Feb
19
2025
How Do Negative Interest Rates Work?
Negative interest rates mean borrowers could be rewarded for taking out loans. Here’s an explanation of other effects negative rates might have.
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Feb
14
2025
Inactivity Fees: What They Are & Ways to Avoid Them
Sometimes, a financial account like a checking account will sit dormant, or unused, for an extended period, and an inactivity fee will be charged. Usually, a bank, credit union, or other financial institution will start to assess an inactivity fee after six months of no activity in the account. However, some banks may wait up to a year before applying inactivity fees to the account.
To better understand and steer clear of this annoying fee, read on. Below, we’ll explore how inactivity fees work, including how much they cost and how to avoid or reverse these fees.
Key Points
• Inactivity fees are charges for accounts with no transactions over a certain period of time.
• Regular account activity prevents inactivity fees and helps you stay on top of your finances.
• An easy way to avoid inactivity fees is to set up a recurring transaction, such as direct deposit of your paycheck or automatic bill pay.
• After prolonged inactivity, banks may close accounts and transfer funds to the state.
• Reclaiming escheated funds is possible but may involve additional effort.
What Is an Inactive Account Fee?
Banks or other financial institutions apply inactivity fees or dormancy fees when financial accounts just sit, without money going in (deposits) or out (withdrawals). Perhaps the account holder isn’t conducting any kind of activity at all; not even checking the balance for a stretch of time.
Financial institutions can apply these inactivity fees to all sorts of accounts, like brokerage or trading accounts, checking accounts, and savings accounts. These fees are a way for banks to recoup some of the costs they incur when maintaining dormant accounts and can trigger the account holder to reactivate the account.
Recommended: What Happens if a Direct Deposit Goes to a Closed Account?
How Do Inactive Account Fees Work?
Here’s a look at the sequence of events that can lead to inactivity fees:
1. No transactions occur within the account. Let’s say you opened a high-yield savings account to fund your next vacation. But life got in the way, and you forgot about it for six months, leaving it inactive. Keep in mind, the definition of inactivity may vary by the financial institution. So, while some banks may only require you to conduct a balance verification to keep the account active, others may require, say, a bank deposit or a withdrawal, to keep the account active.
2. The account is flagged for inactivity. Since money isn’t flowing in or out of the account, the financial institution flags the account. After this happens, some financial institutions may send a notification to the account holder before they begin charging a fee. The notice allows the account holder to take action before fees begin racking up. But other banks may not send a notification before they begin charging you inactivity fees. That means you are responsible for keeping tabs on your accounts so you can ensure they are active and up-to-date.
3. The financial institutions begin charging inactivity fees to the account. Usually, the financial institutions will begin charging an inactivity fee between several months to a year after the last transaction took place within the account.
If these fees go unnoticed for a few years, the account will be deemed a dormant bank account. Every state has a different timeline for determining when accounts are dormant. For example, California, Connecticut, and Illinois considered accounts dormant after three years of inactivity. On the other hand, an account requires five years of inactivity in Delaware, Georgia, and Wisconsin to move to the dormant category.
Once the account is considered dormant, the financial institution will reach out to let you know that if you don’t attend to the account, it must be closed and transferred to the state — a process called escheatment. But, even if your account funds end up with the state, the situation isn’t hopeless. There are several ways to find a lost bank account and hopefully retrieve any unclaimed money.
How Much Do Inactive Account Fees Cost?
Inactive account fees can range between $10 to $20 per month, depending on the bank.
Remember, not all banks charge inactivity fees. However, if your account does have inactivity or dormancy fees, guidelines must be outlined in the terms and conditions of the account. Check the fine print or contact your financial institution to learn the details of these and other monthly maintenance fees.
Why Do Banks Have Inactive Account Fees?
One of the primary reasons banks why charge inactivity fees is that states govern accounts considered inactive and abandoned. Usually, an account that has had no activity for three to five years is considered abandoned in the eyes of the government.
Depending on the state’s laws, the financial institution may have to turn over the funds to the Office of the State treasurer if the account is deemed abandoned. At this point, the Office of The State Treasure is tasked with finding the rightful owner of the unclaimed asset.
Since banks do not want to hand over funds, they may charge an inactivity fee as a way to keep the account active. Thus, the financial institution won’t have to give the account to the state, keeping the money right where it is.
Additionally, inactive accounts cost financial institutions money. So, to encourage the account holder to start using the account, they charge inactivity fees. While some financial institutions send inactivity notices, others may not. Therefore, if your account has been inactive for a long time, you may only notice the fee once your bank account is depleted. At this point, the financial institution may choose to close the account.
Recommended: Can You Reopen a Closed Bank Account?
Can You Reverse an Inactive Account Fee?
It never hurts to call your bank and request a reversal of inactivity fees. However, if the financial institution is unwilling or unable to reverse the fees, you may want to compare different account options to find a type of deposit account that better suits your needs.
Make sure to compare all fees and any interest rates that might be earned to identify the right account for your needs.
Tips to Avoid Inactive Account Fees
Inactive account fees are a nuisance. Fortunately, there are several ways you can avoid them entirely. Here’s how:
• Set up recurring deposits or withdrawals. Establishing a direct deposit into your account or regular transfer out of your account can help keep it active and avoid inactive account fees.
• Review accounts regularly. Checking your financial accounts and spending habits regularly can help you keep tabs on your money and also decide if keeping a specific account open is worth it.
• Keep contact information up-to-date. If your account becomes inactive, some banks may attempt to contact you before charging you an inactive account fee. If you have the wrong information on file, you may never receive a heads-up about the additional fee.
• Move money to another account. If you don’t want to maintain an account, it’s best to move the money to an account you actively manage. Then close the account once the money has been transferred. That way, you’ll dodge fees and streamline your financial life.
The Takeaway
When you don’t use an account, your financial institution could begin assessing an inactivity fee. You can avoid these charges by keeping watch of your bank accounts and setting up automatic deposits or withdrawals. If you discover you’re not using your account, you can empty and close it, so you don’t have to worry about extra fees.
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.
FAQ
Can a bank shut your account down if you have an inactive account fee?
Yes. If there has been no activity on your account for a while (the timeframe varies by financial institution), your bank generally has the right to close your account. Plus, it’s not required that they notify you of the closure.
Are inactivity fees the same as dormancy fees?
Yes, inactive and dormancy fees are the same. They both refer to fees that are applied to an account when it’s inactive for an extended time.
Besides inactivity fees, what other fees do banks often charge?
ATM fees, maintenance fees, overdraft fees, and paper statement fees are just a few fees banks levy on their bank accounts. Before you open an account, make sure you understand the type of fees that accompany your account, so there are no surprises down the road.
About the author
Ashley Kilroy
Ashley Kilroy is a seasoned personal finance writer with 15 years of experience simplifying complex concepts for individuals seeking financial security. Her expertise has shined through in well-known publications like Rolling Stone, Forbes, SmartAsset, and Money Talks News. Read full bio.
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Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning 3.80% APY, we encourage you to check your APY Details page the day after your Eligible Direct Deposit arrives. If your APY is not showing as 3.80%, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning 3.80% APY from the date you contact SoFi for the rest of the current 30-day Evaluation Period. You will also be eligible for 3.80% APY on future Eligible Direct Deposits, as long as SoFi Bank can validate them.
Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi members with Eligible Direct Deposit are eligible for other SoFi Plus benefits.
As an alternative to Direct Deposit, SoFi members with Qualifying Deposits can earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.
SoFi Bank shall, in its sole discretion, assess each account holder’s Eligible Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving an Eligible Direct Deposit or receipt of $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Eligible Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Eligible Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Eligible Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Eligible Direct Deposit or Qualifying Deposits until SoFi Bank recognizes Eligible Direct Deposit activity or receives $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Eligible Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Eligible Direct Deposit.
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Members without either Eligible Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, or who do not enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days, will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
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SOBNK-Q125-015
Read moreFeb
13
2025
Silver Certificate Dollar Bills: What Are They Worth?
Silver certificates are a type of money, or paper bill, issued by the United States government between the years 1878 and 1964.
Although they resemble ordinary currency, and can still be used as legal tender, silver certificate bills are generally worth more than their face value. How much more depends on the type, the size, and several other factors. The rarer the certificate, the higher its likely value. In some cases, certain unusual or historic silver certificates may be worth large sums at auction.
Silver certificates are more like collectibles, in that their value can also fluctuate based on demand or trend factors. There is also the risk of fraud, and it’s wise to consult a professional before buying or trading silver certificates.
Key Points
• Silver certificates, issued from 1878 to 1964, are a unique form of U.S. currency that could, at one time, be exchanged for silver.
• They can now be used as legal tender, and are typically worth above face value, sometimes a lot more, depending on rarity.
• Two types of silver certificates exist: large (pre-1929) and small (1929-1964) certificates, differing in size and production period.
• Value depends on condition, age, denomination, serial number, design, with some rare certificates fetching thousands at auction.
• Preservation involves using protective sleeves and storing in cool, dry, dark places to maintain condition.
What Are Silver Certificates?
Silver certificates, which were issued only between the years 1878 and 1964, could at one time be redeemed for their designated amount in silver: either coins or silver bullion.
History of Silver Certificates
Silver certificates are no longer printed or produced by the U.S. Mint, and haven’t been since the mid-1960s. As such, they’re somewhat rare, and may be worth more than their face value. Each series of silver certificates displays its own combination of design flourishes and security elements that also reflect artistic trends of the day, as well as technological developments.
The Mint stopped producing silver certificates in 1964 after Congress passed a law repealing the Silver Purchase Act — which had allowed certificates to be exchanged for silver. They were gradually replaced by Federal Reserve notes, which solidified the era of fiat currency: legal tender not backed by a precious metal, but rather the U.S. government’s guarantee.
Uses for Silver Certificates
Silver certificates can, however, still be used as cash even today. Depending on the type of silver certificate, they may vary slightly in appearance from other bills, but they are considered legal tender.
For collectors or investors, silver certificates may be considered a type of alternative investment, similar to collectibles like art, rare books, and antique sports cards. While they aren’t necessarily high-risk investments, silver certificates are beholden to certain risk factors, like potential fraud from counterfeit certificates, as well as a lack of transparency in the market for these items.
At this time, SoFi does not offer silver certificates.
💡 Quick Tip: How do you decide if a certain online trading platform or app is right for you? Ideally, the online investment platform you choose offers the features that you need for your investment goals or strategy, e.g., an easy-to-use interface, data analysis, educational tools.
Types of Silver Certificates
Generally speaking, there are two types of silver certificates: Large and small silver certificates. The description actually refers to when the certificates were produced, as well as the difference in their physical dimensions. Because silver certificates are basically a type of collectible — in that their value isn’t derived from their face value — they fall under the rubric of alternative assets.
Large-Size Silver Certificates (pre-1929)
Large silver certificates are, as the name suggests, physically larger than small silver certificates, and measure around seven inches long by three inches wide. These certificates were produced between 1878 and 1923, and came in nine denominations, ranging from $1 to $1,000.
Small-Size Silver Certificates (1929-1964)
Small silver certificates conform to modern bill sizes, measuring at a bit more than six inches long, and two-and-a-half inches wide. They were produced beginning in 1928, after the Mint redesigned bills, and were printed until 1964. They come in only three denominations: $1, $5, and $10. And, like their modern standard counterparts, they feature portraits of either George Washington, Abraham Lincoln, or Alexander Hamilton.
Recommended Comprehensive Guide to Alternative Investments
Factors Affecting the Value of Silver Certificates
There are quite a few variables that ultimately determine the value of a silver certificate today, just as there are a range of factors that impact the value of various types of stocks.
Perhaps the most important is the physical condition of the silver certificate itself, or “grading,” as numismatics would say. Similar to collecting rare coins, there are professionals who assess the condition of paper money and bills, and give them a specific grade to convey that condition.
The grade includes a number between one and 70 (70 indicates that the bill is in mint condition), and a letter, signifying that it is either in good, very good, very fine, extremely fine, about uncirculated, or gem uncirculated condition. The absolute best condition you could hope for would be a “70 Gem Unc.”
Beyond the condition and grade of a silver certificate, the value can be affected by its age, its denomination, and even its serial number, or whether or not it contains a minting error (bills with errors are rarer than those without errors, increasing their value to collectors). Further, where a bill was produced can affect its value, as can its specific design — again, some are more scarce than others.
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Common Silver Certificate Denominations and Their Worth
The most common silver certificate denominations on the market are $1, $5, and $10 varieties, although older bills may come in a wider range of denominations. And while their values depend on some of the factors discussed (most importantly, their grading), potential investors or collectors may want a ballpark figure of what they might pay to get their hands on one — or what they could reap if they were to sell it.
It’s likely worth it to speak with a specialist or numismatist to get a more accurate valuation of a specific bill.
• $1 silver certificates: Depending on the certificate (grading, year, etc.), $1 silver certificates may be worth a bit more than their face value, or they could be worth hundreds of dollars.
• $5 silver certificates: For the more common $5 silver certificates on the market, values are likely to be somewhere between 10% and 30% above face value. But again, some may be worth much more, into the hundreds of dollars, for rarer bills.
• $10 silver certificates: Values for common $10 silver certificates are similar to $5 varieties, typically 10% to 30% above face value. For specific, rare certificates, the values could be much higher.
Owing to the wide range of factors that come into play regarding the actual current value of a silver certificate, it may be best to consult with a professional before buying, trading, or investing in silver certificates.
💡 Quick Tip: Because alternative investments tend to perform differently than conventional ones, even under the same market conditions, alts may help diversify your portfolio, mitigate volatility, and provide a hedge against inflation.
Rare and Valuable Silver Certificates
As mentioned, there are some rare and more valuable silver certificates out there, too. While the more common certificates are not worth much more than their face value, these hard-to-find bills can fetch hundreds, or even perhaps thousands of dollars from the right buyer. Here are a few examples.
• 1896 $1 Silver Certificate Educational Series: Featuring an elaborate design and portraits of George and Martha Washington, this rare bill has sold for as much as $10,000.
• 1886 $5 Silver Certificate (Ulysses S. Grant): This certificate, featuring a portrait of Ulysses S. Grant on the front, is another old, rare bill. These specific certificates often sell for as much as $50,000 at auction, and sometimes more.
• 1891 Series $20 Silver Certificate: This bill has a portrait of Daniel Manning, and there are only a handful of them that still exist. Given its rarity, these bills can sell for as much as $50,000 at auction.
How to Determine the Value of Your Silver Certificate
Determining the value of a silver certificate isn’t easy, and may best be left up to professional numismatists to ensure you’re getting an accurate estimate. But you could begin by trying to assess the grade yourself — that is, determining the overall condition of the bill. Again, this may not be easy to do, but if the bill is damaged in specific ways, you may be able to use a grading guide to help you figure things out.
Beyond that, you can also look up the specific mintage or production information to get a sense of how rare a certificate is. That may also help you get a ballpark idea of the value of your certificate. But again, you may want to go to a professional — perhaps at a local coin shop or auction house — to get a professional appraisal, or more information.
Collecting vs. Investing in Silver Certificates
Perhaps the primary difference between collecting and investing in silver certificates is that investors are actively trying to generate a positive return. So, while a collector may be willing to pay higher prices, or even lose some money in order to get their hands on a specific silver certificate, an investor looking at various types of alternative investments likely won’t be willing to do the same, owing to the lack of transparency and liquidity.
Recommended: Why Alternative Investments?
Where to Buy and Sell Silver Certificates
Whether you’re collecting or investing in silver certificates, there are many online stores or retailers that sell silver certificates, and there are even auction houses that may offer the chance to buy rarer bills. Many physical coin or bullion stores may have silver certificates available for purchase, too, and be willing to buy them as well.
Preserving Silver Certificates
In order to keep silver certificates safe and their condition intact, it’s best to try and put them in some sort of protector, and control the environment in which they’re stored. That means likely purchasing currency sleeves — which can be purchased from many retailers — made of rigid plastic. That will help protect the bill from physical damage.
But you’ll also want to aim to keep your silver certificates in a place that is relatively cool, dry, and dark. Heat, humidity, and direct sunlight can and will damage paper bills, so if you can find a safe spot to keep them, it should help keep their integrity for longer.
The Takeaway
Silver certificates are paper bills that, at one time, could be exchanged for silver coins or silver bullion. They have not been produced since the mid-1960s, and as such, are something of a rarity on the market today — although they can still be used as legal tender to make purchases. Some are rarer than others, naturally, and can have higher values, and that’s made them attractive to investors and collectors alike.
Ready to expand your portfolio's growth potential? Alternative investments, traditionally available to high-net-worth individuals, are accessible to everyday investors on SoFi's easy-to-use platform. Investments in commodities, real estate, venture capital, and more are now within reach. Alternative investments can be high risk, so it's important to consider your portfolio goals and risk tolerance to determine if they're right for you.
🛈 SoFi does not offer silver certificate dollar bill investments, but it does offer alternative investment funds, which may provide access commodities, venture capital, real estate assets, and more.
FAQ
Can silver certificates still be redeemed for silver?
No, silver certificates can no longer be redeemed for silver coins or bullion, but can be used as legal tender to conduct transactions — or bought as a collectible.
What makes some silver certificates more valuable than others?
The primary variables that determine the value of a silver certificate are its denomination, grade, age, and mintage or production information — in general, the rarer a bill, the higher its value.
How do you determine if a silver certificate is genuine?
The best thing to do in order to determine whether a silver certificate is genuine or not is to take it to a professional numismatist.
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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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Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.
SOIN-Q424-049
Read moreFeb
13
2025
How to Invest in Platinum
Platinum is one of several precious metals, including silver and gold, that tend to have high relative values, which can make them attractive to investors. Investing in platinum, likewise, isn’t all that different from investing in other precious metals, and investors can generally add platinum to their portfolios by purchasing bullion (or, the metal itself), purchasing stocks that are involved in the mining or production of platinum, or through funds that may offer exposure to the precious metals market.
Investors may turn to platinum for a number of reasons, such as the potential to see gains or as a possible hedge against inflation. But, as with any alternative investment, there are additional risks and considerations investors should take into account before adding platinum to their portfolios.
Key Points
• Platinum can be added to investment portfolios through physical purchases, mining stocks, or funds offering exposure to precious metals.
• The metal’s value is influenced by supply, demand, and economic factors, including its use in vehicles and electronics.
• Investing in platinum can offer diversification and potential protection against inflation, but involves risks due to price volatility.
• Physical platinum requires secure storage and may be harder to sell compared to stocks or funds.
• Tax implications vary, with physical platinum classified as a collectible, potentially incurring a 28% capital gains tax rate.
Understanding Platinum as an Investment
Platinum is a precious metal, which has a shiny metallic appearance, similar to silver. In fact, the moniker “platinum” comes from the Spanish word “platina,” which translates to “little silver.” It’s been mined and traded for hundreds of years, too, particularly in pre-Columbian South America, and was initially taken to European markets in the mid-1700s. It’s even been found in ancient Egyptian tombs, too. Today, a majority of platinum is mined in South Africa.
It’s commonly used to produce jewelry — again, because of its striking visual appeal — but is also used to produce some auto parts like catalytic converters, in chemical production, and to create computer and electronics components. Additionally, it’s used to produce a host of other products, including wind turbines and even dental fillings. It’s a versatile metal, but it’s largely due to its visual aesthetics that it carries a lot of value.
And that value is mostly tied to the fact that it’s scarce – scarcer even than gold, in fact. Since the mid-1700s, roughly 10,000 cubic tons of platinum have been mined, out of an estimated 70,000 total. So, platinum’s relative scarcity — meaning that it could go up in value in the future (or not, of course!) — is what primarily makes it attractive to investors as an alt investment.
Ways to Invest in Platinum
For investors who are interested in investing in platinum, there are a few primary ways to do it: By purchasing physical platinum, buying shares of funds that may add exposure to platinum to their portfolios, or by purchasing shares of mining companies that may be involved in platinum production. It’s not much different, really, from the types of assets you might consider when determining how to invest in gold or another alternative investment.
In addition, some investors may choose to invest in the precious metal through platinum futures, derivative contracts to buy or sell an asset at a future date for a set price. (Note that SoFi does not offer futures trading at this time.)
Read more: Guide to Alternative Investments
Physical Platinum
Purchasing physical platinum can include buying bullion, examples of which may be bars or coins. Effectively, platinum bullion is solid (or near solid) platinum, valued for its weight, rather than an assigned monetary value (such as a quarter from a mint that’s used for transactions) or its numismatic value (i.e., its value to collectors based on factors such as its rarity and condition).
Bullion coins can be purchased in different sizes, such as one ounce, one-half ounce, and one-quarter ounce . Bars, too, are generally sold by the ounce – one ounce, ten ounces, etc. – and can be purchased through the United States Mint, at coin and bullion dealers’ online shops or stores, and at certain retailers such as Walmart and Costco. Investors may also buy platinum jewelry from jewelers or other retailers.
Platinum ETFs and Mutual Funds
If buying physical platinum isn’t exactly what investors are looking for, they may look at fund options — that can include exchange-traded funds (ETFs) or mutual funds that are focused on or concentrated in the platinum market. There are numerous platinum-focused funds on the market, though each will vary in terms of costs, risks, price-per-share, and individual holdings or allocations. As such, investors should do their due diligence and research the particular funds they’re considering before investing.
💡 Quick Tip: How do you decide if a certain online trading platform or app is right for you? Ideally, the online investment platform you choose offers the features that you need for your investment goals or strategy, e.g., an easy-to-use interface, data analysis, educational tools.
Platinum Mining Stocks
Investing in stocks of companies that are involved in platinum mining or production is another option for investors. Like platinum-focused funds, there are many companies that mine platinum, each with their own individual risks and potential upsides. It’s up to investors to do their homework to weigh the pros and cons and consider how these stocks fit within their overall investment strategy before making a choice.
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Factors Affecting Platinum Prices
Platinum prices are subject to numerous factors, like other precious metals. The largest, however, is supply and demand — as simple as it is, the more that platinum is in demand, the higher its value tends to be. Supply and demand, of course, is influenced by a large set of variables that include how much and often platinum is being used by manufacturers, or even if platinum jewelry experiences a moment of popularity.
In recent years, platinum has seen an increase in demand due to an uptick in electric and hybrid vehicle production, for example. But it’s also been influenced by power outages in South Africa, where most mining takes place, as well as military conflicts and wars in Europe.
Economic factors can also play a role. For instance, some investors crowd into precious metals investing if they feel that a recession is on the horizon or if inflation becomes an issue. That’s because precious metals are often seen as a powerful store of value and a hedge against inflation — though whether or not that’s true is, itself, dependent on other factors.
Advantages of Investing in Platinum
There can be potential advantages of investing in platinum, as noted. For one, adding platinum or other precious metals to your portfolio can add an element of diversification. That is, if your portfolio already contains a good mix of other investment types — which may include stocks, bonds, ETFs, mutual funds, and more — precious metals may be yet another asset class that can help diversify it even further.
Additionally, as mentioned, it’s possible that investing in platinum or other precious metals may help a portfolio retain value if the markets see a dip, or if inflation goes up. Likewise, there’s always the possibility that platinum prices could rise in the future, helping a portfolio’s overall value increase as well — but there are no guarantees.
Read more: What are Alternative Investments?
Risks and Challenges
While there are some advantages to investing in platinum and precious metals, there are risks and other considerations that investors need to take into account to determine if precious metals may be a good investment choice for them.
For example, precious metal values — including platinum — are notoriously volatile. That means that one day platinum prices may look like they’re heading to the moon, and the next, they’re cratering. Investors who don’t have much of an appetite for risk may want to consider whether they can handle wild price swings.
On top of that, if investors are buying physical platinum, they’ll need a safe place to actually store it, where it won’t be affected by environmental conditions, or even tempt thieves. It could also be a bit more of a chore to sell physical platinum, as well, as it’d require at the very least a trip to a trusted coin store or finding a reputable buyer online.
How to Buy Physical Platinum
Buying physical platinum is fairly easy. Investors can find numerous online retailers that sell platinum and other precious metals, and buy through those channels. That includes the United States Mint, which produces and sells platinum coins. Investors can also visit coin or bullion shops in their local markets to see what platinum options are available.
Investing in Platinum Through the Stock Market
Investing in platinum through the stock market is likewise fairly straightforward, as it involves simply selecting the company or fund you want to buy shares in, and executing a trade. But the important part of the trade is doing due diligence before investing.
That means looking at a stock or fund’s financial statements and history of returns, where it’s being operated and by whom, and much more. It’s effectively the same process as investing in any other asset — doing some initial research and analysis of the fundamentals in order to make a choice that aligns with your investment strategy.
Tax Implications of Platinum Investments
Figuring out tax liabilities generated from platinum investments generally boils down to calculating any capital gains on those investments. If you invest in physical platinum, the IRS considers or classifies it as a collectible. So, if you sell it after holding it for more than a year, you may be subject to a 28% capital gains tax rate.
However, if you’ve invested in platinum-focused funds or stocks, there may be other tax implications, and potentially, a different capital gains tax rate. As such, it may be best to touch base with a financial professional to help you figure out exactly what the tax implications of your platinum investment might be.
Comparing Platinum to Other Precious Metals
Platinum is just one of several precious metals that investors often set their sights on, the others being gold, silver, and palladium. They each have their own unique properties, uses, and potential upsides and risks.
Their prices vary over time and, at times in the past, platinum has actually been more expensive than gold, given its rarity. Typically, however, gold is the most expensive per ounce of the four, while investing in silver is typically the cheapest — platinum and palladium lie somewhere between the two.
It may help to review the gold/silver ratio to better understand the pricing differences. Again, depending on an investor’s strategy and how much risk they’re willing to take on, looking at options for each precious metal may be worth the effort.
The Takeaway
Platinum is one of four main precious metals that investors typically focus on. The rare metal has a number of industrial uses, and is valued for its use in jewelry, given its aesthetic and physical qualities.
Platinum investments may be advantageous in that they can diversify a portfolio and act as a hedge against inflation, but precious metal values are typically volatile, and investors would do well to do their research before buying physical assets, or investing in related funds or stocks.
Ready to expand your portfolio's growth potential? Alternative investments, traditionally available to high-net-worth individuals, are accessible to everyday investors on SoFi's easy-to-use platform. Investments in commodities, real estate, venture capital, and more are now within reach. Alternative investments can be high risk, so it's important to consider your portfolio goals and risk tolerance to determine if they're right for you.
FAQ
What are the different forms of platinum investments available?
Investors can buy physical platinum — such as bars or coins — or invest in funds that focus on platinum. It’s also possible to invest in companies that operate in or around platinum mining and production.
How does platinum pricing compare to gold and silver?
Gold is typically the most expensive precious metal per ounce, while silver is generally the least expensive. Platinum (and palladium) prices are often between the two, with platinum prices, as of mid-February 2025, around $1,001 per ounce.
What factors influence the platinum market?
Platinum values and the overall market can be influenced by a number of factors, including general supply and demand, industrial need, economic strength, and more.
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Read moreFeb
13
2025
What Is a Certificate of Deposit?
A certificate of deposit (or CD) is considered a type of savings account, but a CD locks up your money for a fixed time period in exchange for a higher rate of interest than a standard savings account.
While a savings account allows you to access your cash at any time, you typically purchase a CD for a set period of time during which you can’t withdraw the funds without paying a penalty. Typical CD terms can vary from one month to five years, but can be even longer.
Here’s a closer look at how CDs work, how they compare to other savings vehicles, and their pros and cons.
Key Points
• CDs require you to lock your money up for a set period of time and offer higher interest rates compared to standard savings accounts.
• CDs are insured by the FDIC, ensuring the safety of the deposited funds.
• Withdrawing funds from a CD before maturity typically results in financial penalties.
• If not withdrawn at maturity, CDs typically auto-renew, continuing the investment.
• High-yield savings and money market accounts serve as flexible alternatives to CDs.
Is a Certificate of Deposit Just a Savings Account?
A CD has some similarities to a savings account, but several differences. It’s a financial product designed to help consumers save their money, and because CDs typically pay a fixed rate of interest, they can offer savers a predictable return over time.
However, unlike a savings account, CD holders aren’t able to access the funds in their account whenever they feel like it — at least not without paying an early withdrawal penalty, (in most cases). CD holders are also not allowed to deposit more money into an existing CD, generally speaking, although they can buy another CD.
In exchange for giving up the ability to freely withdraw the money in a CD, the institution rewards CD holders with higher interest rates than they’d see in a typical savings account.
What Is APY vs Interest Rate?
An annual percentage yield, or APY, on a CD or savings account tells you how much interest you’ll earn on your money over one year. It includes the interest on the initial deposit, plus the interest on the interest that accumulates, which is called compound interest. An interest rate, on the other hand, only accounts for interest earned on the original amount.
An APY helps you avoid complicated calculations and compare different savings options to find the best yield. Longer term CDs generally pay higher APYs. However, that is not always the case, so it’s important to shop around and compare APYs and terms to find the best CD for your needs.
What Is a Jumbo CD?
A jumbo CD requires a higher minimum deposit than that required by regular CDs, typically $100,000 or more. In return for tying up a large sum of money, jumbo CDs tend to pay higher rates.
Like regular CDs, jumbo CDs are considered risk-free investments, as they’re typically insured up to $250,000 by the Federal Deposit Insurance Corp. (FDIC). CDs offered by credit unions have the same protection under the National Credit Union Administration (NCUA).
Recommended: Are Certificates of Deposit Worth It?
How Does a Certificate of Deposit Work?
When a customer goes to open a CD they’ll be asked to put down a lump sum, often a minimum of $500 to $1,000.
The initial deposit placed in a CD is called the principal, because it is essentially a loan the consumer is offering to the bank. The interest the customer collects is what the bank pays for the privilege of borrowing their money.
Certificates of deposit also carry a “term,” much like a loan does; the term is the amount of time the funds must be left in the CD in order to glean the advertised interest rate. The term might be as short as a few months or as long as a decade. The day the term is over is also known as the CD’s maturity date.
Long story short: When opening a CD, a customer deposits a set amount of money for a set amount of time and agrees to leave it untouched in return for a relatively high fixed APY they’ll earn on the principal once the CD matures.
But how high, exactly, are the rates we’re talking about?
Certificate of Deposit Rates
Certificates of deposit are attractive savings options because they usually offer higher rates than the traditional savings accounts, but are also a lower-risk option than, for example, investing in the stock market.
Since funds in CDs are FDIC-insured, account holders can rest with some assurance that their cash won’t simply disappear (as it might when invested in shares of a company).
As of February 2025, the national average rate for a normal savings account is 0.61% APY, whereas the national average rate for a 12-month CD is 1.83% APY. The national average rate for a 60-month CD is about 1.53%. Online banks typically offer higher rates for savings accounts, and it’s possible to find CDs with higher than the average rates by shopping around.
But it’s possible to find CDs with even higher rates than that by shopping around.
Certificate of Deposits: Fine Print
There are a few more things it’s important to know about CDs before deciding to open one.
Generally, CDs automatically renew once the term is up if the account holder doesn’t take the money out. The bank will typically roll over the existing CD into a new CD with the same term, though the APY may be different. (For example, a one-year CD whose funds aren’t collected on the maturity date would be rolled over into a new one-year CD.)
Most financial institutions offer CD holders a grace period, or a fixed amount of days after the maturity date, during which the account holder can decide whether to withdraw the funds, transfer them to a new account or CD, or allow them to roll over.
Finally, but importantly, most CDs are generally subject to an early withdrawal penalty, which is incurred if the money is accessed prior to the maturity date. Early withdrawal penalties are determined by each financial institution. Depending on the policy, account holders could lose out on interest, or even lose some of their principal deposit.
Recommended: Reasons Why It’s So Hard to Save Money Today
Certificates of Deposit: Pros and Cons
CDs can play an important role in an overall savings strategy because they balance growth and risk management. But as with any financial product, CDs have both drawbacks and benefits, which should be considered carefully before opening one.
Pros of CDs
• Because CDs are FDIC-insured, they’re a relatively low risk account. The FDIC insures up to $250,000, which means if an FDIC-insured institution goes out of business, account holders with a CD would receive their principal and interest, up to $250,000.
• Higher interest rates are available for CDs than for traditional savings accounts, making it easier to see a higher return on investment.
• For savers who are worried about spending down their savings, a CD provides a safe place to place cash, where it’s locked up for a certain period of time.
Cons of CDs
• Although CDs carry higher interest rates than some other types of savings vehicles, they don’t have the same kind of earning potential that stock market investments can have. By investing your money in a CD you’re losing out on potentially much higher market returns (but you’re also protected from market risk).
• CD holders generally don’t have the ability to withdraw their money at any time, at least without being subject to a penalty. That makes a certificate of deposit a poor choice for certain savings goals, like an emergency fund, which should be readily available.
• Savers will owe taxes on the earnings in the account, which effectively lowers the amount you earn. Be sure to take this into consideration shopping around for the best APY.
Where to Open a Certificate of Deposit
Certificates of deposit are available from a wide variety of financial institutions, including national and regional banks, credit unions, and some online-only financial institutions.
Shopping around can help ensure consumers find the best rates and most favorable terms for their needs.
That said, there are also some alternatives to opening a certificate of deposit that are worth considering carefully.
Alternatives to Opening a Certificate of Deposit
Although CDs can be a great way to earn interest, they’re far from the only high-interest account option out there. Here are a few options to mull over.
High-Yield Savings Accounts
Although typical savings accounts offer a relatively low interest rate, high-yield savings accounts are available from some banks. This option helps consumers combine growth potential with the ability to access their money as they need it, and can be a good alternative to CDs for those who aren’t ready to lock away their money for many months or years.
Certain high-yield accounts may offer a higher APY. However, there may be fine print involved requiring that savers meet certain terms in order to maintain that rate, such as making a minimum number of transactions per month or maintaining a minimum account balance.
It’s a good idea to review all the account terms carefully before opening any kind of financial account.
Money Market Accounts
Money market accounts are another option which, similarly to CDs, tend to offer higher interest rates than your typical savings account does. And unlike CDs, money market account holders are generally allowed to write checks or process debit transactions against their funds, which are still covered by FDIC insurance.
While money market accounts can earn higher interest rates than traditional savings accounts, there may be monthly restrictions on the number of deposits and withdrawals. Money market accounts may also require a high minimum balance in order to avoid monthly fees.
Stock Market Investments
Finally, for consumers focused on growing their money in the long-term, investing in the stock market can provide a lot of potential for growth. Historically, the S&P 500 — an index tracking 500 of the largest corporations in the U.S. — has seen an average annual return of 11.7% over the last decade.
Of course, an investment account is very different from a savings account or CD in that there is no FDIC insurance on the funds. Investments in the stock market are vulnerable to market fluctuation, and there’s no guarantee that investments will be safe and make money. It is important to remember that investments have no guarantee and are subject to potential losses.
That said, many financial professionals and advisors still recommend long-term investing as one of the best ways to grow wealth over time and as a part of an overall plan for long-term financial goals like retirement.
The Takeaway
A CD is a type of savings account that pays a fixed interest rate on money held for an agreed-upon period of time. Investing in a CD can be a good choice if you’re looking to put aside money for a set period of time and earn more than you could in a regular savings account. If you’d prefer to have more access to your funds, however, a money market account or high-yield savings account could be a better choice.
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.
🛈 While SoFi does not offer Certificates of Deposit (CDs), we do offer alternative savings vehicles such as high-yield savings accounts.
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SoFi members with Eligible Direct Deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below).
Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning 3.80% APY, we encourage you to check your APY Details page the day after your Eligible Direct Deposit arrives. If your APY is not showing as 3.80%, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning 3.80% APY from the date you contact SoFi for the rest of the current 30-day Evaluation Period. You will also be eligible for 3.80% APY on future Eligible Direct Deposits, as long as SoFi Bank can validate them.
Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi members with Eligible Direct Deposit are eligible for other SoFi Plus benefits.
As an alternative to Direct Deposit, SoFi members with Qualifying Deposits can earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.
SoFi Bank shall, in its sole discretion, assess each account holder’s Eligible Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving an Eligible Direct Deposit or receipt of $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Eligible Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Eligible Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Eligible Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Eligible Direct Deposit or Qualifying Deposits until SoFi Bank recognizes Eligible Direct Deposit activity or receives $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Eligible Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Eligible Direct Deposit.
Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.
Members without either Eligible Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, or who do not enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days, will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 1/24/25. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at sofi.com/legal/banking-fees/.
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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