Aug
08
2024
Understanding ACH Transfer Limits for Incoming and Outgoing Transactions

Understanding ACH Transfer Limits for Incoming and Outgoing Transactions

By | Budgeting & Goals, Financial Independence, money | Comments Off on Understanding ACH Transfer Limits for Incoming and Outgoing Transactions

When it comes to conducting transactions with your bank account, one of the most popular types is using ACH transfers, but they can come with limits, albeit fairly high ones. ACH payments are electronic bank transfers that quickly and conveniently process regular payments such as mortgages, utilities, loans, and tax payments. They can also be used for one-time payments as well.

Nacha, the organization that oversees the ACH network, raised the limit for same-day incoming and outcoming consumer and business transfer to $1 million in March 2022. That, however, does not necessarily mean that limit applies to your particular financial institution. Knowing the full story on ACH transfer limits can help to make sure all your transactions go through smoothly and avoid any potential hiccups.

Key Points

•   ACH transfers enable electronic transactions for various purposes, including bill payments and direct deposits, providing a convenient way to manage finances.

•   The National Automated Clearing House Association raised the ACH transfer limit to $1 million, but individual banks may impose lower limits for customers.

•   Many banks have specific daily and monthly ACH transfer limits, which can vary based on account types and customer relationships.

•   Timing is crucial for ACH transfers, as cutoff times can affect the speed of transactions, and insufficient funds may result in fees.

•   ACH transfers are typically not available for international transactions, which require wire transfers and may incur additional fees.

How ACH Transfers Work

First, a little more about ACH, which stands for Automated Clearing House. ACH transfers are an electronic transfer system that allows individuals or businesses to transfer money from one financial institution. This network is one of the main ways to send and receive money. Did you sign up for autopay on your utilities bill? ACH transfers will make it happen. Do you receive your paycheck by direct deposit? That’s also an ACH transfer.

Other types of transactions include direct ACH debits, electronic funds transfers (EFTs), electronic checks (eChecks), and direct payments. Aside from banks, third-party apps, such as PayPal, which allow you to pay friends without cash, also use the ACH network.

In most cases, ACH payments, which are only for U.S. transactions, are usually faster than other types of transactions — if there’s enough money in the account, an ACH incoming transfer is usually cleared within one to several days. A few instances where it could take longer is during holidays or if the network suspects the transaction is potentially fraudulent. Debits are typically processed on a next-day basis. (If you need a super-fast transfer, look into how ACH vs. wire transfers stack up.)

There are often daily ACH limits as well as ACH period limits — as in, there may be daily or monthly limits, depending on your financial institution.

💡 Quick Tip: Make money easy. Open a bank account online so you can manage bills, deposits, transfers — all from one convenient app.

Incoming ACH Transfer Limits

According to the National Automated Clearing House Association (Nacha), which manages ACH payments, ACH limits can be as high as $1,000,000 per day, up from $100,000 previously.

However, ACH transfer limits for your checking account or savings account may be considerably lower. For clients of Chase bank, for example, the same-day limit is $25,000 for standard accounts and $100,000 for premium or private client accounts.

This means it can be crucial to check with your bank about their policies. By knowing your limits, you can troubleshoot before you wind up in a “Where’s my money?” situation.

Outgoing ACH Transfer Limits

Depending on your financial institution, your outgoing ACH transfer limit may be much lower than what NACHA imposes. Understanding the ACH outgoing transfer limit is important because you want to ensure your transactions go smoothly.

If you have multiple transactions set up regularly to send money, you’ll want them all to go through and not run the risk of payments being held up and late fees accruing.

Get up to $300 when you bank with SoFi.

No account or overdraft fees. No minimum balance.

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ACH Transfer Limits at Top US Banks

The following ACH transfer limits and its associated fees are from the six biggest traditional banks, plus SoFi.

Name of Bank

ACH Transfer Limit

Fees

Bank of America

Typically $3,500 daily outgoing

$10,000 monthly outgoing

$249,999 for some one-time incoming transfers

Higher limits for transfers between Bank of America accounts held by the client

Variable
Capital OneMay vary by account type. Up to $100,000 for a single bill pay payment with 360 CheckingTypically none
U.S. BankVariesVaries, often $0 to $3
Citibank

Inbound, from $10,000 to

$100,000 daily and monthly

Outbound, up to

$25,000 daily and $50,000 monthly

None
Wells FargoVariesVaries
ChaseVaries, but typically $25,000 daily for standard accounts and $100,000 daily for premium or private client accountsNone
SoFiTypically up to $50,000 dailyTypically none

As you can see above, a few of the banks have varying daily and monthly ACH transfer limits. Some of these depend on the type of account you have and your relationship with the bank. For instance, those who have more premium accounts (such as ones that require higher balance minimum requirements) may have higher ACH transfer limits, though it’s not always the case.

Also, business accounts may have different and/or higher limits than personal bank accounts. ACH transfers can be conducted with both brick-and-mortar and secure online bank accounts.

ACH Transfer Penalties

While ACH transfers are a convenient way to conduct bank transactions, there are some limitations you need to be aware of.

Cutoff Times

ACH transfers can be conducted on a same-day or somewhat slower basis. For same-day, transfers must usually be submitted by 4:45 pm ET. Some banks may set earlier deadlines, such as 12:30 ET.

In general, though, ACH transfers can take a bit longer than same-day, and it’s worth taking into account the day of the week. If you submit a transfer at 5:03 pm on a Friday, it may not get moving until the following Monday, which could count as a late payment.

So, if you’re making a transfer from your checking or savings account and want it to arrive as soon as possible, it’s best to initiate the transfer earlier in the day. And keep these timing issues in mind if you are tracking an ACH payment, whether incoming or outgoing.

Insufficient Funds Penalty Fee

Many financial institutions won’t charge you for an ACH transfer, but they may charge you a fee if you don’t have enough money in your account. This penalty is typically called the insufficient funds fee, and the amount varies from bank to bank.

No International Transfers

In most cases, ACH transfers aren’t available to send money to another account internationally. If you want to send money overseas from your bank, you’ll have to do so via a wire transfer. You’ll likely be charged a fee for the service, often between $35 and $50.

Recommended: Understanding ACH Fees

The Takeaway

ACH transfers are an important part of modern banking, whisking funds from account to account. This process enables direct deposit, automatic bill-pay, P2P platforms, and more. However, these transactions may come with dollar and timing limits, as well as fees. Each financial institution will have different rules and guidelines as to how you can conduct ACH transfers. Reading the fine print on your account agreement or checking in with customer support can save you time, money, and headaches.

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 4.20% APY on SoFi Checking and Savings.

FAQ

Which bank has the highest ACH transfer limit?

As of press time, SoFi, Chase, Capital One, and Citi have the highest ACH transfer limits. However, these higher limits may only be available for those who have certain types of bank accounts or have been a long-time customer with these financial institutions.

Are ACH transfers reported to the IRS?

The IRS doesn’t count ACH transfers as cash, so they are not reported.

What is the maximum amount you can transfer from bank to bank?

The maximum amount you’ll be able to transfer between banks will depend on various factors, such as how much you have in your account, ACH transfer limits for your financial institution, and how much the receiving bank is allowed to receive. Nacha recently raised the maximum possible to $1,000,000, but again, that will not be available to every banking customer.

Which bank is good for ACH?

All financial institutions should be able to initiate and receive ACH transactions. The differences involve limits, processing time, and possible fees. It’s worth checking at specific banks to understand their guidelines if you plan on using ACH transfers.

Photo credit: iStock/AleksandarNakic

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 4.20% 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 4.20% 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 4.20% 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 10/31/2024. 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.

*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.

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.

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Aug
08
2024
How to Deposit Cash at an ATM

Can You Deposit Cash at an ATM?

By | Budgeting & Goals, Financial Independence, money | Comments Off on Can You Deposit Cash at an ATM?

It’s often — but not always — possible to deposit cash at an ATM. Whether you can feed bills into the machine can depend on your bank, the particular device you’re using, and other factors. If you are able to make the deposit, fees might be charged.

It’s important to understand the ground rules for depositing cash at an ATM so you can get your money where you want it to go, with a minimum of hassle.

Key Points

•   Depositing cash at an ATM depends on the bank and specific machine, so verifying capabilities in advance is essential for a smooth transaction.

•   Users must insert their bank card and PIN to access ATM options, and some machines allow cardless transactions through mobile devices.

•   Cash can typically be deposited in specific amounts, with limitations on the number of bills accepted at once, usually between 40 to 50.

•   Fees may apply when using out-of-network ATMs, and availability of deposited funds can vary, with delays up to five business days for certain transactions.

•   Potential issues can arise during cash deposits, such as machine malfunctions, so it’s advisable to document any problems and report them to the bank.

How to Deposit Cash at an ATM

Here are the usual steps for depositing cash at an ATM, once you have your bills counted and ready.

Locate an ATM

In order to avoid wasting time at an ATM that won’t accept cash, it’s a good idea to do a bit of research ahead of time. Log onto the website or app for your financial institution, and look for an ATM locator, which will show you all nearby locations and may also specifically mention which services those ATMs can perform.

It’s worth noting that those convenient ATMs that you may see at your local grocery store or at a concert venue may not accept cash. They are likely there just to provide people with some crisp bills for spending.

🛈 SoFi only offers ATM withdrawals at this time

Insert Your Bank Card

Once you’ve arrived at an ATM that will accept a cash deposit, you’ll most likely need to use your debit card or other kind of bank card and personal identification number (PIN) to confirm your identity. That will allow you to pull up the ATM’s service options. Some banks may grant access to an ATM using cardless withdrawal technology, which involves using your phone vs. your bank card to complete transactions.

Follow the On-Screen Instructions

Next, you’ll follow the instructions to make a cash deposit. For instance, if you have multiple accounts, such as a checking and savings account, you’ll typically be asked to select the account where the money should be deposited.

Feed Your Money Into the ATM

Ready for the main event? It’s now time to feed your bills into the machine. It’s worth noting that some ATMs may have limits as to how many paper bills they can take at once (perhaps 40 or 50), and ATMs typically don’t take coin deposits. Incidentally, a few older ATMs still require you to put bills into the designated envelopes they provide prior to depositing.

You will usually have the opportunity to confirm the deposit’s amount during this step, which is a valuable checkpoint.

As with any situation where you’re feeding bills into a machine, it’s possible that the machine may spit one back out if it reads it as damaged or potentially counterfeit. And, of course, any time you are handling cash, you want to take note of your surroundings and make sure you feel safe when conducting your transaction.

Sign Out

Last of all, you can ask for a receipt, if you like (you will usually be offered the option of a printed or an email receipt; either can help with record-keeping). Also make sure you are signed out of the ATM before you leave, which is a wise move whenever you use one of these terminals.

Can You Deposit Cash at Any ATM?

You can’t necessarily deposit cash at any ATM. If you are a customer of the bank, you probably can utilize their ATMs, but if a machine is out-of-network, you may or may not be able to deposit your bills there and have them land in your account.

For this reason, it’s important to check to see which ATMs are part of your bank’s network and accept cash. This can save you a wasted trip to an ATM, only to learn that the device doesn’t accept bills from clients of your financial institution…or doesn’t accept bills at all.

If you are permitted to deposit cash, you may have to pay a fee. Currently, out-of-network fees average $4.73 per transaction. In addition, you may have to wait an extra couple of days to have the funds turn up in your account (more on that in a moment).

Can You Deposit Cash at an ATM for an Online Bank?

Customers of online-only banks may be concerned that they won’t be able to deposit cash at an ATM. However, some of the leading online-only banks partner with ATM networks so you can enjoy this aspect of banking. For example, you may find that you can access more than 50,000 global ATMs for free (whether you want to withdraw or deposit cash, or conduct other business) with some of the key players.

Recommended: 12 Top Mobile and Online Banking Features

When Depositing Cash at an ATM, Is It Available Immediately?

At some ATMs, cash deposits are made available immediately, while with other ATMs you may experience some lag between the moment you feed the money into the machine and the moment the funds become available.

The FDIC requires banks to make cash deposits available within a certain amount of time. In the case of an in-network ATM, availability is not required until the second business day after the deposit. At an out-of-network ATM, however, funds don’t have to be made available until the fifth business day, so it’s wise to take that into account.

Again, your bank may have more information available on their website as to their specific policies.

Get up to $300 when you bank with SoFi.

No account or overdraft fees. No minimum balance.

Up to 4.20% APY on savings balances.

Up to 2-day-early paycheck.

Up to $2M of additional
FDIC insurance.


🛈 SoFi only offers ATM withdrawals at this time

Things to Consider When Depositing Cash at an ATM

Most of the time, depositing cash into an ATM goes smoothly and may happen for free. But there are a couple of scenarios to be aware of and potential hiccups to be prepared for.

Depositing Cash at an ATM That Isn’t Your Bank

As mentioned above, you may or may not be able to deposit cash in an out-of-network ATM. For instance, if you have an account at Bank of America, you probably can’t stick a couple of hundred-dollar bills into a Chase ATM.

What’s more, if you can make a deposit at an out-of-network ATM, there may be fees involved. It will likely take longer to process and become available to use than if you’d stayed in your own network.

If you keep your money at an online-only bank, you may want to stick to their network or make sure your financial institution offers a fee-reimbursement feature. You can usually locate in-network or partner ATMs by checking your bank’s app or website or by calling their customer service number.

Potential Problems

Technology can offer many benefits, such as speed and convenience, but it isn’t perfect. When you are trying to deposit cash at an ATM, you might in rare cases hit a snag. Perhaps the machine won’t accept your bills, or it miscounts the amount deposited.

If an issue like this happens, make sure to note down the details, such as the date, time, location, and what transpired. You can then report the issue to your bank and/or the owner of the ATM to get the matter resolved. If you lost money in this way, you may want to involve the Consumer Financial Protection Bureau to help you get refunded.

Fees

You are unlikely to encounter a fee if you make a deposit at your bank’s ATM. The same can hold true if you keep your accounts with an online-only bank and use their network of terminals.

However, life can get complicated, and you may need to deposit cash when an in-network device isn’t anywhere nearby. In that case, you are likely to incur an out-of-network ATM fee. As noted above, these are currently averaging $4.73 a pop, according to one recent survey, so this can really add up.

Check with your bank ahead of time to get a better grasp of their specific ATM fee policies and avoid these unnecessary fees when possible.

Limits

There can be limits on how much you can deposit at a given time at an ATM. Typically, this isn’t a dollar amount but rather a cap on how many bills can be inserted. For instance, if an ATM allows no more than 50 bills at a time, that might mean you can only deposit $250 if you have $5 bills or as much as $5,000 if you have $100 bills.

Recommended: How to Avoid ATM Fees

The Takeaway

You can usually deposit cash in an ATM in a few simple steps, which can be a convenient way to get money into your checking or savings account. Depending on whether you insert your bills at an out-of-network vs. in-network machine, the transaction may involve fees and potentially a delay in the funds becoming available. It can be wise to do a little research on your options and rely on in-network machines whenever possible.

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 4.20% APY on SoFi Checking and Savings.

🛈 SoFi only offers ATM withdrawals at this time

FAQ

How do you deposit cash at an ATM?

To deposit cash at an ATM, you’ll need an ATM that accepts cash, your bank card, and PIN. Then you simply follow the directions on the machine’s screen. However, it’s good to research first where ATMs in your network are or how much of a fee will be charged to deposit cash at an out-of-network ATM.

Can you deposit checks at an ATM?

Yes, you can usually deposit a check into an in-network ATM, though some machines may not accept them.

Are there ATM deposit fees?

Whether you will pay to use an ATM varies. Typically, you will not be assessed a fee to use an ATM that belongs to your bank or the network of ATMs it partners with. However, if you use an out-of-network machine for a transaction (withdrawal or deposit), you will likely be charged a fee of a few dollars.

How much cash can be deposited in an ATM?

There may be a limit on the number of bills you can deposit at an ATM vs. a limit on the dollar amount. For example, some ATMs accept no more than 50 bills at a time.

How can I deposit money without going to the bank?

You can often deposit cash at one of your bank’s ATMs or a machine that’s part of your bank’s network. Another method would be to buy a money order made out to yourself and then use mobile deposit to get it into your bank account.

Photo credit: iStock/RgStudio

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 4.20% 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 4.20% 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 4.20% 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 10/31/2024. 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.

*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.

SOBK-Q224-1890292-V1

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Aug
08
2024
Endorsing a Check for a Minor

Guide to Endorsing a Check for a Minor

By | Budgeting & Goals, Family Finances, money | Comments Off on Guide to Endorsing a Check for a Minor

Endorsing a check for a minor is a pretty straightforward process. It means printing their name on the back of the check and designating them as a minor. Then, print your name and define your relationship to the minor. Third, sign underneath your name. Finally, it’s a good idea to write the account number so the bank can deposit the check into the appropriate account.

That said, handling a check for your child can raise some issues. After all, how do you endorse a check for a minor if they don’t have a bank account? Fortunately, most banks and credit unions allow parents to deposit such checks into their accounts. You can also use a check made out to a minor as an opportunity to open a custodial account and begin your child’s financial education.

Here are the details on endorsing a check for a minor and how it can facilitate financial literacy.

Key Points

•   Endorsing a check for a minor involves printing the minor’s name, indicating their status as a minor, and providing the endorser’s relationship to the minor.

•   Banks typically allow parents to deposit checks made out to minors into their own accounts, especially if the child does not have a bank account.

•   Opening a custodial account for a minor can facilitate financial education and help children learn money management skills under parental control until they reach adulthood.

•   It’s essential to verify bank policies regarding check endorsements and to include necessary information, such as the account number, to ensure proper deposit.

•   Teaching children about saving and financial fundamentals is crucial for their financial literacy, and involving them in banking activities can enhance their learning experience.

What Is a Check Endorsement?

A check endorsement is when you sign the back of a check that’s been made out to you. Signing your name on the back and providing your account number allow you to deposit or cash the check. If you have a joint bank account, one or both account holders should sign the check.

Signing over a check is also possible. This is a process that allows you to transfer the right to deposit the check to someone else.

Process of Endorsing a Check for a Minor

Endorsing a check for a minor is similar to endorsing a check for yourself, with a few extra steps in the process. Here’s how to endorse a check for a minor.

•   Flip the check so its back is facing upwards. Print the minor’s name where the endorsement section is. Following the printed name, add a hyphen and write “minor.”

•   Below the minor’s name, print your full name. Following your name, add a hyphen and write the best word that describes your relationship to the minor such as parent or guardian.

•   Finally, sign the check and write your account or the minor’s custodial account number.

Recommended: How Do You Write a Check to Yourself?

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Can a Check Made to a Minor Be Deposited Into the Parent’s Account?

Guidelines vary among banks and credit unions for depositing a child’s check into a parent’s account. Generally, banks and credit unions will deposit checks made out to children into the parent’s account. Banks and credit unions usually do this when the child doesn’t have a bank account.

Either way, ask your bank or credit union for their endorsement policy on the child’s checks and endorse them as instructed to ensure you can deposit the check. You may need to provide supplemental documents and your child’s ID.

On the other hand, your bank might encourage you to open a bank account for a minor; you may also hear this referred to as a custodial account for your child. While this account is separate from yours, you’ll control it until your child turns 18 or older.

A custodial account is an excellent way to teach kids money management and show them how to use banking services. Although a minor isn’t technically unbanked if they don’t have a custodial account, opening one can help them acclimate to banks and credit unions and set them up for financial success as an adult.

Recommended: What Does It Mean to Be Unbanked?

Tips for Endorsing a Check for a Minor

With money becoming increasingly digital, matters such as ordering checks and handling them can be challenging for people of all ages. Follow these tips to have a smooth experience when endorsing a check for a minor.

•   Ask your bank for their rules and conditions for how to endorse a check for a minor.

•   Read the front of the check to verify your child is the payee.

•   Print your child’s name and your name on the back and specify who each person is (minor and parent).

•   Adding your account number or your child’s custodial account number under your signature ensures the bank will deposit the money in the correct account.

•   Keep in mind how long checks are good for. Typically, checks expire after six months, so it’s best to endorse and deposit them as soon as possible. In addition, hanging onto a check without depositing it increases the chance of losing it.

Getting Your Child Started With Banking

Opening a bank account for a minor can introduce your child to healthy money management and improve financial literacy. Here are some tips for parents who want to show their children the ropes.

•   Open a custodial bank account. Shop around for a custodial account for your child that can earn an annual percentage yield (APY) and charge no fees. In addition, you can deposit your child’s checks into this account to grow their savings.

   Plus, these accounts usually give control to the parent until your child reaches 18 or older and can take over. You may hear these accounts referred to as UGMA (Uniform Gift to Minors Act) accounts.

   However, for some accounts for minors, your bank may allow joint control between the child and the parent. This may be referred to as kids’ bank accounts at some financial institutions.

•   Involve your child in the process. Instead of managing the custodial account alone, bring your child to the bank to help open the account. They can bring their identification and speak with the banking staff. Ask ahead of time if they offer memorable experiences for children, such as viewing the safe deposit boxes. The more your child enjoys the bank or credit union, the more they may interact with their account.

•   Remind your child that saving is vital. Again, bringing in a real-world example can help. For instance, the next time you have an unexpected expense such as a car repair or emergency dental work, use it as a teaching moment. Explain that saving money helps smooth out financial bumps in the road.

•   Explain financial fundamentals. For example, teaching your child about compound interest can motivate them to save more. You can also create a budget showing what their allowance income lets them afford each month and set long-term goals, such as buying a scooter.

•   Keep up the flow of information as your child gets older. While a first-grader isn’t ready to peruse financial documents, middle-schoolers can begin to understand how to read an account statement from their custodial account. Likewise, your child’s first job can provide a lesson about paychecks and income taxes.

   In addition, the prevalence of phone and internet use has given rise to financial scams over text messages and email. It’s wise to educate and warn kids about this so they don’t become a victim.

The Takeaway

Endorsing a check for a minor requires an additional step or two compared to endorsing your own; the trick is knowing what information you need. Whether you deposit the money into your account or your child’s custodial account, the endorsement process is an opportunity to expose your child to the world of banking. It’s never too early to teach financial literacy, and depositing checks at the bank is a great jumping-off point.

When thinking about your own banking choices, it’s wise to look for multiple better banking features. When you open an online SoFi Checking and Savings account, for instance, you can take advantage of a competitive APY and not pay any account fees that can nibble away at your balance. Plus, SoFi offers features like Vaults and Roundups to help savings grow faster, and qualifying accounts with direct deposit can get paycheck access up to two days early.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.20% APY on SoFi Checking and Savings.

FAQ

Can a child endorse a check?

A child too young to write or sign their name cannot endorse a check. For older children, banks and credit unions generally require parents to write and sign their name under the child’s name. They also must include their relationship to the child and add the account number for the deposit.

Can a minor deposit a check into their own account?

A minor can deposit a check into their account if their parent or guardian endorses it and if the minor is old enough to use banking services. Each bank or credit union sets rules for how old a minor must be to access banking services.

Can you use mobile deposit to endorse a check to a minor?

You can use the mobile deposit to endorse a check for a minor by printing their name on the back of a check with a hyphen and the word “minor.” Then, under the minor’s name, print your name with a hyphen and the word “parent” or another descriptor for your relationship with the minor. Then, sign the back and write your account number or the minor’s custodial account number. Lastly, use your phone to complete the check’s mobile deposit.

How can a minor cash a check?

A minor can cash a check if their parent or guardian endorses it and the minor is old enough to use banking services. Each bank or credit union determines the age requirements for banking services.

Photo credit: iStock/Drazen Zigic

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 4.20% 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 4.20% 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 4.20% 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 10/31/2024. 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.

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.

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2024
9 Cheapest Pets to Own_780x440

9 Cheapest Pets to Own

By | Budgeting & Goals, Financial Independence, money | Comments Off on 9 Cheapest Pets to Own

Pets can bring love, companionship, and fun into your life. But they can also bring a lot of added expenses. In fact, the lifetime cost of owning a dog can run anywhere from $19,893 to $55,132, while owning a cat for its full natural life can range between $4,250 to $31,200.

If you’re yearning for a furry companion, but the high cost of owning a pet gives you worry, you don’t necessarily have to give up on the idea. There are actually a number of cheap pet options out there, and many are also low maintenance and adapt quickly to their new homes.

From small birds to bunny rabbits, here are nine cheap, easy-to-care-for pets you may want to consider adding to the family.

Key Points

•   Pets can provide companionship but also incur significant costs; dogs can range from $19,893 to $55,132, while cats can cost between $4,250 and $31,200 over their lifetime.

•   Affordable pet options exist, including guinea pigs, hermit crabs, and dwarf frogs, which require lower initial investment and ongoing expenses compared to traditional pets like dogs and cats.

•   Guinea pigs are social and cost between $10 and $70, needing basic supplies like a cage and food, which can also include vegetable scraps.

•   Sea Monkeys, marketed as instant pets, are inexpensive to maintain, costing around $16 for a kit, and they require minimal care like feeding and occasional water level checks.

•   Rabbits can be adopted or purchased for about $50, with monthly costs for food around $40, and they can live both indoors and outdoors with proper care.

Guinea Pigs

If you’re looking for something cuddly that’s easier on the wallet than a puppy, you may want to consider a guinea pig. These entertaining creatures live about five to seven years, so they also typically require less of a time commitment than a cat or a dog.

A guinea pig can cost anywhere from $10 to $70. If you go for an exotic guinea pig from a local breeder, you can pay up to $120. In addition to the guinea pig, you’ll need to have a cage that has enough room for it to move around and some bedding that will get changed fairly often.

Guinea pig food is relatively cheap — around $15 for a five-pound bag. But these affordable pets can also live off leftover vegetable and fruit scraps.

Guinea pigs thrive as social creatures, so you may want to purchase more than one guinea pig or ensure you’re spending ample time with your furry companion.

Recommended: Ways to Pay for Unexpected Vet Visits

Hermit Crabs

While hermit crabs aren’t cuddly, they can make great pets if you’re looking for a low-key companion that doesn’t require much supervision.

The cost of owning a hermit crab is pretty low (a crab runs around $3 to $25 through a breeder or at a pet store). You’ll also need to get a tank with a vented lid, drinking and humidity sponges, a water dish, climbing wood, and a humidity gauge. Once crabs have outgrown one shell, you’ll need to buy their next, larger shell, which is a small cost.

Hermit crabs need humidity levels between 70% and 80%, which means you’ll need to mist them and their tanks at least once a day to keep these creatures happy and healthy. It’s also important to clean their quarters and change their water often.

Being small creatures, crabs don’t cost much to feed. You can feed these cheap pets vegetable scraps, fruit, or pellet food.

💡 Quick Tip: Want to save more, spend smarter? Let your bank manage the basics. It’s surprisingly easy, and secure, when you open an online bank account.

Sea Monkeys

Sea Monkeys are a novelty pet marketed as “instant pets.” They’re actually a type of brine shrimp sold in kits, usually targeted to children.

Developed in a lab in the 1950s, sea monkeys are sold as packets of eggs that hatch when you add water. These small pets will hatch in a few days and stay alive for about two years. They also reproduce, so you could have a steady supply for some time.

Sea monkey kits, which include the eggs, an aquarium, and growth food, only run around $16. To keep your Sea Monkeys alive, all you need to do is to top up water levels occasionally and feed them once a week.

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Dwarf Frogs

African dwarf frogs are small, completely aquatic, and among the easiest types of frogs to keep as pets. This species can be a good beginner frog for owners who are content to look-only — handling them is not a good idea.

Dwarf frogs grow to around 1½” and live up to five years with good care. They can live in an aquarium alongside docile fish like tetras if you want to own a few creatures.

Besides the frog, which typically only costs around $5, owners of these low-cost pets will need to purchase a tank with a tight-fitting lid (which you may be able to find second-hand), gravel or sand for the bottom, and some decorative hiding spots, such as live or silk plants and small terra cotta plant pots placed on their sides.

Keeping dwarf frogs healthy is really just a matter of making sure that their aquarium water is clean and offering them a proper dwarf frog diet — they like to munch on frozen mysis shrimp, bloodworms, food pellets, and brine shrimp.

💡 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.

Goldfish

Goldfish can add interest to any room, are fun to watch, and pretty low maintenance. The fish themselves usually only run between 20 cents and $5, depending on the type of goldfish.

While you may picture this fish living in a classic goldfish bowl, these days many experts recommend investing in a filtered tank in order to keep their habitat clean. Aquariums with filters and decor aren’t super cheap, but the only additional cost after that is the food. Purchasing a container of fish pellets or flakes will set you back about $5.

To save some money, you may want to search for used equipment at yard sales and thrift stores or through online marketplaces. Once you’ve invested in a tank and decor, these items will last indefinitely and can be re-used for future fish.

Leopard Geckos

These tiny lizards are friendly and fun to have around, and don’t require a lot of upkeep. As with goldfish, the biggest cost is likely to be a habitat. You may be able to save here by buying one second-hand from an online marketplace.

In addition to the cost of the leopard gecko (normal breeds run around $20 to $40) and tank, you’ll also need to get some type of lighting (with an incandescent bulb), a hide-out, and possibly a heat pad, depending on temperatures in your home.

Other than that, you’ll need to regularly feed them a diet of insects, including crickets and waxworms, as well as fresh vegetables and clean water.

Ants

If you’re looking for one of the cheapest pets, that is also low-maintenance, an ant farm may fit the bill. While ants don’t provide bonding or cuddling opportunities, it can be fun and fascinating to watch an ant farm grow, particularly for kids.

Depending on the kit, ant farms will set you back anywhere from $14 to $34 and some include ants (you can also purchase live ants online or at your local pet store).

While kits have traditionally been made from sand, modern ant farms are now often made with a clear, edible gel that lets you watch your ants tunnel much more closely.

After you get the farm and the ants, there isn’t much to do other than making sure you provide water and the occasional bits of food.

Recommended: Dog-Friendly Vacation Ideas — Plus Tips for Traveling with Pets

Canaries

Canaries can be great pets that offer companionship and melodies, and can even learn to do little tricks like playing with a ball or stepping onto your hand. These types of birds live around 10 years and aren’t as expensive as more exotic breeds.

Costs include a cage, small toys, food, and the occasional veterinary visit (if they’re sick). You can purchase canaries from pet stores or breeders — the latter may offer more options depending on where you live.

You could pay around $300 for a bird, so it’s not necessarily the cheapest pet on the list. However, it’s still considered a low-cost pet compared to a dog or cat.

Recommended: How Much Is Pet Insurance?

💡 Quick Tip: When you feel the urge to buy something that isn’t in your budget, try the 30-day rule. Make a note of the item in your calendar for 30 days into the future. When the date rolls around, there’s a good chance the “gotta have it” feeling will have subsided.

Rabbit

While rabbits are as large as some cat and dog breeds, they qualify as a cheap, low-maintenance pet. If you buy a rabbit from a breezer, you can expect to pay around $50 for a non-pedigreed rabbit. However, you may be able to adopt a rescue through the Humane Society or ASPCA for considerably less.

Rabbits also need both hay and veggies, which can run about $40 per month. These fluffy companions will also need a rabbit hutch, but you may be able to find one cheaply through a second-hand marketplace. Or, you can build one yourself.

Rabbits are happy to live outside or in (they can actually be potty trained). If you opt for indoors, you may want to keep in mind that they can chew on wires and furniture legs if allowed to roam free. Some breeds, such as angora rabbits, also require grooming.

These furry friends live about seven to 10 years.

Recommended: 15 Tips to Cut Costs When Traveling with Pets

The Takeaway

Whether furry, feathered, or reptilian, owning a pet doesn’t need to cost a small fortune. As you can see from the list here, there are plenty of cheap pets that are easy to care for and waiting for you to take them home.

Before you make a commitment to a pet, however, you may want to make sure your little companion will fit into your lifestyle and that you have time to take care of it.

And since even an inexpensive pet will add to your household expenses, you may want to start putting some money aside in some type of savings account to cover your start-up and ongoing pet expenses.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.20% APY on SoFi Checking and Savings.

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 4.20% 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 4.20% 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 4.20% 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 10/31/2024. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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

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Aug
08
2024
Understanding Savings Account Withdrawal Limits_780x440

Savings Account Withdrawal Limits

By | Budgeting & Goals, money | Comments Off on Savings Account Withdrawal Limits

Savings accounts sometimes have withdrawal limits, such as no more than six outgoing transactions per month. That’s because savings accounts are fundamentally different from checking accounts, which are designed for everyday spending.

Because money in a savings account is meant to primarily stay put and be added to, it earns interest. Checking accounts, on the other hand, generally offer no interest or a nominal interest rate, as it’s constantly flowing in and out. Due to this distinction, there are sometimes withdrawal limits on savings accounts.

Here, you’ll learn more about savings withdrawal limits, why they exist, when they are applied, and how you might be able to avoid them.

Key Points

•   Savings accounts typically impose withdrawal limits to distinguish them from checking accounts, which are intended for regular transactions and spending.

•   Regulation D historically limited convenient transactions from savings accounts to six per month, though this enforcement was lifted in 2020, allowing banks more flexibility.

•   Many banks still impose withdrawal limits despite the change, potentially resulting in fees or account conversions if exceeded, emphasizing the importance of checking individual bank policies.

•   Only certain transactions, like electronic transfers and debit card purchases, count toward the withdrawal limit, while in-person withdrawals and ATM transactions do not.

•   To avoid exceeding withdrawal limits, use checking accounts for frequent transactions and consider making larger transfers to checking when anticipating more withdrawals.

How Many Times Can You Withdraw From Savings?

“How many times can I withdraw from savings?” is a common question. To help maintain the distinction between checking and savings accounts (and encourage people to save money), bank accounts traditionally come with savings account withdrawal limits. A federal rule called Regulation D used to limit certain types of transfers and withdrawals — known as “convenient transactions” — from a savings deposit account to no more than six a month.

That changed in April 2020, when the Federal Reserve removed the requirement that banks enforce the limit. However, many banks and credit unions have kept restrictions in place. They may charge a fee, transition your account to a checking account, or close it if you go over that amount.

💡 Quick Tip: Typically, checking accounts don’t earn interest. However, some accounts do, and online banks are more likely than brick-and-mortar banks to offer you the best rates.

Earn up to 4.20% APY with a high-yield savings account from SoFi.

No account or monthly fees. No minimum balance.

9x the national average savings account rate.

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Sort savings into Vaults, auto save with Roundups.


Why Is There a Savings Withdrawal Limit?

Savings account withdrawal limits stem from Regulation D, mentioned above, which is a federal regulatory rule that sets standards for how banks and credit unions oversee savings deposits. But why are these guardrails in place? Some points to know:

•  One of the main reasons Regulation D exists is to ensure that banks and credit unions have the necessary amount of cash on hand to always cover customer withdrawals.

•  When you deposit any amount of money in your bank account, the bank uses most of that money for other things, such as consumer loans, credit lines, and home mortgages. (They most likely loan that money at a higher rate than the interest rate they pay you, the savings account depositor. That’s one of the ways banks make money.)

•  Banking institutions, however, face a legal requirement to have cash available to service customers. Withdrawal limitations help protect both banks and consumers.

•  One of the other motivations for Regulation D is to encourage consumers to see their transactional accounts and savings accounts as separate.

•  A savings account ideally encourages long-term savings, whereas checking accounts enable short-term spending. In some cases, these limitations can help motivate consumers to prioritize saving overspending.

Recent Changes in Savings Account Withdrawal Rules

Because of the financial strain caused by the coronavirus pandemic, the Federal Reserve altered the rules regarding Regulation D in April 2020. Currently, depository institutions have the ability to suspend enforcement of the six transfer limit.

Regulation D

As you’ve learned, in the past, Regulation D was in place and enforceable in order to limit the number of transactions flowing out of savings accounts. This encouraged bank customers to keep money in savings accounts, hopefully save for their goals, and allow banks to use the funds on deposit, confident that the money wouldn’t constantly be flowing in and out.

Now, however, financial institutions can allow their customers to make an unlimited amount of convenient withdrawals and transfers from their savings accounts. The word “can” is important here.

Just because banks aren’t required to follow the six transaction limit anymore, however, doesn’t mean they won’t continue to penalize the account holder for going over that limit.

Many banks still enforce caps on the number of convenient transactions customers can make from their savings accounts.

It can be well worth your while to check in with your financial institution and find out what policies are in place regarding savings withdrawal limits.

💡 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.

Which Transactions Apply to the Cash Withdrawal Limit?

Only “convenient transactions” count towards the monthly withdrawal and transaction limits that consumers face when managing their savings account. But what exactly are convenient transactions?

Regulation D sees these types of transactions as convenient transfers:

•  Overdraft transfers

•  Automated clearing house (ACH) transfers, such as bill-pay

•  Electronic funds transfers (EFTs)

•  Transfers made by writing a check to a third party

•  Debit card transactions

•  Transfers or wire transfers made by phone, fax, computer, or mobile device.

Which Transactions Don’t Count Toward the Withdrawal Limit?

While the six transaction limit per month can sound fairly strict, it does not mean account holders can’t access their savings accounts more than six times a month.

Whatever type of savings account you have, there are less-convenient transfers you can make that do not count towards the monthly limit. These include:

•  Withdrawals or transfers made in-person at the bank.

•  Transfers and withdrawals made at the ATM.

•  A withdrawal made by asking the bank to send you a check.

Recommended: ATM Withdrawal Limits

Convenient Transactions

As mentioned above, Regulation D defines convenient transfers to include such transactions as:

•  Transfers, whether by check, electronic funds transfer, overdraft, or other means.

•  ACH transfers

•  Payments made with your debit card.

What If I Go Over The Savings Withdrawal Limit?

The penalty for exceeding the cap set by your bank for savings transactions will depend on your institution.

You may be charged a fee, and even if your financial institution charges a low (or no) fee for exceeding the cap on transactions per month, you may still want to watch how many withdrawals or transfers you make.

The reason: If there are excessive withdrawals from a savings account, financial institutions have the right to convert the savings account into a checking account or even close the account.

Savings Withdrawal Limit Fees

If you are charged a fee for too many convenient transactions, it might be called a “withdrawal limit fee” or “excessive use fee.” These fees tend to run anywhere from $1 to $15 per transaction.

In some cases, you might ask your bank and see if they would waive the fee.

3 Tips to Avoid Hitting Withdrawal Limits

If your financial institution does have withdrawal limits, here are a couple of ways to avoid fees.

Use Your Checking Account

One simple way to avoid overstepping savings account withdrawal limits, is to use your checking account for most of your transactions.

It can be easy to get your accounts mixed up when you are banking online or in an app. By learning which account is which as you transfer funds, you can minimize use of your savings account.

Do a Single Large Transfer to Checking

If you think you will need to use your savings account to make more than six (or whatever your bank’s current transaction limit is) in a given month, consider making one substantial transfer from savings to checking at the beginning of the month.

You can then arrange to have your withdrawals or automatic bill payments taken right out of checking.

Try Work-Arounds If You Get Close to Your Limit

If you are already at your limit, you can avoid penalties by visiting the bank in person or using the ATM to initiate withdrawals or transfers from your savings account. (You may want to make sure, however, that you’re not triggering any out-of-network ATM charges.)


💡 Quick Tip: When you feel the urge to buy something that isn’t in your budget, try the 30-day rule. Make a note of the item in your calendar for 30 days into the future. When the date rolls around, there’s a good chance the “gotta have it” feeling will have subsided.

Opening a Bank Account with SoFi

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 4.20% APY on SoFi Checking and Savings.

FAQ

How much can you withdraw from your savings account?

Individual banks set limits about withdrawals, both the number and the amount, often according to method (such as ATM withdrawals). Check with yours to learn the specifics.

Why can you only withdraw 6 times from savings?

Regulation D set the number of convenient transactions out of a savings account at six to encourage people to save and to leave their funds in the account, earning interest. The bank, in turn, could count on having a significant amount of those funds to use in their business activities.

Can banks stop you from withdrawing money?

Your bank account can be frozen, which will stop you from withdrawing money. Your bank may do this if they think illegal activity is occurring, or if a creditor or the government requests it.


SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
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SoFi members with direct deposit activity can earn 4.20% 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 4.20% 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 4.20% 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 10/31/2024. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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

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