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Managing money in college isn’t easy, but building strong financial habits now can make a huge difference in the long run. With the cost of tuition, textbooks, and daily expenses, it’s important to make smart financial decisions to avoid unnecessary debt and stress. Whether you’re living on campus or commuting, these 11 tips will help you stay in control of your finances, save money, and build a secure financial future.

1. Create a College Budget

One of the most important financial habits you can develop in college is budgeting. A basic budget helps you track your income and expenses so you don’t overspend. To get started, simply list out how much you have to spend for the semester, including all sources of income, such as financial aid, income from a part-time job, and any parental support. Then subtract all your essential expenses, such as tuition, books, food, and housing. What’s leſt over can be used for nonessential (aka “fun”) spending and savings.

To make sure you don’t overspend on discretionary purchases, consider putting a budgeting app on your phone. These tools track your spending in real time and can help ensure you don’t run out of funds before you get to finals.

2. Open a Checking and a Savings Account

Even if you don’t have a lot of extra cash, it’s worth having a savings account along with a checking account. This allows you to separate everyday spending from money you want to save for a future expense, say a trip to Cabo for spring break.

When shopping for a bank or credit union, you’ll want to look for one that offers no-fee student accounts and a high-interest savings option to maximize your earnings. In addition to local institutions, you might also expand your search to online banks. While these banks don’t operate branches, they typically partner with large ATM networks, making it easy to access your funds at school as well as when you travel home without getting hit with a fee. Some offer student accounts and potentially better deals than traditional banks.

3. Automate Bill Payments and Transfers

If you’re new to paying bills, it’s easy to forget about due dates, especially if you are focused on doing class assignments or studying for an upcoming exam. But missing a billing deadline means you could rack up late fees (and potentially damage your credit). A simple solution is to set up automatic payments for recurring expenses like rent, utilities, and student loans. To avoid overdrafts, be sure you have enough in your checking account to cover the bills when they come due.

Now that you have a savings account (see tip #2), also consider setting up an automatic transfer from checking to savings for a set amount on the same day each month. It’s fine to start small — even siphoning $25 into savings each month can add up over time. Many banks also offer features that round up your purchases and deposit the spare change into your savings account, which is another way to save without even thinking about it.

4. Build an Emergency Fund

Unexpected expenses, such as a trip to urgent care or a car repair, can quickly derail your college finances. Having an emergency fund can help you cover these costs without relying on credit cards. You might aim to save at least $500 initially, then gradually increase it over time. Even setting aside a small amount each month can make a big difference. Consider keeping your emergency fund in a high-yield savings account so it grows over time while remaining easily accessible.

5. Take Advantage of Student Discounts

Being a college student comes with some financial perks, including discounts on a wide range of goods and services. Many major companies offer student deals on transportation, entertainment, digital music subscriptions, laptops, car insurance, and more. Websites like UNiDAYS and Student Beans also provide access to exclusive deals. All you typically need to qualify for the student rate is a .edu email account.

Shops and eateries located on and around campus also tend to offer student discounts. It’s a good idea to keep your student ID handy and always about any potential discounts before you make a purchase. Using student deals can significantly reduce your expenses and help stretch your college budget further.

6. Start Building Your Credit

Having good credit can help open doors after you graduate. Your scores can come into play when applying for loans, renting an apartment, or even getting a job. Fortunately, there are a number of ways to start building your credit while you’re still a student. Here are some to consider:

•   Apply for a student credit card and use it responsibly. That means keeping your credit balance low and paying it off in full (and on time) each month

•   If you’re new to credit, consider becoming an authorized user on a parent’s credit card or getting a secured credit card.

•   If you have student loans, you might start making small payments of $25 to $50 per month while you’re still in school to pay down interest and have some positive repayment history on record.

7. Get a Part-Time Job

Getting a part-time job while you’re in school can help cover your expenses and/or build your savings. It can also give you valuable work experience that could give you a leg up when searching for employment after graduation. Many universities offer work-study programs or on-campus jobs that fit around your class schedule. If you prefer more flexibility, you might look into freelancing, tutoring, or gig economy jobs like rideshare driving or food delivery. You might also check online platforms for remote job opportunities, such as being a virtual assistant or helping a business manage their social media accounts.

Recommended: How to Make Money Fast

8. Seek Out Scholarships

Scholarships are not a one-time thing you can only apply for when you’re in high school, before you start college. Hundreds of companies and organizations offer scholarships for both new and returning students that may be awarded based on merit or financial need. In fact, dedicating some time to finding and applying for scholarships each year could net some significant cash. Some helpful resources:

•   Your school’s financial aid office

•   Online scholarships databases like Fastweb, Scholarships.com, and CareerOneStop

•   Religious and community organizations

•   Organizations related to your field of study

•   Your employer (or parents’ employers)

•   Ethnicity-based organizations

If you find scholarships you are eligible for, be sure you apply for them by the deadline.

9. Save on Textbooks

Textbooks can take a major bite out of your college budget, but buying used or renting can save you hundreds of dollars each semester. There are numerous websites with low prices on used textbooks (such as Chegg, AbeBooks, and Amazon); many also offer 30- to 180-day rentals. Also look into purchasing the e-book version of a textbook, which typically costs a lot less than the hard copy. If you have friends who are taking the same class the next semester (or vice versa), consider splitting the cost of the required textbooks with them.

Recommended: 33 Ways to Save Money

10. Start Investing if You Can

A lot of employers provide 401(k) plans or other savings options, even while you’re still in college. If your employer offers a matching contribution, it’s wise to take advantage of this opportunity — it’s essentially free money. Enrolling in the plan can also help you learn about different types of investments, such as stocks, bonds, and mutual funds. If your employer doesn’t offer a plan, you might consider investing independently through a brokerage account, Traditional IRA, or Roth IRA. Each of these options has its own benefits and drawbacks, and understanding them early on can set you up for long-term financial success.

11. Take a Personal Finance Course

Your degree program may not be in finance or even math, but that doesn’t mean you can’t take a personal finance course as an elective. Ask your college advisor if there are any courses in personal finance available through the school to help you learn the basics of budgeting, borrowing, and investing.

If your school doesn’t offer classes in personal finance basics, you can teach yourself online. Some websites (like this one!) are designed to help improve your financial literacy with helpful articles and videos. You can also find personal finance courses that you can take online; consider taking one in between semesters or over the summer.

The Takeaway

College is a time of learning and growth, and developing smart money habits now can set you up for a secure future. By budgeting, saving, building credit, and seeking out cost-saving opportunities, you can manage your finances responsibly and minimize debt while you’re a student. This can help you save money and establish a strong financial foundation for life after college.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible 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 3.30% APY on SoFi Checking and Savings with eligible direct deposit.

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SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. 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.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details 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.

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

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 .

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With nearly 40 million residents, California is the most populated state in the U.S. It also boasts a robust economy and a gross domestic product (GDP) that is actually larger than many countries, including France and the United Kingdom. Whether you’re just starting out or looking for a change, California offers a wealth of job opportunities, along with average wages that often run higher than the national numbers. Read on to learn which jobs sit highest on the salary ladder in the Golden State.

Top-Paying Jobs in California

While California offers job opportunities in a wide variety of sectors, health care jobs offer the highest mean (or average) salaries in the state, according to recent data from the U.S. Bureau of Labor Statistics’ State Occupational Employment and Wage Estimates report. Jobs in the airline, business, tech, and legal fields also rank high on the list. If a good salary is important to you, check out this list of the 20 highest-paying jobs in California.

💡 Quick Tip: Help your money earn more money! Opening a bank account online often gets you higher-than-average rates.

1. Anesthesiologist

Average salary in California: $452,930

National average salary: $339,470

Educational requirements: To become an anesthesiologist, you need a four-year bachelor’s degree, followed by four years of medical school and a four-year residency program.

Anesthesiologists specialize in administering anesthesia to manage pain and ensure patient safety during surgeries. Their duties include selecting and administering medications, monitoring vital signs of the patient during procedures, and adjusting anesthetics as needed. They also collaborate with other physicians and surgeons and communicate with patients about pain management plans.

2. Cardiologist

Average salary in California: $389,120

National average salary: $423,250

Educational requirements: To become a cardiologist, you need a four-year bachelor’s degree, followed by four years of medical school, a three-year residency, and a three-year fellowship. To specialize further, you may need to complete a one-year advanced practice fellowship.

Cardiologists specialize in treating conditions affecting the heart and blood vessels, such heart disease, arrhythmias, and high blood pressure. To make a diagnosis, they may give physical exams and order tests such as an electrocardiogram (EKG). They also prescribe medicines, advise on diet and lifestyle changes, and can perform nonsurgical procedures (such as implanting a pacemaker or inserting a cardiac catheter).

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3. Orthopedic Surgeon

Average salary in California: $346,070

National average salary: $378,250

Educational requirements: To become an orthopedic surgeon, you need a four-year bachelor’s degree, followed by four years of medical school and typically a five-year residency. To specialize in a particular area (such as pediatric orthopedics), you also need to complete a one- to two-year fellowship.

Orthopedic surgeons specialize in diagnosing and treating conditions that affect the musculoskeletal system, which includes joints, bones, ligaments, muscles, and tendons. They treat injuries like fractures and dislocations, manage chronic conditions like arthritis, and perform surgeries such as joint replacements. They also recommend nonsurgical treatments like physical therapy to restore mobility and function.

4. Surgeon

Average salary in California: $340,260

National average salary: $343,990

Educational requirements: To become a surgeon, you need a four-year bachelor’s degree, followed by four years of medical school and a three- to eight-year surgery residency. Surgeons may also opt to complete a one- to three-year fellowship.

Surgeons perform operations on patients with injuries or illnesses. Their duties include reviewing X-rays, discussing procedures with patients, preparing for surgery, and completing surgeries with the help of other medical and surgical professionals. They also monitor and follow-up with patients after the surgery.

5. Ophthalmologist

Average salary in California: $324,270

National average salary: $312,120

Educational requirements: To become an ophthalmologist, you need a four-year bachelor’s degree, followed by four years of medical school and three to eight years of post-graduate training, including an internship and residency in ophthalmology.

Ophthalmologists diagnose and treat conditions that affect the eyes and vision. They perform routine eye exams, prescribe eyeglasses and contact lenses, and prescribe medications to treat eye conditions. They also perform surgeries to correct vision and treat eye conditions such as cataracts and glaucoma.

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6. Dermatologist

Average salary in California: $313,330

National average salary: $342,860

Educational requirements: To become a dermatologist, you need a four-year bachelor’s degree, followed by four years of medical school and a four-year residency. To specialize in a particular area (such as dermatopathology or pediatric dermatology), you also need to complete a one- to three-year fellowship.

Dermatologists are doctors who specialize in diagnosing and treating skin, hair, and nail conditions. They manage issues like acne, eczema, psoriasis, and skin cancer. They perform skin screenings, prescribe medications, and perform minor surgical procedures on the skin, such as biopsies and mole removal. They may also assist patients with cosmetic issues and concerns.

7. Psychiatrist

Average salary in California: $288,270

National average salary: $256,930

Educational Requirements: To become a psychiatrist, you need a four-year bachelor’s degree, followed by four years of medical school and a four-year residency. To pursue a subspecialty (such as addictions or geriatric psychiatry), you must also complete a one-year fellowship.

Psychiatrists are medical doctors that specialize in diagnosing and treating mental health disorders. They work closely with patients to address a wide range of mental health issues, from anxiety to severe psychiatric conditions. Treatments they offer may include medication, therapy, and behavioral interventions. They also monitor their patients over time, making adjustments to treatment as necessary.

8. Airline Pilot

Average salary in California: $286,040

National average salary: $250,050

Educational Requirements: To become an airline pilot, you typically need a minimum of 1,500 hours of recorded flight time. This includes at least 100 night hours, 500 cross-country hours, and 50 multi-engine hours. You may also have to pass a medical exam to prove they have the strength and stamina demanded by the job. All pilots must also have a Federal Aviation Administration (FAA) license.

An airline pilot flies a commercial aircraft that carries passengers and cargo from one location to another. In addition to operating planes safely, airline pilots have a range of other responsibilities. These include developing flight plans, conducting pre- and post-flight checks, monitoring equipment, communicating with air traffic control, coordinating with flight attendants, and filing status reports after each trip.

9. Obstetrician and Gynecologist (OB-GYN)

Average salary in California: $285,470

National average salary: $278,660

Educational Requirements: To become an OB-GYN, you need a four-year bachelor’s degree, followed by four years of medical school and a four-year residency.

OB-GYNs, also known as obstetrician gynecologists, specialize in female reproductive health. They provide a range of services, including obstetrics (care during pregnancy, childbirth, and postpartum) and gynecology (care for a woman’s reproductive organs and health). They play a key role in promoting women’s health across all life stages.

10. Chief Executive Officer (CEO)

Average salary in California: $281,030

National average salary: $258,900

Educational requirements: To become a CEO, you typically need a four-year bachelor degree. Many aspiring CEOs also pursue a master’s degree in business administration or their desired field, which typically takes two years to complete.

A chief executive officer, or CEO, is the top-ranking executive within an organization and is responsible for leading the company. Their duties include setting strategic goals, overseeing operations, communicating between board members and other company executives, and making key decisions that impact the company’s financial health and success.

💡 Quick Tip: Most savings accounts only earn a fraction of a percentage in interest. Not at SoFi. Our high-yield savings account can help you make meaningful progress towards your financial goals.

11. Internal Medicine Physician

Average salary in California: $275,110

National average salary: $245,450

Educational requirements: To become an internist, you need a four-year bachelor’s degree, followed by four years of medical school and a three- to four-year residency. To pursue a subspecialty (such as gastroenterology or infectious diseases), you also need to complete a two- to three-year fellowship.

Internists, also known as internal medicine physicians, specialize in providing general medical care for adult patients. Their duties include conducting physical exams, ordering bloodwork and other tests, analyzing data to make diagnoses, and prescribing medications and treatments. Internists also counsel patients about lifestyle changes that can lead to better health.

12. Pathologist

Average salary in California: $264,450

National average salary: $270,560

Educational requirements: To become a pathologist, you need a four-year bachelor’s degree, followed by four years of medical school and a three- to four-year residency. Many pathologists also pursue an additional one- to two-year fellowship in a pathology subspecialty.

Pathologists are doctors who specialize in examining tissue to diagnose diseases and determine how illnesses and injuries occurred. Their duties include collecting specimens, studying samples in the lab, and identifying the particular bacteria or virus that resulted in a patient’s symptoms. They also write reports and communicate their findings to the patient’s physician.

13. Radiologist

Average salary in California: $261,020

National average salary: $353,960

Educational requirements: To become a radiologist, you need a four-year bachelor’s degree, followed by four years of medical school and a four- to five-year residency. To pursue a subspecialty (such as musculoskeletal radiology or neuroradiology), you also need to complete a one- to two-year fellowship.

Radiologists are doctors who read and interpret images from diagnostic imaging procedures, such as X-rays, CT scans, MRIs, and ultrasounds. They use imaging results to diagnose disorders and injuries, and to help determine the best treatment. They communicate their findings to physicians and sometimes to patients and families. Some radiologists also treat conditions with radiation and perform image-guided procedures such as biopsies.

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14. Family Medicine Physicians

Average salary in California: $251,640

National average salary: $240,790

Educational requirements: To become a family medicine physician, you need a four-year bachelor’s degree, followed by four years of medical school and a three-year residency.

Family medicine physicians are generalists who provide comprehensive health care for people of all ages. Also known as primary care doctors, they provide or prescribe treatment, medications, and vaccinations; order and interpret tests; educate patients; and refer patients to specialists when needed for further diagnosis or treatment.

15. Nurse Anesthetist

Average salary in California: $250,920

National average salary: $214,200

Educational requirements: To become a nurse anesthetist, you need a four-year bachelor’s degree, followed by a master’s degree from a nurse anesthesia education program. The program must be accredited by the Council on Accreditation of Nurse Anesthesia Educational Programs (COA) and can take 24 to 51 months to complete.

Nurse anesthetists are registered nurses who specialize in anesthesia and provide care for patients before, during, and after surgical and other procedures. Their duties include preparing patients for anesthesia, administering anesthesia, maintaining anesthesia during surgery, and managing recovery. Nurse anesthetists may work alone or with a team of health care providers.

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16. Physician

Average salary in California: $249,660

National average salary: $248,640

Educational requirements: To become a physician, you need a four-year bachelor’s degree, followed by four years of medical school and a three- to eight-year residency. Subspecialization requires additional training in a fellowship of one to three years.

Physicians are medical professionals who diagnose and treat injuries and illnesses and help patients maintain their health. They examine patients; take medical histories; prescribe medications; and order, perform, and interpret diagnostic tests. Some also perform surgery, close wounds, and administer other medical procedures. Many also advise patients on diet, lifestyle, and preventive health care.

17. Dentist

Average salary in California: $249,610

National average salary: $244,470

Educational requirements: To become a dentist, you need a four-year bachelor’s degree, followed by four years of dental school to get a Doctorate of Dental Surgery (DDS) or a Doctorate of Dental Medicine (DMD). For some specialties, dentists must receive additional training through a two- to three-year residency program.

Dentists are health care providers who specialize in oral health. They diagnose, treat, and prevent issues related to teeth, gums, and mouth, such as cavities and gum disease. They perform procedures like fillings, extractions, root canals, and may provide cosmetic services like whitening or veneers. They also educate patients on proper oral hygiene to maintain good oral health.

18. Oral and Maxillofacial Surgeon

Average salary in California: $221,820

National average salary: $334,310

Educational requirements: To become an oral and maxillofacial surgeon, you need a four-year bachelor’s degree, followed by four years of dental school and a four-year residency program.

An oral and maxillofacial surgeon is a medical doctor who diagnoses and treats conditions and injuries of the face, mouth, jaw, neck, and head. They use dental, medical, and surgical skills to perform a variety of specialized procedures, including dental implants, facial trauma repair, cosmetic facial enhancements, and cleft lip and palate surgery.

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19. Computer and Information Systems Manager

Average salary in California: $217,030

National average salary: $180,720

Educational Requirements: To become a computer and information systems manager, you need a four-year bachelor’s degree in a field such as computer science, information systems management or information. You typically also need a master’s degree, which generally takes two years.

A computer and information systems manager, also called an information technology manager (IT manager), oversees an organization’s technology needs. Their role is to make sure the company’s tech systems are secure, efficient, and aligned with business goals. They lead IT teams, manage budgets, evaluate emerging technologies, troubleshoot system issues, and ensure data security.

20. Lawyer

Average salary in California: $213,860

National average salary: $176,470

Educational requirements: To become a lawyer, you need to get a four-year bachelor’s degree followed by three years of law school.

Lawyers provide legal advice and represent clients in legal matters. They interpret laws, draft legal documents, negotiate settlements, and provide guidance on various issues like contracts, disputes, or criminal charges. Some lawyers offer a broad range of legal services, while others specialize in specific areas, such as criminal law, corporate law, or family law.

The Takeaway

California is home to some of the most lucrative career opportunities in the nation, offering competitive salaries across industries like health care, technology, business, and air transportation. While these roles often demand extensive education and training, the rewards can be well worth the investment. Whether you’re drawn to the state for its economic prospects or its vibrant lifestyle, exploring high-paying careers in California can open doors to a fulfilling and financially secure future.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible 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 3.30% APY on SoFi Checking and Savings with eligible direct deposit.

FAQ

What’s the highest paying job in California?

In California, health care roles consistently rank among the highest-paying jobs. Anesthesiologists, cardiologists, and surgeons are at the top, with anesthesiologists earning an average salary of $452,930. These roles require extensive education and specialized training, reflecting the significant responsibilities and expertise required.

What is a good salary in California?

A “good” salary in California varies depending on location and lifestyle. Given the state’s high cost of living, particularly in metropolitan areas, a salary above the national average is often necessary. Research suggests that, on average, you need to earn just over $143,000 a year to be happy in California.

What are some of the fastest-growing jobs in California?

California is seeing rapid growth in several sectors, especially health care and technology. Jobs like nurse practitioners, physical therapists, medical and health services managers, solar photovoltaic installers, and data scientists are among the fastest-growing jobs in the Golden State.

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Photo credit: iStock/Jacob Wackerhausen

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. 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.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details 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.

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

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Cannabis ETFs are funds that concentrate their holdings in the cannabis or marijuana industry. Investing in a single weed ETF could allow you to gain exposure to dozens of cannabis-related companies, without having to buy individual stocks. As such, you might consider adding a cannabis ETF to your portfolio if you’re looking for diversification, as exchange-traded funds or ETFs may offer exposure to a collection of investments in a single basket.

Investors should learn more about ETFs as investments, and the specifics of the marijuana industry, however, before investing.

What Are Cannabis ETFs?

Cannabis ETFs are exchange-traded funds that invest in companies that are connected to the cannabis industry. A marijuana ETF works the same way as any other type of ETF, in terms of how it’s traded, as they can be bought and sold on the stock market. As for how they work, ETFs pool money from multiple investors and trade on an exchange. All that sets a cannabis ETF apart from other ETFs is what it invests in — in this case, the cannabis industry.

There are only a handful of cannabis ETFs that trade in the U.S. which suggests that there may be room in the market for newcomers. The world’s first marijuana ETF, Global X Marijuana Life Sciences Index (HMMJ) was launched in Canada in 2017. The first U.S.-focused cannabis ETF landed in 2020, with the introduction of AdvisorShares’ Pure US Cannabis ETF (MSOS).

Marijuana legalization efforts have spurred interest in cannabis investments. At the time of writing, 24 states and the District of Columbia have legalized marijuana for recreational use. Another 14 states have legalized cannabis for medical use. Under federal law, marijuana remains illegal.

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Understanding the Cannabis Industry

The cannabis industry is multilayered and diverse. Cannabis products are typically categorized according to their purpose and use.

Medical Cannabis

Medical marijuana is used to treat pain and symptoms of illness. It’s derived from the Cannabis sativa plant, which contains chemicals and active compounds. These chemicals, which include delta-9 tetrahydrocannabinol (THC) and cannabidiol (CBD), produce reactions in the brain and body that may help to ease pain or create psychoactive effects.

Doctors may prescribe medical marijuana for a variety of conditions, including:

•   Glaucoma

•   Crohn’s disease

•   Epilepsy/seizures

•   Multiple sclerosis

•   HIV/AIDs

•   Alzheimer’s disease

•   Amyotrophic lateral sclerosis (ALS)6

It can also be used as a form of pain management for people suffering from other chronic or terminal conditions.

Recreational Cannabis

Recreational or adult-use cannabis is cultivated for non-medical purposes.7 In terms of its composition, the underlying chemicals are the same but the strength of each one can vary. With recreational marijuana, there may be higher amounts of THC present. THC is the chemical that produces a “high” when using marijuana.

There’s also a difference in how recreational vs. medical marijuana is sold. Both can be sold at dispensaries but you may need a state-issued cannabis card to purchase the medical version. With recreational marijuana, you may just need a state-issued ID card proving that you’re old enough to make the purchase. Note that the laws regulating how, when, to whom, and even if any type of cannabis is sold varies from state to state.

Hemp and CBD Products

Hemp is any part of the Cannabis sativa plant that has a THC concentration of no more than 0.3%. CBD is derived from hemp products and is the second most active ingredient in marijuana.

The legality of hemp and CBD products varies from state to state. Legality typically ties into the concentration of THC present. Again, some states are more stringent than others. In Idaho, for instance, CBD must be derived from one of five acceptable parts of the Cannabis sativa plant and have 0% THC.

Types of Companies in Cannabis ETFs

Cannabis ETFs vary in the underlying investments they hold. Some marijuana ETFs invest in a range of companies across different segments of the industry. Others choose to target a specific niche.

Typically, cannabis investing extends to companies that:

•   Grow, distribute, or sell marijuana (medical or recreational)

•   Conduct research into the chemical composition of marijuana and its range of uses

•   Have an ancillary connection to the industry or have substantial exposure to marijuana stocks

•   Marijuana ETFs may have many underlying holdings or few; reading the ETF’s prospectus can give you a better idea of how investments are concentrated.

For example, Cambria Cannabis ETF (TOKE) offers broad exposure that includes cannabis growers, cannabis retailers, and cigarette manufacturers. Amplify Alternative Harvest ETF (MJ), meanwhile, is largely focused on cannabis pharmaceutical companies.

Advantages of Investing in Cannabis ETFs

Since this is a relatively new asset class, there are some risks, but if your ETF picks perform well you could realize solid returns with marijuana investments.

Cannabis is a growing industry and investors have the opportunity to get in on the ground floor of new companies as they emerge. As legalization efforts expand, there may be more demand for growers, distributors, sellers, and pharmaceutical companies.

In terms of how much of your portfolio to invest in cannabis ETFs, it depends on your risk tolerance and diversification needs. You may start with a smaller allocation and increase it over time as you get comfortable with the cannabis ETF market and its risks.

Risks Associated with Cannabis ETFs

All investments have some risk, but cannabis ETFs tend to be more volatile. The market’s relative newness makes it more susceptible to pricing and trading fluctuations. Beyond that, there are legal and regulatory considerations to keep in mind.

Here are some things to weigh before investing in a marijuana ETF.

Regulatory and Legal Risks

Cannabis ETFs are subject to greater scrutiny from the Securities and Exchange Commission (SEC) due to the nature of the underlying investments and the overall legality of marijuana. Weed ETFs must adhere to regulatory guidelines regarding the use of a custodian to hold assets, which can sometimes spell trouble if a fund is unable to find a willing custodian.

Aside from that, the legality of marijuana, hemp, and CBB products is not uniform across all 50 states and the various territories held by the U.S. For that reason, it’s important to do your due diligence to understand what you’re really investing in when you buy a cannabis ETF.

If a fund holds investments in cannabis companies that are operating illegally, that could put the entire ETF in jeopardy. Aside from that risk, certain jobs, including government jobs, may revoke your security clearance if you invest in marijuana stocks or ETFs.

Popular Cannabis ETFs in the Market

There are a handful of cannabis ETFs available for trade in the U.S., and those include:

•   AdvisorShares Pure US Cannabis ETF (MSOS)

•   Amplify Alternative Harvest ETF (MJ)

•   Cambria Cannabis ETF (TOKE)

•   Roundhill Cannabis ETF (WEED)

•   AdvisorShares MSOS Daily Leveraged ETF (MSOX)

Some of these ETFs have more than a dozen holdings while others have less than ten. They also vary with regard to dividends, returns, and expense ratios.

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Factors to Consider When Choosing a Cannabis ETF

Choosing a cannabis ETF typically starts with researching and evaluating what type of cannabis companies you’d like exposure to. Once you narrow that down, you can then compare specific metrics for different funds, including:

•   Expense ratio. An expense ratio represents how much you’ll pay to own the fund annually. Typically, the lower this number is, the better.

•   Holdings. Holdings are what an ETF invests in. You’ll want to look at what a cannabis ETF owns and how much of the fund’s money is concentrated in each investment.

•   Trading volume and liquidity. Trading volume and liquidity can give you an idea of how in-demand a marijuana ETF is and how easy (or difficult) it will be to sell it when you’re ready to unload it.

It’s also helpful to consider the minimum investment required, if any, and the share price of the fund. If you have a limited budget for cannabis investing you’ll have to decide whether you want to spread your money across multiple funds or concentrate all of it in a single fund.

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How to Invest in Cannabis ETFs

The simplest way to invest in cannabis ETFs is through a brokerage. If you don’t have a brokerage account, you can open one and start investing online. Before you do, take time to review the brokerage’s investment options to make sure you’ll have access to marijuana ETFs. Then consider the minimum account deposit required, if any, and the fees you’ll pay to trade.

Once your account is open and funded, you can begin buying cannabis ETF shares. If you skipped the previous step and haven’t researched any funds yet, you’ll want to backtrack and do that before you get started with trading.

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Tax Implications

ETFs held in a brokerage account are subject to capital gains tax if you sell them at a profit. There are two capital gains tax rates:

•   Short-term capital gains apply when you hold an investment for less than one year. The rate is equivalent to your ordinary income tax rate.

•   Long-term capital gains apply when you hold an investment for longer than one year. Capital gains tax rates range from 0% to 20%, with some exceptions.14

If you’re trading cannabis ETFs it’s to your advantage to consider how selling them at a profit might affect your tax situation. You might consider holding them in a Roth IRA vs. a traditional brokerage account, which allows for tax-free distributions in retirement. Note, however, that you may incur a tax liability in some circumstances.

The Takeaway

Cannabis ETFs can help you mix things up with your investment portfolio but it’s important to know the pros and cons. Specifically, there may be some legal and ethical concerns related to cannabis ETFs that investors should be aware of. It is also a relatively new industry, too, which means it could grow in the years ahead, but may be more volatile than other investments.

And if you’re brand new to the market, learn how to invest in stock and build a portfolio from the ground up. You can explore different types of stocks, including marijuana stocks, to decide which investments align with your needs and goals.

Invest in what matters most to you with SoFi Active Invest. In a self-directed account provided by SoFi Securities, you can trade stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, options, and more — all while paying $0 commission on every trade. Other fees may apply. Whether you want to trade after-hours or manage your portfolio using real-time stock insights and analyst ratings, you can invest your way in SoFi's easy-to-use mobile app.

Opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.¹

FAQ

What sectors of the cannabis industry do these ETFs typically cover?

Cannabis ETFs can cover all sectors of the industry, including growers and distributors, pharmaceutical companies and researchers, and related businesses, such as tobacco manufacturers. Marijuana ETFs may offer exposure to companies that deal in recreational marijuana, medical marijuana, and/or hemp and CBD products.

How do regulatory changes affect cannabis ETFs?

Regulatory changes can affect demand for cannabis ETFs if legal changes make marijuana more accessible. On the other hand, regulators could add hurdles to marijuana investing by implementing changes that require cannabis ETFs to meet more stringent guidelines.

Are cannabis ETFs more volatile than traditional ETFs?

Cannabis ETFs may be more volatile than traditional ETFs since the industry is so new and there are still plenty of questions about legality and regulatory requirements. Knowing that going in can help you decide how much of your portfolio to commit to marijuana ETFs if you want to diversify while still managing your risk exposure.

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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.

Exchange Traded Funds (ETFs): Investors should carefully consider the information contained in the prospectus, which contains the Fund’s investment objectives, risks, charges, expenses, and other relevant information. You may obtain a prospectus from the Fund company’s website or by emailing customer service at [email protected]. Please read the prospectus carefully prior to investing.


¹Probability of Member receiving $1,000 is a probability of 0.026%; If you don’t make a selection in 45 days, you’ll no longer qualify for the promo. Customer must fund their account with a minimum of $50.00 to qualify. Probability percentage is subject to decrease. See full terms and conditions.

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