Financial Topics Archives | Page 66 of 824

Apr

2025

Can You Spend Money From A Savings Account?

By Kylie Ora Lobell | Budgeting & Goals, Financial Independence, money | Comments Off

Sure, savings accounts can be a good place to stow extra cash and build wealth. You’ll typically earn interest, helping your money grow and boosting your progress towards your financial goals.

However, unlike checking accounts, you usually can’t spend straight from a savings account. What’s more, you may find that there are limitations on the number of withdrawals or transfers you can make from out of your savings account.

If you want to avoid getting entangled with savings account rules and restrictions or triggering fees, here’s advice. Read on to learn the ins and outs of spending money from a savings account.

How Does a Savings Account Differ From a Checking Account?

You might think the main difference between a checking account and a savings account is how you view them–namely, one is for now, and one is for later. But the bank also views these two accounts very differently. Here’s a closer look at how savings accounts work vs. checking accounts.

• Savings accounts typically earn interest while checking accounts which generally earn zero or very little interest.

• Savings accounts may come with cash transfer and withdrawal limits. A federal rule called Regulation D used to limit certain types of transactions from a savings account to no more than six per month.

• In the wake of the coronavirus pandemic, the Federal Reserve lifted this rule to allow people to have easier access to their savings. Many banks, however, still enforce the six-per-month cap on savings account transactions.

• Savings accounts don’t usually come with debit cards that can be used to make purchases with money from that savings account. Only a few banks offer this service.

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Can You Write a Check From a Savings Account?

Typically, you can’t write checks from a savings account. Of course, it’s always possible to transfer money from a savings account to a checking account and then write a check from there.

If you want to save money and have the ability to write a check with the money you save, you may want to consider opening up a money market account.

Money market accounts are a type of savings account that often pay a higher interest rate than traditional savings accounts and generally include check-writing and debit card privileges.

However these accounts often come with minimum monthly balances, and falling below the minimum can trigger fees. Like other savings accounts, money market accounts may limit transactions to six per month (which includes writing checks and debit card payments).

How to Spend (and Save) With a Savings Account

To take advantage of the interest you’re earning on your savings, and avoid triggering penalty fees or the closure of your account, you may want to keep these savings account spending tips in mind.

Keeping Track of Your Withdrawals

It can be a good idea to find out what your bank’s policy is regarding monthly transactions from savings. Many institutions are sticking with the standard limit of six “convenient transactions” per month, while some are allowing more, such as nine transactions per month.

Convenient transactions include money transfers you make online, by phone, or through bill pay. Transactions, including ATM withdrawals and those that you make in person at the bank, do not typically count towards the monthly cap.

Paying Bills From Your Checking Account

Scheduling automatic bill payments from your savings account may put you over the savings withdrawal limit. It can be a better idea to have automatic bill payments or recurring transfers come out of your checking account.

Withdrawing Money Only for Large Expenses

If you withdraw money from your savings account for everyday spending, it can reduce the amount of interest you earn, and make it harder to reach your savings goals.

It can be wiser to only touch your savings when it’s necessary to cover an emergency expense or a large purchase (ideally, one you’ve been saving up for).

Building Your Savings

A savings account can help you work towards your financial goals, such as creating an emergency fund, making a downpayment on a home, or going on a great vacation. In some cases, you may even want to have different savings accounts for different goals.

To help achieve those goals faster, you may want to set up an automatic transfer from your checking account into your savings account on the same day each month (perhaps after your paycheck gets deposited). It’s perfectly fine to start slowly. Even small monthly deposits will add up over time.

💡 Quick Tip: Want a simple way to save more everyday? When you turn on Roundups, all of your debit card purchases are automatically rounded up to the next dollar and deposited into your online savings account.

Maximizing the Interest You Earn

The higher the interest rate, the faster your savings will grow. That’s why it can be worthwhile to do some research into which institutions and which types of savings accounts are paying the highest rates.

Some options you may want to look into include: A high-interest savings account, money market account, certificate of deposit (CD), checking and savings account, or an online savings account.

The Takeaway

Savings accounts generally aren’t designed for making frequent transactions. Instead, their main purpose is to provide a safe place to store money for the medium- to long-term. This is one of the key differences between checking and savings accounts.

Savings accounts still allow you to have access to your money, of course. To avoid exceeding transaction limits, you can visit the bank in person or use the ATM to make withdrawals or initiate transfers (since these transactions typically don’t count towards transaction caps).

To make the most out of your savings account, you may also want to look for an account that pays a higher-than-average interest rate.

Open a SoFi Checking and Savings Account

Another savings option you may want to consider is opening a checking and savings account, which can combine the best features of each kind of financial vehicle.

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

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.80% APY on SoFi Checking and Savings.

About the author

Kylie Ora Lobell

Kylie Ora Lobell is a personal finance writer who covers topics such as credit cards, loans, investing, and budgeting. She has worked for major brands such as Mastercard and Visa, and her work has been featured by MoneyGeek, Slickdeals, TaxAct, and LegalZoom. Read full bio.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2025 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
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SoFi members with Eligible Direct Deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below).

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

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

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

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

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

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

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

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

2025

Guide to Writing Call Options: What You Should Know

By Dan Miller | Growing Wealth, invest, Investing | Comments Off

SoFi does not currently offer all the products and services in this article. Our content covers a variety of financial topics for educational purposes only.

Editor's Note: Options are not suitable for all investors. Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire amount invested in a short period of time. Please see the Characteristics and Risks of Standardized Options.

Writing a call option refers to selling a call option contract to a buyer in exchange for a premium, or fee. The writer agrees to sell the option’s underlying stock at a fixed price (the strike price) if the buyer exercises the option within a set time frame.

There are two ways to write a call option — sell a covered call or sell a naked call.

• Writing a covered call means selling an option on an underlying stock that you own.

• Writing a naked call means selling an option on a stock you do not currently own.

The biggest difference between these two paths is the risk profile. Your risk with covered calls is that you may miss out on some of the upside gains if the stock’s price goes above the strike price of your call option.

When you sell a naked call, however, you have no risk protection and theoretically unlimited risk.

Key Points

• Writing call options involves selling the right to buy an asset at a fixed price, in a set time frame.

• Writing call options generates income through the premiums received.

• Covered calls limit risk because the seller owns the underlying shares and can deliver them if assigned.

• Risk in covered calls is limited to the difference between the strike price and the market price of the underlying asset.

• Naked calls have higher risk and potential for theoretically unlimited losses.

What Are Calls?

To understand writing call options, it can be helpful to consider the basics of call vs. put options: When you buy a call option at a specific strike price, you have the right (but not the obligation) to purchase the underlying stock at the strike price of the option over a given time period.

Buying a put gives you the right, but not the obligation, to sell the underlying stock at the strike price before expiration.

To learn how to trade options, it’s important to understand the differences between calls and puts, when to buy or sell options, and how to develop options strategies to minimize risk. When you buy an option, your maximum risk is capped at the amount of the premium, or fee, that you initially paid for the option. But when you write a call option or put option, your risk can be substantial or theoretically infinite.

Writing Call Options

Writing call options is similar to writing put options in that you initially sell the option for a premium. When you write a call option, you are creating a new option contract that allows the buyer the right to buy the stock at the specified strike price at any time on or before the expiration date.

When you write a call option, the option holder may exercise their right to buy the stock at the strike price at any time. In practice, early exercise is rare and typically occurs when the option is deep in-the-money, particularly if there is little time value remaining before expiration.

Finally, user-friendly options trading is here.^*

Trade options with SoFi Invest on an easy-to-use, intuitively designed online platform.

*Check out the OCC Options Disclosure Document.

Writing Call Option Strategies

There are different options trading strategies you could use when writing call options, depending on whether you have a bullish or bearish outlook for a given stock. Here are two of the most common call writing option strategies:

Writing Covered Calls

One common options strategy is writing covered calls. A call is considered a “covered” call when you also own at least 100 shares of the underlying stock. Writing covered calls is a popular income strategy if you think that the stock you hold will move within a specific range. You then might write a covered call with a strike price a little above the expected price range.

When you write covered calls, you will collect an initial premium since you are the seller of the option contract. Your best case scenario is that the underlying stock will close below the strike price of the call option at expiration. That means that the call will expire worthless, and you will keep the entire premium. If the stock closes above the strike price at expiration, you will be forced to sell your shares of stock at the strike price. This means that you may miss out on any additional gains for the stock.

Writing Naked Calls

Understanding what naked calls are is essential for options traders. A naked call is written when the seller does not own the underlying stock, creating the potential for unlimited losses. Unlike covered calls, writing naked calls comes with significant risk. Since a stock has no maximum price, you have unlimited exposure. The more a stock’s price rises above the strike price of the call option, the more money you will lose on the trade.

Due to the potential for unlimited losses, writing naked calls is considered a high-risk strategy and is typically used by traders with significant options experience or investors with a high risk tolerance. It’s important to understand these risks before writing naked calls, and you should also have a plan for what you will do if the stock moves unfavorably.

Writing Call Options Example

To understand the difference between writing covered calls and naked calls, here are two examples.

Covered Call Example

Say that an investor owns 100 shares of a stock with a cost basis of $65. Expecting the stock to trade between $60 to $70, the investor writes a covered call with a one-month expiration and a strike price of $70, collecting $1.25 in premium, or $125 ($1.25 x 100 shares).

If the stock closes below $70 at expiration, the investor retains their shares and the full $125 premium. Since the stock remains in their portfolio, another covered call could be written in the following month, which may generate additional premium income.

If the stock rises to $75 by the expiration date, the writer will be obligated to sell 100 shares of stock at the strike price of $70. Because the investor already owns 100 shares, they would be assigned. A broker facilitates the sale at $70/share, resulting in a $500 opportunity loss versus the $75 market price.

Naked Call Example

Assume that an investor has a bearish outlook on a stock that is currently trading at $100 a share. The investor decides to execute a naked call, meaning writing a call option for stock they don’t already own. They sell a call option with a $110 strike price for a premium of $4.25, collecting $425 upfront ($4.25 x 100 shares per the option contract). If the stock closes below $110/share at expiration, the contract expires worthless, allowing the investor to keep the entire $425 option premium.

If the stock price rises to $250 per share, for example, the seller would need to buy 100 shares for $25,000 and then sell them at a strike price of $110 per share to the buyer, incurring a $14,000 loss. This loss is offset slightly by the $425 premium initially collected.

The Takeaway

Writing call options may serve as an income-generating options trading strategy under certain market conditions. Writing covered calls on stocks already held in a portfolio may provide additional income, but limits profit potential if the stock price rises significantly.

A naked call involves writing calls on stocks the seller does not own. This strategy could result in substantial losses, depending on price movement, making risk management essential.

Explore SoFi’s user-friendly options trading platform.

🛈 While investors are not able to sell options on SoFi’s options trading platform at this time, they can buy call and put options to try to benefit from stock movements or manage risk.

FAQ

Is writing a call option the same thing as buying a put?

Writing a call option and buying a put are different strategies with distinct risk profiles. An investor writing a call collects a premium but may be required to sell shares of the underlying asset at the strike price if assigned. A put gives the buyer the right to sell shares at a set price. Put buyers risk only the premium paid, whereas uncovered call writers face significant risk, as losses can increase indefinitely if the stock price continues to rise.

Does a writer of a call option make an unlimited profit?

No, a call option’s writer’s profit is capped at the premium collected. If the stock closes below the strike price at expiration, the option expires worthless, and the writer keeps the full premium. Unlike buyers, call writers do not benefit from stock price gains beyond the premium received.

How are call options written?

Writing a call option is another way to say that an investor is selling a call option. The call option seller receives a premium in exchange for giving the buyer the right (but not the obligation) to buy 100 shares of the stock at a predetermined strike price before expiration. If the option is exercised, the seller must deliver shares at the strike price, regardless of the market price at the time.

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Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire amount invested in a short period of time. Before an investor begins trading options they should familiarize themselves with the Characteristics and Risks of Standardized Options . Tax considerations with options transactions are unique, investors should consult with their tax advisor to understand the impact to their taxes.
Disclaimer: The projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results.
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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Apr

2025

Smart Financial Strategies to Reach Your Goals

By Kylie Ora Lobell | Budgeting & Goals, Financial Independence, money | Comments Off

Most people have money goals. One person might want to pay off their student loans; another might be saving up for the down payment on a house; and yet another might want a seven-figure retirement fund.

Whatever your particular aspiration may be, there are smart strategies that can help you achieve your goals. These tactics can help improve your financial fitness, balance your budget, reduce debt, and save more money.

Read on to learn some of the best personal financial strategies that can scoot you closer to reaching your money goals.

Smart Financial Strategies to Aim For

Here are some solid ways to begin to enhance your financial fitness.

Build and Maintain an Emergency Fund

When faced with an unexpected big expense or being laid off, it can be helpful to have saved up an emergency fund, which is a cash reserve that is only tapped, well, in case of an emergency. When should you use your emergency fund? A layoff, an unexpected medical or car repair bill, or a relative in need may all be good reasons to dip in.

Starting an emergency fund might cover your basic living expenses for anywhere from three to six months or more. So, if a person normally spends $3,000 per month, then they could strive to set aside $9,000 to $36,000 in their emergency fund. Naturally, this amount will vary based on individuals’ unique financial situations and income vs. expenses.

Now, if that dollar amount sounds a little daunting, it’s always possible to start small — setting aside 50 or 100 dollars a month. With some accounts, users can even automatically transfer a set amount to a savings account on a specific date each month (e.g., payday). Over the course of a year, that bit-by-bit approach to saving money can add up to a much larger sum.

Once a person has tackled high-interest debt, they may have more income available to squirrel away towards their emergency fund.

Some savers prefer to host their emergency fund in a high-yield savings account, which, thanks to its higher annual percentage yield (APY) than standard accounts, can help your money grow faster.

Paying Off Debt

Debt can be a budget killer. With high interest rates and fine-print fees, individuals can end up paying significantly more than an initial charge on outstanding recurring debts, whether student loans or credit cards.

When it comes to credit cards, for instance, the average interest rate is 20.09% for existing accounts and 22.29% for new accounts . If a person gets charged hundreds or even thousands of dollars in interest per month on existing debts, it could take longer to pay off the initial borrowed amount.

In terms of adopting smart strategies that can lead to greater financial independence, a good place to start is by paying off high-interest debts as quickly as possible.

Two popular debt-repayment approaches are called the snowball method and avalanche approach.

• With the snowball method, you pay down your smallest debts first — no matter what the interest rate is. Once that smallest debt is paid off, you could then apply that payment amount towards the next debt, and so on.

For instance, if a person pays $150 a month to one debt, they could continue paying that sum to their next smallest debt after the first one has been paid down. At the same time, you’ll make minimum payments on all other debts to keep the payment history intact. Over time, the additional payments “snowball,” building up to less overall debt.

• With the avalanche method, a person opts to pay off the debt with the highest interest rate first. Once the highest debt gets paid off, they’ll then roll the regular payments on that now-cleared debt into their next highest debt, all while paying the minimums on other debts at the same time.

While the avalanche method may make more sense mathematically, the snowball method can be more psychologically motivating. The snowball approach can keep some people engaged, since they’ll see quicker progress towards paying down one of their high-interest debts.

However, if a person can commit to the avalanche method, they may end up saving more in total interest paid than with the snowball financial strategy.

Using Credit Cards Wisely

Credit card debt can land cardholders in financial hot water. However, using credit cards judiciously can come with certain benefits (assuming the cardholder regularly pays down what they buy). Here’s a closer look:

• Many credit cards give rewards in return for account holders spending money when shopping. For instance, a user may be able to get 1% to 5% back on grocery store or other purchases at specific retailers. With some cards, it’s possible to earn points that can be used toward discretionary expenses like travel, eating out, hotels, and more.

• Generally, credit cards offer fraud protection, which means that if a card gets stolen (or their account gets hacked), fraudulent charges are not paid by the cardholder — unlike, say, with cash.

• When it comes to healthy financial strategies, it’s also possible to use your credit cards to maintain one’s credit score. One factor that lenders might consider is a loan applicant’s credit history (including the number of active accounts open and their debt-to-income ratio).

Smart financial strategies for credit cards include paying off the entire bill on time and keeping old lines of credit open so the account holder’s credit history is longer. Also, it’s advisable to aim for a lower credit utilization ratio — which is how much debt a person has in relation to how much credit is available. A credit utilization rate below 30% is, generally, considered “good,” though lower will be better.

• Another one of the smart financial strategies is to use credit cards for 0% interest balance transfers. If someone has a credit card with a high-interest rate, they could apply for a balance transfer credit card, pay a fee to transfer over their card’s balance, and then get more time to pay down the existing debt interest-free.

Some cards offer over a year of interest-free access. However, it can be smart to pay off the transferred debt before the end of the agreed-to 0% interest period. Otherwise, a higher interest rate will kick in on whatever has not been paid off. In some cases, the interest after the zero-interest period could be higher than what was paid on the original card.

Budgeting Incoming and Outgoing Money

Budgeting is a classic way to keep tabs on how much money is coming in and how much is being spent each month. If a person is not yet budgeting for their expenses, whether essential or discretionary, it can be one of the simplest ways to track money, and there are many different budgeting methods available.

When adopting financial strategies for budgeting, a good place to start with the 50/30/20 rule. With this budgeting rule, a person spends 50% on needs, 30% on wants and 20% on savings.

• Needs include housing, utility bills, food (basic groceries, not pricey takeout or restaurant meals), car payments, and debts.

• Wants span entertainment, travel new but unnecessary clothing and gadgets, and similar purchases.

• Savings could include an emergency fund, retirement account, and investments.

Budgeting can be made easier with Google Sheets or Excel, or by using an app, or taking advantage of tools that your financial institution offers. Digital personal finance apps can be easy to use. Many financial institutions offer solid ones that give users insights on spending patterns and money habits.

Considering Reducing Monthly Expenses

After tracking their monthly expenses, some people like to see where they can trim and tighten their spending. Some pricey expenses that could be pared down include:

• Housing costs: If rent is gobbling up a huge amount of income each month, moving to a less expensive place or area (i.e., lowering your cost of living) could help with cutting back on spending. If an individual ends up moving to a more economical city or town, it’s likely that local housing costs, groceries, and the general amount it takes to cover day-to-day living expenses will go down as well. Or you could take in a roommate.

• Transportation: In terms of transportation, drivers could try to get out of an expensive lease and purchase or lease a less expensive vehicle. Or a person could utilize public transit or carpool with colleagues to save on gas. One good financial strategy is to shop around for lower car insurance rates.

• Pricey cable plans: If a person spends a significant amount each month on non-essential items or services, they may want to try to reduce their discretionary costs, too. For instance, instead of paying an expensive cable bill every month, one could only pay for Hulu or Netflix as a way of lowering your streaming services costs. Many internet providers run promotions, so it may be worth thinking about switching to a less expensive provider.

• Eating out vs. cooking at home: In lieu of eating out every day, budget-minded individuals could cook at home. Buying ingredients is, generally, much less expensive than dining in a restaurant or picking up take-out. And, if cooking is intimidating, perhaps invest in a slow-cooker to ease into cooking at home.

• Shopping online: Online shopping can tempt many to spend unnecessarily. It’s just so darned easy to click-to-buy when a credit card is saved online. So, some savings seekers opt to delete their credit card details from their favorite online shops.

This adds one extra step (digging the card out of the wallet) before being able to purchase. Those added seconds can give shopping lovers a second chance to decide whether the item in their cart is really essential. You might also unsubscribe from shopping emails that can tempt you with sales and special offers.

Negotiating Better Deals

If you don’t have time to call up your providers and search for better deals, apps like Trim can analyze an individual’s spending patterns, negotiating internet, cable, phone and medical bills while canceling older subscriptions. Users pay a fee for this service, but it could end up saving dollars that would otherwise get spent unknowingly.

You might also call your credit card company and see if they can lower your rate, especially if you’ve found a better deal elsewhere. And if you have a major bill, don’t be shy about seeing if it can be reduced. You may even be able to negotiate medical bills.

Opening a Retirement Fund

When it comes time to retire, money will be needed to pay for everyday life. That’s why it’s a good financial strategy to start a retirement account as soon as a person starts working.

There are many different types of retirement accounts to choose from, including individual retirement accounts like a Roth IRA (which individuals can open on their own and contribute to with after-tax money), a 401(k) (which is a plan through an employer, and a traditional IRA (which people open on their own and gets taxed upon withdrawal).

If an employer offers retirement fund matching, take advantage of it! Matching entails putting a percentage of a paycheck automatically into one’s retirement. The employer then matches that deposit with the same amount. Employer matching can speed along an individual’s path towards saving for retirement; it’s pretty much free money.

In terms of how much to save for retirement, it can be smart to put aside at least 15% of pre-tax income every single year. Doing so can help you later on in life to avoid needing to delay retirement because not enough had been saved prior.

Searching for Low Interest Rates on Loans

Big expenses — going to college, purchasing a car, buying a home, repairing a house, or moving — can come with a big price tag. So, many individuals seek out loans to cover these big-ticket items. When taking out a loan, some smart financial strategies include shopping around and comparing interest rates — looking for the lowest interest rate possible.

As with any debt, it’s essential to pay back the loan on time every month to avoid late payment fees or dings to one’s credit history. For some, it may also be possible to refinance a loan and secure a lower interest rate.

Getting Started with Investing

For those stashing money in a traditional savings account, it’s likely that the money is earning very little interest. As a result, some individuals choose to invest their money with the hopes of earning a higher return over time.

Investing is one the financial strategies, however, that can come with higher risks. Few investments, including those in the volatile stock market, are guaranteed to make a return. For instance, investing in stocks can bear higher returns, but stocks can also plunge in value. Indeed, some investments are riskier than others.

Speaking with a financial advisor can help many to understand the pros and cons of investing and whether it’s the right choice for them.

Here’s an overview of common kinds of investments:

Investing in the Stock Market

While investing money in the stock market can result in a higher return, it’s not guaranteed. It can be safer to invest in already profitable companies that pay out dividends, which distribute some of a company’s earnings to investors. However, more seasoned investors may choose to take on more risks, investing in start-ups or lesser known companies.

Micro Investments

Should a person want to purchase stocks that are more expensive but can’t afford buying an entire share, it’s possible to complete a micro investment. Micro investments are fractions of stocks and a good way to get in on the market without taking too big of a risk.

Mutual Funds

Mutual funds are diverse investments; rather than investing in one stock, an investor is putting their money into a collection of them. The fund has a manager who decides what they’ll do with the money. Typically, investors are charged a fee to invest in these funds.

Investment Bonds

Investment bonds, which are loans made to a company or government, are significantly less risky than stocks. But, it’s worth remembering that lower risk also typically comes with a lower return. Many people get U.S. Treasury Savings Bonds when they’re children and cash them in at a later date.

High-interest Savings Accounts

Some high-interest savings accounts offer around 3.00% APY or higher on deposited funds — significantly higher than the 0.01% that many standard accounts offer. There’s no risk of lost saving, as long as account holders stay below the FDIC-insured limit of $250,000 per account holder, per account ownership category, per insured institution. Interest rates on savings accounts can, of course, vary over time and by bank.

Whichever method gets chosen, there are investment brokers and financial advisors who can offer guidance on how to utilize income and savings.

The Takeaway

Keeping tabs on income, expenses, savings, and investments is one smart financial strategy. With so much to track when it comes to personal finances, budgeting tools can help you develop smarter financial habits and trim back on unnecessary spending.

Opening an online bank account with SoFi lets you save and spend in one convenient place, while earning a competitive APY. Ready to track and then tweak your spending? A SoFi Checking and Savings Account has tools to help you do just that, as well as save towards different goals with our Vaults feature.

Learn more about SoFi Checking and Savings today.

About the author

Kylie Ora Lobell

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

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

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

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

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

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

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

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

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

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

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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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.

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Apr

2025

31 Ways To Save On Back to School Shopping

By Kylie Ora Lobell | Financial Independence, money, Terminology | Comments Off

Here comes another school year, and that can mean it’s time to get shopping for some nice new pencils, notebooks, backpacks, and cool clothes. But don’t expect it to come cheap: Last year, the cost was estimated at $661 per school-age child, and this season could well top that.

No one wants to go into credit card debt to get their kid outfitted for the first day of school, so here’s help.

Read on for 31 back-to-school shopping tips that will save you money while getting your kids prepped for a great year ahead.

1. Check the Circulars

You might receive weekly circulars in the mail that include coupons to local stores that can help you save money on school supplies. If you don’t receive any circulars or you want more, using a website like Flipp can give you access to digital circulars and coupons you can use at the store.

2. Download Honey

The Honey browser extension is helpful when it comes to back-to-school savings. Installing Honey on your web browser will enable the extension to automatically search for coupon codes and deals when you check out online, saving you both time and money.

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

3. Use Online Coupons

Some websites, such as Coupons.com, RetailMeNot, and Savings.com, offer online coupons. Browsing these sites may lead to savings on school supplies you need.

4. Join Target Circle

Doing back-to-school shopping at Target will let you earn rewards through Target Circle . You can access hundreds of deals as well as earn 1% back when you shop (or 5% back when you shop with your Target RedCard). You can redeem your savings on later purchases. Another perk: You may also see special discounts on back to school, such as 20% off a purchase for college students.

5. Use Cash Back Credit Cards

Making school-supply purchases with a cash-back credit card is another option to save some money. Then, you can put your savings towards future purchases or use the cashback to pay a portion of your credit card bill.

6. Get Cash Back for Shopping

On sites like Rakuten and Swagbucks , you can earn cash back when you shop at your favorite stores. Check these sites for cash back offers before heading out for back-to-school shopping.

7. Sign Up for Store Emails

If there are a few stores you know you’re going to be shopping at this year, then sign up for their email list ahead of time to receive coupons and find out when they are running sales. Some stores offer a percent-off coupon or a dollar-amount discount for signing up for their emails or texts.

8. Download Store Apps

Along with signing up for emails, you can also download store apps to receive exclusive savings and deal alerts. You may receive a one-time coupon at the beginning and then additional deals after that.

9. Ask Friends for Their Old Supplies

If you have friends who aren’t using their old supplies anymore, they may be willing to give them to you so they don’t go to waste. This could save you a lot of money, especially when it comes to paying for college textbooks.

10. Join Parent Groups

Consider joining local parent groups on Facebook or other social media platforms to see if anyone is giving away supplies or selling them at a steep discount. Connecting with other parents before the first day of school can also be a good way to form friendships and trade back-to-school shopping tips.

11. Look on Used Goods Marketplaces

You may also be able to find the supplies you need on used goods marketplaces such as Facebook Marketplace or Craigslist. Keep safety precautions in mind when meeting strangers to complete a transaction: Consider meeting at a police station, bring someone with you, and trust your instincts if you feel the situation is unsafe.

12. Wait to Make Some of Your Purchases

Your children are not going to need all of their school supplies on the first day, or perhaps even in the first month of school. Instead, you can ask your children’s teachers what they will need right away and then wait to shop for the rest of the supplies when retailers start marking down their inventory, which typically happens in September or October.

13. Create a Budget

Before setting foot into a store, come up with a back-to-school monthly budget so you know exactly how much you can spend and avoid impulse purchases. Without a plan, it can be easy to spend too much and get caught off guard when you get your credit card statement in the mail.

14. Take Inventory of What You Already Have

You may already have what you need for back to school in your home. Look around for extra pencils, art supplies, books, and other items that you thought you needed to purchase but may already own.

15. Pay With Cash

One of the old tricks for sticking to a budget and saving money is to pay with cash instead of a debit or credit card. Paying with cash may make you more mindful of your purchases because you see the cash disappear when you spend it. You might not be tempted to spend as much if you opt for good, old-fashioned dollar bills and coins.

Recommended: Pros & Cons of Living Cash-Only

16. Negotiating on a Cash Purchase

Cash is also helpful for negotiating. Though you may not be able to negotiate prices at a big-box store, you might be able to at a local shop, flea market, or yard sale if that’s where you’re headed for school supplies. Let the merchant know how much you’re willing to pay, and they may just be willing to cut a deal with you.

17. Look for Price Matching

Some stores will match another store’s price if you show them that their competitor is offering a better price on the same product. Prior to going to the store, take a few minutes to compare prices online, and bring proof of the lower price when you shop. Price matching policies vary from store to store and can usually be found on a store’s website.

18. Buy in Bulk

When it comes to how to save on school supplies, you may be able to save big if you buy in bulk from wholesale clubs or warehouse stores like Costco or Sam’s Club. Some of the best things to buy in bulk for back-to-school include pens and pencils, folders, and notebooks. Bulk purchases of things like paper towels, toilet paper, and shampoo might also make good financial sense. Joining other parents to split costs on bulk purchases might just result in a new, like-minded friend group.

💡 Quick Tip: If you’re creating a budget, try the 50/30/20 budget rule. Allocate 50% of your after-tax income to the “needs” of life, like living expenses and debt. Spend 30% on wants, and then save the remaining 20% towards saving for your long-term goals.

19. Buy Refurbished Electronics

If you need to pick up electronics like laptops, tablets, or phones, consider buying a refurbished version instead of a new device. Certified used models are often available directly from the manufacturer or from reputable online sellers.

20. Head to the Dollar Store

While the dollar store isn’t the ideal place for all your back-to-school shopping needs, you can find a number of inexpensive items there to save money on. These items include pencils, pens, crayons, folders, and clipboards.

21. Shop on Tax-Free Days

Some states hold annual tax-free days, usually in July or August, which can be perfect for back-to-school shopping. Check online to see if and when your state offers this money-saving option.

22. Use Your Student Discount

College students may be able to use their college ID or student email address to score discounts on electronics and other items. Check out stores around your college that offer deals to students.

23. Buy Used Textbooks

Another way to score some back-to-school savings is to purchase used textbooks. BookFinder.com searches all the bookseller websites to find the best deals on your textbooks.

24. Keep Your Receipts

If you keep your receipts and find out that items you purchased have been discounted further, then you may be able to get a price adjustment or a partial refund to make up for the price difference. Policies vary by retailer, but it doesn’t hurt to check sales after you’ve made a purchase and ask the store if they offer price adjustments.

25. Buying From Thrift Stores

Thrift stores like Goodwill or Salvation Army often have back-to-school essentials like clothing and backpacks. Plus, buying used items can be environmentally friendly. Families who are facing financial difficulty affording school supplies may qualify for assistance through various charitable organizations, such as The Salvation Army or even their local school districts.

26. Find Brand Giveaways

By following brands on social media or contacting them directly, you may get free samples or promo codes to get discounts on goods.

27. Turn in Those Rebates

Sometimes, you won’t be able to access back-to-school savings at the time of purchase. Instead, you’ll need to send in rebates. Look for products that offer rebates and remember to keep your receipts and anything else required for the savings.

28. Invest in Quality Purchases

While you may want to buy everything at discount stores, poor-quality items may not even last an entire school year. For items that get a lot of use, such as a backpack, consider paying a bit more so they last. For example, you may be able to use the same high-quality, well-made backpack for several years before it wears out.

29. Use Alternatives for Your Kids’ Favorite Characters

Your child might really want a backpack with a specific character on it, but next year’s favorite character will probably be different. Buying your child a plain backpack and then adding some keychains or stickers that feature their favorite character is an inexpensive compromise that will keep your kids happy and save you big bucks.

30. Buy Reusable Items

While plastic and paper bags may be convenient, you’ll save much more money (and the environment) if you buy a reusable lunch bag and containers instead. Find a lunch bag that’s easy to clean to save time as well.

31. Hold a Clothing Swap

Kids quickly grow out of clothes, so it’s not budget-friendly to buy a lot of expensive new garments. You can invite over some friends and neighbors who have kids and swap used clothing instead. Or you might try Nextdoor and see if people in your community want to see about a trade or offloading some outgrown clothes.

💡 Quick Tip: When you overdraft your checking account, you’ll likely pay a non-sufficient fund fee of, say, $35. Look into linking a savings account to your checking account as a backup to avoid that, or shop around for a bank that doesn’t charge you for overdrafting.

The Takeaway

Taking some pre-shopping time to estimate costs is a good practice when trying to figure out how to save on school supplies. Setting a financial goal and saving a little bit at a time is a good thing to do whether the goal is purchasing school supplies or something a little more expensive.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.80% APY on SoFi Checking and Savings.

About the author

Kylie Ora Lobell

Photo credit: iStock/TARIK KIZILKAYA

Apr

2025

How Much Does Insurance Go Up After an Accident?

By Nancy Bilyeau | Financial Independence, Insurance | Comments Off

Those moments right after a car accident deliver some of the worst stress imaginable. You’re figuring out if anyone is hurt and how bad your car’s been damaged. And before too long you’re asking yourself this stomach-churning question: “How much will my insurance go up after an accident?”

There are many factors at play, including who was at fault, how serious the injuries and damage, your driving record, what state you live in, and the policies of your chosen insurance company.

Understanding these factors and digging into the forces controlling car insurance rates can help you pursue the best options possible.

Key Points

• Car insurance rates can increase significantly after an accident, depending on the severity and fault.

• Factors affecting rate increases include driving history, location, and type of insurance.

• Rate increases can last for several years, impacting long-term costs.

• Defensive driving courses and good driving records can help reduce rates.

• Comparing quotes from multiple insurers can lead to better rates post-accident.

Why Do Rates Go Up After an Accident?

Auto insurance is a highly competitive business, and that competition plays a role in keeping rates low. But it also means that when an accident happens, there can be quite a jump in what you pay for coverage.

When you’ve had a car accident and you are at fault, your insurer now assumes you drive in a way that could cause an accident. That may sound unfair, but that’s part of how car insurance works. They are assuming a higher risk, and that is passed on to you in the form of a higher rate.

If you are found not at fault in the accident, your insurance rate may go up by a small percentage. California and Oklahoma are two states, however, that mandate insurance companies cannot raise insurance rates after an accident where the driver was not at fault.

This is yet another reason why it’s important to go over policies carefully when making your choice. It’s smart to compare the rates among top insurers and even look at how much insurance increases after an accident with various insurers.

There is one bright spot in the insurance landscape when dealing with an accident. If your insurer offers and you elect to pay for accident forgiveness, your insurance rate will not go up after your first at-fault accident. Driving record and driving experience requirements must be met before this benefit is available.

Recommended: Auto Insurance Terms, Explained

Average Rate Increases by State

After an at-fault accident, yes, your car insurance is likely to go up. Rates can increase by about 45% a year on average after an accident, according to 2025 MarketWatch research. But as the analysis below shows, just how much your rate jumps can depend on the state in which you’re insured.

Average Car Insurance Rate Increase After an At-Fault Accident
State	Average rate with a clean driving record	Average rate after one at-fault accident	% increase
Alabama	$1,775	$2,498	41%
Alaska	$1,685	$2,248	33%
Arizona	$2,008	$2,938	46%
Arkansas	$2,038	$3,001	47%
California	$2,313	$4,085	77%
Colorado	$2,173	$3,040	40%
Connecticut	$1,919	$2,699	41%
Delaware	$2,881	$3,893	35%
Florida	$3,244	$4,608	42%
Georgia	$1,973	$2,931	49%
Hawaii	$1,656	$2,306	39%
Idaho	$1,402	$2,057	47%
Illinois	$1,541	$2,193	42%
Indiana	$1,587	$2,333	47%
Iowa	$1,563	$2,086	33%
Kansas	$1,918	$2,924	52%
Kentucky	$2,522	$3,655	45%
Louisiana	$3,040	$4,423	45%
Maine	$1,238	$1,796	45%
Maryland	$1,833	$2,958	61%
Massachusetts	$2,430	$4,403	66%
Michigan	$3,643	$5,204	43%
Minnesota	$1,766	$2,528	43%
Mississippi	$1,658	$2,603	57%
Missouri	$2,104	$2,992	42%
Montana	$1,979	$2,848	44%
Nebraska	$1,871	$2,679	43%
Nevada	$2,788	$4,112	47%
New Hampshire	$1,362	$2,088	53%
New Jersey	$2,513	$4,127	64%
New Mexico	$1,943	$2,720	40%
New York	$2,088	$2,863	37%
North Carolina	$1,627	$2,756	69%
North Dakota	$1,916	$2,431	27%
Ohio	$1,599	$2,341	46%
Oklahoma	$2,278	$3,066	35%
Oregon	$1,925	$2,945	53%
Pennsylvania	$1,981	$2,820	42%
Rhode Island	$2,357	$2,605	11%
South Carolina	$1,845	$2,496	35%
South Dakota	$2,291	$3,300	44%
Tennessee	$1,524	$2,227	46%
Texas	$2,205	$3,365	53%
Utah	$1,928	$2,855	48%
Vermont	$1,199	$1,722	44%
Virginia	$1,781	$2,636	48%
Washington	$1,616	$2,320	44%
West Virginia	$2,177	$3,195	47%
Wisconsin	$1,694	$2,516	49%
Wyoming	$1,702	$2,305	35%

Source: MarketWatch

How Do I Keep My Rates Low After an Accident?

If you’ve had a car accident, there are some things you may be able to do to keep your car insurance rates from rising.

First, explore discounts that you may have overlooked. Check with your insurer to make sure you’re receiving discounts you’re eligible for.

• If you haven’t already signed up for paperless billing, now might be a good time to take advantage of the discount you may receive with this option.

• The number of miles you drive annually is one factor that goes into calculating your insurance rate. Check with your insurer to make sure your rate correctly reflects your annual mileage.

• Consider a usage-based insurance that tracks different elements of your driving habits and sets your rate accordingly. Better driving habits typically equate to lower rates.

• Ask about multi-policy discounts if you have all your policies with one insurer.

• Check into military and government employee discounts.

Another tactic that might be worth pursuing if you’ve had an accident but are looking for ways to decrease your car insurance rate is to increase your deductible. The higher your deductible, the lower your premium.

Look into how much insurance you’re carrying on the car. It’s worth your time to determine how much coverage you need. If your car is worth less than the deductible plus your annual total for car insurance, it could be time to rethink your coverage.

And another thing to scrutinize is what kind of car you drive. Some cars are cheaper to insure than others.

When Does Car Insurance Go Down After an Accident?

Generally speaking, it takes three to five years for car insurance to go down following most at-fault accidents. The insurers are going by the statistical wisdom that if you’re in one accident, the chances are higher that you will be in another. Some insurers also take into account the seriousness of the accident and whether impaired driving was a factor in the accident.

One tactic people employ to lower their rates is to shop around for a new insurer. While the record of the accident and claim will be visible to a second insurer, you may still be able to get better deals.

Your insurance rates will also be affected by your credit. Merely being involved in an accident will not damage your credit, but an improvement in your credit score can be used as leverage in getting a lower premium.

Don’t rule out getting a brushup on your driving to improve those skills. Some insurance companies will discount your rates if you complete a defensive driving or driver education course.

Recommended: Car Insurance Guide for New Drivers

The Takeaway

that can seem hard to figure out. Rates can go up by about 45% a year on average after an accident. But that figure may fluctuate depending on a variety of factors including who was at fault, the seriousness of the accident, your driving record, and to a surprising degree, the state in which you live.

Taking the opportunity to compare car insurance companies before committing to a policy can be a smart move that might save you money on your insurance rate.

When you’re ready to shop for auto insurance, SoFi can help. Our online auto insurance comparison tool lets you see quotes from a network of top insurance providers within minutes, saving you time and hassle.

SoFi brings you real rates, with no bait and switch.

Photo credit: iStock/simpson33

Auto Insurance: Must have a valid driver’s license. Not available in all states.
Home and Renters Insurance: Insurance not available in all states.
Experian is a registered trademark of Experian.
SoFi Insurance Agency, LLC. (“”SoFi””) is compensated by Experian for each customer who purchases a policy through the SoFi-Experian partnership.

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

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

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Can You Write a Check From a Savings Account?

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How to Spend (and Save) With a Savings Account

Keeping Track of Your Withdrawals

Paying Bills From Your Checking Account

Withdrawing Money Only for Large Expenses

Building Your Savings

Maximizing the Interest You Earn

The Takeaway

Open a SoFi Checking and Savings Account

Guide to Writing Call Options: What You Should Know

What Are Calls?

Writing Call Options

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Trade options with SoFi Invest on an easy-to-use, intuitively designed online platform.

Writing Call Option Strategies

Writing Covered Calls

Writing Naked Calls

Writing Call Options Example

Covered Call Example

Naked Call Example

The Takeaway

FAQ

Is writing a call option the same thing as buying a put?

Does a writer of a call option make an unlimited profit?

How are call options written?

Smart Financial Strategies to Reach Your Goals

Smart Financial Strategies to Aim For

Build and Maintain an Emergency Fund

Get up to $300 with eligible direct deposit when you bank with SoFi.

Paying Off Debt

Using Credit Cards Wisely

Budgeting Incoming and Outgoing Money

Considering Reducing Monthly Expenses

Negotiating Better Deals

Opening a Retirement Fund

Searching for Low Interest Rates on Loans

Getting Started with Investing

Investing in the Stock Market

Mutual Funds

Investment Bonds

High-interest Savings Accounts

The Takeaway

31 Ways To Save On Back to School Shopping

1. Check the Circulars

2. Download Honey

3. Use Online Coupons

4. Join Target Circle

5. Use Cash Back Credit Cards

6. Get Cash Back for Shopping

7. Sign Up for Store Emails

8. Download Store Apps

9. Ask Friends for Their Old Supplies

10. Join Parent Groups

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11. Look on Used Goods Marketplaces

12. Wait to Make Some of Your Purchases

13. Create a Budget

14. Take Inventory of What You Already Have

15. Pay With Cash

16. Negotiating on a Cash Purchase

17. Look for Price Matching

18. Buy in Bulk

19. Buy Refurbished Electronics

20. Head to the Dollar Store

21. Shop on Tax-Free Days

22. Use Your Student Discount

23. Buy Used Textbooks

24. Keep Your Receipts

25. Buying From Thrift Stores

26. Find Brand Giveaways

27. Turn in Those Rebates

28. Invest in Quality Purchases

29. Use Alternatives for Your Kids’ Favorite Characters

30. Buy Reusable Items

31. Hold a Clothing Swap

The Takeaway

How Much Does Insurance Go Up After an Accident?

Finally, user-friendly options trading is here.^*

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