make changes, do you want to touch base before making any changes? Do you want to establish a monthly spending limit? It can be wise to agree to how you will use the account and what guardrails you may want in place before applying.

As for payments, you have decisions to make about who pays the bill. For instance:

•   You might decide it’s best to have one co-owner make payments and have the other person pay them back.

•   You could alternate making payments. That is, one account holder pays the January bill; the other takes care of February, and so forth.

•   Another payment guideline could be that you tally who bought what during each billing cycle and have each person be responsible for their fair share.

Recommended: What Is a Credit Card Chargeback and How Does It Work?

Impact of a Joint Credit Card on Your Credit Score

Joint accounts can affect your credit score. Here are a few scenarios to consider:

•   As all credit card payments on a joint account are reported to the credit bureaus, if you stay on top of payments, a joint account can help establish your credit. They can also help build your credit history.

•   On the flip side, if you fall behind on payments or the account goes to collections, that can negatively impact your credit scores. Debt gone to collections will stay on your respective credit reports for seven years.

•   Another way joint credit cards can impact your credit is credit utilization. If you run up a high balance and are using close to your credit limit, then it could depress your score. But if you keep a low credit usage ratio, then it could help establish or build credit from scratch.

•   Opening any credit card can affect your credit card history, which is another factor that plays into your credit score as tracked by the three credit bureaus.

Open too many credit cards in a short time period, and that may not be a positive thing; it looks as if you are trying to quickly access a lot of credit. But if you open a joint account and stay in good standing, it can lengthen each of your credit histories, which can be good.

Joint Credit Card vs Authorized User vs Cosigner

You might’ve heard the terms “authorized user” and “cosigner” tossed around when considering credit cards. While they both imply a level of joint usage on a credit card, they actually mean very different things.

•   An authorized user is a person you add to your account. They can use the card to make purchases. However, you remain the account holder and are fully responsible for paying off the card. And as the account holder, you are the only person authorized to manage and make changes to the account.

Your credit card payments are also reported on the authorized user’s credit file. So if you stay on-time with your debt payoff, this could establish or build your authorized user’s credit score.

•   A cosigner is someone who agrees to share financial responsibility on a credit card account. If you have a low credit score or are building credit from scratch, a lender will take into consideration the cosigner’s credit. A cosigner’s strong credit could help you get approved for a credit card you might otherwise not be granted. Furthermore, should you fall behind on payments, the cosigner is financially responsible for your paying off the balance.

Benefits of Joint Credit Card Accounts

Here’s a look at some of the advantages of having a joint credit card account:

•   Can help you land better credit card offers. If you both have strong credit scores, then it could potentially improve the chances of getting credit cards with higher credit limits and better terms and rates.

Should one of you have a lower credit score, it might help that person get approved for a better credit card.

•   Shared financial responsibility. If both co-owners of the credit card account are responsible and do their share to pay off the balance, it can help you stay on top of payments.

•   Streamlines bills. Instead of having two separate credit cards, putting both people’s transactions on a single account could simplify payments. You have one fewer bill to manage.

•   Can help build credit history. If one applicant is starting from scratch in terms of building a credit history, a joint account can help them establish themselves if payments are made on time and the credit utilization is kept low.

Disadvantages of Joint Credit Card Accounts

Now, consider the potential downsides of a joint account:

•   Shared financial responsibility. This is one of those “could be a pro, could be a con” factors. Why’s that? Well, if one person is doing most of the spending, you’re both on the hook for making payments. This could potentially get complicated if one person isn’t pulling their weight, financially speaking.

•   Potential personal complications. Should your relationship change or you end up fighting over transactions and other financial matters, a joint credit card could wind up being a difficult thing. Also, having a shared account could lead to each of you scrutinizing one another’s spending habits, for better or for worse.

•   Confusion over who pays for what and when. Even if you set up some basic guidelines, you might find yourself in a quandary as to who pays for what. Or maybe one of you overspends and it becomes challenging to pay off the balance or even the minimum payment due. A joint credit card could become a source of stress or arguing in this way if you can’t develop a good, fair system for responsible usage and timely payments.

Factors to Consider Before You Open a Joint Account

Before making a decision on whether to open a joint credit card account, you’ll need to decide on how doing so can benefit both parties. It can be wise to work through the following points:

•   Can a joint credit card help boost the odds of getting a credit card with better rates, terms, and more attractive perks? How can it help build both people’s credit histories?

•   Another important consideration is the payment arrangement. Who is responsible for making the payments? Or will you set it on autopay and link it to one person’s account? Who will be responsible for going through each billing statement and figuring out which transaction belongs to which user?

•   If you’re sharing a joint account with someone, it might be a good idea to have a savings account that serves as a cash cushion. You could each contribute a small amount every week, so it’s there in case money gets tight and you need help covering a credit card bill.

Do You Trust the Joint Account Holder?

As a joint credit card can impact your credit and financial situation, you likely need to truly trust the other party involved. If you’re relying on the other person to make payments on your behalf, can you count on them to do so? Also, it’s important that both parties are in a financially sound place where they can cover their share of the bill.

You also want to feel reassured that the co-account holder isn’t the type to splurge and put an extravagant purchase on the card. For instance, if you usually put, say, $250 a month on your credit card, you will likely want to know how much the other person usually rings up, as well as if they ever go buying sprees.

Are There Other Options to Consider?

Understanding exactly how a joint credit card works, what your respective responsibilities are, and how it impacts your finances and credit is important.

If a joint credit card doesn’t seem like the right fit, you can look into alternatives. These include keeping separate credit cards and possibly, if one person is building their credit from scratch, using a secured credit card.

Or the individual with a stronger credit history could add the other as an authorized user on their credit card account, as described above.

Recommended: Understanding Purchase Interest Charges on Credit Cards

Tips for Removing a Partner From Your Accounts

Unlike an authorized user, where you can simply remove someone from your account, you usually can’t remove one co-owner on a joint credit card. Typically, you need to close the account entirely.

Either person has the power to close the account. However, both parties will be responsible for making payments until the balance goes to zero. So, you’ll likely want to have a discussion before doing so. When would be a good time to close the account, and how will you go about handling paying off the remaining balance? Communication is key to making sure that closing the account doesn’t become a difficult situation.

The Takeaway

Opening a joint credit card can impact your credit, both positively and negatively. Typically, both applicants’ credit histories will be reviewed when seeking one of these cards, and each party, if given this kind of access to credit, will have full use of the account and full responsibility for the balance. If handled well, this can help establish and build your credit. If handled poorly, it can negatively impact your credit.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

🛈 SoFi does not currently offer joint credit cards, but it does offer authorized users on its credit cards.

FAQ

How do shared finances affect my credit rating?

Sharing your bank accounts and budgets doesn’t inherently impact your credit rating. But when you open a joint credit card account, it can impact your credit histories, credit history length, and credit usage. With both parties responsible for the balance, it’s wise to think carefully about this kind of account. Another option is to be an authorized user on someone’s account who makes on-time payments and keeps their credit usage low.

Do both users on a joint credit card have the same credit score?

While both users on a joint credit card can be affected by the payment history and credit usage on the joint account, credit histories are always on an individual basis.

In other words, there’s no such thing as a shared credit account, and many factors go into someone’s credit score. So having a joint credit card doesn’t merge your scores or mean you’ll have the exact same score.

Is it advisable to open a joint account with my friend?

While you can open a joint credit card account with a friend, whether it’s a good idea depends on your financial habits and the level of trust between you two. Can they be trusted not to overspend and to do their part in paying off any credit card balance? A lot of discussion will need to take place before making this decision.


Photo credit: iStock/Jelena Danilovic

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.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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.

SOCC-Q125-037

Read more
Solo 401(k): The Retirement Plan Built for the Self-Employed

Navigating Solo 401(k) Plans: A Complete Guide for the Self-Employed

Being self-employed offers many perks, including freedom and flexibility. What it doesn’t offer is an employer-sponsored retirement plan. But when you don’t have access to a 401(k) at work, opening a solo 401(k) can make it easier to stay on track with retirement planning.

Before you establish a solo 401(k) for yourself, it’s important to understand how these plans work and the pros and cons involved.

What Is a Solo 401(k)?

A solo 401(k) is a type of 401(k) that’s designed specifically with self-employed individuals in mind. This retirement savings option follows many of the same rules as workplace 401(k) plans in terms of annual contribution limits, tax treatment, and withdrawals. But it’s tailored to individuals who run a business solo or only employ their spouses.

It’s one of several self-employed retirement options you might consider when planning a long-term financial strategy.

Definition and Overview

A solo 401(k) is a tax-advantaged retirement account that’s for self-employed individuals and business owners who have zero employees, or no employees other than their spouse. This type of 401(k) plan is also known by a few other names:

•   Solo-k

•   Uni-k

•   One-participant plan

Traditional solo 401(k) contributions are made using pre-tax dollars. However, it’s possible to open a Roth solo 401(k) instead. In the case of a Roth solo 401(k), you’d make contributions using after-tax dollars and be able to withdraw the money tax-free in retirement.

A self-employed 401(k) plan works much the same as a regular 401(k). For instance, you may be able to take loans from your savings if needed. Catch-up contributions are also allowed. The biggest difference is that there is no matching contribution from an outside employer.

You can start investing in a solo 401(k) for yourself through an online brokerage. There’s some paperwork you’ll need to fill out to get the process started, but once your account is open you can make contributions year-round.

At the end of the year, the IRS requires solo 401(k) plan owners to file a Form 5500-EZ if the account has $250,000 or more in assets.


💡 Quick Tip: Look for an online brokerage with low trading commissions as well as no account minimum. Higher fees can cut into investment returns over time.

Contribution Limits in Solo 401(k) Plans

Much like workplace 401(k)s, there are annual contribution limits that apply to solo 401(k) plans.

The IRS caps total contributions to a solo 401(k) account at $69,000 for 2024 and $70,000 for 2025. That doesn’t include catch-up contributions for those age 50 and over.

As both the employee and employer of your own business, you can contribute both elective salary deferrals and employer nonelective contributions (you are both the employer and the employee in this scenario). Each has different contribution caps.

Annual Contribution Limits

As an employee, you can contribute up to 100% of your earned income up to the annual contribution limit: $23,000 in 2024 and $23,500 in 2025, plus an additional $7,500 for those age 50+ in elective salary deferrals. In 2025, those aged 60 to 63 may contribute an additional $11,250, instead of $7,500.

In addition, you can make employer nonelective contributions. These come directly from the “employer” (aka you) and are not deducted from the employee’s (your) salary. As an employer, you can contribute up to 25% of your self-employment income (business income – ½ self-employment tax and elective salary deferrals), in pre-tax dollars.

Setting Up a Solo 401(k) Plan

If you’re interested in setting up a solo 401(k) for yourself, you can do so through an online brokerage. Here’s a step-by-step guide for how to open a solo 401(k).

Steps to Establish Your Plan

1. Choose a Plan Administrator

A plan administrator is the person responsible for managing your solo 401(k). It’s their job to make sure the plan is meeting reporting and other requirements established by the IRS. If you’re self-employed, you can act as your own plan administrator or you could choose your accountant instead.

2. Choose a Brokerage

Once you know who’s going to manage the plan, the next step is deciding where to open it. A number of brokerages offer solo 401(k) plans so you may want to spend some time comparing things like:

•   Account setup process

•   Investment options

•   Fees

You may be able to start the solo 401(k) account setup process online, though some brokerages require you to call and speak to a representative first. And you may need to finalize your account opening by mailing or faxing in any supporting documents the brokerage needs to complete the application.

3. Fill Out a Solo 401(k) Application

Before you can start a 401(k) account for yourself, you’ll need to give your brokerage some information about your business. A typical solo 401(k) application may ask for your:

•   First and last name

•   Employer Identification Number (EIN)

•   Plan administrator’s name and contact information

•   Social Security number

•   Mailing address

•   Citizenship status

•   Income information

You’ll also need to disclose any professional associations or affiliations that might result in a conflict of interest with the brokerage. In completing the application, you’ll be asked to name one or more beneficiaries. You may also be asked to provide bank account information that will be used to make your initial contribution to the plan.

4. Choose Your Investments

Once you’ve returned your solo 401(k) account application and it’s been approved, you can choose your investments. The type of investments offered can depend on the brokerage and the plan. But typically, you may be able to choose from:

•   Target-date funds

•   Index funds

•   Actively managed funds

•   Exchange-traded funds (ETFs)

Whether you have access to individual stocks, bonds, CDs, or alternative investments such as commodities can depend on the platform that’s offering the plan.

5. Decide How Much to Contribute

You may choose to schedule automatic investments or make them manually according to a schedule that works for you.

Choosing Between Traditional and Roth Solo 401(k)s

You can opt for a traditional solo 401(k), which is made with pre-tax dollars, or a Roth solo 401(k), which is made with after-tax dollars. Which plan is better for you may depend on what you expect your income to be in retirement.

If you believe your income will be higher in retirement than it is now, in general, a Roth could be a better choice since you can take the distributions tax-free at that time. But if you think your income may be less in retirement than it is now, you might be better off with a traditional solo 401(k), which allows you to take the tax deduction now and have your distributions taxed in retirement.

Advantages and Disadvantages of Solo 401(k) Plans

When considering retirement account options, it can be helpful to look at the pros and cons to determine what works best for your personal situation.

Benefits of Having a Solo 401(k)

There are different reasons why opening a 401(k) for self employed individuals could make sense.

•   Bigger contributions. Compared to other types of self-employed retirement plans, such as a SEP IRA or SIMPLE IRA, solo 401(k) contribution limits tend to be more generous. Neither a SEP IRA or SIMPLE IRA, for instance, allows for catch-up contributions.

•   Roth contributions. You also have the option to open a Roth solo 401(k). If you anticipate being in a higher tax bracket when you retire, you may prefer being able to withdraw contributions tax-free with a Roth.

•   Flexible withdrawal rules. A solo 401(k) can also offer more flexibility with regard to early withdrawals than a SEP IRA, SIMPLE IRA, traditional IRA, or Roth IRA. If your solo 401(k) plan allows it, you could take out a loan in place of an early withdrawal. This could help you to avoid early withdrawal penalties and taxes. An IRA-based plan wouldn’t allow for loans.

Considerations and Potential Drawbacks

There are also a few potential downsides of investing in a solo 401(k).

•   Eligibility restrictions. If you run a small business and you have at least one employee other than a spouse, you won’t be able to open a solo 401(k) at all.

•   Complicated reporting. Calculating contributions and filing can be more complicated with a solo 401(k) vs. a SEP IRA or SIMPLE IRA. If your plan has more than $250,000 in assets you’ll need to file Form 5500-EZ with the IRS each year.

•   Administrative costs. Depending on where you open a solo 401(k) plan, the cost of maintaining it year to year may be higher compared to other self employed retirement plans. And an early 401(k) withdrawal can trigger taxes and penalties.

It’s important to consider the range of investment options offered through a solo 401(k). What you can invest in at one brokerage may be very different from another. The individual cost of those investments can also vary if some mutual funds or exchange-traded funds offered come with higher expense ratios than others.


💡 Quick Tip: Did you know that you must choose the investments in your IRA? Once you open a new IRA and start saving, you get to decide which mutual funds, ETFs, or other investments you want — it’s totally up to you.

Withdrawals and Loan Provisions

There are certain requirements for withdrawals and/or loans from a solo 401(k).

Rules for Withdrawing Funds

You can make withdrawals from a solo 401(k) without penalty at age 59 ½ or older. Distributions may be allowed before that time in the case of certain “triggering events,” such as a disability, but you may owe a 10% penalty as well as income taxes on the withdrawal.

Loan Options and Conditions

Some solo 401(k) plans may be set up to allow loans. If yours does, you could take out a loan in place of an early withdrawal. This could help you to avoid early withdrawal penalties and taxes. Just be sure to find out the loan terms and conditions, which can vary by plan.

Testing and Compliance for Solo 401(k)s

Unlike workplace 401(k)s, solo 401(k)s have no testing compliance requirements involved.

Alternatives to Solo 401(k) Plans

Instead of a solo 401(k), self employed individuals can consider another type of retirement account. Here’s how different options stack up.

Comparing a Solo 401(k) to a SEP IRA and Other Retirement Options

A SEP IRA is designed for small businesses. However, unlike a solo 401(k), a SEP IRA allows no catch-up contributions and there is no Roth version of the plan.

A SIMPLE IRA is for businesses with no more than 100 employees. It has much lower contribution limits than a solo 401(k) and once again, there is no Roth option.

Pros and Cons of a Solo 401(k)

A solo 401(k) has advantages and disadvantages. Here’s a side-by-side comparison of the benefits and drawbacks.

Solo 401(k) Pros

Solo 401(k) Cons

Catch-up contributions may allow older investors to save more for retirement versus a SEP IRA or SIMPLE IRA. Only self-employed individuals who have no employees or just employee their spouses can contribute.
It’s possible to choose between a traditional solo 401(k) or Roth solo 401(k), based on your investing goals and tax situation. Annual reporting requirements may be more complicated for a solo 401(k) compared to other self employed retirement plans.
Solo 401(k) plans may allow for loans, similar to workplace plans. Early withdrawals from a solo 401(k) are subject to taxes and penalties.

The Takeaway

A solo 401(k) can be a worthwhile investment vehicle for self-employed people who want to save for retirement. It has more generous contribution limits than some other retirement options. In addition, there is a Roth version of the plan, and a solo 401(k) plan may also offer flexibility in terms of early withdrawals. For individuals who are self-employed, opening a solo 401(k) is one potential way to start saving for their golden years.

Ready to invest for your retirement? It’s easy to get started when you open a traditional or Roth IRA with SoFi. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

Easily manage your retirement savings with a SoFi IRA.

FAQ

Can I contribute 100% of my salary to a solo 401(k)?

As an employee, you can contribute up to 100% of your earned income to a solo 401(k) up to the annual contribution limit, which is $23,000 in 2024, and $23,500 in 2025, plus an additional $7,500 for those age 50 and up in elective salary deferrals. For 2025, those aged 60 to 63 may contribute an additional $11,250, instead of $7,500.

Is a solo 401(k) taxable income?

You will pay taxes with a solo 401(k), but the type of plan you open determines when you’ll pay those taxes. If you have a traditional 401(k), your contributions are tax-deferred, and they reduce your taxable income for the year in which you make them. However, you will pay taxes on distributions when you take them in retirement. If you have a Roth 401(k), you pay taxes on your contributions when you make them, but your distributions in retirement are tax-free.

What is the average return on a solo 401(k)?

The return on a solo 401(k) depends on the investments in your portfolio. However, in general, a solo 401(k) invested in a mix of bonds, stocks, and cash assets can have an average rate of return ranging between 3% and 8%. But again, it depends on what your investments are, and how much you allocate to those different assets. You may want to compare your plan’s performance to plans with similar funds to get a general sense of what the average return might be.

Who qualifies for a solo 401(k)?

To be eligible for a solo 401(k), you must be self-employed or a small business owner with no employees other than a spouse. To open a solo 401(k) you will need an Employee Identification Number (EIN), which is available from the IRS.

Photo credit: iStock/visualspace


About the author

Rebecca Lake

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.




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.


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

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

SoFi Invest®

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.
For a full listing of the fees associated with Sofi Invest please view our fee schedule.

SOIN1023177

Read more

Saving Money With a Zero-Waste Lifestyle

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.

Recommended: 50/30/20 Budget Calculator

Earn up to 3.80% 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 $3M of additional FDIC insurance.

Sort savings into Vaults, auto save with Roundups.


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.

Recommended: How to Manage Passive Income Streams

Reducing Waste in Home and Energy Consumption

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.

Recommended: Ways to Make Money From Home

The Takeaway

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.

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

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.


Photo credit: iStock/JulPo

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


SoFi members with Eligible Direct Deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below).

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning 3.80% APY, we encourage you to check your APY Details page the day after your Eligible Direct Deposit arrives. If your APY is not showing as 3.80%, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning 3.80% APY from the date you contact SoFi for the rest of the current 30-day Evaluation Period. You will also be eligible for 3.80% APY on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi members with Eligible Direct Deposit are eligible for other SoFi Plus benefits.

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

SoFi Bank shall, in its sole discretion, assess each account holder’s Eligible Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving an Eligible Direct Deposit or receipt of $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Eligible Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

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

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

Members without either Eligible Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, or who do not enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days, will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 1/24/25. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
*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.

SOBNK-Q424-048

Read more

Investing in Rare Coins

Investing in rare coins involves buying and selling old, uncommon, scarce, historic, or otherwise notable coins in the hope that they will appreciate over time and can be sold for a profit.

Rare coins are a type of collectible, and as such are considered a type of alternative asset. Some alternative investments may offer potential returns or diversification (like most alternate assets, coin values don’t move in sync with traditional markets). But coins can be subject to fraud and forgery, as well as the whims of the market, and as such investing in coins is not without risk.

Key Points

•   Rare coins are considered a type of collectible, similar to vintage cars and baseball cards.

•   Investing in rare coins is a type of alternative investment. Alternatives are not correlated with traditional assets like stocks and bonds.

•   Like many alternatives, investing in coins requires that investors do their due diligence to understand the value of each asset, and the potential upside as well as the risks.

•   Certain types of coins can be subject to fraud and may be fake.

•   Like many alts, the coin market can be volatile, and there’s no way to predict whether a certain rare coin will hold its value.

Understanding Rare Coin Investing

Rare coins are a type of collectible, meaning that investors might consider investing in rare coins as a form of alternative investments, which can also include other collectibles, such as vintage wines or antique books, or assets like commodities and real estate.

(Note that SoFi offers alternative investments including a number of different asset types, including real estate, commodities, private credit, hedge funds, and more. It does not offer rare coins, however.)

Alternative investments tend not to be correlated with traditional assets like stocks and bonds. Thus collecting and investing in coins can be a way to diversify your portfolio, but as with any new type of investment there can be a steep learning curve.

Prospective investors may not have a background in coin collecting or numismatics (a term that refers to the formal study of currency, but can apply to hobbyists), and thus may not know how to assess various types of currency.

While collectibles can have value, coins may not rank near the top of the list of the most valuable types of collectibles.

So, before investors get started in rare coin investing, it’s a good idea to learn the ins and outs of rare coins, and even dip into an alt investment guide to see where they stand in the greater ecosystem of alternative investments. At this time, SoFi does not offer rare coins or investment products focused on rare coins.

What Are Rare Coins?

Rare coins are what they sound like: Coins or currencies that are limited by mint location, nation of origin, year, condition, and other variables. Some collectible coins are unusually beautiful, or historically significant.

As an example, you could pick up a dime minted in 2023 in Philadelphia, which would be the opposite of a rare coin. In fact, more than 791 million dimes were minted in Philadelphia during 2023.

But if you were to stumble across a 1969 Lincoln penny minted in San Francisco which features a specific double-die error — that’s an extremely rare coin that might fetch as much as $25,000 at auction (assuming it was authentic).

Recommended: Why Invest in Alternative Assets?

A Brief History of Coin Collecting and Investing

People have been collecting and investing in coins, both common and rare, for thousands of years — perhaps for as long as there have been coins used as currency. In fact, Roman emperors were interested in coin collecting, as were the aristocracy during subsequent eras, and even some of the first U.S. presidents.

Owing to their design and relative rarity, the coins of antiquity were valued as something akin to works of art. But being small and portable, coins were easier to exchange and collect.

While collecting coins was reserved for those with the wealth to obtain exotic coins in the first place, coin collecting as a hobby became more widespread as coins became more common as a basic currency. For example, in the 17th and 18th centuries, when the study of coins and currency became more formalized, the growing base of knowledge also fueled collectors’ interest.

Then, as the minting process became more automated, and the use of various metal alloys made coin manufacturing cheaper in the 19th and 20th centuries, coin collecting continued to gain popularity. Trade shows and organizations emerged, and the first international convention for coin collectors was held in Detroit, in 1962.

Today, the advent of the internet has supported online forums for discussion and networking. In addition, alternative platforms for buying, selling and trading coins have emerged.

Sophisticated collectors may also become de facto investors hoping to see a profit from their collections. However, as with most types of alternative investments, especially collectibles, there are risks involved in coin collecting, owing to the rise of forgeries, fraud, and various scams. In addition, the market for a type of coin may wax and wane, taking a collector’s coin values with it.

Alternative investments,
now for the rest of us.

Start trading funds that include commodities, private credit, real estate, venture capital, and more.


💡 Quick Tip: All investments come with some degree of risk — and some are riskier than others. Before investing online, decide on your investment goals and how much risk you want to take.

How to Get Started in Rare Coin Investing

For enterprising investors curious about rare coin investing, some initial research is paramount. That includes learning about the different types of rare coins, how to evaluate them, and more. But for someone who wanted to start a simple collection or portfolio of coins, they could always start with commonly used U.S. currency, which is relatively easy to verify and obtain. U.S. coins also have a long and storied history.

However, if you want to start adding rare or high-end coins to your portfolio, one way to do so is to consider buying coin sets. There are hundreds of such sets from all over the world, and from different time periods.

Once you start learning about the different types of coins that comprise sets, you should be able to build up your knowledge and pursue other rare coins. But again, this all depends on an investor’s resources and risk tolerance.

Rare coins are relatively high-risk investments, and there’s no guarantee that there’ll be a return when investors look to sell.

Types of Rare Coins

As discussed, there are many types of rare coins. As a collector or investor, you may want to narrow your focus to a specific subset of coins. Some examples:

•   Ancient coins: Ancient coins date back hundreds or even thousands of years. They may be made from gold, silver, copper, or other metals. They may be sourced from ancient empires such as the Greeks or Romans, and since they’re quite rare, they tend to be valuable.

•   Rare U.S. coins: The U.S. has minted a lot of coins over the past 250 years, and some are exceedingly rare, making them valuable. These coins may be valuable because they date from specific periods of U.S. history (e.g. the Civil War), have errors, or just have limited mintage.

•   International coins: International coins, as a category, can include any coins sourced from around the world. These coins may be valuable due to low mintage, composition, or history, similar to U.S. coins.

•   Error coins: Coins with mintage errors can also be valuable. Minting errors may vary, and include double dies (duplicate images), missing markings, strike errors (the design is off-center), and more.

•   Bullion: Bullion coins are typically valuable for their composition, and don’t usually have an assigned dollar value. That is, a bullion coin might be one ounce of silver, and is valuable for its silver content. That said, bullion coins can also be minted or designed in rare or unusual ways, and some collectors may enjoy tracking them down as a way of investing in precious metals.

Evaluating Rare Coins

Evaluating rare coins can be difficult, and in many cases, it may be a good idea to take a rare coin to a numismatist or specialist. But in a general sense, investors can do some basic research and look into a coin’s history and origin, its design and features, and its weight and dimensions. There are numerous guides available for this exact purpose.

Would-be coin investors should also bear in mind that there are many fakes on the market. A coin may not actually be of its purported origin or metal composition (a “gold” coin may actually be gold-plated copper, for example). It may be incorrectly graded, too, and be in worse condition than it appears.

This is one of the reasons that investing in coins is rife with risk, and why it may be a good idea to speak with a specialist.

Buying and Selling Rare Coins

Buying and selling rare coins is fairly simple. There are coin and precious metal retail stores all over the world, and you can shop at those stores to find and select the rare coins you want.

There are also large and popular online retailers – an internet search will bring up many names — that you can use to make a purchase, or a sale.

The key, of course, is to try and make sure you’re not being taken advantage of or falling for a scam. So, read reviews, do some research on retailers, and frequent a dealer or retailer that you trust.

Market Trends and Price Factors

Forecasting or even wrapping your head around the market for rare coins can be difficult. But overall, it’s a nearly $10 billion market worldwide, one that’s expected to grow to nearly $20 billion by 2030. The market itself is often driven by passionate collectors and investors, and not economic or external forces like the stock market (though economic and geopolitical factors can have an effect, of course).

For example, the value of precious metals like gold and silver are often in flux. This would likely impact the value of certain coins. But other factors can come into play, like an archeological discovery or historical analysis that alters the perception of a powerful figure or era.

In other words, as with many types of assets it can be difficult to mark what, exactly, is going to increase or decrease the value of a specific coin, other than simple supply and demand. It’s a complex market, and one that will likely require some time and experience to get a handle on for investors.

Risks and Challenges

For investors, perhaps the biggest challenge or risk involved in investing in rare coins is that you may not know exactly what you’re looking at or investing in — especially if you’re inexperienced with coin collecting. You could pay too high of a premium on a coin, for instance, or misunderstand something related to mintage or strike errors. There are a lot of details you need to know, and it can be difficult to take everything into consideration.

Further, investors should be aware of the risks associated with generating returns. Coins don’t accrue value like stocks do, and it’s not easy to tell how much a coin can be worth. You also may need to find a buyer once you’re ready to sell — it’s not as liquid a market as the stock market.

Tax Implications of Rare Coin Investing

Since coins are a form of alternative investment — and collectibles, more specifically — a tax liability is generated once an investor sells it. If you realize a capital gain on that sale — that is, you sell it for more than you paid for it – then you owe capital gains tax, either short-term or long-term, depending on how long you owned it.

But because coins are collectible, a long-term capital gain from the sale of coins can be taxed as high as 28%, plus a potential 3.8% net investment income tax, depending on your adjusted gross income (AGI).

This is why it’s important to keep track of your purchases and sales, so that you can make an accurate tax record for the IRS. Note, too, that depending on where you live, you may not need to pay sales tax when you buy coins — that’s up to the states. As always, it may be best to consult with a tax professional if you have questions.

The Takeaway

Investing in rare coins can be a way to add alternative investments to your portfolio, but it’s an area that has risks. Investors will need to research what they’re buying and selling — which may require some experience in the market — and keep track of their investments to ensure they’re paying a proper amount in taxes.

Investing and collecting coins isn’t for everyone, but It may be a potentially fun and interesting way to add diversification to your portfolio.

Ready to expand your portfolio's growth potential? Alternative investments, traditionally available to high-net-worth individuals, are accessible to everyday investors on SoFi's easy-to-use platform. Investments in commodities, real estate, venture capital, and more are now within reach. Alternative investments can be high risk, so it's important to consider your portfolio goals and risk tolerance to determine if they're right for you.

Invest in alts to take your portfolio beyond stocks and bonds.

FAQ

What factors determine the value of a rare coin?

Several variables can determine a coin’s value, including its age, mintage, mint location, potential minting errors, the coin’s metal composition, as well as its beauty or historical rarity, and more.

How do you authenticate rare coins before investing?

To authenticate rare coins, it may be best to rely on the expertise of a professional numismatist. Otherwise, you’ll be doing a lot of research on your own to validate dates, origins, mintage, and more.

Is it better to invest in graded or ungraded rare coins?

It may be a good idea to invest in graded rare coins, so that you know what, exactly, you’re investing in.


Photo credit: iStock/Jitalia17

SoFi Invest®

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.
For a full listing of the fees associated with Sofi Invest please view our fee schedule.


An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. This and other important information are contained in the Fund’s prospectus. For a current prospectus, please click the Prospectus link on the Fund’s respective page. The prospectus should be read carefully prior to investing.
Alternative investments, including funds that invest in alternative investments, are risky and may not be suitable for all investors. Alternative investments often employ leveraging and other speculative practices that increase an investor's risk of loss to include complete loss of investment, often charge high fees, and can be highly illiquid and volatile. Alternative investments may lack diversification, involve complex tax structures and have delays in reporting important tax information. Registered and unregistered alternative investments are not subject to the same regulatory requirements as mutual funds.
Please note that Interval Funds are illiquid instruments, hence the ability to trade on your timeline may be restricted. Investors should review the fee schedule for Interval Funds via the prospectus.


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.


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

Disclaimer: The projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results.

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.

SOIN-Q424-007

Read more
TLS 1.2 Encrypted
Equal Housing Lender