Dec

2024

Is a Savings or Checking Account an Asset?

By Rebecca Lake | Budgeting & Goals, Financial Topics | Comments Off

Are Checking and Savings Accounts Assets?

Checking accounts and savings accounts are typically considered assets, since they have a positive financial value. They represent accessible money that is part of your personal wealth and can be used as you like. Other types of bank accounts, including certificates of deposit (CDs) or money market accounts, are also assets.
Knowing what kind of assets you have, including checking and savings accounts, can make it easier to calculate your net worth. Learn more about how your bank accounts and assets work.

Key Points

• Checking and savings accounts are considered assets as they represent accessible money that is part of personal wealth.

• An asset is something owned that has intrinsic value, including bank accounts.

• Checking accounts are for spending and typically do not earn interest, unlike savings accounts.

• On a balance sheet, these accounts are listed under “current asset, cash,” reflecting their financial role.

• Savings accounts are liquid assets, easily accessed and contributing to net worth.

What Is an Asset?

An asset is something you own that has intrinsic value. Examples of assets can include bank accounts, cash, a home or other real estate, vehicles, retirement accounts, and brokerage accounts. In addition, assets can include art, antiques, jewelry, and other objects of value.

Some assets can rise in value over time.

• For instance, real estate can appreciate or grow in value over time.

• Similarly, as you earn interest on your savings account, your wealth can increase. Or if you get a bonus at work and deposit it, that too can build your net worth.

Assets may also diminish or lose value over time.

• For example, if you had $20,000 in your emergency fund but have to withdraw $10,000 for major dental work, that asset has decreased. You still have $10,000 in the account, but that’s less than you previously had in the plus column, financially speaking.

• Stocks can also lose value due to shifting economic and other forces. So, a stock you paid $100 per share for yesterday might be worth $75 per share tomorrow.

However, as long as your savings account has a positive balance and those stocks have some value, they’re still considered to be an asset.

Assets vs Liabilities

Assets are one part of the equation when you’re calculating net worth. Your net worth is a measure of what you own versus what you owe. To find your net worth, you’d subtract your liabilities or debts from your assets.

• When your net worth is positive, that means you have more assets than debts. When net worth is zero, it means your assets and liabilities are equal to one another. Effectively, they cancel each other out.

• Can you have a negative net worth? Certainly, if your debts exceed your assets. For instance, if your only assets are $5,000 in a checking account and $10,000 in a savings account but you owe $40,000 in student loan debt, your net worth would be -$25,000 at this moment in your life.

Keep in mind that it takes time to build wealth. Assets tend to accumulate over time (say, as savings in your retirement account grow), so don’t be discouraged if you are early in your career and in negative net worth territory.

How Are Assets Categorized?

There are different ways to group assets, depending on the context in which you’re discussing them. You can think of assets in terms of liquidity.

• Liquid assets are ones that can easily be converted to cash. For instance, if you have $10,000 in your savings account, you could quickly access those funds in a variety of ways (electronic transfer, for instance). If you own 100 shares of stock, you could sell them for cash.

• Illiquid assets, on the other hand, are ones that can’t easily be sold for cash. Real estate is an example of an illiquid asset, since it can take time to find a buyer and complete the sale. Your grandmother’s diamond engagement ring, which might be sitting in a safe deposit box, is another example. While it has value, it would likely take some time to have it appraised and find the right buyer.

In business and accounting, assets can also be categorized as tangible or intangible.

• Tangible assets are things that you can physically see and touch. If you own a restaurant, for example, then kitchen equipment is a tangible asset. (If someone were to ask you if you had tangible assets, they might be referring to, say, artwork or jewelry.)

• Intangible assets include things like trademarks, patents, and copyrights. You might also think of intangible assets as intellectual property, or IP.

In addition, if you are talking about investments, you might group assets into such categories as stocks, bonds, commodities, and other categories.

Is a Savings Account an Asset?

A savings account is an asset since it has financial value and is something you own, not something you owe money to (which would be what’s known as a liability). That’s true, regardless of whether you have $5 in your savings account or $500,000.

Savings accounts are secure places to keep assets that you can access fairly easily. If you’re saving in a bank that is insured by the Federal Deposit Insurance Corporation, or FDIC — and most banks are — then your deposits are insured up to $250,000 per depositor, per ownership category, per insured institution. Credit unions typically offer similar coverage via the National Credit Union Administration (NCUA).

Depending on where you choose to keep your savings, you could also earn a competitive interest rate (expressed as annual percentage yield, or APY, which reflects the power of compounding interest) on deposits.

Different savings account types include:

• Basic or standard savings accounts

• High-yield savings accounts, which can offer as much as several times the interest rate that standard savings accounts deliver

• Money market accounts, which combine the features of checking and savings accounts

A CD can also be considered a savings account, but it works somewhat differently. Rather than allowing you to dip into savings whenever you like, CDs are term deposits, meaning they have a set maturity date at which you can either withdraw or roll over the funds. Taking money out before the maturity date typically triggers an early withdrawal penalty.

Recommended: How to Switch Banks

Is a Checking Account an Asset?

A checking account is an asset, just like a savings account. The main difference between a checking account and a savings account is how they’re meant to be used.

• Checking accounts are designed for spending. You can use a checking account to pay bills online, transfer funds to friends and family, or make purchases using a linked debit card. Unlike savings accounts, checking accounts typically don’t earn interest, though some may earn a small amount. But it’s for this reason that you probably don’t want too much cash just sitting in a checking account. Moving some of the funds to a savings account could help your money grow into an even bigger asset.

• Savings accounts are designed to hold money that you don’t plan to spend right away. You might use a savings account to stockpile your emergency fund or set aside money for an important short-term goal, like buying a new car or paying for a wedding. Because the money typically sits in a savings account for a while, the depositor is rewarded with interest.

You can keep your checking account and savings account at the same bank for convenience. However, if you’re using a brick-and-mortar bank for checking, you might get more bang for your buck by keeping your savings account at an online bank. Online banks typically pay higher rates to savers than traditional banks.

Checking and Savings Accounts on a Balance Sheet

Here’s an overview of how your banking assets can be viewed in a business context. Businesses use a balance sheet to see at a glance how much money is moving in and out. Checking and savings accounts can be included on a balance sheet and are usually listed under “current asset, cash.”

A balance sheet is intended to capture how a business’s assets compare to its liabilities over a specific time period. Businesses can use balance sheets to get an idea of how financially healthy they are. When applying for loans, lenders may ask to see an up-to-date balance sheet, along with a profit and loss statement or cash flow statement.

The Takeaway

Understanding that checking and savings accounts are assets can be an important step in building your financial literacy. What’s more, recognizing that these bank accounts add to your net worth can help you make smarter decisions with your money. One of those decisions centers on where to keep your bank accounts.

If you’re interested in helping the money in your bank accounts grow, then SoFi could be a great fit.

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

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

FAQ

What kind of asset is a savings account?

A savings account is a liquid asset, since you can easily tap into the cash in your account if needed. Savings accounts offer a convenient way to set aside money for emergencies or other goals, while earning some interest in the process. These assets can contribute to your net worth calculations, along with your other assets.

Is your savings account a liability?

A savings account is an asset (meaning it contributes to your net worth and personal wealth), not a liability, which is an obligation to pay another party. The only way that a savings account could become a liability is if you were to overdraw your account. In that case, you would need to make a deposit to bring your account balance to or above zero.

Is a savings account an asset or equity?

Savings accounts are assets since you own the money in them outright. (Also, if you’re wondering, a checking account is an asset, too.) Equity is a term you’ll hear when talking about investing. For example, when you buy a share of stock you’re getting equity, or an ownership stake, in the company.

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.

photocredit: iStock/andresr
SOBK0523008

Dec

2024

19 Key Banking Terms to Know

By Timothy Moore | money, Money & Life, Terminology | Comments Off

Most of us don’t learn bank terms in school, but knowledge of these concepts is an important part of developing your financial literacy. Becoming familiar with banking vocabulary can help you better understand financial products and might even boost your money-management skills.

Here, you’ll find a glossary of 19 banking terms and definitions to know. Whether you’re opening your very first checking account or diversifying your investments, this bank terminology can enhance your personal finance journey.

Key Points

• Understanding frequently used banking terms, such as FDIC, APY, and EFT, as well as common types of bank accounts can help you manage your finances.

• Savings accounts, checking accounts, and money market accounts are key banking products, each offering unique features like interest earnings and transaction capabilities.

• Certificates of Deposit (CDs) are accounts that may provide higher interest rates for funds committed for a fixed term, with penalties for early withdrawal.

• Knowing the differences and similarities between common banking terms, such as APY vs. interest rate and EFT vs. ACH, can help you make informed financial decisions.

• Familiarity with financial terms may help you identify and avoid certain types of banking fees.

19 Banking Terms

Here’s a list of 19 important banking terms and definitions to know:

1. Savings Account

A savings account is a type of bank account that lets you safely store your money. Money in a savings account earns interest and grows over time, thanks to the power of compounding interest.

Savings accounts can be a good place to stash funds for an emergency fund or short-term goals, such as next year’s vacation. You can typically access funds as needed, although some financial institutions may limit how often you can take money out of your savings account.

When shopping for a savings account, know that a high-yield savings account can pay out more interest than a typical savings account. Currently, some HYSAs pay 9x the national savings account interest rate or more.

2. Checking Account

Checking accounts are also a common type of bank account that enable consumers to access and spend their money easily. You can tap funds in your checking account by writing paper checks, using an ATM, swiping or tapping a debit card, entering account information online, or using mobile payment apps. Many checking accounts don’t earn interest, but you may find some that offer a low interest rate, often at online banks.

Checking accounts may come with a variety of fees, so it can be wise to compare charges for at least a few accounts before opening one. You’ll also want to make sure you understand whether there’s a minimum opening deposit or balance requirement.

3. Money Market Account

Another type of bank account is a money market account. These are often structured as a blend of savings and checking accounts. Like a savings account, a money market account usually has a higher interest rate than a checking account (which may or may not earn any interest at all) in exchange for having certain restrictions, such as a limited number of withdrawals that can be made each month. But it may also have some checking account features, like the ability to write checks.

4. Certificate of Deposit (CD)

You can also open a certificate of deposit (CD), a kind of term deposit, at many financial institutions. Here, your money is less liquid (i.e., it’s not as easily available). When you put money in a CD, you agree to a set number of months or years that you won’t access that cash — typically between a few months and several years. In exchange, however, you may receive an interest rate that’s higher than most standard savings accounts. If you do tap your funds before the CD term ends, you will likely be assessed a penalty.

5. Account Number

Your bank account number is a unique string of numbers (usually between eight and 12 digits) that identifies your individual bank account. Every time you open a new bank account, you’ll get a new account number — and you can typically find it on your account statements, on paper checks, and on your bank’s website and in its app when you’re logged in.

Recommended: How to Balance Your Bank Account

6. Routing Number

While an account number is unique to your individual account, a routing number is unique to your bank. Most banks have a single routing number, though larger banks may have multiple routing numbers, with each number attributed to a specific region.

A routing number (also called an American Bankers Association number, or ABA number) is always nine digits and helps other entities route payments to and from your bank.

By the way, when thinking about routing numbers vs. account numbers, remember that they are important bits of personal information, to be kept confidential. In the wrong hands, they could be used to commit bank fraud.

7. Direct Deposit

Direct deposit is a method wherein a business or government agency can pay you electronically by transferring funds into your bank account. If you receive payment from your employer directly into your bank account, you’re already using direct deposit; more than 95% of American workers get paid this way.

8. Annual Percentage Yield (APY)

Annual percentage yield (APY) refers to how much interest you’ll earn each year from money in a deposit account, like a savings account. Unlike the straight interest rate, however, APY also accounts for compound interest (earning interest on the interest you’ve earned thus far).

9. Credit Union

A bank is one common type of financial institution. But you can also get typical banking services — like deposit accounts and loans — from credit unions. Credit unions are member-owned nonprofits and are typically local, rather than a national network. You may need to qualify to join one, based upon such attributes as where you live or your profession. Depending on your needs, you might choose a credit union vs. a bank to get the best fit for your finances.

10. Federal Deposit Insurance Corporation

Congress created the Federal Deposit Insurance Corporation (FDIC) in 1933 to create a safety net in the event of a bank failure and instill confidence in the U.S. banking system. Today, the FDIC offers insurance typically up to $250,000 per depositor, per account category, per insured institution. Some banks have programs to offer even a higher level of insurance than that. Worth noting: Most but not all banks are FDIC-insured. It’s worthwhile to check that you keep your funds at one that is, to enjoy that protection.

Deposits at credit unions are also typically insured in a similar manner, but by the National Credit Union Association, or NCUA, vs. FDIC insurance.

11. Fintech

Fintech, meaning “financial technology,” refers to companies leveraging new technologies to improve or provide innovative financial services. They may be a chartered online bank or an unchartered neobank, often offering higher interest rates on savings accounts and lower or no fees as a result of their having less overhead than traditional brick and mortar banks. Many fintechs have built their models on younger consumers’ frustrations with the traditional banking experience.

12. Automated Teller Machine (ATM)

You probably know automated teller machines as ATMs, and they’re an important part of banking. An ATM allows you to access certain banking services — like cash withdrawals — on the go. You can find ATMs all over, from inside bank branches to hotels and airports.

Just make sure an ATM is in your bank’s network before using it. If you use an out-of-network ATM, you may incur high ATM fees.

13. Debit Card

A debit card is a form of payment that typically comes with a checking account. You can swipe, tap, or wave the debit card at a point of sale to pay for goods and services with money from your checking account. You can also enter your debit card to pay bills or shop online, or tie your debit card to peer-to-peer transfer apps to send money between friends.

14. Joint Account

A joint bank account allows more than one person to manage the account. That means any account holder can withdraw or deposit money at their discretion. With so much power available to multiple account holders, there are a lot of pros and cons of joint accounts to consider before moving forward, but it can be a good tool for couples or family members who want to merge their finances.

15. Electronic Fund Transfer (EFT)

An electronic fund transfer refers to any type of electric payment where money moves electronically. Examples of EFTs include wiring money, paying with a debit or credit card, sending funds via P2P transfer, receiving direct deposit, and conducting ACH transfers. They are typically quick and secure.

16. ACH Transfer

An ACH transfer is a type of electronic fund transfer. ACH stands for Automated Clearing House, and an ACH transfer simply refers to the electronic movement of money from one bank account to another. That process is regulated by the Automated Clearing House (governed by the National Automated Clearing House Association, or NACHA).

17. Overdraft Fee

If you pay for a transaction with a check or debit card but don’t have enough money in your account to cover the purchase, your payment can be declined or the purchase can still go through, which is called overdrafting. Essentially, your bank may cover the shortfall. Some financial institutions charge you an overdraft fee when this happens. The average fee is currently quite high, over $27. You may be able to link accounts (say, your checking and savings accounts) to provide coverage in the case of overdraft.

18. Emergency Fund

An emergency fund is money set aside in a savings account that you can access in an emergency, such as if you are laid off, need unexpected car repair, or have to pay a high vet bill. The amount of money you need in an emergency fund can vary, but most experts advise working toward saving enough cash to cover three to six months’ worth of basic living expenses. Saving this much can keep you from needing to take out a personal loan or going into credit card debt when unplanned expenses arise.

19. Minimum Account Balance

A minimum account balance, also called minimum daily balance or simply minimum balance, is the amount of money you must keep in your bank account to avoid minimum balance service fees (if your bank charges these). Not all bank accounts require minimum balances, and, of those that do, the amount can vary from one financial institution to the next. The amount may also vary by account type.

Why Understanding Banking Terms Matters

Understanding banking terms — and the concepts and products they describe — can help you pick the right bank for your needs. It can also help build a good foundation of knowledge that can enhance your money management for years to come.

The Takeaway

Knowing basic financial terms, like ACH, EFT, and FDIC, as well as those that describe different types of bank accounts, can build your financial literacy. This, in turn, can help equip you to make well-informed decisions and manage your money better.

Another important aspect of managing your money is partnering with the right bank.

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

FAQ

What are basic banking terms?

Some basic banking terms include savings account, checking account, direct deposit, routing number, and electronic fund transfer. If you’re new to banking, it’s a good idea to review a list of common banking terminology to get a better handle on your finances and how to manage them.

What are common banking transactions?

Some common banking transactions include cash withdrawals or deposits at the bank or ATM, mobile check deposits via an app, and direct deposits into and direct debits from a bank account. Individuals can also transfer money from one bank account to another, like from their checking to their savings.

What are banking processes?

Common banking processes include managing customers’ checking and savings accounts, which can include charging fees or paying interest. Banks also often offer loans, which have a range of processes from underwriting to account servicing.

Photo credit: iStock/george tsartsianidis

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.

*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.

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.

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

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

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

SOBK0423018

Dec

2024

Counter Credits Explained

By Timothy Moore | money, Money & Life, Terminology | Comments Off

Despite the advent of digital banking and managing your finances on a screen, many people still step inside a brick-and-mortar bank to make a deposit. When they do, this transaction may turn up on their monthly statement as a “counter credit.” The reason why: They approached the counter at the branch and handed over funds that were credited to their account.

Here, learn more about counter credits and the role they can play in your financial life.

Key Points

• Counter credits involve in-person deposits at a bank branch, using cash or checks handed to a teller.

• Counter credits often clear immediately or within a business day, providing individuals with quick access to funds.

• Bank statements reflect counter credits to differentiate them from other deposit types.

• Those less comfortable with digital technology and frequently making large cash deposits may find counter credits ideal.

• Despite digital banking trends, counter credits can be helpful for personal interaction and when handling large sums.

What Is a Counter Credit?

A counter credit is a cash or check deposit made to your checking or savings account in person at a brick-and-mortar branch of a bank or credit union. In that way, it’s really the most straightforward, traditional kind of deposit you can make.

This counter credit meaning is pretty narrow: It doesn’t include deposits made at an ATM, it doesn’t include mobile check deposits, and it certainly doesn’t include direct deposits from an employer. It has to be in person, at a bank, and with a teller.

As briefly noted, it’s called counter credit because you make the deposit at the counter inside the branch, and the teller then credits your account the amount you deposited. (If you withdraw money at the counter, it should show up on your bank statement as a counter debit.)

How Do Counter Credits Work?

Don’t let the unfamiliar terminology fool you: You’ve likely made a counter credit before. You simply enter your bank and then hand the money or check to a teller.

If you use a deposit slip from your checkbook, you can just add the date and the amount of money. If you use a bank’s blank deposit slip, it will require you to know your bank account number. If you don’t know it, don’t sweat it: Just take the slip to the teller and show your ID, and the teller should be able to help you with the rest.

Or, you may well be able to skip the deposit slip altogether. Often, just having your debit card and PIN handy will be enough to move the transaction ahead with the teller.

How Long Does a Counter Credit Take to Clear?

Cash deposited via counter credit should be available in your bank account quickly; sometimes almost immediately, especially with small sums. At other times, the funds may clear within a business day. This makes it an attractive way to deposit your funds. Worth noting: Large cash deposits may take longer to clear.

Check deposits can take a little longer, whether made at the counter or via mobile deposit. Typically, a domestic check takes one or two business days to clear. Checks for large sums or drawn on international banks may take longer.

Recommended: How Long Does Direct Deposit Take?

Why Do Counter Credits Appear on Bank Statements?

Your bank statement gives a complete picture of account activity during a statement period (usually a month). Every transaction and transfer is accounted for.

Because counter credits are a type of deposit to your account, a bank will include them. Labeling them as counter credits can make it easier for you to identify which deposits were made in person vs. other deposits, like mobile check deposits, ATM deposits, and direct deposits from an employer, a company (like an insurance company depositing a payout), or the government.

How Do You Make Counter Deposits?

As noted above, counter deposits occur when an account holder gives a deposit to a teller at the counter of a bank branch. The customer might use a deposit slip, filled out with account details, or they might swipe their debit card and enter their PIN. This process allows the teller to ensure that the deposit is going to the intended account.

Typically, the bank customer will get a paper receipt, showing that the deposit was accepted.

Although the deposit is handed off in person, typically a check will be verified and processed before the funds are fully available. This can take a couple of business days or sometimes longer. A cash deposit, on the other hand, usually clears within a day, though a large deposit can take longer.

Deposits vs. Counter Credits

Counter credits are a type of deposit. Thus, all counter credits are deposits, but not all deposits are counter credits.

In today’s world of advanced banking technology, you can deposit money into your account in a number of ways:

• Direct deposit: A third party, like an employer with your paycheck or the federal government with a tax refund or unemployment payment, will electronically transfer money into your account.

• Other electronic funds transfers: Other forms of electronic fund transfers that you might use to deposit money into your account include transferring money from one bank to another or moving money from a peer-to-peer payment app into your bank account after a friend sends you money.

• Mobile check deposit: Mobile banking technology enables consumers to take pictures of their checks on their phone, from the comfort of their own home, then deposit them via the bank’s app.

• ATM and retailer deposits: You can often deposit money to your bank account at an ATM or participating retailer. When depositing cash at an ATM, it can be a good idea to find an in-network ATM to avoid paying ATM fees. However, be aware that not all online banks support cash deposits at ATMs and may instead allow you to make these deposits at participating retailers, which could impose a small fee. (SoFi, for example, only supports cash deposits at participating retailers at this time.)

As you see, counter credits are just one of many techniques that can be used to get money into your bank account.

Recommended: What Is a Cashier’s Check?

Is Counter Credit Obsolete?

With more people using online banking, you might think counter credit is obsolete. However, in-person banking still has its place.

Some people just prefer the customer experience of walking into a bank and working with another human to deposit their funds. A counter credit can also be reassuring when you’re depositing a large sum of cash and don’t want to feed it into an ATM.

Pros and Cons of Counter Credits

What are the advantages and disadvantages of counter credits? Consider these points.

Pros

The upsides of counter credits are as follows:

• Quick access to funds: When depositing a check or cash, the money is often available in your bank account soon thereafter, especially when depositing cash. There’s no need to wait for, say, the ATM you deposited your money into to be emptied.

• In-person customer service: If you need help, the bank teller is literally right on the other side of the counter — and should be happy to assist you.

• Ideal for large deposits and people who use cash: Some people who work primarily with cash and make large deposits may prefer to hand the cash or check directly to the bank teller. This can be a positive when an ATM or retailer deposit may be less practical (and might have deposit limits).

• Easy to understand: People who have grown up with tech may argue that digital deposits are easier and more convenient, but if you’re not comfortable with these technologies, it may be simpler for you just to head to the bank and deposit money in person.

Cons

Next, review the downsides of counter credits:

• Inconvenience: For many, the thought of driving to a bank and waiting in line in person is wildly inconvenient in this era of digital banking.

• Inaccessible when traveling: Whether you are a digital nomad or simply traveling on your summer vacation, sometimes you simply can’t get to a bank branch. Mobile deposit (or signing up for direct deposit to automate the process) can help eliminate this issue.

• Limited hours: Banks aren’t always open. They close in the evening, they may have short Saturday hours (if any), and they’re closed for holidays. But with online banking, you can make a mobile deposit any time of day (and often in the evenings at participating retailers).

Recommended: Online Banking vs. Traditional Banking

The Takeaway

Counter credits refer to in-person deposits (check or cash) into your bank account, made at a brick-and-mortar location. If you bank in person at a traditional bank, it’s likely you’ll see these transactions on your monthly bank statement. However, with the advent of online banking, you may make all or most of your deposits via functions like mobile check deposit and electronic fund transfer, as well as at participating ATMs and retailers.

If you don’t have a need for in-person banking, consider the benefits of an online bank account with SoFi. Note that SoFi does not currently support cash deposits at ATMs, though it enables you to make cash deposits at participating retailers nationwide for a small fee.

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

🛈 While SoFi does not support counter credits, members can deposit funds using the mobile check deposit feature or make in-person cash deposits following these instructions.

FAQ

Is counter credit a direct deposit?

A counter credit is not a direct deposit. A counter credit refers to an in-person deposit made by you at your bank’s counter with a teller. A direct deposit is an electronic process in which a third party, like an employer or the government, transfers money directly into your bank account.

What is a counter transaction?

A counter transaction is a banking transaction made in person with a bank teller at the counter of a brick-and-mortar branch. This might include depositing money (a counter credit) or withdrawing money (a counter debit).

What is an over-the-counter deposit?

An over-the-counter deposit (aka a counter credit) is a cash or check deposit made into a bank account in person at a bank or credit union branch. The counter refers to the counter at which the bank teller works. You may see counter credits on bank statements referencing these transactions.

Photo credit: iStock/Fly View Productions

SOBK0423023

Dec

2024

Can You Get a Debit Card for a Savings Account?

By Rebecca Lake | money, Money & Life, Terminology | Comments Off

You usually can’t get a debit card for a savings account. Typically, debit cards are issued for checking accounts.

There’s a simple reason for that. Savings accounts are designed to hold money that you don’t plan to spend right away. Earning interest on deposits is the reward you get for adding money to your savings balance. Checking accounts, on the other hand, are designed for spending.

There’s a backdoor way to use a debit card for a savings account, but it requires you to have a checking account and transfer funds. Knowing the rules for debit cards and bank accounts can make it easier to manage your money.

Key Points

• Savings accounts typically don’t come with debit cards; they are designed for holding money and earning interest.

• Debit cards are often linked to checking accounts, which are meant for spending.

• ATM cards can sometimes be issued for savings accounts, allowing limited access to funds.

• Alternatives to debit cards for savings accounts include transferring funds to checking accounts or making in-person withdrawals.

• Understanding the rules and limits of savings accounts can help you manage funds effectively.

What Accounts Offer Debit Cards?

Usually, you cannot get a debit card with standard or high-yield savings accounts. You can, however, get a debit card with other types of bank accounts, such as:

• Traditional checking accounts

• High-yield checking or interest checking

• Money market accounts

• Cash management accounts

• Health savings accounts

You can find traditional checking accounts, high-yield checking, and money market accounts at traditional banks or online banks. Some banks also offer HSAs with a debit card so that paying for health care is easy and convenient.

A cash management account is a little different. These accounts, which you can find at a brokerage, blend features of savings and checking accounts. You can use them to pay bills, make purchases with a debit card, or hold funds that you plan to transfer into your investment account.

Debit Cards vs. ATM Cards

Debit cards and ATM cards may look the same at first glance, but there are some key differences between them.

• A debit card is a PIN-enabled card that’s linked to a checking account or a money market account. You can use a debit card to make purchases, pay bills, or withdraw cash at ATMs. When you complete a debit card transaction, the money is deducted from your checking or money market account.

• ATM cards are also PIN-based but they have less functionality than a debit card. You can use an ATM card to view your balance, withdraw cash, or make deposits at an automated teller machine. You cannot, however, use a debit card to make purchases.

Banks can issue ATM cards for checking accounts, though it’s more common to get a debit card instead. Some banks also offer ATM cards for savings accounts, though that’s more of an exception than the rule. If you have an ATM card for checking or savings, there may be an ATM withdrawal limit that dictates how much cash you can take out daily or weekly.

Accessing Your Savings Account Funds

If you want to access money in your savings account but don’t have a debit card, your options will depend on your bank’s policies. Generally, the alternatives can include:

• You can use an ATM card if you’re issued one for transferring funds into a checking account and withdrawing from there. Or you can make a transfer on your financial institution’s website or in the app. That’s the backdoor method that was mentioned earlier. This process can be especially easy if you have linked checking and savings accounts at the same financial institution.

• If you have a savings account at a traditional bank, you could also make withdrawals in person at the teller window.

When accessing savings account funds, it’s important to know what limits your bank imposes. For instance, it’s not uncommon for banks to limit you to six withdrawals from savings per month. If you go over that limit, the bank can charge an excess withdrawal fee for each additional transaction or convert your savings into a checking account.

Tips for Using Your Savings Account

Savings accounts are not meant to be complicated or confusing, but there are some rules to know about using them. These tips can help you make the most of your savings.

• Choose the right bank to open a savings account. Online banks can offer higher interest rates on savings with fewer fees, compared to traditional banks. The trade-off is that you don’t have access to bank branches.

• Know your limits. As mentioned, banks may limit you on the number of withdrawals you can make from savings per month. There may also be limits on how much you can transfer from savings to checking or withdraw in cash at a teller.

• Link savings to checking. Linking your savings account to a checking account can make it easy to transfer funds between them. Just keep in mind that linking accounts is not an excuse to siphon away money from savings unnecessarily. This is especially true if your savings account is your emergency fund.

• Automate deposits. Setting up automatic deposits to savings is an easy way to grow your balance. You can also use direct deposit to send some of your paycheck to savings or create a recurring transfer from checking to savings each payday.

If your bank offers an ATM card with a savings account, remember to check the ATM withdrawal limits. Also, it’s important to be aware of any added ATM fees you might pay for using another bank’s machine to withdraw cash.

Alternatives to Getting a Debit Card for Savings Accounts

If you can’t get a debit card for a savings account, you have some other options for managing your money. For instance, you could:

• Link your savings account to a checking account (especially an interest-bearing one) for convenient transfers.

• Set up a cash management account that combines features of a checking and savings account, including a debit card.

• Open a money market account that includes a debit card and check-writing privileges.

• You could also use a prepaid debit card to hold your savings. That can make it easy to access your money, but there are a few drawbacks. You won’t earn interest the way that you could with a savings account at a bank. Also, if your card is lost or stolen you might be out your entire savings if you don’t report the loss to the card issuer right away. Prepaid debit cards can also charge fees, which can nibble away at your savings balance.

These are some work-arounds since you usually can’t get a debit card with a savings account, and as you see, each can have its pros and cons.

The Takeaway

Savings accounts can help you set aside money toward your big (or small) financial goals. While you usually don’t get a debit card for savings accounts, you could still get a great rate for your money to make up for it. If you are determined to get something akin to a debit card with a savings account, you might look at such alternatives as money market or cash management accounts or link your checking and savings accounts for easy transfers and then withdrawals.

Another smart move: Bank with SoFi. We offer checking and savings in one convenient place, with debit card access.

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

FAQ

Do banks give debit cards for savings accounts?

Banks usually do not issue debit cards for savings accounts. Money market savings accounts may be an exception, as those can sometimes come with a debit card, paper checks, or both. Debit cards are most commonly associated with checking accounts.

Is there a card for a savings account?

A bank may offer an ATM card for a savings account. If you get a savings account with an ATM card, you could use your card to deposit or withdraw cash at ATMs. You would not, however, be able to make purchases with the card.

Can I use an ATM card to access my savings account?

You could use an ATM card to access a savings account if the bank issues one to you. If you don’t have an ATM card for your savings account, you may need to first transfer money to checking and then withdraw it using your debit card.

Photo credit: iStock/Miljan Živković

SOBK1222077

Dec

2024

What Are the Conforming Loan Limits for 2022?

What Are the Conforming Loan Limits for 2023?

By Alene Laney | Financial Independence, Home Ownership, mortgage | Comments Off

A 5.2% increase in the conforming loan limits for 2025 raised the baseline loan limit for a single unit to $806,500 in most counties in the United States.

The adjustment is a result of a change in the average price of a home nationwide from the third quarter of 2023 to the third quarter of 2024. Home prices increased an average of 5.21%, and the baseline conforming loan limit kept pace.

Conforming loans may be cheaper than nonconforming loans like jumbo mortgages, but jumbo loans have their place.

Key Points

• For 2025, the conforming loan limit for one-unit properties in most of the U.S. is set at $806,500.

• In high-cost areas, the limit for a one-unit property reaches $1,209,750.

• Staying within these limits enables buyers to secure lower-cost mortgages.

• Loans within these limits can be acquired by Fannie Mae and Freddie Mac.

• This arrangement reduces risk for lenders and lowers costs for consumers.

Conforming Loan Limits for 2025

The conforming loan limits set by the Federal Housing Finance Agency can vary based on area and the number of units in the property.

In most counties, that number increased to $806,500 in 2025 for a one-unit property. In high-cost areas, the limit is $1,209,750 for a one-unit property.

In general, here’s how the baseline conforming loan limits break down for 2025.

Maximum baseline loan limit for 2023

Units	Many counties in the contiguous states, District of Columbia, and Puerto Rico	Alaska, Hawaii, Guam, and the U.S. Virgin Islands
1	$806,500	$1,209,750
2	$1,032,60	$1,548,975
3	$1,248,150	$1,872,225
4	$1,551,250	$2,326,875

Recommended: The Cost of Living by State

Why Care About Conforming Loan Limits?

Staying under a conforming loan limit means you’ll most likely obtain a lower-cost mortgage. Mortgages that “conform” to the limits can be acquired by Fannie Mae and Freddie Mac, government-sponsored enterprises.

Because these mortgages can be bought by the agencies and then sold to investors on the secondary mortgage market, they represent a lower risk to the lender and a lower cost to the consumer.

If you need to finance more than the conforming limit, you’ll need to look at jumbo mortgage loans.

Getting a jumbo loan involves clearing more hurdles than a conforming loan. The rate will usually be similar to conforming loan rates, but sometimes it can be lower. How jumbo can a loan be for a primary residence, second home, or investment property? It’s up to each lender.

Government-backed mortgages are also nonconforming loans, and although they serve certain homebuyers, they also may be more expensive than conforming conventional loans because they usually come with additional fees.

Recommended: How to Get a Mortgage Loan

Notable Counties Above the Standard Loan Limits

Loan limits are higher in counties where the average home price is above 115% of the local median home value. The loan ceiling is 150% of the baseline value.

For 2025, the high-cost-area loan limit increased from $1,209,750 to $1,209,750 on a one-unit property. Alaska, Hawaii, Guam, and the U.S. Virgin Islands also have a baseline loan limit of $1,209,750.

The following is a chart of counties (and some cities) in high-cost areas with an increased baseline loan limit. The increased amount for high-cost areas maxes out at $1,209,750 in select areas.

State	County	2024 limit for a single unit	2025 limit for a single unit	% change year over year
Alaska	All	$1,209,750	$1,209,750	5.21%
California	Los Angeles County, San Benito, Santa Clara, Alameda, Contra Costa, Marin, Orange, San Francisco, San Mateo, Santa Cruz	$1,209,750	$1,209,750	5.21%
California	Napa	$1,017,750	$1,017,750	0%
California	Monterey	$920,000	$970.600	5.50%
California	San Diego	$1,006,250	$1,077,550	7.09%
California	Santa Barbara	$838,350/td>	$913,100	8.92%
California	San Luis Obispo	$929,200	$967,150	4.08%
California	Sonoma	$877,450	$897,000	2.23%
California	Ventura	$954,500	$1,017,750	6.63%
California	Yolo	$806,500	$806,550	5.21%
Colorado	Eagle, Garfield, Pitkin	$1,209,750	$1,209.750	5.21%
Colorado	San Miguel	$994,750	$994,750	0%
Colorado	Boulder	$856,750	$862,500	.07%
Florida	Monroe	$929,200	$967,150	4.08%
Guam	All	$1,209,750	$1,209,750	5.21%
Hawaii	All	$1,209,750	$1,209,750	5.21%
Idaho	Teton	$1,209,750	$1,209,750	5.21%
Maryland	Calvert, Charles, Frederick, Montgomery, Prince George’s County	$1,209,750	$1,209,750	5.21%
Massachusetts	Dukes, Nantucket	$1,209,750	$1,209,750	5.21%
Massachusetts	Essex, Middlesex, Norfolk, Plymouth, Suffolk	$862,500	$914,250	6.00%
New Hampshire	Rockingham, Strafford	$862,500	$914,250	6.00%
New Jersey	Bergen, Essex, Hudson, Hunterdon, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset, Sussex, Union	$1,209,750	$1,209,750	5.21%
New York	Bronx, Kings, Nassau, New York, Putnam, Queens, Richmond, Rockland, Suffolk, Westchester	$1,209,750	$1,209,750	5.21%
Pennsylvania	Pike	$1,209,750	$1,209,750	5.21%
Utah	Summit, Wasatch	$1,209,750	$1,209,750	0%
Utah	Wayne	$997,050	$997,050	0%
Virgin Islands	All	$1,209,750	$1,209,750	5.21%
Virginia	Arlington, Clarke, Culpeper, Fairfax, Fauquier, Loudoun, Madison, Prince William, Rappahannock, Spotsylvania, Stafford, Warren, Alexandria City, Fairfax City, Falls Church City, Fredericksburg City, Manassas City, Manassas Park City	$1,209,750	$1,209,750	5.21%
Washington	King, Pierce, Snohomish	$997,500	$1,037,300	6.11%
Washington D.C.	District of Columbia	$1,209,750	$1,209,750	5.21%
West Virginia	Jefferson County	$1,209,750	$1,209,750	5.21%
Wyoming	Teton	$1,209,750	$1,209,750	5.21%

Will Conforming Loan Limits Rise or Fall?

The baseline conforming loan limit is adjusted each year to reflect the change in the average home value in the United States.

The conforming loan limit has increased steadily for the past 10 years and has never declined. From 2006 to 2016, for example, the conforming loan limit remained at $417,000, despite declining home values across the country. If home values continue to rise, the conforming loan limit will also rise.

First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.

Conforming Loan Limits Over the Past 10 Years

The 5.2% increase in loan limits for 2025 is lower than the previous year’s increase of 5.5% and far lower than the 18% increase of 2022, which was the largest jump in the past 40 years. But it still represents an increase of $39,950 over the past year alone.

Conforming loan limit

Year	Amount
2025	$806,500
2024	$806,500
2023	$726,200
2022	$647,200
2021	$548,250
2020	$510,400
2019	$484,350
2018	$453,100
2017	$424,100
2016	$417,000
2015	$417,000
2014	$417,000

The Takeaway

Conforming loan limits are intended to keep costs low for homebuyers. This means competitive pricing on mortgages, no matter what the housing market looks like each year.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

Is a conforming loan a good thing?

Yes, generally speaking, staying under a conforming loan limit means you’ll most likely obtain a lower-cost mortgage.

Is a conforming loan the same as a conventional loan?

No, a conventional loan is one that is not backed by a government agency — it might come from a private lender such as a bank. A conforming loan is one in which the underlying terms and conditions adhere to the funding criteria, including loan amount limits, spelled out by Freddie Mac and Fannie Mae. Conventional loans can be conforming. Those that do not follow the conforming loan limits are considered “jumbo” loans.

Photo credit: iStock/marchmeena29

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.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

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.

SOHL-Q424-151

Is a Savings or Checking Account an Asset?

Are Checking and Savings Accounts Assets?

What Is an Asset?

Assets vs Liabilities

Get up to $300 when you bank with SoFi.

How Are Assets Categorized?

Is a Savings Account an Asset?

Is a Checking Account an Asset?

Checking and Savings Accounts on a Balance Sheet

The Takeaway

FAQ

What kind of asset is a savings account?

Is your savings account a liability?

Is a savings account an asset or equity?

19 Key Banking Terms to Know

19 Banking Terms

1. Savings Account

2. Checking Account

3. Money Market Account

4. Certificate of Deposit (CD)

5. Account Number

Get up to $300 when you bank with SoFi.

6. Routing Number

7. Direct Deposit

8. Annual Percentage Yield (APY)

9. Credit Union

10. Federal Deposit Insurance Corporation

11. Fintech

12. Automated Teller Machine (ATM)

13. Debit Card

14. Joint Account

15. Electronic Fund Transfer (EFT)

16. ACH Transfer

17. Overdraft Fee

18. Emergency Fund

19. Minimum Account Balance

Why Understanding Banking Terms Matters

The Takeaway

FAQ

What are basic banking terms?

What are common banking transactions?

What are banking processes?

Counter Credits Explained

What Is a Counter Credit?

How Do Counter Credits Work?

How Long Does a Counter Credit Take to Clear?

Why Do Counter Credits Appear on Bank Statements?

How Do You Make Counter Deposits?

Deposits vs. Counter Credits

Is Counter Credit Obsolete?

Pros and Cons of Counter Credits

Pros

Cons

The Takeaway

FAQ

Is counter credit a direct deposit?

What is a counter transaction?

What is an over-the-counter deposit?

Can You Get a Debit Card for a Savings Account?

What Accounts Offer Debit Cards?

Get up to $300 when you bank with SoFi.

Debit Cards vs. ATM Cards

Accessing Your Savings Account Funds

Tips for Using Your Savings Account

Alternatives to Getting a Debit Card for Savings Accounts

The Takeaway

FAQ

Do banks give debit cards for savings accounts?

Is there a card for a savings account?

Can I use an ATM card to access my savings account?

What Are the Conforming Loan Limits for 2023?

Conforming Loan Limits for 2025

Why Care About Conforming Loan Limits?

Notable Counties Above the Standard Loan Limits

Will Conforming Loan Limits Rise or Fall?

First-time homebuyers can prequalify for a SoFi mortgage loan, with as little as 3% down.

Conforming Loan Limits Over the Past 10 Years

The Takeaway

FAQ

Is a conforming loan a good thing?

First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.

Student Loan
Refinancing

Personal
Loans

Online
Investments