Taking a break from financial obligations can offer some breathing room, but it’s important to understand how deferred payments may affect your credit score.
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Money orders are a form of payment that are sometimes very useful if you need to transfer funds to someone. They can be obtained from various outlets, at typically a low fee, and can be a good way to move cash when a person doesn’t have or doesn’t want to use a bank account.
Here, you’ll learn more about what money orders are, how they work, when to use them, and what alternatives to money orders exist.
Think of a money order as a paper check that can never bounce because it has been prepaid by the sender. It can be cashed or deposited just like a check, but it offers a few benefits over checks beyond never bouncing.
For one thing, if for whatever reason you don’t have a bank account, that isn’t a problem. You don’t need a bank account to get a money order, cash one, or even use money orders to pay bills.
To send a money order, here’s the protocol of the U.S. Postal Service:
1. Take cash, a debit card, or a traveler’s check. You cannot pay with a credit card.
2. Fill out the money order at the counter with a retail associate.
3. Pay the dollar value of the money order plus the issuing fee.
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Many of the biggest banks offer money orders and often require that they be purchased at a branch. There can be a $5 to $10 fee when buying a money order worth up to $1,000 (though the fee may be waived for premium accounts).
Sometimes the money order fee is also waived for members of the military. However, many banks require that you already have an account with them to purchase a money order.
Money orders are also issued at places like Walmart (with a maximum fee of $1, and the exact fee varying by location), convenience stores, credit unions, and the Postal Service.
Postal Service fees for money orders are based on the dollar amount: $1.45 for a money order of up to $500, $1.95 for one from $500 to $1,000 (which is the maximum amount for a single money order), and 50 cents for postal military money orders issued by military facilities.
Money orders may be safer than some other forms of money. For example, while a check contains sensitive personal information like your home address, phone number, and bank account and routing number (plus the name of anyone else on the account), a money order usually only contains the names of the payer and payee.
So a money order is usually a more anonymous and therefore a potentially more secure method of payment than a check, although some money order issuers may require an address. That’s usually in case the check’s payee needs to contact the sender about the payment.
Sometimes both halves of the transaction may have to include this information. If you’re unsure, the best bet is to just ask.
Here are a few of the cons of money orders:
• Fees. While you can pay bills with money orders, the small fees can add up if you’re relying on them for that purpose.
Check cashing stores may charge a flat fee of $2.99 per money order, while some might charge around 4% to 5% to cash a money order. Many banks usually will do it for free. Also note that there are banks that will deposit a portion of the order and then after a couple of days release the rest.
• Payment limits. Usually $1,000 is the ceiling for most money orders.
• Inconvenience. The fact that many banks require your presence to process a money order may make putting money orders you receive into use less convenient.
The cap on a money order’s value also means there’s a time investment if, say, you need to pay $2,000 to someone — that’s two money orders, two fees, and twice as much time spent getting them issued.
In addition, not all businesses may accept money orders. If you are trying to use one to pay a bill, check with the payee first. Every now and then, you may encounter someone who accepts only, say, online bill paying.
• Use in scams. A big strike against money orders overall — and this is why banks can be somewhat cautious in accepting them — is that they can be used in banking scams. Money orders are perceived as a safe way to receive payments, and that is true when they are legitimate.
But the news can share stories about counterfeit money orders that revolve around suspicious prizes, employment opportunities, classified ads, and so on. Because money orders are not checks, it can make them harder to trace. It’s a good idea to keep your receipt for a money order until you are sure the order has been received and cashed.
Sometimes vendors or recipients aren’t able to accept a check, and a money order might make sense. But there are digital age options like peer-to-peer payments or P2P transfers.
P2P platforms are often a free service offered by financial institutions that lets users send and receive money, usually in minutes.
And P2P transfers are generally quick, as fast as a few seconds. Examples of services people use for P2P payments are PayPal and Venmo, as well as Zelle which moves money in a slightly different way, from bank account to bank account, but is usually mentioned in the same breath with the others.
Also, many banks now offer ways to transfer money from one bank to another as part of their services, making it easy to move money between your own accounts and to other individuals and businesses.
Recommended: Pros and Cons of Electronic Banking
Money orders are a paper financial tool, which, like a check, can move funds. They have the added benefit of being able to be used even if you don’t have a bank account, and the fees involved in getting one can be quite low. However, there is typically a $1,000 cap on the amount of a money order, and it can take some time and energy to get one.
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.
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.
SOBK0523023U
The unemployment benefits system is a lifeline for those who have lost jobs through no fault of their own and need help before they can find another position.
This federal unemployment program is administered by the states, and the rules differ, depending on where you live. However, there are some basic guidelines for how to file for unemployment no matter what state you’re in.
Here’s what you need to know about filing for unemployment.
Unemployment insurance is meant to assist a specific group of people that lost their jobs by temporarily replacing a portion of their wages. You must meet specific eligibility requirements to collect unemployment. Collecting unemployment benefits could help you survive a layoff.
While unemployment requirements vary by state, generally, you need to have lost your job through no fault of your own and worked a certain amount of time or earned a specific amount of income. Some states have additional requirements. Be sure to check with your state’s unemployment office.
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The first question to ask is if you’re eligible for benefits in the first place.
Typically, to be eligible for unemployment you need to have worked a salaried job for an employer. Employers pay federal unemployment tax to fund the unemployment account of the federal government. Businesses also may have to pay state unemployment taxes.
By working a set amount of time — it varies from state to state — for an employer that pays that tax, you become eligible to receive unemployment benefits.
The first part of eligibility relates to how you work. The second part relates to how you stop working.
Unemployment is designed to assist those who are no longer working “through no fault of (their) own,” according to the Department of Labor. While each state’s exact rules are different, the general guideline is that you are only eligible for unemployment if you’ve lost your job for economic reasons on the part of your employer as opposed to having been terminated for cause or having left voluntarily.
If you meet the two conditions, you can usually then apply for unemployment benefits from your state. You can use these funds to pay your bills during a job loss.
There are some basic commonalities among the states: You will need to provide your address, phone number, address of your former employer, Social Security number, and the dates that you were employed by your former employer.
It varies by state, but the average maximum benefit amount in the third quarter of 2022 was $392 a week, according to the Center on Budget and Policy Priorities. Your unemployment benefit is based on your former wages, with higher-wage workers typically getting more benefits, up to a cap.
The amount you get varies by state and it ranges widely. Having an emergency fund can help tide you over until you find a new job.
This is also a good time to create a budget so that you can carefully track your spending and savings.
If you receive a Form W-2 and lose your job through a layoff, you will typically be eligible for unemployment Insurance.
If you’re self-employed or an independent contractor, you generally can’t receive unemployment because you haven’t paid into the unemployment fund. However, it may depend on the specific law in your state. Check with your state’s unemployment office to find out if you may be covered.
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Apply as soon as possible. It can take weeks for claims to be approved, so apply right after you lose your job, if possible. You can apply through your state’s unemployment office.
This varies state by state, and you should check on your state’s procedures. You can typically apply online or over the phone.
The Department of Labor says it typically takes “two to three weeks” to receive benefits, but it can take longer.
You will receive benefits for the full amount of time from when you successfully applied (in some states there’s a one-week waiting period), not just from when you started receiving benefits.
Once again, there are variations among states about the form in which your unemployment benefits are received.
Some states offer direct deposit, meaning you can receive your unemployment benefits as you would your paycheck, directly into your bank account.
Others disburse benefits through a debit card mailed by the state.
One benefit of using a debit card is that an unemployment recipient does not need a bank account in order to access benefits. While this is convenient for those without bank accounts, there are some downsides, like limits on ATMs that can be used without fees, and the general limitation on which merchants accept debit cards.
Using a debit card also puts you at the mercy of the mail before you can start using benefits. If you were getting paid from your job via direct deposit, you will likely receive your benefits faster.
You may want to consider opening a bank account, if you don’t have one, to get your unemployment faster and easier via direct deposit.
Learn more: How to Set Up Direct Deposit
Again, this varies by state, but generally you need to have a record of seeking work to remain eligible for unemployment benefits. States may have some kind of form or portal that you’re required to fill out or log into to show that you are looking for work.
Recommended: How to Handle Student Loans During a Job Loss
Unemployment benefits last 26 weeks in most states. However, several states provide fewer weeks of benefits, and two states (Massachusetts and Montana) currently offer a bit more.
If you lose your job through no fault of your own, unemployment insurance can cover some of your lost wages as long as you meet the eligibility requirements. File for unemployment with your state unemployment office as soon as you can, since it can take several weeks to receive benefits.
You may obtain your benefits faster through direct deposit. With a SoFi Checking and Savings account, your unemployment funds can be deposited directly into your account. You’ll also earn a competitive APY, which can help your money grow, and you’ll pay no account fees. Nor is there a minimum balance to meet.
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.
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.
SOBK0523016U
Does it seem as if the second you earn money, it goes flying off to pay for food, gas, utility bills, dining out, student loans, and everything else on your plate?
It can be hard to track where your hard-earned cash goes, and that’s where a budget can help. A budget provides a framework to see how much is coming in and what it’s being spent on, and it gives you the chance to recalibrate so you can, say, put more into savings.
Zero-based budgeting is one method that can help you account for every collar so you better understand your cash flow situation. This in turn can help you better manage your money and hit your financial goals.
When building a zero-based budget, your income minus your expenses should equal zero. In other words, with zero-based budgeting, every dollar of your income has purpose.
This doesn’t mean you won’t have any money in your bank account, since you might want to allocate some of your budget to savings. Rather, using this method could help you know exactly how much you will spend, save, and invest in any given month. And depending on your monthly needs, these figures may change or stay the same.
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As with most budgeting techniques, you might want to start the zero-based budgeting process by making a list of your expenses. Start with your fixed and necessary expenses first, such rent, utilities, groceries, transportation, insurance payments, and debt payments.
You know that these payments have to be covered each month, so you could allocate income to each necessary expense. Tally these expenses and subtract them from your total income. The resulting figure could be the amount available for discretionary expenses.
Next, you could allocate those remaining discretionary funds. These expenses could include money that you pay to yourself to save for short-term goals such as an emergency fund.
Or you might target longer-term goals such as stocking an online retirement account, or other farther-along savings goals, such as a down payment on a house.
Other expenses might include entertainment, clothing, and non-essential items.
Keep in mind that some expenses might be seasonal, such as vacations or holiday gifts. You might want to determine how you’d like to save for these expenses. You may choose to allocate funds in a single month, or it may make sense to set aside a small amount over each monthly period. It might take a little bit of extra planning to figure out how much you’ll need and how to divide up the cost.
Some expenses may also be variable — for example, say you’re hit with an unexpected bill when your car needs a new transmission — and these can be tricky to deal with. One way you could build them into the budget is to have a line item such as “savings for variable expenses” to help you cover them. This line item would be different from your other savings.
A simple example of a zero-based budget for someone who makes $6,000 a month might look like this:
| Rent/Housing | $3,500 |
| Utilities | $200 |
| Car payment | $300 |
| Gas | $200 |
| Groceries | $400 |
| Savings | $750 |
| Eating out | $200 |
| Entertainment | $150 |
| Student loan payments | $200 |
| Credit card payments | $100 |
| Total | $6,000 |
In this example, the person’s income less their total expenses — $6,000 minus $6,000 — equals $0. As mentioned above, every dollar has a job to do.
Finally, remember that with a zero-based budget every dollar should have a purpose. So if at the end of figuring out your expenses, you find yourself with some extra cash, it needs to go somewhere. You might want to put a little extra toward savings or pay off some debt quicker.
But if you don’t allocate the funds, they might get spent. The problem is you may not know where you spent that money, and keeping track of it is the whole point of this exercise.
No account or overdraft fees. No minimum balance.
Up to 4.00% APY on savings balances.
Up to 2-day-early paycheck.
Up to $2M of additional FDIC insurance.
You might want to keep an eye on your spending throughout the month to make sure you’re sticking to your budget. This process could be dynamic. If you find that you don’t need to spend as much on one budget item one month, you could shift that extra cash into another category the next month.
If you find yourself needing extra money to cover an expense, you could look for places to save. If you find yourself with little wiggle room in your budget and need to add to or boost your existing expenses, you might want to increase your budget with extra sources of income, like a side hustle.
Many people earn a variable income, whether that means being a seasonal worker or a freelancer whose earnings ebb and flow. A variable income can pose some challenges to building a zero-based budget, but they’re not insurmountable. First, you could consider maintaining a buffer of cash, or a cash cushion, to help cover your expenses as your income expands and contracts.
You could then use your previous month’s budget as a base for the current month, using the buffer to cover any shortfalls. You might want to replenish this buffer when you have extra money in a month. You may also try building your budget based on a low estimate of your monthly income to increase the odds that you’ll be able to stay within your budget.
An irregular income means that you might spend more time adjusting your budget as you income fluctuates.
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There are other budgeting methods that may be worth a try. One rule of thumb, called the 50-30-20 rule, allocates percentages of your income to different categories. When using this rule, 50% of income goes to necessities, like housing, utilities, and food. The next 30% of income goes to discretionary spending, and the final 20% is allocated to retirement accounts and savings.
You may also consider a budgeting system known as reverse budgeting, in which you focus on savings goals rather than expenses. To use this method, you might want to determine your short- and long-term savings goals, such as a downpayment on a house, paying down student loan debt, and retirement.
You could figure out how much you need to save for those goals and then automate the savings. The money could be taken from your checking account and put into a savings account each month. You might use the money left in your checking account to pay for necessary expenses first, and the rest you could use however you’d like.
Budgeting can help you take a closer look at how you’re spending your money and how you want to be spending it. By taking time to work through a budget, you could make sure that your money is going exactly where it needs to go.
Budgeting can also help you stop spending on things that aren’t important to you (things you may not even realize you are spending money on) and can help you fund the things you care about most.
It’s a good idea to find a budgeting strategy that works for you and that you’ll stick with. Budgeting apps can be a good solution to help you track your purchases, and some financial institutions offer excellent ones. An online account like SoFi Checking and Savings is one example: You spend and save in one convenient place and can keep track of your money on the dashboard. What’s more, your money earns a competitive annual percentage yield (APY) and you pay no account fees, both of which can help your money grow faster.
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.
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.
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Depending on how many and what kind of credit cards you have, you could be thinking about closing unused credit cards. After all, if you’re not using them, you might think it’s better to simplify your life and your finances. However, there are some good reasons to keep your credit card accounts open, even if you’re not actively using the card.
There are a few ways that credit cards affect your credit score, and closing an unused credit card might actually lower your credit score. So before you cancel an unused credit card, make sure you understand how that can impact your credit score. That will allow you to make an informed decision that is best for your specific financial situation.
Here, you’ll learn:
• Should I cancel unused credit cards?
• Do unused credit cards hurt your credit score?
• When is it better to cancel a credit card?
There are a few factors that make up your credit score. Two of the components of your credit score are your utilization ratio (how much of your available credit you’re using) and your average age of accounts. Closing an unused credit card can impact both of these:
Your credit card utilization is defined as the amount of your available credit that you are currently using. So if you have a card with a $10,000 limit and you have an average balance of $1,000, your utilization is 10% ($1,000 divided by $10,000). A low utilization is a positive indicator for your credit score. So closing any credit card account will lower the total amount of available credit you have. This will raise your utilization percentage and possibly lower your credit score.
Recommended: How to Read a Credit Report
Another factor that makes up your credit score is the average age of your accounts. Having credit accounts that have been open for a long time is generally considered more positive for your credit score than having only recent accounts. So if you close an unused credit card, especially one that you’ve had open for a long time, it can lower your average age of accounts and possibly also hurt your credit score. The account may stay on your report for a while, but when it eventually drops off, your score could decrease.
Recommended: 10 Advantages of Credit Cards
So while it can make sense to keep your unused credit cards open, there are a few risks of keeping unused credit cards. If you no longer are monitoring your account, there is a higher risk that someone might commit credit card fraud with your account. So you’ll want to make sure that you are regularly looking at your accounts, and maybe even make an occasional purchase on each credit card that you have.
There are also some situations where it’s better to just cancel a credit card. One reason to cancel a credit card is if it comes with an annual fee.
• If you’re not using a credit card and not getting any value from its benefits, it usually won’t make sense to pay the annual fee, especially when there are so many credit cards that offer good rewards with no annual fee.
• Another situation where it might make sense to cancel a credit card is if you’re having trouble controlling your spending. If having a credit card is causing you to go into debt or spend more than you earn, it might make sense to do a bit of a financial reset.
Using a debit card or moving to paying with cash might help you get to a better spot, financially speaking.
If you’re thinking about canceling a credit card without impacting your credit score, there are a few things that you can do to help mitigate the hit to your credit score.
• One thing is to make sure to pay down any balance on the card before you close it.
• Another possible option is to call your credit card company and see if you can move some of your available credit to another credit card. That might help keep your credit utilization ratio high.
If you have a credit card hidden away in your sock drawer that you no longer use, you might wonder, “Should I close unused credit cards?” You might be tempted to just cancel the card so you don’t have to think about it anymore. However, there may be some reasons where it can make more sense to keep the card open, even if you never or rarely use it. Keeping it open may help build your credit score, and if you close a card you’ve had for a long time, it can impact your credit score.
Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.
An unused credit card generally won’t be closed automatically, at least at first. However, most credit card companies do reserve the right to close your account for any reason, including if you don’t use your credit card. So if you want to keep a credit card account open, it may make sense to occasionally make a purchase or two.
Canceling an unused credit card can lower the total amount of your available credit. This may lower your credit utilization ratio, which is one of the major factors that make up your credit score. Make sure that you understand any possible impacts to your credit score before you cancel an unused credit card.
No, in most cases it is not bad to have an unused credit card. In some cases, it can even help to keep your credit card accounts open, even if you’re not actively using the card. This is because having an open account increases your available credit and it may raise your average age of accounts. Both of these are factors that go into calculating your credit score.
Photo credit: iStock/FreshSplash
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 .
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.
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