Oct
29
2024

Comparing Cashier’s Checks vs. Money Orders

By | Family Finances, money, Terminology | Comments Off on Comparing Cashier’s Checks vs. Money Orders

Cashier’s checks and money orders are two forms of currency used to make payments. While there are similarities between the two, there are also significant differences. Cashier’s checks are drawn on a bank account and guaranteed by the financial institution. A money order, on the other hand, is a prepaid financial tool that can be obtained at banks, the post office, or retail businesses.

Depending on your needs, one payment method may be a better choice than the other. Here, learn what distinguishes a money order from a cashier’s check, the way they work, plus the pros and cons of each.

Key Points

•   Cashier’s checks are issued by banks and are backed by the institution, making them a secure option for larger payments.

•   Money orders are prepaid financial instruments that can be purchased at various locations, offering more accessibility than cashier’s checks.

•   Both payment methods provide guaranteed funds, ensuring that transactions do not bounce due to insufficient funds.

•   Cashier’s checks typically have higher fees and no maximum limit, while money orders often have lower fees and a cap of around $1,000.

•   The choice between a money order and a cashier’s check depends on factors like payment size, accessibility, and associated fees.

🛈 Currently, SoFi does not provide either money orders or cashier’s checks.

What is a Cashier’s Check?

A cashier’s check, also known as a bank check, is issued by a bank or credit union. You can obtain a cashier’s check by either paying cash upfront or, if you’re a customer of that bank, have the funds drawn from your account.

Because the check is backed by the bank, it’s guaranteed so you don’t have to worry about a bounced check. This is why it’s considered a safe and secure method of payment. Cashier’s checks also clear rather quickly, with some of the funds usually available in one business day.

Cashier’s checks are typically available in smaller and larger amounts, and generally there’s no upper monetary limit. Many people use a cashier’s check for a large purchase or deposit, such as a car, boat, down payment on a home, or a security deposit to a landlord.

Recommended: Where to Cash a Check Without Paying a Fee

How Do Cashier’s Checks Work?

In most cases, you’ll visit your bank in person to do the cashier’s check transaction. Your bank may offer the opportunity to get one through their website, but doing so will take longer since the check will be mailed to you, instead of handed to you.

When you go to the bank, you’ll likely give the bank employee the recipient’s name and the amount of the check. You’ll either purchase the check with cash or have the money debited from a checking or savings account that you have with that particular bank. Cashier’s checks often come with a fee, which usually run about $10 to $20.

Don’t have a bank account? You may be able to get a cashier’s check from a bank where you’re not a customer, but you’ll have to check with the financial institution first. And, if you are able to get a cashier’s check from a bank where you don’t have an account, you’ll have to purchase the cashier’s check with cash.

A credit union may offer you more flexibility if you’re not a customer. Often, credit unions will issue cashier’s checks to members of other credit unions along as their own.

Recommended: Issuing a Stop Payment on a Check

What is a Money Order?

Like a cashier’s check, a money order is a form of paper payment and an acceptable alternative to paying a bill or debt with cash or a check. You can purchase a money order with cash, traveler’s checks, and a credit or debit card. Since a money order is prepaid, unlike a regular check, a money order can’t bounce.

A money order has empty spaces where you’ll need to fill out certain information, similar to writing out a check. Besides the amount being paid and the date the money order is issued, you’ll need to fill out your name and address as well as who is the payee, and then sign your name. In the memo line, you can fill in the reason for payment.

There may be limits on the amount of the money order that’s possible. For example, at a United States post office, a single money order can be no more than $1,000.

You’ll also get a receipt when you purchase a money order which is important to keep safe. With a receipt, you can track your money order and, if the payment is lost or stolen, use it to attempt to recover the funds.

Money orders can be obtained at a number of different places, including post offices, Western Union and similar retail businesses, check-cashing outlets, financial institutions, supermarkets, and convenience stores. Along with paying the face value of the money order, you’ll also have to pay a fee. The amount depends on such specifics as where you obtain the money order, but typically fees don’t exceed $10.

People who want to cash a money order can generally do so at the same places you purchase one. Unless you deposit it into a bank account, be aware that you may be charged a small fee for cashing the money order.

Money Order vs. Cashier’s Check

While both money orders and cashier’s checks are similar in some ways, there are also distinctions between the two. Here’s how the two compare.

Similarities

Both money orders and cashier’s checks are forms of payment that can be used instead of cash or a personal check. Because these are both completely prepaid, a person can cash or deposit a money order and a cashier’s check without worry that either will be declined or returned for insufficient funds.

Money orders and cashier’s checks share the following features:

•   Can both be purchased at a bank or credit union.

•   Prepaid so funds are guaranteed.

•   Provide more privacy for the payer because neither contain a checking account number.

•   Each typically comes with fees.

•   Allow you to trace or track payments.

Differences

Now, consider the ways in which they differ:

•   Cashier’s checks may be available in large sums, while money orders often have limits.

•   Money orders can typically be obtained at more locations than cashier’s checks.

•   Cashier’s checks are guaranteed by the financial institution that issued them; money orders are paid for with cash. Or you could use a debit card, a credit card, or similar payment method.

•   Money orders must usually be purchased in person.

•   The fees on money orders may be lower.

Differences Between a Money Order and a Cashier’s Check

Here, how money orders and cashier’s checks compare in chart form.

Money Order Cashier’s Check
Minimal fees, as low as $1 Higher fees that can equal $10 or more
Generally have a maximum limit amount of $1,000 No limit on amount
Backed by the outlet where you purchased the money order Backed by the bank
Can be purchased more widely Can only be purchased at a bank or credit union
Must be bought in person May be purchased through a bank’s online portal
The ‘pay to’ line is blank so payer must fill in this information or else anyone can cash it Recipient’s name is filled out by the bank or credit union cashier so the check can only be cashed by the payee
No expiration date May have an expiration date depending on the bank or local laws

Pros and Cons of Cashier’s Checks

Next, take a closer look at the pluses and minuses of cashier’s checks. First, the pros:

•   Available in higher dollar amounts

•   Higher security because it’s guaranteed by a bank

•   May be purchased through a bank’s website.

Next, the cons:

•   Not as widely accessible because you can only obtain at banks or credit unions

•   Harder to get at a bank if you’re not a customer

•   Higher fees than money orders.

Pros and Cons of Money Orders

Here’s a closer look at money orders and their benefits and downsides. First, the pros:

•   Useful for people who don’t have a bank account

•   Can be purchased with cash or another type of payment such as a credit or debit card

•   Lower fees make it less expensive than a cashier’s check

•   More widely and readily available.

And, on the other hand, the cons:

•   Typically can only be purchased up to $1,000

•   Must get them in person

•   May not be able to deposit through mobile banking

•   Can be cashed by anyone if you don’t fill out the ‘payment to’ line.

The Takeaway

Both cashier’s checks and money orders are a form of prepaid payment, which makes the funds guaranteed so you don’t have to worry about a bounced check. Whether you use a money order or a cashier’s check as a payment depends on many factors, including the size of the payment you’re making, if you have a bank account, and the outlet you choose to make the purchase. Taking into the account of the pros and cons of each can help you make the decision of which method is right for you.

FAQ

Are a cashier’s check and a money order the same?

No. While both are prepaid forms of payment and therefore guaranteed not to bounce, a cashier’s check can only be obtained at a bank or credit union, while money orders are more widely available at other venues including post offices, check cashing places, and various retailers. Cashier’s checks are better for large purchases or deposits since there’s no monetary limit, while money orders often have a maximum limit of $1,000.

Why would someone use a money order instead of a cashier’s check?

People who choose to use a money order may not have a bank account, could be paying a bill or a debt less than $1,000, or might want to avoid the higher fees associated with a cashier’s check.

How quickly do money orders and cashier’s checks clear?

In most cases, funds from deposited money orders and cashier’s checks can be available the next business day. If the bank suspects there might be fraud involved, however, it could be several weeks.

Photo credit: iStock/Fly View Productions

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.

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Oct
29
2024

How to Save Up for a Car

By | Budgeting & Goals, money | Comments Off on How to Save Up for a Car

According to Car & Driver, the average transaction price for a new car tops $48,000 in spring of 2023. And Kelley Blue Book says that the average used car price tops $26,000.

Whichever option you may be pursuing to get yourself some wheels, that’s not an insignificant amount. You likely know that the more money you put down, the lower your monthly payments will be. That’s even more incentive to save up as much as you can for a car.

There are a few simple steps that can jumpstart the process and help you get your funds together for a car. These can include researching your options, then setting a budget for a new vehicle, and putting systems in place so it’s faster and easier to save.

Here’s how to make saving up for a car as quick and easy as possible.

Key Points

•   The average price for a new car exceeds $48,000, while used cars average around $26,000, highlighting the need for substantial savings.

•   Establishing a budget and calculating a down payment can lead to lower monthly payments and potentially better loan terms from lenders.

•   Setting a monthly savings goal helps in accumulating the necessary funds for a down payment, considering potential maintenance costs for an older vehicle.

•   Opening a separate high-yield savings account and automating contributions can streamline the saving process for a car purchase.

•   Cutting non-essential expenses and exploring additional income sources can significantly boost savings toward buying a car.

Researching Your Options

If your plan is to buy a new car, you can start getting a sense of costs by researching car options that might fit your needs and budget.

Some questions to consider when buying a car include:

•   Do you want a compact, sedan, wagon, minivan, truck or SUV?

•   Will you use it for work, travel or school?

•   What features are important, and which can you live without?

You can read articles, peruse car review sites, visit dealerships in person, and/or review manufacturers’ websites to research car models that appeal to you.

You may also want to look into purchasing a used or preowned vehicle, and seeing exactly how much this could save you. You can get a sense of costs by reviewing the used car market for the makes and models you are considering.

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Calculating Your Down Payment

Once you have a rough idea of how much it will cost to get the car you want, you can start figuring out how much you may need for a downpayment.

Parting with a solid chunk of cash is never fun, but an appropriate down payment can help to make your car repayment process more manageable.

A 20% down payment is often recommended when purchasing a new car, and a downpayment of 10 percent is a general guideline for a used car.

But this is not a set rule.

A higher down payment can lead to lower monthly car payments. For one reason there’s less money to finance. For another, a lender might extend better terms, such as a lower interest rate, when you make a substantial downpayment.

Your down payment can include cash, the trade-in value of the vehicle you drive now, or a mix of the two.

Recommended: 12 Mobile Banking Features

Calculating Your Monthly Payments

If you believe you can save up enough to buy the car outright, way to go! That means you will ultimately pay less for the car because you’ll avoid paying any interest.

But if, like many people, you plan to get an auto loan, you may next want to determine how much your monthly car payments will be.

You can sit down and crunch the numbers, or you can let an online car loan calculator do the work. These calculators are designed to help you estimate what your monthly car loan payments will be throughout the life of your auto loan.

Steps to Saving up for a Car

Once you have a general idea of how much you need to save up for a downpayment, and how much money you’ll need to budget each month after you purchase your vehicle, you can set the saving money process in motion.

Here are some smart steps to help you get to the finish line.

Figuring Out How Much to Save Each Month for a Car

You can come up with a monthly savings goal by taking the amount you’ve determined you’ll need for a car upfront (subtracting any money that may come from selling or trading in your current car), and then dividing it by however many months you have left until your ideal purchase date.

The number you get after doing this equation is how much money you ideally want to save each month to meet your goal. You might also think about saving more than that per month so you can prepare for your monthly payments.

And if you’re currently driving an older vehicle that is prone to issues, you may want to save a little extra as a cushion for any necessary maintenance or repair costs.

Remember, saving for a car isn’t an overnight process and it may take longer than you initially expected, and that’s okay–the key is to get started.

Finding the Right Savings Account to Save Up for a Car

If you haven’t set up a savings account yet, this may be a good time to do so.

Good options for a short-term saving goal like buying for a car include: a high-yield savings account, money market account, online savings account, or a checking and savings account.

These options can offer a higher interest rate than a standard bank account, yet allow you to access your money when you’re ready to buy your car.

Having a savings account that is separate from your spending account can help you keep track of your progress, and allow you to know exactly how much money you have for a down payment for your car.

Making Saving for a Car Automatic

Once you have a good place to start and build your car savings, consider setting up automatic contributions to this account. You may hear this referred to as automating your savings.

You can time these transfers to happen on the same day each month, maybe right after you get your paycheck.

This makes sure the savings happens (since you won’t have to remember to transfer the money), and also ensures that you don’t accidentally spend the money you want to put aside each month to save up for your car.

Cutting Back on Extras

If your current budget doesn’t give you much room to save for a car, you may want to see if you can pair back some of your monthly expenses.

For instance, if you’re paying a high price for cable each month, but primarily watch streaming services, you may be able to cut that line item right out of your budget for a significant savings.

Or, if you seldom use your gym membership, you might want to pause or cancel it and jog around the neighborhood and/or stream workout videos at home for free instead.

Or, you might be able to save money on food by cooking more and eating out/getting takeout less often. You might also decide to only use your credit card for essentials for the next few months.

Any changes you make don’t necessarily have to be permanent. You may decide that you can go back to certain spending habits once you have a sufficient down payment to buy a car.

Finding a Extra Stream of Income

If your current income is only enough to cover your current bills, you may want to look into taking on a low-cost side hustle to help you save up for a car.

You might be able to get some extra work delivering people’s groceries, mowing lawns, babysitting, cleaning houses, driving for a ride-share service, selling homemade goods online, or working as a virtual assistant.

Or you might be able to turn one of your talents into some freelance work, such as designing websites or managing social media for a local business.

Earning a little extra cash can go a long way, giving you the chance to put more toward a car, borrow less money, and lower your monthly payment.

Trading in or Selling Your Old Car

Trading in your old car to help fund your next car purchase, and is often a good option to lower the overall amount you’ll owe on your new vehicle.

To get the most money, it’s a good idea to compare what different dealers will offer you for the car.

You can also research what your car may be worth on sites like Edmunds and Kelley Blue Book to see if your trade-in offer seems reasonable.

You may also want to look into selling the car yourself to a private party since it could yield a higher price than trading in. The tradeoff is that this typically requires a little more work.

Recommended: How to Switch Banks

Getting the Best Deal on a Car

When you’re ready to start seriously shopping for a car, you’ll want to take advantage of any deals you can find, such as rebates and special dealership offers.

You can receive quotes from multiple dealerships; it’s a good idea to ask them if the price quoted includes deducted rebates. This process may feel tedious, but it can help you learn which make and model you can afford.

If you’ll be financing the car, you may also want to shop around for auto loans. You can check with various lenders, including banks and credit unions, to see who might offer the best lending terms.

With that information in hand, you can ask the car dealership whether it can offer a better financing deal.

If you do decide to go the used car route, it’s a good idea to follow the steps recommended by consumer.gov, such as finding out if the car has any recalls, researching if the warranty is still in effect, and having a mechanic inspect the vehicle before making a purchase, for your financial (and physical) protection.

The Takeaway

A car is a major purchase, and it’s a good idea to save up as much as you can before you take the plunge.

For one reason, you may be able to buy the car outright, and avoid taking a loan (and paying interest). For another, the higher your down payment, the lower your monthly car payments may be once you purchase the car.

Learning how to save money for a car can take a little trial and error. You may need to rejigger some of your expenses and find ways to cut back and/or bring some extra money, at least temporarily.

Ready to start saving up for that car? You may want to consider signing up for a SoFi Checking and Savings account.

With SoFi Checking and Savings’s Vaults feature, you can separate your spending from your savings (even create a Vault specifically for car savings) while still earning competitive interest on all your money.

Plus, you’ll earn a competitive annual percentage yield (APY), and there are no account fees.

Sign up for SoFi Checking and Savings, and start saving up for that car today!

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.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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Oct
29
2024
A Complete Guide to Ordering Checks

A Complete Guide to Ordering Checks

By | Budgeting & Goals, Financial Independence, money | Comments Off on A Complete Guide to Ordering Checks

Checks may not be used as often as they were in the past, but they are still a useful financial tool for most people to have.

Perhaps you want to buy something at a flea market from a vendor who doesn’t take plastic. Or you like to write checks as a way of keeping track of your spending since it may provide a better record than electronic transactions. Or maybe you need that voided check as a way to set up direct deposit with your employer.

Often, you’ll receive some complimentary checks when opening a checking account. However, sooner or later, you are likely to run out and need some additional checks.

When that happens, how do you order a new checkbook? Should you order through your bank? Or is there a faster, cheaper option elsewhere?

You’ll learn the answer to those questions and more in this guide to ordering checks for less.

Key Points

•   Checks remain a useful financial tool for various transactions, including making payments and setting up direct deposits, despite declining usage in the digital age.

•   Different types of checks exist, including personal, business, cashier’s, and certified checks, each serving specific purposes in financial transactions.

•   Ordering checks through banks can be costly, with prices typically around $20 for a box of 100, but numerous online vendors offer more affordable options.

•   When ordering checks online, it is essential to ensure the vendor’s security measures are in place, and to provide the necessary personal and banking information.

•   Having checks on hand is beneficial for those who may face situations requiring paper payments, despite the increasing prevalence of digital transactions.

What Are the Different Types of Checks?

There isn’t just one kind of check in the world. Get acquainted with these four common options that can play a role in managing your money.

Personal Checks

When people wonder about how to order checks, they are typically referring to personal checks. These are the rectangular documents you usually get when you open a bank account. They allow you to transfer funds from your account to a payee, whether that’s your cousin, your WiFi provider, or your dentist.

When you first open an account, you may get a small number of what are called counter checks, which may not be fully personalized with, say, your name and address.

Then, your fully printed checks are likely to arrive, complete with your name, address, account number, and bank routing number. They are also useful when making payments and setting up direct deposit. A voided check can be used by your employer to route your paycheck to the correct account.

Business Checks

What’s the difference between a business check vs. a personal check? Business checks are similar to personal checks, but are drawn from a business checking account instead of a personal one. If you run your own business, you might use these checks to, say, pay for your office rent or send funds to suppliers.

Cashier’s Checks

Sometimes also called a bank check or official check, this is a secure payment used to make significant purchases.

A cashier’s check requires a teller to withdraw funds from your personal account and then cut a check from the bank to pay the recipient on your behalf.

With these checks, the bank is guaranteeing payment, so there is no chance the check will bounce. There is typically a fee for getting a cashier’s check, often around $10 or $15.

Certified Check

A certified check is a type of personal check that the bank guarantees. When you write the check, the bank verifies you have enough money in your checking account to cover the amount and may place a hold on that money until the check clears.

The bank will typically then stamp or print “certified” on the check. Fees vary depending on which bank you use and the size of the check, but are often in the $15 to $20 range.

Recommended: What Is an Electronic Check (E-Check)?

Reasons Why Checks Are Used Today

In a tap and app world, checks may seem like a byproduct of a past era. Some transactions, however, still require a check. It’s not uncommon, for instance, for some landlords to require a check for a security deposit or for some smaller businesses to prefer cash or check payment.

Here are some of the reasons why checkbooks can still be useful and even a preferred payment form:

•   Checks can protect your money. A transfer can be misdirected with a typo, and cash can get lost or stolen. A check made out to the recipient is challenging to cash if it gets into the wrong hands.

•   If a check is lost, you can stop payment on the check and reissue a new one.

•   A check provides a paper record of payments made.

•   Checks can also be a way to verify identity. A voided check (a check you pull from your checkbook and write VOID so no one can cash it) can be necessary to set up autopay or direct deposit, or as a way to verify your address for certain services. (While you can use a check with an old address, it may cause confusion and can be wise to order a checkbook of new, updated ones.)

Of course, checks have their drawbacks too.

•   There can be a significant delay between the day you write a check and the day it gets processed, which could cause you to accidentally overdraw your account if you don’t keep careful records.

•   Checks can sometimes get lost in transit or stolen. Since a check is good for six months, it can be a good idea to cancel any checks that don’t get to the intended recipient in a timely fashion.

•   Checks can also come with fees (such as when cashing a check) and other costs (like having to buy checks).

Fortunately, there are ways to cash a check without a fee. And, if you look beyond your bank when it comes to re-ordering checks, you can often pay significantly less.

Where Can I Order Checks?

Many people will order checks through their bank simply because it’s convenient. These often cost about $20 per box of one hundred, though they may be less or even free if you are a premium account holder.

However, you don’t have to buy your checks at your bank. There are numerous online vendors, such as Checks In The Mail and Carousel Checks, as well as big box retailers (such as Costco and Walmart) that offer customized personal checks that include the same security features as bank checks.

Prices can range from five cents to twenty-plus cents per check, and minimum orders might be anywhere from 25 checks to almost 500.

But how do you order checks from the best vendor? Because you need to input sensitive information, such as your bank account number and the routing information for your bank, it can be a good idea to make sure you choose a vendor that takes security measures seriously and also that the checks you buy are secure.

Some actions that can help maximize security:

•   Making sure the site where you buy checks is secure. A lock image in the address bar of your browser indicates a secure connection and that any information transmitted, such as your bank account info, will be done in a secure manner.

•   Choosing a reputable seller. It can be a good idea to vet any company you are considering buying checks from by taking a look at their Better Business Bureau ratings and reviews.

•   Considering security features. Some check printing companies offer enhanced security features, including watermarks, hard-to-copy microprint, hologram foil, and thermochromic ink (ink that disappears with heat). These features can add to the cost of your checks, but they can make your check payments even more secure.

Get up to $300 when you bank with SoFi.

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.


What You Need for Ordering Checks Online

When you’re wondering “How do I order checks online?” it can be wise to have some key information ready to complete your transaction. This typically includes:

•   Your personal information. This is your name (or the name of your company for business checks) and address.

•   Bank information. This includes the name and address of your bank, which you can find on your existing checks.

•   Your checking account number. You can find this at the bottom of your existing checks or on your bank statement. Of the three listed numbers along the bottom of your check, your account number will be the second number from the left.

•   Your bank routing number. Also known as an ABA number, this number serves as an address so the banking system knows which bank will pay the check. You’ll want to look for the nine-digit number on the bottom left of your checks.

•   Check number. To keep your finances organized, it’s a good idea to have your new checks start with the next number in your checkbook series. For instance, if the last check in your last checkbook is 199, consider starting the new set with check number 200.

When ordering checks, you may want to keep in mind that, depending on the company, production time may take a few weeks. That’s why It can be a good idea to order checks well before you may need them.

Recommended: What Is a Voucher Check?

Protecting Your Money With SoFi

If you’re like many Americans, you probably don’t use checks often these days. But checks are still with us, and it can be a good idea to always have checks on hand for those times when you need or want to pay by check.

Buying checks from the bank can be pricey though. Fortunately, it’s fine to search the web for cheaper options, provided you take some security precautions.

Prefer to get all of your checks for free? SoFi Checking and Savings offers paper checks at no cost when you open an online bank account. Plus, SoFi helps you bank better in other ways: You’ll earn a competitive annual percentage yield (APY) and pay no account fees, which can mean your money grows faster. And you’ll spend and save in one convenient place, which may simplify your financial life.

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

FAQ

Can you print checks by yourself?

It is possible and legal to print checks at home. However, you will need the tools to do so, including a printer, software to format the checks properly, special paper (known as check stock paper) with security features, a magnetic ink character-recognition font (for the numbers at the bottom of the checks in a way that can be read electronically), and magnetic ink.

How much does it cost to order checkbooks?

When you order additional checkbooks from a bank, a box of 100 may cost $20 or more. Some banks and premium accounts will lower or even eliminate that fee. When you order from check companies or mass merchants, the per-check price can range from a few cents to more than 20 cents per check, with orders ranging from 25 to 480 or more checks.

Do I have to order checks through my bank?

You do not have to order checks through your bank. If you want to, you may order from online check companies or merchants like Costco and Walmart.


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.

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.

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.

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29
2024

How Much Money Should You Keep in a Checking Account?

By | Budgeting & Goals, Family Finances, money, Money & Life | Comments Off on How Much Money Should You Keep in a Checking Account?

It can be a good move to keep one to two months’ worth of living expenses in your checking account, plus a buffer of about 30% of that amount.

For some people, that will be a stretch. For others, the preference may be to stash more there. While you may like to see a robust balance in your checking account, you want to have “just enough” on deposit (or enough to meet a minimum balance requirement).

Here’s why: A checking account likely pays very low or no interest, so additional funds are better stowed elsewhere, so your money can grow. Read on to learn more about this topic and how to determine the right amount to keep in your checking account.

Key Points

•   Maintaining one to two months’ worth of living expenses in a checking account, along with a 30% buffer, is generally advisable for financial stability.

•   Monthly income and expenses should be assessed to determine the appropriate balance for a checking account, ensuring enough funds to avoid overdrafts.

•   Major upcoming expenses and savings goals should influence the decision on how much money to keep in a checking account, encouraging transfers to higher-interest savings.

•   Checking accounts typically offer low or no interest, making it beneficial to keep only necessary funds there while saving excess money in accounts that yield higher returns.

•   Tracking spending closely and automating savings transfers can help maintain an optimal checking account balance, allowing funds to grow in savings accounts instead.

What Is a Checking Account?

First things first: A checking account is a type of deposit account that is held at a traditional bank, online bank, or a credit union. It provides a secure spot for your funds (thanks to FDIC or NCUA insurance) and can be the foundation of your daily financial life.

For instance, your paycheck can land there by direct deposit; you can withdraw funds from your account by using an ATM, making a transfer, and more. And you will likely have a debit card that’s linked to the account which allows you to easily spend as you stock up at the supermarket or grab a cold brew.

A few other details to note:

•   Checking accounts typically allow you unlimited transactions, but they probably earn no or very low interest. The average checking account currently earns 0.08% in interest, according to the Fed. It can be wise to consider high-yield checking accounts or premium accounts to see if you can snag a higher return.

•   Some checking accounts are available fee-free, but they may have minimum deposit requirements and some surcharges. It’s wise to read the fine print on an account you currently have or are contemplating opening to know the full story.

If you’re curious how much others keep in their checking accounts, the Federal Reserve’s recent Survey of Consumer Finances (based on 2022 data) found that Americans keep a median balance of $8,000 in their transaction accounts, which include checking and savings accounts, among others. The average amount in checking and other transaction accounts is $62,410, but that number’s pulled up by those with higher net worth.

Get up to $300 when you bank with SoFi.

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.


💡 Quick Tip: Make money easy. Enjoy the convenience of managing bills, deposits, and transfers from one online bank account with SoFi.

Factors to Consider

When deciding how much money you should have in a checking account, there’s no one-size-fits-all number. Instead, consider these factors:

Monthly Expenses and Income

To determine how much cash to keep in your checking account, you’ll first want to tally your monthly income and expenses — those two numbers are vital. For example, if you net $8,000 a month in pay and your usual expenses (housing, utilities, food, healthcare, “fun” spending, etc.) are $7,000 a month, you might want to aim for a balance of $10,000 to $15,000 in the account at any time.

This would give you one to two times your monthly expenses, plus a little overage. That overage is important, as it’s your buffer in case your spending were to increase one month (say, a mega dental bill). You don’t want to wind up in overdraft.

If you need help tallying or tweaking your monthly expenses vs. income, there are a variety of budgeting methods that can help you out.

Upcoming Large Expenses

When deciding how much to keep in your checking account, you may want to account for any major expenses coming your way. Perhaps you pay your homeowners insurance annually or your partner’s big birthday is coming right up. You’ll want enough money accessible to cover those.

Savings Goals

On the other hand, you don’t want to let too much cash just sit in your account when it could be working harder for you. You can transfer any excess funds into a savings account where you will likely find much higher interest rates.

For instance, the average savings account has 0.57% interest as of May 2024, which is an improvement over checking’s 0.08%. Also, online-only banks may offer rates in the range of 4.5% for their savings accounts. Higher interest (and more frequent compounding) can help plump up your savings for a summer vacation, new car, or down payment on a house.

In addition, you may want to prioritize stockpiling some money in an emergency fund, which financial experts say should have at least six months’ worth of living expenses in it.

Account Fees and Requirements

As you compare checking accounts, be sure to drill down on account fees and requirements. Fees can nibble away at your money, and there are quite a number that can be assessed. There are account maintenance fees, overdraft fees (at about $35 a pop), out-of-network ATM fees, and more. Read the fine print (or look at your statement if you already have an account) to see where you stand. Then you can make a choice that helps you avoid bank fees.

Also note that there may be requirements for your account, such as keeping a certain amount on deposit or using your debit card a certain amount per month. If you don’t meet the guidelines, you could wind up paying more fees as well.

The Basic Living Expenses Approach

As mentioned above, one popular approach for how much money you should keep in a checking account is to have one to two months’ worth of living expenses on deposit.

Need help calculating that number? Tracking your expenses can be done fairly simply by reviewing a couple of months of your current checking account statements and totaling how much flowed out. Some accounts have a dashboard that make it extra easy to see your spending.

Or you could add up your typical expenses the old-school way, using an online spreadsheet or pencil and paper. You will want to include such costs as housing, transportation, food, utilities, clothing, healthcare, loan payments, credit card payments, dining out, entertainment, streaming services, insurance, and the like.

If your usual expenses were, say, $6,000 a month, you might want to keep somewhere between $8,000 and $14,000 in your checking account.

Recommended: Checking vs. Savings Accounts: A Detailed Comparison

Earning Interest vs. Liquidity

Another way to look at how much money you should keep in your checking account is to balance two financial forces: earning interest and liquidity.

Typically, in order to pay out higher interest, a financial institution needs to feel confident that money will be accessible for them to use for other business purposes. That is why savings accounts, which used to allow only a limited number of transactions per month (incidentally, some banks still enforce this guideline), will pay a higher interest rate.

Similarly, a certificate of deposit (CD) will likely pay more than a checking account, because the customer agrees to keep their funds in the account for a specific period of time.

The other side of the coin is liquidity, meaning that you can access money on demand, without fees or penalties. This is what a checking account excels at. You may not earn much (or any) interest, but you know you can withdraw funds and pay bills from it as often as you like.

For this reason, you probably want to keep just enough cash in checking to pay bills without overdrafting, while moving any additional funds into savings (perhaps earmarked as an emergency fund) to reap a higher interest rate.

Recommended: Checking Account Pros and Cons

Tips for Right-Sizing Your Balance

As you fine-tune the amount of money you keep in your checking account, try these tactics:

Track Spending Closely

You may think you know how much your monthly expenses are, but tracking the exact amount can be a very helpful exercise as you think about your bank account balances. For instance, you may not be accounting for such spending as gifts for friends and family, subscriptions, prescription medications that refill every three months, contact lenses, and charitable donations.

Some banks provide tools to help you track your spending, or there are apps and websites that can give you a fuller picture. As you comb through your spending, you may also find places where you can easily trim some money.

Automate Savings Transfers

One way to make sure you are building your savings is to set up automatic transfers from your checking account to savings. This can be a seamless, no-effort way to make sure money doesn’t just sit in checking.

You might automate your money by having recurring transfers from checking to savings right after you are paid. That can help you avoid spending when you see money piling up in checking, and it moves money to where it can earn interest.

Take Advantage of Personal Finance Apps

As noted above, there are personal finance apps that can help you manage your money. First check your current bank; they may offer helpful tools. There are also paid apps (like YNAB and PocketGuard) available for budgeting, typically for $8 to $15 a month.

Or you might want to take advantage of round-up apps that can help build your savings as you spend. These round up the price of purchases to the next dollar and send the difference into your savings account (or investments) so it can help build your wealth, bit by bit.

The Takeaway

Keeping slightly more than one to two months’ worth of living expenses in your checking account can be a good rule of thumb. Any additional funds can work harder for you when transferred to a savings account, where they can earn interest and help your money grow.

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


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

FAQ

Is too much in checking a bad idea?

While not exactly a bad idea, keeping too much money in your checking account can mean you are missing out on the opportunity to earn interest and help your money grow.

What is the average checking account balance?

The average transaction account balance (which includes checking and savings accounts) is over $62,000, but that skews high due to those who are wealthier. The median figure is $8,000.

What does it mean for money to be liquid?

When money is liquid, that means it can be accessed on demand. For example, cash in the bank is liquid; the equity you have in real estate is not, since it would require effort to secure funds related to that investment.

Photo credit: iStock/JLco – Julia Amaral

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.

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

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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Oct
29
2024
woman mobile depositing check

How Long Is a Check Good For?

By | Budgeting & Goals, money | Comments Off on How Long Is a Check Good For?

Maybe you think paper checks are a relic from the recent past, but don’t write them off so quickly. Did you know that there are still 14.5 million checks issued in the U.S. every day?

That means there may be many instances when you need to cash a check, such as receiving a tax refund or getting paid for a side-hustle gig. All too often, people set aside that paper rectangle and plan to deal with it later, only to realize weeks or even months have passed before they come across it again.

But is a check still good if it’s not cashed right away? Learn the answers here.

Key Points

•   Paper checks typically expire six months after the issue date, although some may have shorter void dates set by the issuer.

•   Treasury checks have a longer validity period, expiring one year after issuance, making them more flexible than personal or corporate checks.

•   Certified and cashier’s checks do not have a strict expiration date but can become unclaimed property if not cashed, depending on state laws.

•   Money orders do not expire but may incur fees if not cashed in a timely manner, and they can usually be replaced if lost.

•   It is advisable to cash checks promptly to avoid complications; contacting the issuer for a reissue is necessary if a check is stale.

How Long Do Checks Usually Last?

Both corporate checks and personal checks technically expire after six months from the issue date. There may be alternate void dates written on the check, such as 90 days, but that’s more of the issuer’s preference rather than a rule that’s etched in stone. After six months, a bank considers the check “stale” and isn’t legally required to cash it.

Here’s one reason why checks have expiration dates. If you wait too long to cash a personal check, there’s a decent chance that the issuer won’t have enough money in their account to cover the outstanding check.

If this happens, the check bounces and you’ll likely be charged a fee by the bank.

Fees for Bounced Checks

•   The maximum amount varies, but typically it costs about $27 dollars when a check bounces as of 2022.

•   You may also be hit with overdraft fees, which average almost $30.

When you wait a long time to cash some type of corporate check, you usually run less risk of having it bounce. It could, however, happen.

When a Check Is More Than Six Months Old

So what should you do if you discover an uncashed check that was issued more than six months ago? It can obviously happen, especially in this era when many transactions are done by payment apps and e-checks. Some of us aren’t used to dealing with paper checks.

Here’s the scoop:

•   Even if the check doesn’t bounce, the bank can refuse to cash it after the six-month mark. When that happens, you’ll generally need to reach out to the issuer and ask for another check. In that case, the issuer may ask you to return the first copy so they can properly void it.

•   In a best-case scenario, the bank could still honor the check. They’re not required to do so by federal law, meaning you could still access the cash despite exceeding six months.

When a Treasury Check Is More Than a Year Old

How long are checks good for when they are issued by the U.S. Treasury? They usually don’t expire until one year after the date it’s issued. Common types of Treasury checks include federal tax refunds, Social Security benefits, and Veterans Affairs benefits. If these checks expire, follow these steps:

•   In order to get an expired check reissued, you must contact the paying agency directly and go through the check claims process and appropriate paperwork.

•   You can avoid expired U.S. Treasury checks completely by signing up for electronic direct deposit or opting for a direct express card (designed for those without bank accounts). For those who receive federal benefits, like Social Security, receiving payments electronically is required by law.

Note that state and local governments all have their own expiration dates when it comes to checks. Consider looking into those specific guidelines for things like state tax refund checks.

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Expiration Dates for Different Types of Checks

You’ve just learned about how six months is the usual expiration date after a check is issued or one year for Treasury checks.

However, there are some exceptions to these guidelines. These likely occur when the funds attached to a check were secured by the issuing bank in some way.

Certified Checks

With a certified check, the issuer’s bank guarantees the funds, but they remain in the individual’s account until you cash the check. However, the bank puts a hold on the correct amount of cash so there’s no risk of the account being overdrawn before you deposit that check.

Still, there’s no hard and fast expiration date for a certified check. The main concern is that eventually, the bank may hand over the funds to the state in your name as unclaimed property if you fail to cash the check. Each state has its own process for reclaiming those abandoned funds, which you may learn more about from the state’s unclaimed property office.

Alternatively, you can visit MissingMoney.com , a multi-state database which may help you find your unclaimed cash from certified checks and other sources.

Recommended: What Is a Business Check vs. a Personal Check?

Cashier’s Checks

When you receive a cashier’s check from someone, the funds have already been withdrawn from their personal bank account and transferred into an escrow account with the issuing bank. The money sits there waiting until you cash the check. The bank may still place a void date on the check and no longer guarantee the funds after that point.

If you miss your window of opportunity, the bank may transfer the money to the state as unclaimed property, just as they would with uncashed certified checks.

Cashier’s checks are usually reserved for large amounts of money. When someone pays you with this method, it’s generally smart to cash it as quickly as possible. Plus, it can be very difficult to replace a hard copy of a cashier’s check if you lose it.

Money Orders

A money order is another secure form of payment. It never expires, but, depending on the terms of the money order, there may be fees incurred if it is not cashed in a certain amount of time.

A money order works differently than most checks. The issuer doesn’t transfer funds from their bank account. Instead, they can use cash, a debit card, or traveler’s check to pay for it. The money order then gets assigned a cash value and can be cashed or deposited.

It’s relatively easy to replace a money order if it’s been lost, especially compared to certified and cashier’s checks. If this happens, the original issuer will generally need to go to the place where the money order was purchased to complete the replacement process.

There may also be a fee for replacing the money order (for example, $13.90 at the U.S. Post Office). However, the process isn’t immediate. It can take between 30 and 60 days to investigate a lost or stolen money order. So, if there are any issues with a lost money order, it’s typically best to try and resolve the issue as soon as possible to help expedite the process.

Recommended: What Is a Counter Check?

Traveler’s Checks

Traveler’s checks are a sort of check that assumes cash value without ever expiring. You may choose to use them while traveling abroad to avoid carrying around large amounts of cash. When you arrive in your destination country, traveler’s checks can be exchanged for local currency.

How long is a traveler’s check good for if not cashed during your trip? You can bring any unused checks home, and then consider these options:

•   Since they’re marked in U.S. dollars rather than foreign currency, you can simply save them to exchange during a future overseas trip, regardless of the type of currency used there.

•   You can usually redeem unused travelers checks with the issuing bank. Just check in advance what kind of fees may be involved.

•   Traveler’s checks are also accepted domestically, meaning you may be able to use them instead of cash, plastic, or personal checks at some stores.

Quick Money Tip: Want a new checking account that offers more access to your money? With 55,000+ ATMs in the Allpoint network, you can get cash when and where you choose.

Why Do Checks Have Expiration Dates?

As mentioned briefly above, checks typically have an expiration date as a way to nudge the recipient to cash it sooner rather than later. When people hold onto uncashed checks, it makes it challenging for the issuer to know how much money they actually have in their account and keep their personal finances up to date.

An expiration date, whether it’s six months or a year, can help them balance their books and not worry about someone cashing a check years later.

Recommended: How to Write a Check to Yourself

What to Do With an Uncashed Check

It’s not uncommon to dig through a pile of unopened mail or a stack of papers and discover a check that you never cashed. What’s next in this situation? Consider these tips:

•   If it’s been less than six months for a conventional check, you can likely cash it as usual. Treasury checks are good for up to a year. Mobile deposit can make getting the funds into your bank account quick and easy.

•   If it’s past the expiration date, you may check with your bank and see if they will honor it. If they believe the funds are available, they just might cash it.

•   If the check cannot be cashed, you will likely have to contact the issuer and request a new check. You may need to return the expired check as part of this process.

If you are the issuer of the check and see that six months have gone by and your check hasn’t been cashed, you may try reaching out to the payee to see if the check has been lost or stolen. If that is the case, or they just let it sit uncashed, you may reissue the check as your next step.

Recommended: How to Sign Over a Check to Someone Else

The Takeaway

It’s wise to deposit checks quickly once you receive them. As a general rule of thumb, the six-month mark represents the strictest timeline. Cashing or depositing any check before then can help avoid problems with a check getting stale. Checks issued by the federal government via the U.S. Treasury Department have a little more leeway — a full year from the issue date.

SoFi can help you avoid the hassle of going to a bank branch or ATM to cash your check. With SoFi Checking and Savings, you’ll be able to snap a photo and deposit your check. There are plenty of other great benefits too: We offer a competitive Annual Percentage Yield (APY) and no account fees, which can help your money grow faster (as can savings features like Vaults and Roundups). Plus, you’ll spend and save in one convenient place.

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

FAQ

Can I cash an expired check?

It depends. Your bank may still cash a cash that’s past the expiration date if they believe the funds are available. But they do have the right to refuse it if six months have passed since the date it was issued or one year in the case of checks from the U.S. Treasury.

How can banks tell if a check is expired?

The date on the check tells you and your bank when the check was issued. A check typically expires six months after that date or, in the case of U.S. Treasury checks, a year later. Some companies print on their checks “void after 90 days,” but most banks will honor a check up to 180 days.

Can an expired check be reissued?

Yes, an expired check can likely be reissued. Contact the payor to request this.

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.

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.

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

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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