SoFi

Scholarships can be a helpful resource to pay for grad school and are available through many different avenues, including states, organizations, nonprofits, companies, and more.

Grants and scholarships are similar in that they’re both gift aid you don’t typically have to repay after graduation. The main difference is that scholarships are typically merit-based, while grants are need-based.

Let’s look at some common scholarships and grants for prospective graduate students.

State Scholarships & Grants

To find scholarships and grants at the state level, you can try contacting your state’s Department of Education for assistance and resources. Scholarships and grants vary state by state, but here are 10 options you may want to consider:

Graduate Tuition Assistance Grant (Colorado)

Provides financial support to graduate students enrolled at participating Colorado public universities. Awards are need-based and subject to fund availability.

Kansas Comprehensive Grant (Kansas)

Offers need-based grants to Kansas residents attending state universities, private colleges, or community colleges for graduate programs.

Massachusetts Gilbert Matching Student Grant (Massachusetts)

Supports financially needy graduate students attending participating colleges in Massachusetts.

Texas Public Education Grant (TPEG) (Texas)

Available to graduate students with demonstrated financial need attending Texas public colleges or universities.

Florida Student Assistance Grant (Florida)

Offers need-based aid to graduate students enrolled in eligible Florida postsecondary institutions.

New York State TAP for Graduate Studies (New York)

Provides financial aid for eligible New York residents pursuing graduate degrees at participating institutions within the state.

Oregon Chafee Education and Training Grant (Oregon)

Supports former foster youth pursuing graduate studies in Oregon with financial need.

North Carolina Education Lottery Scholarship (North Carolina)

Available to graduate students who demonstrate financial need and meet residency requirements.

Georgia Tuition Equalization Grant (Georgia)

Offers financial assistance to graduate students attending private colleges in Georgia, encouraging participation in higher education.

Maine State Grant Program for Graduate Students (Maine)

Provides financial aid to graduate students with financial need attending eligible institutions in or out of Maine.

Recommended: The Differences Between Grants, Scholarships, and Loans

Federal Scholarships & Grants

To apply for federal grants and scholarships, students will need to fill out the Free Application for Federal Student Aid, or FAFSA®, each year. There are several types of federal grants available, including:

Teacher Education Assistance for College and Higher Education (TEACH) Grants

Iraq and Afghanistan Service Grants

This federal grant is for graduate students with a parent who died serving in Iraq or Afghanistan. The grant amount is the same as the maximum amount of a Federal Pell Grant award for that year, which is $7,395 for the 2024-2025 school year. You can apply via the FAFSA.

Fulbright Grants

The U.S. Department of Education provides Fullbright Grants for graduate students to study and research in designated countries abroad.

When you visit the Fulbright website, click on your country of interest to view the details. For example, in Germany, there are 70 study/research grants available, the program lasts for 10 months, and its recommended participants speak German at the beginner level. In Iceland, there are only seven grants available, the program lasts nine months, and there is no foreign language requirement.

Finding Additional Federal Grants

To find additional federal grants for graduate school, take a look through Grants.gov or the U.S. Department of Labor’s database. On these sites, students can specify their search by things like their program, field of study, or other qualifiers.

Private Graduate Scholarships & Grants

When it comes to finding money for grad school, there are plenty of organizations, companies, and nonprofits that offer scholarship opportunities. The scholarships could be merit-based, need-based, or simply granted based on your affiliation or application.
Some scholarships are on the smaller side, others much larger, but any amount of aid can help. You may want to consider these elements while you’re on the hunt for private scholarships for graduate school:

Your College or University

Your school might offer merit-based scholarships or grants. To see what your school offers, connect with the office of financial aid to see if you qualify for any scholarships from the school and what additional steps you may need to take to apply.

Your Course of Study

You may be able to find scholarships related to your field of study. To find scholarships in your area of study, search national foundations or companies that might provide a scholarship. This might be especially helpful in STEM fields and other careers where there’s a high need for employees in the workforce.

Recommended: Scholarships for STEM Students

Your Neighborhood

Another way to find scholarships as a grad student is to see if your religious organization, local civic group, or other community organizations you belong to offer scholarships. You could reach out to see what may be available and perhaps complete the necessary applications.

Your Background

Based on your ethnicity or cultural heritage, you may be able to qualify for several scholarships or grants. Reach out to national foundations or local community groups to see what they offer.

Some specific private scholarships and grants include:

Greek Life Scholarships

Contrary to what society may think, enrolling in a fraternity, sorority, or other Greek organization has more benefits than the wild parties. Many Greek organizations reward their high-achieving members and alumni who pursue master’s degrees.

For example, members of Alpha Chi Rho could receive up to $3,500 for their graduate studies.

The Harry S. Truman Scholarship

The Truman Scholarship is for students who want to make a difference in society. If you’re pursuing a degree, such as Master of Public Administration, Master of Education, or Master of Social Work, and you have significant community service experience, you could qualify for the Truman Scholarship.

To apply, you must be pursuing any major that could lead to a career in public service and interested in a graduate degree. Between 55 and 65 students receive the Truman Scholarship per year, each receiving $30,000.

Government Finance Officers Association (GFOA) Scholarships

GFOA Scholarships are for graduate students intending to pursue a career in state or local finance. The association offers 11 scholarships ranging from $5,000 to $30,000.
The four kinds of graduate school scholarships are as follows:

•  The Goldberg-Miller Public Finance Scholarship for full-time students. Award amount is $30,000.

•  The Frank L. Greathouse Government Accounting Scholarship for full-time accounting students. Award amount is $10,000.

•  The Clark Burrus Public Service Academic Scholarship for minority students studying for a career in state or local government finance. Award amount is $10,000.

•  The Betty Jo Harker Professional Development Scholarship for part-time graduate students. Award amount is $10,000.

NCAA Postgraduate Scholarship

The NCAA Postgraduate Scholarship is for athletes who have attended an NCAA member institution for their undergraduate studies. Students must be in their final year of undergraduate athletics to apply.

The distribution of graduate school scholarships is unique. Three times per year (autumn, winter, spring), the NCAA gives scholarships to 21 men and 21 women per each sports season, for a total of 126 scholarships per year. This timeline splits up candidates based on the sport they play. Each scholarship is $10,000.

American Association of University Women

This is an example of a grant offered by a private organization rather than the federal government. The grant is specifically for women, and you must have received your most recent degree before June 30, 2017, to qualify.

The Career Development Grant recipients will receive between $8,000 and $20,000 for graduate school.

The Geological Society of America Grant

If you’re going into geological research, joining the Geological Society of America (GSA) and applying for their Graduate Student Research Grant may open up some opportunities. The GSA awarded 302 students money in 2023, with roughly 57% of students receiving aid. The average grant amount was $2,235.

These are only a few avenues to consider when looking for private graduate school scholarships. Databases and search engines can help, but don’t be afraid to get creative.

Fellowships

Unlike a grant or scholarship, graduate fellowships are money typically tied to an opportunity. Those who get a fellowship likely have to meet requirements to study, research, or work in a field for a short period. Not only will fellowships help students pay for graduate school, but they can also be a valuable opportunity to gain relevant experience.

Finding a fellowship will be specific to your field of study. One place to start your search process is by talking to your academic department for assistance or finding a nonprofit institution specializing in your field of study. Applicants should be aware that fellowships typically require a fairly rigorous application process.

How to Qualify for Graduate School Scholarships

Qualifying for graduate school scholarships involves careful planning and preparation. Below are tips to help you qualify:

•  Start by researching scholarships specific to your field of study, location, or demographics.

•  Maintain a strong academic record, as many scholarships prioritize academic excellence.

•  Demonstrate leadership, community involvement, and unique skills, which can set you apart from other applicants.

•  Craft a compelling personal statement that highlights your achievements, goals, and passion for your field.

•  Submit all required materials, such as transcripts, letters of recommendation, and essays, by the deadlines.

•  Make sure to apply for multiple scholarships to increase your chances of success, ensuring you meet the specific eligibility criteria for each opportunity.

Where to Find Scholarships for Graduate Students

When looking for scholarships for grad school, filling out the FAFSA is the first step. Just like undergraduates, the FAFSA is required for graduate students interested in federal student aid, including scholarships, grants, and student loans. Some schools may also use the FAFSA to determine aid awards.

From there, you can check in with your school’s financial aid office. They may have more information on the scholarship opportunities and requirements available at your school.

Community organizations can be another source of scholarships. Some career or professional organizations may also offer scholarships.

When to Apply for Graduate School Scholarships

Fill out the FAFSA as early as possible. Some aid may be awarded on a first come, first served basis, so completing the application early could potentially improve your chances of qualifying for some aid.

For private scholarships, be sure to track all relevant deadlines. Each scholarship may have its own deadline, so it may help to put together a spreadsheet so you can see a high level overview of important deadlines and application requirements.

Recommended: FAFSA Guide

Factors to Consider When Applying for Graduate School Scholarships

Applying for scholarships is a time commitment, but it may be time well spent if you can secure money to help pay for your graduate school program. Consider the following factors when applying to graduate school scholarships:

Eligibility Requirements

Review eligibility requirements closely. Do you need to be enrolled in a specific school or program of study? Be sure you understand and meet the eligibility requirements so you don’t waste time applying for grad school scholarships you aren’t actually eligible for.

Application Requirements

Some applications may require an essay and letters of recommendation. Think carefully about who you want to ask to write a letter of recommendation on your behalf. Be mindful of deadlines and ask with enough advance notice to give them enough time to write a letter.

Deadlines

Each scholarship may have its own deadlines. Track these closely. Many scholarships won’t accept late submissions.

Some scholarships may go unclaimed when the school year starts. Consider checking in with your financial aid office to see if there are any unclaimed scholarship funds available. For more information on appealing for these awards, take a look at SoFi’s guide to unclaimed scholarships.

Using Student Loans to Cover Grad School

Scholarships and grants aren’t the only options for paying for graduate school. You may also choose to take out graduate student loans.

After you receive grants and scholarships, it’s possible to fill in the gaps with financial aid for graduate school. Consider focusing on scholarships and grants before student loans, as those don’t need to be repaid. Student loans, on the other hand, will have to be paid back. If you’re applying for graduate federal or private loans, it’s worth noting that the process is different from applying for undergraduate loans. You can borrow more as a graduate student, but you might be looking at higher interest rates.

As a graduate student, you may qualify for a Direct PLUS Loan through the U.S. Department of Education. To qualify, you must be enrolled at least half-time and not have an adverse credit history.

If you don’t receive enough financial aid through a Direct PLUS Loan, you can consider private student loans. Rather than being provided by the government, these loans come from private businesses, banks, and online lenders. Students should focus on private student loans as a last resort, as private student loans lack the borrower protections afforded to federal student loans.

Alternative Funding for Graduate School

Other than taking on student loans, there are several alternatives to funding your graduate degree. If you’re able to work while attending school, you can save and budget to cover a portion or all of your tuition.

If you are working, you can speak with your employer to see if they offer a tuition reimbursement program. Employee tuition reimbursement might require you to stay at the company for a number of years or pursue a specific degree. Program requirements will vary by company.

The Takeaway

There are a wide array of grants and scholarships available for students pursuing graduate school. These include those offered by federal and state governments, individual schools, and other interest groups like nonprofit organizations. To find grants and scholarships, students can review online databases, speak with the financial aid office at their school, and fill out the FAFSA each year.
In addition to scholarships, students can pay for graduate school with cash savings, grants, and federal and private student loans.

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

FAQ

How do I get a full scholarship to graduate school?

It’s possible to get a scholarship that will pay for all of your graduate school costs. It can be very competitive to qualify for full-ride scholarships, so it may help to complete an application and make sure you meet all the requirements. If an essay is required, be sure to allocate enough time for writing and editing to be sure you are submitting a strong application. Some schools may offer full-ride scholarships to the top students.

What scholarships are available for graduate students?

There are a variety of scholarships available for graduate students, including federal and state scholarships, school-specific scholarships, and scholarships from private companies and nonprofit organizations.

Do master’s programs give scholarships?

Yes, many master’s programs offer scholarships to help offset tuition costs. These can include merit-based awards, need-based scholarships, and funding for specific fields of study. Additionally, universities, private organizations, and government programs often provide scholarships tailored to graduate students pursuing advanced degrees in various disciplines.

Are scholarships available for graduate school?

Yes, scholarships are available for graduate school. Fill out the Free Application for Federal Student Aid if you are interested in federal scholarships or grants. Check in with your school’s financial aid office for more resources.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

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

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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.

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.

SOISL-Q424-042

There are seven federal tax brackets for the 2024 tax year, ranging from 10% to 37%. As a general rule, the more you earn, the higher your tax rate. And the higher your income and tax rate, the more money you will probably owe the IRS (Internal Revenue Service) in taxes.

How much you’ll pay in federal tax on your 2024 income (due in 2025) will depend on which bracket your income falls in, as well as your tax-filing status and other factors, such as deductions.

When people look at tax charts, however, they often assume that having an income in a particular tax bracket (such as 22%) means that all of your income is taxed at that rate. Actually, tax brackets are “marginal.” This term means that only the part of your income within each range is taxed at the corresponding tax rate.

Read on to learn more about this at times complicated topic, including answers to these questions:

•   Which tax bracket am I in?

•   How can I use the 2024 tax chart to figure out how much I will owe?

•   What are some tips to lower my tax bracket?

What Are Tax Brackets?

A tax bracket determines the range of incomes upon which a certain income tax rate is applied. America’s federal government uses a progressive tax system: Filers with lower incomes pay lower tax rates, and those with higher incomes pay higher tax rates.

There are currently seven tax brackets in the US which range from 10% to 37%, as briefly noted above. However, not all of your income will necessarily be taxed at a single rate. Even if you know the answer to “What is my federal tax bracket?” you are likely to pay multiple rates. Read on to learn more about how exactly this works.

Also note that the income levels have been adjusted in 2024 vs. 2023 to take into account the impact of inflation and other factors. So even if you made the same amount in 2024 as in 2023, you are not necessarily in the same bracket again. It’s important to note these changes.

How Do Tax Brackets Work?

Whether you’re filing taxes for the first time or have been doing so for decades, you may wonder how you know what tax bracket you’re in.

While there are seven basic tax brackets, your income doesn’t necessarily get grouped into one level in which you pay that rate on all of your income. This only happens if your total income is in the lowest possible tax bracket.

Otherwise, the tax system is also graduated in such a way so that taxpayers don’t pay the same rate on every dollar earned. Instead, you pay higher rates on each dollar that exceeds a certain threshold.

•   For example, if your taxable income is $50,000 for 2024, not all of it is taxed at the 22% rate that includes incomes from $47,150 to $100,525 for single filers. Some of your income will be taxed at the lower tax brackets, 10% and 12%. Below, you’ll find a specific example of how this works.

In addition to knowing which tax bracket you’re in, it’s important to be aware of standard deductions that are applied when calculating taxes. (This is separate from common payroll deductions, such as health insurance.) The standard deduction will lower your taxes owed.

For income earned in 2024, the standard deduction is $14,600 for unmarried people and for those who are married, filing separately; $29,200 for those married, filing jointly; $21,900 for heads of household. (There may be tax benefits to marriage beyond your bracket, by the way.)

There are additional deductions that may lower your taxable income, too, such as earmarking certain funds for retirement.

In addition to federal taxes, filers may also need to pay state income tax. The rate you will pay for state tax will depend on the state you live in. Some states also have brackets and a progressive rate. You may also need to pay local/city taxes.

Example of Tax Brackets

According to the 2024 tax brackets (the ones you’ll use when you file in 2025), an unmarried person earning $50,000 would pay:

10% on the first $11,600, or $1,160
12% on the next $35,550 ($47,150 – $11,600 = $35,550, or $4,266
22% on the next $2,850 ($50,000 – $47,150 = $2,850), or $627
Total federal tax due would be $1,160 + $4,266 + $627, or $6,053

This doesn’t take into account any deductions. Many Americans take the standard deduction (rather than itemize their deductions).

2024 Tax Brackets

Below are the tax rates for the 2025 filing season. Dollar amounts represent taxable income earned in 2024. Your taxable income is what you get when you take all of the money you’ve earned and subtract all of the tax deductions you’re eligible for.

Not sure of your filing status? This interactive IRS quiz can help you determine the correct status. If you qualify for more than one, it tells you which one will result in the lowest tax bill.

2024 Tax Brackets For Unmarried People

According to the IRS, for tax year 2024, there is a tax rate of:

•   10% for people earning $0 to $11,600

•   12% for people earning $11,601 to $47,150

•   22% for people earning $47,151 to $100,525

•   24% for people earning $100,526 to $191,950

•   32% for people earning $191,951 to $243,725

•   35% for people earning $243,726 to $609,350

•   37% for people earning $609,351 or more

2024 Tax Brackets For Married People Who Are Filing Jointly

Tax rate of:

•   10% for people earning $0 to $23,200

•   12% for people earning $23,201 to $94,300

•   22% for people earning $94,301 to $201,050

•   24% for people earning $201,051 to $383,900

•   32% for people earning $383,901 to $487,450

•   35% for people earning $487,451 to $731,200

•   37% for people earning $731,201 or more

2024 Tax Brackets For Married People Who Are Filing Separately

Tax rate of:

•   10% for people earning $0 to $11,600

•   12% for people earning $11,601 to $47,150

•   22% for people earning $47,151 to $100,525

•   24% for people earning $100,526 to $191,950

•   32% for people earning $191,951 to $243,725

•   35% for people earning $243,726 to $365,600

•   37% for people earning $365,601 or more

2024 Tax Brackets For Heads of Household

Tax rate of:

•   10% for people earning $0 to $16,550

•   12% for people earning $16,551 to $63,100

•   22% for people earning $63,101 to $100,500

•   24% for people earning $100,501 to $191,950

•   32% for people earning $191,951 to $243,700

•   35% for people earning $243,701 to $609,350

•   37% for people earning $609,351 or more

Recommended: How Income Tax Withholding Works

Lowering Your 2024 Tax Bracket

You may be able to lower your income into another bracket (especially if your taxable income falls right on the cut-off points between two brackets) by taking tax deductions.

•   Tax deductions lower how much of your income is subject to taxes. Generally, deductions lower your taxable income by the percentage of your highest federal income tax bracket. So if you fall into the 22% tax bracket, a $1,000 deduction would save you $220.

•   Tax credits, such as the earned income tax credit, or child tax credit, can also reduce how you pay Uncle Sam but not by putting you in a lower tax bracket.

Tax credits reduce the amount of tax you owe, giving you a dollar-for-dollar reduction of your tax liability. A tax credit valued at $1,000, for instance, lowers your total tax bill by $1,000.

Many people choose to take the standard deduction, but a tax expert can help you figure out if you’d be better off itemizing deductions, such as your mortgage interest, medical expenses, and state and local taxes.

Whether you take the standard deduction or itemize, here are some additional ways you may be able to lower your tax bracket as you think ahead and prepare for tax season:

•   Delaying income. For example, if you freelance, you might consider waiting to bill for services performed near the end of 2024 until early in 2025.

•   Making contributions to certain tax-advantaged accounts, such as health savings accounts and retirement funds, keeping in mind that there are annual contribution limits.

•   Deducting some of your student loan interest. Depending on your income, you may be able to deduct up to $2,500 in student loan interest paid in 2024.

It can be a good idea to work with a CPA (certified public accountant) or tax advisor to see if you qualify for these and other ways to lower your tax bracket.

Recommended: 10 Personal Finance Basics

The Takeaway

The government decides how much tax you owe by dividing your taxable income into seven chunks, also known as federal tax brackets, and each chunk gets taxed at the corresponding tax rate, from 10% to 37%.

The benefit of a progressive tax system is that no matter which bracket you’re in, you won’t pay that tax rate on your entire income. If you think you might get hit with a sizable tax bill, you may want to look into changing your paycheck withholdings or, if you’re a freelancer, making quarterly estimated tax payments.

You may also want to start putting some “tax money” aside each month, so you won’t have to scramble to pay any taxes owed when you file in April. An interest-bearing checking and savings account could be a good option for this purpose.

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.

FAQ

Has anything changed from 2023 to 2024 tax brackets?

Yes, the IRS has adjusted tax brackets for tax year 2024 to reflect the impact of inflation and other factors.

What is a marginal tax rate?

The marginal tax rate refers to the highest tax bracket that you possibly fall into. However, your effective tax rate averages the taxes you owe on all of your income earned. For this reason, your effective tax rate will likely be lower than your marginal rate.

How do deductions affect your tax bracket?

Deductions lower your taxable income. The more deductions that are taken, the more of your earnings are taxed at reduced brackets.

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

4.00% APY
0.50% APY

*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.

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.

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.

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.

SOBK1223002

Switching banks doesn’t have to be a difficult process, and it can benefit your financial health. For instance, one reason you might make a change is to earn a more favorable interest rate or pay lower (or no fees). Or you might get a sign-up bonus at a new financial institution. There might be other reasons to switch banks, such as finding one with branches or ATMs that are more convenient to your daily life or one that offers other financial services you are seeking.

While changing banks isn’t usually an instantaneous process, here are the simple steps to follow to make the switch as quickly and easily as possible.

How to Switch Banks in 6 Steps

If you think changing banks is the right path for you, here are the six steps that can make it happen.

Step 1. Research and Find a New Bank

Identify the key benefits you want but currently don’t have and do an online search to compare options. Here are some points to consider as you evaluate options:

•   Interest rates earned on money on deposit. For instance, you might want to look for a high-yield savings account to help your money grow. These can offer several times the interest rate of standard savings accounts. Also, some checking accounts may pay interest, though most do not.

•   Minimum deposit and balance requirements. Certain accounts require you to open the account with a particular sum of money and/or keep an amount on deposit to earn a specific interest rate and/or avoid fees.

•   Fees assessed for accounts. There can be various fees that can eat away at your money, such as monthly maintenance fees, overdraft and NSF (non-sufficient funds) fees, out-of-network-fees, and more.

•   Convenience. If you want a traditional vs. online bank, make sure the branches are near your home and work. Also, if you use ATMs often, check to make sure in-network machines are easily accessible. If you travel frequently, look at the reach of the financial institution’s network.

•   Customer service. Read reputable online reviews and check availability (24/7? Only on weekdays?) for customer support.

•   If you are planning to buy a home soon, you might want to bank with an institution that also offers mortgages to streamline that process. Or you might prefer a bank where you can access personal financial and investing services. Consider your needs carefully.

Step 2: Open a New Account

Found a new home for your cash? Go and open that checking account to get started. You can typically fill out the information needed online, in the bank’s app, or (with traditional banks) in person. Here’s what you will usually need:

•   Valid ID. This typically means government-issued photo identification, such as your state driver’s license or a passport. Other forms of ID may be accepted. When opening an account online, you may be asked for such details as your name, Social Security number, and birthdate, with an image of your ID needing to be uploaded on the spot or in the future. (Worth noting: You usually must be at least age 18 to open your own bank account.)

•   Contact information. This means your address, phone number, and email address will likely need to be provided.

•   An opening deposit. Some banks will allow you to open an account with no money at first (say, you might sign up to have your paychecks direct-deposited going forward) or others will require you to make a deposit of anywhere from $1, $25, $100, or more to start your bank account. If you are signing up for a premium checking account or high-yield account, there may be higher minimums involved.

Now that you know what’s needed to open a bank account, don’t overlook this important point: Don’t whisk every last cent out of your old account into the new account, though you may be tempted to do so to feel as if you are making progress. You may have pending transactions and autopays coming up that will take time to sort out.

Recommended: Interest APY Calculator

Step 3: Make a List of Automatic Payments and Direct Deposits

Here’s a closer look at those pending money movements. If you’re like most of us, you rely on autopay to simplify your banking; the pros of automatic payments are hard to ignore. This means that each month your various bills and subscriptions are seamlessly deducted from your primary account on their due date.

To avoid falling behind on bills or accidentally getting your streaming service suspended, you need to turn off or redirect every automatic payment that currently comes out of the account you wish to close. As you plan to make the switch, here are items you should keep track of:

•   Automatic payments: Take a careful look at which payments are made automatically from your bank account, such as mortgage, utilities, student loans, and more.

•   Recurring payments: Consider what subscription payments you have automatically coming out of your checking account, such as yoga studio memberships or streaming services

•   Recurring outgoing transfers: Look for payments that move to external accounts, such as funds being funneled into a retirement account or a health savings account.

•   Automatic deposits: This might include the direct deposit of paychecks, alimony, Social Security benefits, a tax refund, and other sources of income (such as payouts via P2P transfers, such as PayPal or Venmo for a side hustle).

Take a look at your monthly account statement and make a list of every automatic deduction. Also scan for those irregular automatic deductions (perhaps a quarterly insurance premium payment?). Once you’ve made your list, log in to each of your service provider accounts and change your payment information.

Step 4: Transfer Funds and Update Automatic Payments

You may have already made an opening deposit to your new account, but if not, now it’s time to transfer some funds from your old one to the new one.

It’s often possible to do this online; check with both banks involved to find the best way to transfer the funds. (Keep in mind, you’ll need to leave a bit of cash in your soon-to-be former account, to cover any pending transactions and miscellaneous charges or fees.)

You’ll also want to update any automatic payments you typically receive. This can involve contacting your job’s HR team about changing your direct deposit details or contacting Social Security about how to redirect your benefits.

Recommended: 7 Tips for Managing Your Money Better

Step 5: Monitor Pending Transactions

After you’ve canceled or rerouted all the automatic payments that deduct from the account you want to close, you will need to wait for any pending transactions to clear. These pending transactions are usually for bills or subscriptions that have one remaining payment left before the company can change your payment information. Or it could require an extra pay cycle for your salary to go into your account by direct deposit.

Waiting for all pending transactions to clear ensures that your bills will be paid and your subscriptions will continue without facing any overdraft fees. Make sure there is enough money in the account you wish to close to cover any pending payments. Wait two weeks to one month for any automatic payments to be deducted. Otherwise, you risk incurring fees for overdrafting.

Step 6: Close Your Old Bank Account

Once you have transferred all automatic payments and possible deposits and waited a cycle for those to update, you’re done. It’s time to close your old account.

•   Depending on where it’s held, you may be able to finalize this online or by phone. In other cases (usually at smaller local banks or credit unions), you may have to send a written request or turn up in person.

•   Be sure to transfer out any remaining funds or get a check for the amount left in the account.

•   Whether you close your account online or in person, make sure to request written confirmation that the account has been closed, says the Consumer Financial Protection Bureau. This is a safety-net move to protect you if some issue were to arise. When you receive the letter confirming your bank account is closed, make sure to save it somewhere safe for future reference.

You’re done! You’ve completed the process and switched banks.

Challenges and Considerations When Switching Banks

There are many good reasons to switch banks, but there are times when changing banks may not be worthwhile. So before diving in, think about the following:

•   If you are switching banks to get a sign-up bonus or short-lived perk, is it worth the trouble? Make sure that the amount of money you will gain is worth the effort, and that you won’t be hit with fees that negate the extra money you bring in. (You might look at what online banks offer; they often have lower or no fees.)

•   Check if the new account will require a hard credit inquiry to gain approval. Typically, financial institutions only do a soft pull, but if you are focused on maintaining or building your credit score, you should make sure.

•   Take extra care in tracking your automatic payments and deposits. It’s not uncommon to have more of these electronic financial transactions than you expect, and some can be infrequent or irregular, such as annual payment of a subscription or insurance premium. Forgetting to redirect payments or direct deposits can create a hassle down the road.

The Takeaway

As the personal banking market becomes ever more competitive, you may find yourself thinking about changing banks for the sake of better services, greater convenience, lower fees, higher interest rates, or other features. If you do find a new home for your money, it takes just six steps to make the switch. Yes, it’s a bit of effort, but the payoff can be well worth it.

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.

FAQ

Are there downsides to switching banks?

If you’re wondering about cons or how hard it is to switch banks, know that changing banks requires just a bit of effort and patience. You will need to complete some forms and move any automatic payments or deposits to your new account, as well as wait a cycle while these update. But changing financial institutions should not involve a charge or impact your credit score.

Is it difficult to switch banks?

To switch banks, you’ll need to identify a new financial institution and fund your new account. Then, you will need to transfer automatic payments, deposits (say, via direct deposit or PayPal), and wait for them to update. Once that happens, you are ready to transfer any remaining funds and officially close your old account.

What is the easiest way to switch banks?

The easiest way to switch banks can be to identify a new financial institution, complete your application, monitor and redirect automatic deposits and payments, wait a billing cycle, and then transfer any remaining funds and close your old account.

How long does it take to switch banks?

While it can take just a few minutes to open a new bank account, it usually is wise to wait a full billing cycle or two so that automatic payments and deposits can be transferred to your new account. Once that happens, you can feel confident in closing your old account.

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

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

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

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

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

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

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

*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.

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.

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.

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 .

SOBNK-Q424-102