Jun
25
2024

Guide To Depositing a Check

By | Budgeting & Goals, money, Money & Life | Comments Off on Guide To Depositing a Check

They may seem old-fashioned compared to digital payment methods, but checks are still very much a part of many people’s financial lives. In fact, there are a whopping 14.5 billion checks circulating every year in the U.S.

If you receive checks, you have options in terms of how to deposit them, including in person at a bank, at an ATM, or via a mobile app. Here’s what you need to know about the different methods for depositing a check and the easiest way to get the job done.

How To Deposit a Check in 5 Steps

Typically, depositing a check involves these five simple steps (unless of course you automate the process with direct deposit). Follow these guidelines to successfully get a check into your bank account where you can then use it.

1. Select Your Preferred Method

Your financial institution may have different ways you can deposit a check, including in person, at an ATM, or through their mobile app. The method you choose will affect the specifics of what you need to do to deposit your check. If you choose to go in person, double check the bank’s open hours. For mobile apps, you will need to download the app. Most ATMs will let you deposit a check as long as the machine is in your bank’s network.

2. Gather What You Need

Aside from your paper check, the exact type of documentation you’ll need will depend on how you go about depositing a check:

•   In person: This procedure can vary depending on your financial institution. At some banks, you may be able to use your debit card at a teller’s window to deposit a check, no deposit slip required.

In other cases, you may need to get and fill out a deposit slip. This piece of paper outlines how much you want to deposit and to which account. Information you will need to fill out includes your name, account number, and deposit amount. In many cases, banks may also need to see a government-issued photo ID when you make the deposit.

•   Mobile app: You will need to log into your bank’s mobile app on your device. Be prepared to take a photo of the front and back of the check. Typically taking a photo against a dark background helps the app take a clearer photo.

•   ATM: When heading to the ATM, you’ll need your debit card. Check to see if the ATM accepts check deposits for your financial institution (SoFi, for example, only offers ATM withdrawals at this time). Also, a few ATMs still require that checks be put into envelopes (provided at the machine) for deposit.

3. Endorse Your Check

Endorsing your check means to sign your name on the back of it in the appropriate place (it typically says “Endorse here” or provides a line to sign on). You can write “for deposit only” on the back when making a deposit so that the money can only go to your account.

Some checks also have a box you can tick if you’re making a mobile deposit. Or your bank may request that mobile deposit checks are endorsed with your name and a phrase like, “for electronic deposit at [bank]” or “for mobile deposit at [bank].”

4. Confirm Deposit Amount

If you deposit a check in person, you may need to indicate the amount on the deposit slip. If you’re using your bank’s mobile app, you may have to enter in the payment amount of your check. Same goes if you deposit it at an ATM.

Before confirming your deposit, make sure you have indicated the correct information. Being even one digit off from your account number, for example, could result in delays to access the funds you’ve deposited.

5. Wait for Confirmation

Once you’ve successfully deposited a check in person, the bank teller may give you a confirmation slip reflecting the transaction or you can request one. You can also check your bank’s website or app to see the pending deposit.

With mobile deposits, you may receive a pop-up confirmation message or an email acknowledging receipt of the check. Some banks may show the pending transaction in the app right away.

At an ATM, you usually receive a receipt of the transaction. Hang onto this piece of paper until you confirm that the deposit has indeed been posted to your account.

In terms of how long it will take for the check to deposit and be cleared, that will vary depending on such factors as how you deposited it, the amount, and the bank it’s drawn on. It could take between one and several days.

Get up to $300 when you bank with SoFi.

No account or overdraft fees. No minimum balance.

Up to 4.00% APY on savings balances.

Up to 2-day-early paycheck.

Up to $2M of additional
FDIC insurance.


💡 Quick Tip: Don’t think too hard about your money. Automate your budgeting, saving, and spending with SoFi’s seamless and secure mobile banking app.

Ways of Depositing a Check

When it comes to depositing a check, the method you choose will depend on what your bank offers and what feels most convenient for you.

In Person

Though not always convenient, you can take your check to your local bank and deposit it into your account. (Worth noting: Some banks may allow you to cash checks without an account there, but you may have to pay a fee.)

Mobile App

Many banks and credit unions offer mobile apps for their customers. A popular feature is mobile check deposit, which allows you to snap a photo of the check with your device and deposit it remotely…no trip to a bank or ATM required.

ATM

Traditional and some online-only banks offer the convenience of depositing a check at an ATM, whether to your checking or savings account. Read your account’s fine print or contact customer service to see if this needs to be at an ATM in your bank’s network.

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

Keeping Safety in Mind When Depositing Checks

No matter which method you choose, it’s important to be safe when depositing checks. Keep these safety tips in mind:

•   One key step is to make sure a check is valid and comes from a legitimate source. If you’re not expecting a payment and receive a check in the mail, you’re not wrong to be suspicious. It could be part of a scam. The same holds true for checks you were expecting but that arrive for a higher amount of money than you anticipated.

•   If you want to verify a check, or see if it’s legitimate, hold the check up to the light to see if there are any watermarks (which are a good thing) or if there’s any evidence that it’s been tampered with (a bad thing). In addition, get a feel for the paper the check is printed on; if it feels thin, like the paper you put in a printer, it may be fraudulent.

•   Checks also have a safety feature called an MICR (magnetic ink character recognition) line. Located at the bottom of the check, this usually shows details like the issuing bank’s routing number. The ink should look flat and dull. If it looks shiny when you hold it under the light, it may be a fake check.

Think you have a fake check in hand? Talk to your bank about how to proceed, and you may want to report it to the Federal Trade Commission (FTC) or the Better Business Bureau (BBB), which has a Scam Tracker department.

One last suggestion: You might also keep in mind that mobile deposit and even direct deposit (bypassing checks altogether) are often good options in terms of safety. These techniques can be preferable to looking for a bank branch or ATM that can accept your check, especially at night or in bad weather.

Recommended: Cashier’s Check vs Certified Check

The Takeaway

Depositing a check typically involves five simple steps: Select a deposit method, gather materials, endorse the check, confirm its amount, and be sure that it’s hit your account.

While checks are a common, time-honored way to receive funds, you have plenty of options today to send and receive money. Check out what different banks offer (and how much services cost) to make sure you have the right banking partner for you.

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


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

FAQ

How do you deposit a check into your account?

You can deposit a check in your account either in person, through your bank’s mobile app, or at an ATM. Once you decide on a method, you gather what you need, endorse the check, confirm its amount, and receive acknowledgement that it’s in your account.

How do you deposit a check at an ATM?

You can deposit a check at an ATM by going to a machine that will accept your deposit — your bank may stipulate which ones are acceptable. Insert your debit card and enter the correct PIN number, then follow the prompts to deposit your check.

How do you deposit a check without going to the bank?

You can deposit a check without going to the bank by doing it through your bank’s mobile app or at an ATM.

Photo credit: iStock/AndreyPopov

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

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

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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

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

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Jun
25
2024

Savings Account Advantages and Disadvantages

By | Budgeting & Goals, money, Money & Life | Comments Off on Savings Account Advantages and Disadvantages

If you’re looking for a place to safely store (and grow) money you don’t need right away, a savings account could be a great choice. These accounts are typically federally insured, pay interest on your deposits, and allow easy access to your funds when you need them.

That said, savings accounts also have some downsides. The interest rates can be low and may not keep up with inflation, which means your money could lose spending power over time. Many savings accounts also put limits on how often you can access your refunds, such as six withdrawals or transfers per month.

Depending on your needs and savings goals, a savings account may or may not be your best option. Here’s a look at the pros and cons of a savings account, plus alternatives that could be a better choice for growing your nest egg.

What Is a Savings Account?

A savings account is a deposit account held at a bank or other financial institution that earns interest over time. These accounts are designed to help people save money while providing easy access to funds when needed. This makes them well-suited for emergency savings and money you’re setting aside for an upcoming goal like a large purchase or vacation.

Unlike checking accounts, which are primarily used for daily transactions, savings accounts are intended for longer-term deposits, and you may be limited to a certain number of transactions you can make each month, such as six or nine.

Savings accounts at banks in the U.S are typically insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per depositor per institution. In the case of joint accounts, each co-owner can get up to $250,000 in FDIC coverage across their joint accounts at the same bank. Savings accounts at credit unions have similar protections through the National Credit Union Administration (NCUA).

Recommended: Reasons to Keep Money in a Savings Account

Earn up to 4.00% APY with a high-yield savings account from SoFi.

No account or monthly fees. No minimum balance.

9x the national average savings account rate.

Up to $2M of additional FDIC insurance.

Sort savings into Vaults, auto save with Roundups.


Savings Account Pros and Cons

Savings accounts offer a range of benefits, as well as some drawbacks. Understanding these can help you make an informed decision about whether a savings account is the right choice for your needs and goals.

Pros

•   Earns interest: Savings accounts earn interest, which means your money can grow over time. The interest rate is expressed as an annual percentage yield (APY), which tells you how much you’ll earn on your deposits over one year, including compound interest. APYs vary depending on the bank and the type of savings account. Online savings accounts generally offer higher APYs than traditional savings accounts.

•   Safety and security: Funds in savings accounts are usually federally insured. This means you’re protected (up to at least $250,000) if the bank were to run into financial trouble or shut its doors.

•   Liquidity: While not as liquid as checking accounts, savings accounts still allow easy access to your money. You can withdraw money or transfer it to other accounts relatively easily and quickly.

•   Low or no opening deposit required: Unlike some savings and investment vehicles, you can often open a savings account with little or no money. Many online banks have no minimum deposit requirements; traditional banks may require a deposit, but it’s often as low as $25.

•   Encourages saving: By keeping money in a savings account separate from your daily spending funds, you may be less tempted to spend it. Some institutions allow you to set up an automatic transfer from your checking account to your savings for a set amount on a set day (such as right after you get paid). This allows you to save without thinking about it.

Recommended: What Is a Long-Term Savings Account?

Cons

•   Variable interest rates: The interest rates for savings accounts aren’t fixed, which means they can vary with the federal funds rate, the benchmark rate set by the Federal Reserve. If the Fed raises the federal funds rate, APYs on savings accounts tend to increase. However, if the Fed lowers rates, your savings account APY may go down.

•   Relatively low returns: Compared to other investment options, savings accounts generally offer lower interest rates. This means your money grows more slowly than it might in higher-risk investments. As of May 20, 2024, the national average yield for savings accounts is 0.45%. However, many online banks have savings interest rates higher than the national average for savings accounts.

•   Limited transactions: A federal rule called Regulation D used to limit withdrawals from savings accounts to no more than six a month. That changed in April 2020 when the Federal Reserve announced that it was removing the requirement that banks enforce the limit. Even so, banks and credit unions have largely kept restrictions in place.

•   Inflation risk: The interest earned on savings accounts may not always keep pace with inflation. Any time your savings isn’t growing at the same rate as inflation, you are effectively losing money because the real value of your money is diminishing.

•   May have minimum balance requirements: You might need to keep a certain amount of money in your savings account in order to avoid monthly maintenance fees and/or earn the top interest rate.

Pros of Savings Accounts

 Cons of Savings Accounts
Earns interest Interest rate can change
Money is safe Low return
Easy access to funds Rates may not beat inflation
Automatic savings Transaction limits
Takes no or little money to start Might have fees and account balance minimums

Savings Accounts vs Checking Accounts

While both savings and checking accounts serve essential roles in personal finance, they have different purposes and distinct features.

Checking accounts are designed for spending money. Therefore they generally offer little to no interest, come with debit cards, and allow unlimited transactions. Savings accounts, on the other hand, are set up to encourage saving. They pay interest on your deposits, don’t come with debit cards, and may place some limitations in how, and how often, you can access your cash.

Here’s a look at how these two accounts types compare side-by-side.

Savings Account

 Checking Account
Main purpose Save money and earn interest Manage daily transactions and spending
Interest earned Earns interest Low or no interest
Transaction limits Yes (typically six withdrawals/transfers per month) No
Fees Low or no fees with minimum balance May have monthly and other fees
Accessibility Moderate (designed for less frequent use) High (designed for frequent access and use)
Check-writing No Yes
Debit Card No (just ATM card) Yes

Is a Savings Account Right for You?

Whether a savings account is right for you depends on your financial needs and savings goals. A savings account could be the right place to stash your cash if you are:

Building an emergency fund: Due to its liquidity and security, a savings account can be a good place to keep your emergency savings.

Saving for a short-term goal: If you are saving up for a goal that is a few months to a few years in the future — such as a vacation, home improvement project, or a down payment on a car —- a savings account can be a great option.

Looking for low-risk savings: If you prefer a low-risk place to store your money while still earning some interest, a savings account can make sense. Just keep in mind that for mid- to long-term savings goals (defined as roughly five years or more), investing in the market may be more appropriate, though there is risk involved.

Recommended: How Much Should I Have in Savings?

Choosing a Savings Account

Savings accounts are offered by different types of financial institutions, including traditional banks, online banks, and credit unions. There are also many different types of savings accounts, including traditional savings accounts and high-yield savings accounts. Which to pick?

When choosing the right savings account for your needs, it helps to consider the following factors:

•   Interest rate: APYs offered by savings accounts can vary widely, so it pays to shop around. While rates are generally low, some institutions offer higher rates, particularly online banks.

•   Fees: Ideally, you want to open a savings account with no (or very low) fees. Be sure to check if there are any requirements to avoid fees, such as maintaining a minimum balance.

•   Accessibility: Consider how easy it will be to access your funds and if the account comes with any limitations on how many withdrawals or transfers you can make per month. You may also want to look for accounts with user-friendly online and mobile banking options.

•   Insurance: You’ll want to make sure that the institution offering the savings account is insured by the FDIC or NCUA.

Recommended: Understanding High-Yield Savings Accounts

Alternatives to Savings Accounts

A traditional or high-yield savings account isn’t the only place to put your savings. Depending on your goals, you may want to consider other options. Here are some alternatives.

•   Money market accounts (MMAs): MMAs often offer higher interest rates than traditional savings accounts, plus a debit card and/or check-writing privileges. However, they might require a higher opening and ongoing minimum balance.

•   Certificates of deposit (CDs): CDs typically offer higher interest rates than traditional savings accounts in exchange for locking your money in for a set period of time (anywhere from a few months to a few years). They can be a good option if you don’t need immediate access to your funds. However, you may be able to find a high-yield savings account that offers the same or better APY with fewer restrictions.

•   Investment accounts: For longer-term goals, you may want to consider investment accounts like individual retirement accounts (IRAs), mutual funds, or stock portfolios, which can offer higher returns but come with greater risk.

•   Treasury securities: U.S. Treasury securities, such as bonds and bills, are low-risk investments backed by the federal government. They offer different maturity terms and interest rates.

SoFi Savings Accounts

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


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

FAQ

What are the cons of a savings account?

Savings accounts, while beneficial for many reasons, do have some drawbacks:

•   Relatively low interest rates: Savings accounts generally offer lower interest rates compared to other investment options.

•   Limited transactions: You may be limited to six withdrawals and transfers per month. Exceeding this limit can result in fees.

•   Inflation risk: The interest earned may not always keep pace with inflation, potentially reducing the purchasing power of your savings over time.

•   Opportunity cost: Funds in a savings account might earn less compared to higher-yield investments, representing a missed opportunity for greater returns.

What is the benefit of a savings account?

Savings accounts offer significant benefits. They provide a safe and secure place for your money (since your deposits are typically insured up to $250,000). These accounts also earn interest, allowing your money to grow over time, albeit often at a modest rate. In addition, savings accounts offer easy access to your funds when needed. And many come with minimal or no fees, though a minimum balance may be required.

Is it worth putting money in a savings account?

Yes, putting money in a savings account can be worth it, especially for specific financial needs. For example, savings accounts can be the ideal spot for building an emergency fund due to their safety, liquidity, and ease of access. They can also be a good choice for short-term savings goals, such as vacations or major purchases. Since interest rates are relatively low, however, they are generally not ideal for long-term savings goals like retirement or a child’s college fund.

Photo credit: iStock/Ridofranz

SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

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

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

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

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Jun
25
2024

Guide to Bank Health Ratings

By | money, Money & Life | Comments Off on Guide to Bank Health Ratings

There are thousands of banks and other financial institutions in the United States, and consumers have a variety of choices for where to keep their money. Bank health ratings are one tool that people can use to identify where they should invest their assets. Several government and non-government agencies issue bank health ratings, based on a number of criteria and various ranking systems.

It can be a good idea to make sure any financial institution where you are considering depositing your money has a good bank health rating. Here, learn more about how to do this.

What Are Bank Ratings?

Bank ratings express how healthy and reliable a financial institution is. A solid number can inspire you to feel confident about opening accounts with a particular bank.

The Federal Deposit Insurance Corporation (FDIC) is one of the primary governmental agencies that oversees banking in the United States. The FDIC was created in 1933 in the wake of the Great Depression. The entity examines and supervises financial institutions for safety and soundness as well as enforcement of bank regulations. It is one of the primary entities responsible for rating banks.

The FDIC, however, is not the only company that evaluates banks. There are other resources that give banks credit worthiness ratings, such as Standard & Poor’s, Fitch, and Moody’s.

Get up to $300 when you bank with SoFi.

No account or overdraft fees. No minimum balance.

Up to 4.00% APY on savings balances.

Up to 2-day-early paycheck.

Up to $2M of additional
FDIC insurance.


💡 Quick Tip: Don’t think too hard about your money. Automate your budgeting, saving, and spending with SoFi’s seamless and secure mobile banking app.

How Bank Ratings Are Calculated

There are a number of different ways bank ratings are calculated, depending on the institution that is doing the rating. The Federal Reserve, FDIC and other governmental financial agencies use the CAMELS system, ranking bank health and safety on six different criteria:

•   (C)apital adequacy

•   (A)sset quality

•   (M)anagement

•   (E)arnings

•   (L)iquidity

•   (S)ensitivity to market risk

In terms of the FDIC’s Safety and Soundness scale, for example, factors are rated from 1 to 5, with 1 being the highest and best (strong), and 5 being the lowest and worst (critically deficient).

Other companies use their own proprietary ratings systems. For example, for its credit-worthiness evaluations, Fitch uses a combination of letters and numbers, assigning ratings like F1+ and AA- (in this system, a grade of F is actually good).

Bank Safety and Soundness Ratings

Government and credit rating agencies have developed rating systems in order to vet the safety and soundness of banks, including any specific issues that could pose a credit risk.

A bank’s safety and soundness may be determined by a combination of several different factors that make up the overall health and viability of a bank. Often, a critical factor for this is evaluating how well the bank can handle economic fluctuations.

Bank Health Ratings

One aspect of bank ratings is how healthy a bank is. This can include things like the amount of liquidity they have in relation to their total customer deposits, as well as how secure their upper management structure is.

Bank Safety Ratings

Another facet to consider is the safety of a given bank. While a bank’s health and safety are correlated, they are not quite the same thing. Remember too that the FDIC and NCUA (National Credit Union Administration) insure deposits at most banks and credit unions, respectively, in the United States, should a rare worst-case scenario of a bank failure come to pass. The money in your checking account and other types of deposit accounts would be covered.

Recommended: FDIC vs SPIC: What’s the Difference?

Why It’s Important for Your Bank To Be Healthy

Broadly speaking, the health of the banks in the U.S. is an important factor in the overall health of the economy, which is one reason they’re monitored carefully. Credit ratings can also be an important measure of a bank’s health for both potential investors and consumers. For example, the safety of checking accounts is something to be aware of in one’s daily banking life.

However, it’s not the only thing that you should consider when opening up a new account. The interest rate a financial institution pays on deposits, how convenient the bank is, and its overall account features are probably more important for most people.

Because the United States government (through the Federal Reserve and FDIC) takes an active role in supervising the banking industry, most of the major banks you might consider are likely to be sufficiently healthy. However, you may want to delve in to make sure.

Checking Your Bank’s Rating

It’s important to feel confident that your money is secure with the bank you choose — nobody wants to put their money somewhere where it might not be safe. Fortunately, the U.S. government actively supervises banks for their safety and soundness and the possibility of credit risk.

Before opening up a checking account or savings account, you might want to check your bank’s credit worthiness rating. You can search for these at the Fitch Ratings website. However, government agencies such as the Federal Reserve and FDIC do not publish their ratings, and other rating agencies may limit access to their rating information to paid subscribers.

Bank FDIC Insurance

Bank ratings are important for transparency in the health of any one bank as well as providing insight into issues that need to be resolved. But it’s also important to know that most banks are insured by FDIC. Deposits at FDIC-insured banks are insured for up to $250,000 per depositor, per account ownership category (such as single, joint, or trust account), per insured institution. So unless you have more than that amount at any one bank, your money is guaranteed by the U.S. government in the very unlikely event that your bank fails.

What’s more, if you do have more than $250,000 to put in a bank, some financial institutions have extended insured deposit programs1. This allows them to insure a higher amount by partnering with other banks to hold your funds, with no single account topping the $250K figure.

Opening a Bank Account With SoFi

If you’re looking for a secure place to keep your money, see what SoFi offers.

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


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

FAQ

What is a good health rating for a bank?

Different rating agencies have different scales for rating how safe and sound a bank is. The CAMELS ratings used by government agencies go from 1 (strong) to 5 (critically deficient), while Moody’s ratings go from Aaa at the top level to C at the low end.

How do you find out the rating of a bank?

You can check Fitch Ratings’ website to find out the creditworthiness rating of a bank, but otherwise, you may not be able to access this kind of data. The government agencies that evaluate banks do not make their ratings public, and some other private agencies may only publish their ratings to paid subscribers.

Who rates banks?

The FDIC and Federal Reserve are two government agencies that oversee financial regulations concerning banks and financial institutions. These agencies use the CAMELS ratings to help assess how secure and healthy banks in the United States are. Other credit agencies such as Standard & Poor’s, Fitch, and Moody’s also rate banks using their own proprietary rating systems.

Are CAMELS ratings public?

CAMELS ratings issued by the government are not public record. In fact, the CAMELS rating of any particular bank as well as its examination report may not be disclosed to unauthorized users. Other institutions may disclose or publicize their own bank ratings, which are often calculated based on data that is publicly available.

Photo credit: iStock/SDI Productions

1SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per depositor per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by banks in the SoFi Insured Deposit Program. Deposits may be insured up to $2M through participation in the program. See full terms at SoFi.com/banking/fdic/terms. See list of participating banks at SoFi.com/banking/fdic/receivingbanks.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

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

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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

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

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

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11
2024

Is $150K a Good Salary for a Single Person?

By | Life & Career, Money & Life, relay | Comments Off on Is $150K a Good Salary for a Single Person?

Depending on your financial liabilities, a gross annual income of $150,000 is a good salary, especially for a single person.

Keeping tabs on the competitiveness of your income is an essential part of career growth and the financial and life goals you set for yourself. If you’re curious about how your six-figure salary compares to the average worker nationally and in each state, keep reading.

Is $150K a Good Salary?

For a single person, especially one who’s not supporting any dependents, $150,000 is a good annual salary. Consider the average salary in the U.S., which is $65,470, according to May 2023 data from the Bureau of Labor Statistics (BLS). A $150,000 annual salary is about 129% higher than the national average.

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Track your credit score for free. Sign up and get $10.*

Recommended: What Is the Average Pay in the United States Per Year?

Median Income in the US by State in 2024

The median income of workers differs across state lines, often even for the same profession. Typically, this is due to varying costs of living between states. Below are the median household incomes in every U.S. state, according to the latest data available from the U.S. Census Bureau.

State

 Median Household Income
Alabama $59,609
Alaska $86,370
Arizona $72,581
Arkansas $56,335
California $91,905
Colorado $87,598
Connecticut $90,213
Delaware $79,325
Florida $67,917
Georgia $71,355
Hawaii $94,814
Idaho $70,214
Illinois $78,433
Indiana $67,173
Iowa $70,571
Kansas $69,747
Kentucky $60,183
Louisiana $57,852
Maine $68,251
Maryland $98,461
Massachusetts $96,505
Michigan $68,505
Minnesota $84,313
Mississippi $52,985
Missouri $65,920
Montana $66,341
Nebraska $71,772
Nevada $71,646
New Hampshire $90,845
New Jersey $97,126
New Mexico $58,722
New York $81,386
North Carolina $66,186
North Dakota $73,959
Ohio $66,990
Oklahoma $61,364
Oregon $76,362
Pennsylvania $73,170
Rhode Island $81,370
South Carolina $63,623
South Dakota $69,457
Tennessee $64,035
Texas $73,035
Utah $86,833
Vermont $74,014
Virginia $87,249
Washington $90,325
West Virginia $55,217
Wisconsin $72,458
Wyoming $72,495

Average Cost of Living in the US by State in 2024

Although $150K is a good salary for a single person, how far it goes depends on multiple factors, including your state’s cost of living (COL). Using a money tracker can offer insight into how to manage your finances no matter where you live.

Let’s take a look at the breakdown of COL by state, as aggregated by the Missouri Economic Research and Information Center.

State

 Cost of Living Index
Alabama 88.3
Alaska 125.2
Arizona 108.4
Arkansas 89.0
California 138.5
Colorado 105.1
Connecticut 112.8
Delaware 101.1
Florida 100.7
Georgia 90.8
Hawaii 180.3
Idaho 98.6
Illinois 92.1
Indiana 91.0
Iowa 90.3
Kansas 87.1
Kentucky 92.0
Louisiana 91.0
Maine 109.9
Maryland 116.5
Massachusetts 146.5
Michigan 90.6
Minnesota 94.1
Mississippi 86.3
Missouri 88.5
Montana 102.9
Nebraska 90.9
Nevada 101.0
New Hampshire 114.1
New Jersey 113.9
New Mexico 94.0
New York 125.9
North Carolina 95.3
North Dakota 94.6
Ohio 94.7
Oklahoma 86.2
Oregon 114.7
Pennsylvania 95.6
Rhode Island 110.7
South Carolina 95.3
South Dakota 92.4
Tennessee 90.3
Texas 92.7
Utah 103.2
Vermont 115.3
Virginia 101.9
Washington 116.0
West Virginia 87.7
Wisconsin 95.1
Wyoming 92.4

How to Budget on a $150K Annual Salary

There are many budgeting strategies to explore, but one that offers a helpful guideline is the 50/20/30 budget. It buckets 50% of your take-home pay toward need-based expenses, like housing payments, auto loan payments, utilities, and groceries. Thirty percent of your net salary goes toward your wants, like shopping, entertainment, and dining out. Finally, 20% of your net salary is directed to your savings, like a high-yield savings account or retirement fund.

The 50/20/30 guide helps you allocate your take-home salary to your most important financial obligations and future self, while also leaving wiggle room for you to enjoy the rewards of your hard work.

One way to track your progress is with a budget planner app. This tool lets you set custom budget categories and goals for your spending so you see where your dollars go each month.

Maximizing a $150K Salary

A six-figure salary can provide a comfortable life, but how you manage it has just as big an impact. Here are a few ideas to maximize your $150K pay as a single person:

•   Automate your savings. “Paying yourself first” is the first step in maximizing your $150K salary. This includes setting up auto-deposits into a high-yield savings account for a rainy day, and enrolling in your employer’s 401(k) retirement plan so your contributions have time to grow.

•   Pay down existing debt. Letting unpaid revolving debt, like credit card balances, roll over each month keeps you buried in seemingly never-ending payments. If you have a lot of credit card debt, and already have a comfortable emergency fund, focus on paying off your debt. Doing so offers significant savings on interest over the long-term.

•   Explore investments. If you have your savings, retirement, and debt repayment strategy handled, another area that can help maximize your $150K salary is investing. Note that with any investment, there’s always a risk of losing your money.

Is $150,000 a Year Considered Rich?

An annual salary of $150K won’t get you into the upper 1% — that requires an annual wage of at least $785,968, according to the Economic Policy Institute. But a $150,000 annual income will place you just above the 90th to 95th percentile among U.S. earners.

Since “rich” is a subjective description, one way to answer this question is by learning how to calculate your net worth. Your net worth is your total assets minus your total liabilities (e.g., debt, bills, child support, etc.).

You can use a net worth calculator by age to see where your finances stand.

Is $150K a Year Considered Middle Class?

Generally, earning $150K is way more than a good entry-level salary, and can be a comfortable wage for a single professional. If you don’t provide for dependents, your income exceeds the overall national median salary and the median salary in every state.

To further illustrate this point, the Pew Research’s income calculator states that a $150K salary puts you in the “upper income” tier even in high-cost areas like California, Hawaii, and the District of Columbia.

Example Jobs That Make About $150,000 a Year

Interested in the highest-paying jobs by state? How much a profession pays is largely subject to the industry you work in and whether there’s a high demand for your skills in your area.

Although annual salaries vary between companies across the country, here are a few jobs that make about $150K annually, according to data from the BLS:

Profession

 Median Salary
Advertising, promotions, and marketing managers $156,580
Financial managers $156,100
Physicists and astronomers $149,530
Podiatrists $141,650

Recommended: Low-Stress Jobs for Introverts

The Takeaway

Is $150K a good salary for a single person? Generally speaking, yes, earning $150,000 a year is considered an excellent salary in most places in the U.S. It surpasses the median income across all states, even in areas with high cost of living, like New York. But whether a $150,000 annual salary feels comfortable to you depends on how you budget your money and expenses.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

SoFi helps you stay on top of your finances.

FAQ

Can I live comfortably making $150k a year?

Whether you can live comfortably earning $150,000 annually depends on your household size and preferred lifestyle. By comparison, the average pay in the United States is $65,470, according to the Bureau of Labor Statistics May 2023 National Occupational Employment and Wage Estimates.

What can I afford with a $150k salary?

What you can afford with a $150,000 salary depends on various factors, like the cost of living in your area, household size, current debt, and overall lifestyle. A home is arguably the largest purchase workers have. According to Zillow’s affordability calculator, with a $20K down payment and $250 in monthly debts, you can comfortably afford a home price of $508,202.

How much is $150k a year hourly?

An annual $150K income breaks down to an hourly wage of $72.12 per hour. This figure is your gross hourly salary and doesn’t include taxes and payroll deductions.

How much is $150k a year monthly?

With a $150K annual salary, your monthly gross salary is $12,500.

How much is $150k a year daily?

A gross annual income of $150,000 per year equates to a $576.92 daily salary. This calculation assumes you’re working 40 hours per week and eight hours per day.

Photo credit: iStock/VioletaStoimenova

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*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

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.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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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03
2024

Is $50K a Good Salary for a Single Person in 2024?

By | Life & Career, Money & Life, relay | Comments Off on Is $50K a Good Salary for a Single Person in 2024?

If you’re single and making $50,000 a year, you likely have enough to live on comfortably in just about any state in the U.S. This is particularly true in suburbs and smaller cities, like Jacksonville, FL, Birmingham, AL, and Toledo, OH, where the cost of living is lower than the national average. However, if you’re planning to live in a major metropolis like San Francisco, New York, or Boston, making ends meet on a $50,000 salary could be more of a challenge.

Is $50K a Good Salary?

While $50,000 a year isn’t a six-figure salary, it’s often enough for a single person to be able to afford the basics — think housing, utilities, food, and insurance — and still have cash left over for fun and savings.

If you’re just entering the job market after graduating college, $50,000 can be a good entry-level salary, especially if you decided to live at home for a while. Doing so can help you build up your bank account, so when it comes time to find a place to live, you’ll have a financial cushion to show potential landlords.

And remember, whether you’re earning $50K a year at your first job or less, your income will likely increase with time and experience. As your earning potential grows, a money tracker can help you keep an eye on where your paycheck is going.

Check your score with SoFi Insights

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Average Median Income in the US by State in 2024

According to the latest data from the Social Security Administration, the average salary in the U.S. is $63,795. The Bureau of Labor Statistics (BLS) reports the median average salary, which represents the midpoint of salaries in the U.S., was $59,540 in 2023.

The chart below shows the list of the average median income in each U.S. state according to USA Today and Blueprint, based on BLS data:

State Average Median Income
Alabama $57,564
Alaska $66,820
Arizona $65,780
Arkansas $53,716
California $84,448
Colorado $74,152
Connecticut $78,572
Delaware $64,896
Florida $64,168
Georgia $64,844
Hawaii $62,296
Idaho $53,976
Illinois $70,564
Indiana $57,304
Iowa $56,264
Kansas $56,212
Kentucky $57,200
Louisiana $56,836
Maine $58,396
Maryland $72,904
Massachusetts $86,840
Michigan $63,440
Minnesota $68,380
Mississippi $48,048
Missouri $59,800
Montana $55,744
Nebraska $57,784
Nevada $61,828
New Hampshire $72,124
New Jersey $76,128
New Mexico $57,564
New York $84,292
North Carolina $62,296
North Dakota $61,568
Ohio $60,320
Oklahoma $54,704
Oregon $66,612
Pennsylvania $66,404
Rhode Island $63,492
South Carolina $56,108
South Dakota $53,820
Tennessee $62,140
Texas $68,744
Utah $61,516
Vermont $61,100
Virginia $71,292
Washington $85,748
West Virginia $55,900
Wisconsin $58,552
Wyoming $56,992

Average Cost of Living in the US by State in 2024

The term cost of living refers to the amount of money someone needs to cover basic necessities. Based on data from Forbes Advisor, here’s the average cost of living per state in 2024:

State Average Cost of Living
Alabama $33,654
Alaska $48,670
Arizona $39,856
Arkansas $32,979
California $53,171
Colorado $45,931
Connecticut $46,912
Delaware $44,389
Florida $40,512
Georgia $38,747
Hawaii $55,491
Idaho $37,658
Illinois $41,395
Indiana $36,207
Iowa $35,871
Kansas $35,185
Kentucky $35,508
Louisiana $35,576
Maine $39,899
Maryland $48,235
Massachusetts $53,860
Michigan $37,111
Minnesota $41,498
Mississippi $32,336
Missouri $35,338
Montana $37,328
Nebraska $37,519
Nevada $41,630
New Hampshire $45,575
New Jersey $49,511
New Mexico $34,501
New York $49,623
North Carolina $36,702
North Dakota $35,707
Ohio $35,932
Oklahoma $33,966
Oregon $46,193
Pennsylvania $40,066
Rhode Island $44,481
South Carolina $34,826
South Dakota $36,864
Tennessee $34,742
Texas $37,582
Utah $40,586
Vermont $43,927
Virginia $43,067
Washington $47,231
West Virginia $34,861
Wisconsin $37,374
Wyoming $37,550

Recommended: The 25 Highest-Paying Jobs in the U.S.

How to Live on a $50K Salary

To make sure you can live on a $50,000 salary without being stretched too thin, you’ll want to review your overall spending and create a budget. Online tools like a budget planner app can help with that.

When it comes to defining “living comfortably,” your salary would ideally be able to fit the guidelines of a 50/30/20 budget. This method suggests that 50% of your earnings covers your needs, such as housing, utilities, groceries and healthcare costs, 30% goes toward your wants, such as entertainment, hobbies and travel, and 20% goes toward savings and paying off debt.

How to Budget for a $50K Salary

Before you can create a budget, it helps to estimate how much you bring home. Here’s a breakdown of a $50,000 annual salary (40-hour work week, 52 weeks a year):

•   Monthly income: $4,166.93

•   Biweekly paycheck: $2,083.46

•   Weekly income: $961.60

•   Daily pay: $192.32

The figures above do not factor in taxes, so someone with an annual salary of $50,000 may actually end up taking home closer to $41,860.

Once you crunch the numbers and figure out how much you’ll need for your basic needs, you can see how much money you’ll have for the other 50% to cover your wants and savings.

Maximizing a $50K Salary

A person with a $50,000 salary can afford to spend about $1,250 a month on rent, which can be tough if you want to live alone. The average monthly rent in the U.S. is about $1,515, according to Apartments.com. Sharing an apartment or renting a house with another person can save you money on housing, allowing you more room to put your money toward other necessities.

Other ways to maximize making $50,000 a year include limiting dining out, shopping smartly when it comes to buying groceries, being mindful of utility usage, and riding your bike, walking, or taking public transportation to save on fuel costs.

Recommended: How to Calculate Your Net Worth

Is $50,000 a Year Considered Middle Class?

Yes. According to the Pew Research Center, people who have annual incomes between $39,693 and $119,080 in 2023 are considered middle-income or middle class.

While $50,000 a year may not be considered rich, you’re certainly living well above the poverty line, which for a single person household is between $12,880 and $16,090, depending on the state.

Examples of Jobs that Make About $50,000 a Year

Per the BLS, here are some of the occupations where you can earn $50,000 a year, some of which would be good jobs for introverts:

•   Automotive service technician and mechanic

•   Bookkeeping, accounting, and auditing clerk

•   Construction laborer

•   Correctional officer

•   Dental assistant or laboratory technician

•   Event planner

•   Firefighter

•   Makeup artist

•   Massage therapist

•   Mortician

•   Paramedic

•   Postal service mail carrier

•   Real estate sales agent

•   Secretary and administrative assistant

•   School bus driver

•   Social worker

•   Travel agent

•   Veterinary technician

•   Welder

The Takeaway

Is $50k a good salary for a single person? Generally speaking, yes. An annual salary of $50,000 is considered a middle-class income, and can be a comfortable wage for a recent graduate or a person starting a new career. A single person may not be able to live large in some areas of the country, but that doesn’t mean they can’t live comfortably elsewhere.

Depending on the cost of living in your area, making ends meet on $50,000 a year might require sharing a living space, keeping close tabs on your spending, and forgoing some luxuries. However, you should still have enough to take care of your basic needs with some left over to put toward your future.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

See exactly how your money comes and goes at a glance.

FAQ

Can I live comfortably making $50K a year?

It depends on where you live. People making $50,000 a year can find a place to live easily in every state in the U.S., though it will be challenging if you decide to live in one of America’s largest cities. Still, a $50,000 annual salary is above the median cost of living in most states, so it’s possible to enjoy a comfortable lifestyle within your means.

What can I afford with a $50K salary?

With a $50,000 a year salary, you’d need between $20,000 and $35,000 for basic needs, including housing, groceries, healthcare, transportation, and other fixed expenses. That means you may have less than $15,000 for everything else. What you can afford will depend heavily on your geographical location and other factors, such as having a car payment and student loans.

How much is 50K a year weekly, hourly and daily?

Based on a 40-hour work week, the average weekly pay for someone who makes $50,000 a year (before taxes) is $961.60. Someone making $50,000 earns $24 an hour and approximately $192 a day.

Photo credit: iStock/Delmaine Donson

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