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The average cost of estate planning varies widely, and the amount you pay will depend on several factors, such as the complexity of your estate and where you live. But the benefits of having a proper estate plan in place — from peace of mind to knowing your family is financially protected — are often worth the price.

Learn how to determine the average cost for will and estate planning for your specific needs so you can choose the option that’s right for you.

Understanding Estate Planning Costs

The cost of estate planning partially depends on location, but also a few other variables.

Key Factors Affecting Cost

How much does estate planning cost? Here’s what you need to take into consideration.

•   DIY vs. professional help: It’s possible to handle your estate plan on your own, provided you follow your state laws regarding signatures, notaries, and witnesses. Hiring an attorney may be ideal if you need more than a simple will, but of course the costs will be higher.

•   Estate complexity: Owning large investment accounts, businesses, or properties beyond your primary residence could lead to higher costs because you may need additional documentation and accounts to administer your wishes.

•   Location: Estate attorneys in lower cost of living areas typically charge less than in those in large cities. You usually need to work with a lawyer licensed to practice your state in order for the will to be compliant with state law.

Average Cost Ranges for Wills and Trusts

While there’s no way to assign an exact price tag to any estate plan, you can get an idea of what you’ll spend based on different scenarios. Here are some average cost ranges for wills vs. trusts.

The cost of a will depends on how you’re creating it. You may be able to find a free template online that you can fill out on your own, then follow your state’s laws on how to finalize it (such as signing in front of witnesses and/or getting the document notarized).

But if you want state-specific documents or more details on things like healthcare directives, you may need to upgrade to a paid version. Online estate planning services offer more specific templates and can cost anywhere from $40 to over $100. If you opt for a lawyer to help you draft a will, you could pay at least $1,000, if not more.

The process can cost even more if you want to open one or more trusts. You can find online options for living trusts, which cost between $500 and $1,500 to get started. The cost jumps to $1,000 to $3,500 for hiring a lawyer to draft your trust. You’ll incur ongoing management fees, which are usually charged as 0.5% to 1% of the trust’s assets each year.

Recommended: What Is Estate Planning?

Finding Affordable Estate Planning Solutions

You can create key estate planning documents without breaking the bank. Keep an eye out for balancing cost and value to make sure you’re spending the right amount on the right services.

Comparing DIY Online Services vs. Hiring an Attorney

As you figure out which estate planning process is best for you, consider the pros and cons of doing it yourself versus hiring an attorney.

Understanding Attorney Fee Structures

Not all estate attorneys charge in the same way. You may encounter hourly rates or flat fees, which can impact your final bill. Both rates vary depending on where you live. An attorney could charge several hundred dollars an hour as they work on your estate plan or several thousand dollars for set deliverables.

Hourly billing may seem like the cheaper option, but you’re typically charged for every phone call and email — making that final number add up fast. You may not know what the actual budget will end up being until the estate plan is finalized. So, if something requires more time and attention, you’ll pay for it.

A flat fee may seem costly at first, but the benefit is that there’s no financial sticker shock at the end. Plus, you can reach out to your attorney as needed without worrying about charging up the bill. Just be sure to find that balance between value and budget so you’re not paying the cheapest lawyer for subpar service.

Tips for Managing Professional Fees

How do you find the best estate planning attorney for your needs? Follow these three steps before you sign any contract.

•   Schedule introductory meetings with multiple attorneys. These are usually free, and you can compare recommendations as well as cost structures.

•   Ask upfront about rates and variables that could impact the cost beyond the initial estimate.

•   Sign a contract with all of the details you agreed upon so there’s no question or disagreement later on. If you have questions, ask before signing.

Why Planning Is a Smart Investment

Estate planning is an important process to undertake regardless of your age or net worth. Let’s take a closer look at reasons to consider it.

Protecting Family, Assets, and Your Wishes

Estate planning serves as a financial and legal safety net for your family so that your assets are protected after your death and distributed according to your own wishes. With a solid estate plan in place, you minimize the risk of a lawsuit of someone trying to claim part of your estate for themselves because you have clear intentions in a legal document.

On top of that, you may also wish to move some assets into a trust or LLC. They can protect personal assets from being collected by creditors. Finally, estate planning can help minimize family conflict. Even if someone is upset about the directions in your will, your executor and the court will ensure your wishes are carried out.

Minimizing Future Taxes and Probate Headaches

Having a strategic estate plan in place can help you reduce future taxes. An estate attorney in particular can help you navigate both federal estate taxes and any potential state estate or inheritance taxes. They’ll factor in gifts while you’re alive as well as potential high property values that could impact your estate’s tax exemptions.

While you may not be able to completely avoid your estate going through probate, having the right plan can reduce the time and money spent in court. You can incorporate life insurance policies and account beneficiaries into your estate plan, both of which go directly to the beneficiary rather than waiting for the probate process.

An attorney may also recommend one or more trusts, such as revocable living trust, which also doesn’t go through the probate process.

Recommended: New Parent’s Guide to Setting Up a Will

The Takeaway

There are estate planning options at every price point, from free online will makers to experienced attorneys who can help navigate a complex portfolio of assets. Find the budget that works best for you to make sure you have everything in place for your family or other beneficiaries.

When you want to make things easier on your loved ones in the future, SoFi can help. We partnered with Trust & Will, the leading online estate planning platform, to give our members 20% off their trust, will, or guardianship. The forms are fast, secure, and easy to use.

FAQ

What’s the biggest factor affecting estate planning cost?

The biggest factor affecting estate planning cost is the size and complexity of your assets. If you have a high net worth, businesses, and/or multiple properties, you’re likely to spend more than someone who primarily has savings and retirement accounts to pass on.

Is DIY estate planning safe or reliable?

Yes, DIY estate planning can be safe and reliable. If choosing an online will maker, be sure the service is reputable and takes the highest security measures. Also check your state laws to make sure you take the necessary steps to make your will legally binding.

How do I know if I need a simple will or a more complex trust?

A will is a solid foundation for any estate plan. Adding a trust transfers ownership of the assets to a third party in order to avoid going through probate. Upon your death, the assets will be distributed based on the rules of the trust.

What questions should I ask an estate planning attorney about fees?

Ask the estate planning attorney whether they charge hourly or as a flat fee. If it’s hourly, get an estimate of how many hours they anticipate your estate plan to take. If it’s a flat fee, ask for a clear outline of all the services included and not included.

Can good estate planning actually save money in the long run?

Yes, good estate planning can save you money, particularly if you have a larger estate with more complex assets. You could save your family money on taxes, probate fees, and even potential litigation.

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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.

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.

SOPRO-Q225-058

The role of the Federal Deposit Insurance Corporation (FDIC) in protecting depositors’ bank accounts is important for everyone to understand.

Most banks are insured by the FDIC, but not all. Moreover, there are usually limits on how much can be covered in an individual person’s accounts and what kind of financial products are eligible for this insurance at all.

Read on to learn the policies and practices of the FDIC and how you can find out the status of your bank.

What FDIC Insurance Means

Having FDIC insurance means that the money you keep in your bank account is safe, up to certain limits, in the rare event that the bank goes out of business. The FDIC was created in 1933 in response to the many banks that went belly up during the Great Depression. The goal was to rebuild public trust in the U.S. banking systems by protecting deposits. And it has done just that: Since its inception, no depositor has lost a penny of insured funds as a result of a failure.^[1]

So what exactly does FDIC insurance cover? Typically, it covers up to $250,000 per depositor, per insured bank, for each account ownership category, including principal and any accrued interest through the date of an insured bank’s closing. “Ownership category” refers to how you own the account, such as an individual account, joint account, trust account, or corporate account. If you open a bank account in just your name, that’s a single account. So if you have a savings account and checking account at the same bank and both are individual accounts, you have $250,000 in coverage across both accounts. If one of those accounts is a joint account, however, you have $500,000 in total coverage (the co-owner of your joint account also has $250,000 in coverage).

Some banks also offer expanded FDIC coverage by partnering with a network of banks to insure deposits.

What FDIC Insurance Does and Does Not Cover

These deposit accounts are generally covered by FDIC insurance up to the $250,000 limit:

Important to note: The FDIC does not insure the money you invest in the following products, even if they were purchased from an FDIC-insured bank:

How to Learn if Your Bank Is FDIC-Insured

One simple way to find out if your bank is insured by the FDIC, is to use the FDIC’s BankFind Tool. Bankfind also provides detailed information about every FDIC-insured institution, including its branch locations, official website, and current operating status.

Another way to find out if your bank is FDIC-insured is to look for the FDIC insurance logo on the bank’s website or an FDIC sign displayed in a local branch. Alternatively, you can ask a bank representative in person or by phone, or call the FDIC at 1-877-275-3342 and have an agent check if your bank is insured.^[2]

Recovering the Money if Your Bank Is FDIC-Insured

For insured deposits — those within the deposit insurance limits — the FDIC almost always pays depositors within a few business days of a closing, usually the next business day. They typically provide payment either by giving each depositor a new account at another insured bank in an amount equal to the insured balance of their account at the failed bank or by issuing a check for that amount. Note: the FDIC does not guarantee that if the funds move to a new bank, they will earn the same interest rate.

There are some situations where the payment process may take longer, according to the FDIC. These include deposits that both exceed $250,000 and are linked to trust documents, as well as accounts established by a third-party broker on behalf of other individuals.

Recommended: How to Keep Your Bank Account Safe Online

Understanding How the FDIC Works

You may wonder where the FDIC gets the money to cover lost accounts after a bank fails.

The FDIC says it receives no Congressional appropriations. It is primarily funded by premiums that banks and savings associations pay for deposit insurance coverage. The FDIC also makes money through investing in assets like treasury bonds.

In addition to protecting your deposits, the FDIC also directly supervises and examines more than 5,000 banks and savings associations for “safety and soundness.” Banks can be chartered by the states or by the Office of the Comptroller of the Currency. Banks chartered by states also have the choice of whether to join the Federal Reserve System. The FDIC is the primary federal regulator of banks that are chartered by the states that do not join the Federal Reserve System.

The FDIC also examines banks for compliance with consumer protection laws, including the Fair Credit Billing Act, the Fair Credit Reporting Act, the Truth in Lending Act, and the Fair Debt Collection Practices Act.

Recommended: How Are Financial Institutions Governed?

The Takeaway

The Federal Deposit Insurance Corporation (FDIC) was created by Congress in 1933 to maintain confidence in the American banking system and protect consumers if a financial institution fails. Most U.S. banks are covered by FDIC insurance, but the coverage typically only applies to accounts of $250,000 or less. Checking accounts, savings accounts, money market accounts, and certificates of deposit are covered. Should an insured bank fail, the FDIC will restore those funds up to the limit within a short time.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible 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

What is the FDIC?

The Federal Deposit Insurance Corporation (FDIC) is an independent agency, created in 1933, with a mission to maintain confidence in the nation’s financial system. To keep that system stable, the FDIC insures deposits; examines and supervises financial institutions for safety, soundness, and consumer protection; and resolves failed banks by selling their assets and settling their debts.

Is there a limit on how much the FDIC will insure?

Yes, The Federal Deposit Insurance Corporation (FDIC) insures up to $250,000 per depositor, per insured bank, for each account ownership category. This means if you have multiple accounts at the same bank under different ownership categories (such as individual, joint, or corporate accounts), each category can be insured up to $250,000. However, if your combined balances in one category exceed the limit at a single bank, the excess is generally not insured.

To increase coverage, consider spreading funds across different FDIC-insured banks or ownership categories. Some banks also offer expanded FDIC coverage by partnering with a network of banks to insure deposits.

Am I supposed to take out FDIC insurance on my bank account?

No, depositors do not need to apply for Federal Deposit Insurance Corporation (FDIC) insurance. When you open a deposit account (like a checking or savings account) at an FDIC-insured bank, your funds are automatically protected up to $250,000 per depositor, per ownership category (such as an individual or joint account). Just make sure the bank is FDIC-insured and you’re covered — no separate application or fee is required for the insurance.

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SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. 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.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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 every 31 calendar days.

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 the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, 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 the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit 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, Wise, 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 Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://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 Bank Fee Sheet for details at sofi.com/legal/banking-fees/.

SOBNK-Q225-005

Typically, a savings account is a safe, insured place to sock away your cash and earn some interest. You usually don’t use this money for spending, as you do with a checking account, nor is it necessarily the growth vehicle of investments, which also typically bring risk.

A savings account can be a good place to store funds for future goals. This could mean a short-term goal, like a fund for holiday gifts or a beach rental next summer. You might also use a savings account for longer-term goals, like the down payment on a house.

What Is a Savings Account?

Savings accounts can be a great way to diversify a financial strategy. While a person might not want to put all their money into a savings account, this kind of financial product can complement their larger financial plan.

Compared to investments, savings accounts can be a safer spot to put cash away for short-term savings. Savings accounts typically earn more interest than checking accounts.

To look at this in more details, savings accounts set themselves apart because:

•   They’re insured. The money in a savings account is insured by the FDIC (Federal Deposit Insurance Corporation). The usual limits are up to $250,000 per depositor, per account ownership category, per insured institution. When an account is insured, it guarantees that the customer will be able to access their money even in the very rare event that a bank goes out of business. Savings accounts in FDIC-insured institutions are generally a safe place to keep cash.

•   They earn interest. Unlike many checking accounts, savings accounts are interest-bearing — that means the bank will pay an annual percentage yield (APY), based on the money in the account.

Savings vs. Checking Account

Are you wondering what the difference is between a savings vs. a checking account?

•   A checking account is designed to be the hub of your financial life, with money flowing in and out.

•   Typically, you will earn no or low interest with checking accounts, but you will not face transaction limits.

•   With a savings account, money typically stays in the bank (or most of it). Since the bank can then use some of it to meet other business needs (such as loans to other clients), it pays you interest for the privilege of using some of your money in this way.

•   Savings accounts typically do pay interest, though it will vary depending on the kind of account and perhaps how much you have on deposit.

•   With a savings account, you may be limited to six outgoing transactions per month, depending on the financial institution. If you go over that number, you may be charged, have your account switched to a checking account, or even have your account closed.

How Does a Savings Account Work?

Savings accounts work by depositing funds into a savings account. The bank, as mentioned above, expects you to keep the funds there, where they can use some of the money to make, say, loans to others.

To compensate you for using your money in this way, the bank pays you interest. So, as your money sits there, it is growing. This can help you reach your financial goals sooner.

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

How to Use a Savings Account

Generally, a savings account is used for short-term savings goals, like an upcoming vacation or large purchase. This type of account is generally used to save or plan for expenses that don’t come up on a daily basis.

If you have multiple short-term savings goals, you might choose to open multiple savings accounts. You don’t have to open up an account for every goal, but keeping separate savings accounts could make budgeting easier. Watching balances grow could be an excellent motivator to keep saving.

On the other hand, financial minimalists might be overwhelmed by juggling multiple account numbers and balances. In that case, having more than one savings account might cause more confusion than clarity. The important thing is knowing how much you are saving and where.

Some specific reasons a person might open a savings account (or two):

•   An emergency fund. Emergencies crop up when least expected. That means the money always needs to be liquid and available. A savings account can be a good place to build and keep an emergency fund.

•   Short-term saving goals. Many things could fall under this umbrella, including upcoming travel, saving for a downpayment on a home, or putting aside funds to purchase a car. A savings account can be a good place for savings goals you hope to accomplish within the next few months or a year.

These are just a couple of the ways someone could use a savings account when it comes to personal finance.

There’s no one right way to use a savings account, and, depending on a person’s preference and goals, they might keep one or multiple savings accounts.

How Much to Keep in a Savings Account

How much to keep in a savings account will vary depending on a variety of factors, which may include your income level, your expenses and cost of living, and your financial goals.

For starters, experts advise having the equivalent of three to six months’ worth of basic living expenses in an emergency fund, as noted above. This can be a valuable cushion if you have unexpected bills or a job loss.

Otherwise, financial experts typically advise that you save 20% of your pay. Some of this might go towards investments and some might go into a savings account (or a couple of them) at the bank. It’s a personal decision.

Pros of a Savings Account

Savings accounts yield lots of benefits for their users. Account benefits vary by financial institution, so customers might want to check the fine print for rates and details.

•   Earned interest. As money sits in a bank account, it makes more money. The bank pays you a rate since it uses your cash, lending it out to other customers at a higher interest rate. But don’t worry, savings account holders can access their savings at any time.

•   Easy access. A savings account is typically more liquid than an investment account, making it a good candidate for short-term savings goals, since account owners can easily and quickly access their money. Typically, a customer can transfer the funds online with the click of a few buttons.

•   Low risk. Since savings accounts are liquid and easy to get to, they’re generally regarded as low risk. Savings accounts don’t have the risk associated with investing. If a person is saving up for a big purchase in the next year or two, they might want to consider keeping the money in a savings account, where they can access it easily without the concern of market volatility.

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

Cons of a Savings Account

While savings accounts have their fair share of benefits, they also have a few drawbacks.

•   They might require a minimum balance. Some savings accounts require a minimum balance, depending on the financial institution. That means the account can’t fall below a certain amount. If it does, there could be a fee or extra charges headed the account holder’s way.

•   Limited transactions. With the benefit of higher-than-average interest comes the drawback of potentially limited savings account withdrawals, deposits, and transfers. The Federal Reserve lifted its rule that banks must penalize members who make more than six transactions per month from their savings accounts in 2020. However, banks can still penalize you (with fees) if they want to. It’s a good idea to ask your bank about its policy before making more than six transactions in a month.

•   Setup fees. Depending on the financial institution and type of account, there could be fees associated with opening a savings account. This varies by institution.

•   No tax advantage. If you are thinking about saving for your future, you might get tax breaks with a different kind of retirement vehicle, such as a 401(k) or an IRA.

Types of Savings Accounts

While they follow the same general rules, not all savings accounts are built the same. What follows are some different types of savings accounts you’ll likely find available.

1. Traditional Savings

A traditional savings account is offered by most financial institutions and typically comes tied directly to a checking account. These accounts are often offered by brick-and-mortar banks. A traditional savings account typically will have a low-interest rate compared to other savings accounts.

2. High-Yield Savings

As the name suggests, a high-yield savings account will have a higher yield than a traditional savings account. Often, these accounts are found at online banks (see below). The higher APY may come with caveats that vary by bank, such as requiring a large initial deposit and/or monthly balance. The bank might also be more likely to limit transactions to six per month.

3. Online Savings

Online-only banks don’t have to support expensive brick-and-mortar branches, which can enable them to offer annual APYs that are higher than traditional savings accounts. These online savings accounts also tend to have low initial deposit requirements and typically don’t charge monthly maintenance fees.

Recommended: Savings Account Interest Calculator

Alternatives to Savings Accounts

There are other short-term savings options that don’t involve investment risk. Here are a few alternatives.

Certificate of Deposit (CD)

A certificate of deposit (CD) is similar to a high-yield savings account when it comes to interest rates. However, when a person sets up a CD, they have to commit to keeping it there for a certain amount of time, and early withdrawal can lead to penalties. As a general rule of thumb, the longer the length of the CD, the better the interest rate.

Money Market Deposit Account (MMA)

A money market deposit account (MMA) is often similar to a high-yield savings account but may include features of a checking account as well, such as providing checks and a debit card. Account holders typically need to meet requirements and adhere to the transaction limits to see the benefits. These may include a minimum balance, and a limited number of transactions per month (including deposits, withdrawals, and transfers).

Cash Management Account

A cash management account (CMA) functions as both a spending and a savings account and may offer investing features. Often offered by brokerage houses, these accounts may offer a higher interest rate than a traditional savings account. With many CMAs, account holders can write checks, pay bills, transfer funds, and make deposits.

What to Consider When Choosing a Savings Account

When choosing a savings account, consider the following factors:

•   Interest rate: There is considerable variation, and your money might earn a fraction of a percent or several percentage points. It can be wise to shop around for the highest rates.

•   Fees. Some financial institutions may hit you with fees, such as monthly account maintenance fees. Ask in advance before signing up.

•   Minimum opening deposit and balance requirements. These can stipulate that you put and then keep a certain amount of money in the account. Make sure you are aware of the guidelines and can adhere to them.

•   Transaction limits. As discussed above, some banks place limits on the number of times you can pull money out of your savings account. Know whether your account would have penalties if you exceed the number.

•   Accessibility. You want to be sure you can reach your bank and your money when you need to. Depending on your banking and lifestyle, this could mean a local vs. a national bank, or an online bank vs. a traditional one.

The Takeaway

Most savings accounts are bank accounts that let you store your money securely while earning interest. Using a savings account separates money you intend to use at a later date, say for a large purchase or upcoming event, from everyday spending money that is kept in your checking account.

High-yield savings accounts and online savings accounts often offer higher interest than traditional savings accounts.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible 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

How exactly does a savings account work?

A savings account is typically a secure, insured way of keeping your money on deposit with a financial institution. For the privilege of having your money on deposit and being able to use it to lend to others, a bank pays the depositor interest.

Can you withdraw money from a savings account?

Yes, you can likely withdraw money from a savings account. Check with your financial institution to see whether they have a monthly limit regarding the number of withdrawals or whether there are fees if your balance falls under a certain amount.

Is a savings account worth it?

For many people, a savings account is a worthwhile financial product. It keeps your money secure and pays some interest as you save towards goals, whether that’s an emergency fund or a travel fund.

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. 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.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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 every 31 calendar days.

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 the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, 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 the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit 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, Wise, 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 Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://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.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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In general, it’s a good idea to keep bank statements for at least one year. If they contain any tax-related information, however, you may want to hold them for at least three years, and possibly as long as seven.

Here’s a closer look at how long you should keep bank statements, why you may want to keep them around, and how to store them.

What’s in a Bank Statement?

A bank statement is a document created by your bank that summarizes the financial activity in your account, such as your checking account or savings account, over a specific period, typically a month. It serves as an official record of all transactions, including deposits, withdrawals, and fees, and provides the beginning and ending balances for the period.

Information you’ll find on your bank statement can help you manage your bank account and may include:

•   The statement period dates

•   Personal details such as your name and bank account number

•   Interest earned and the applicable APY (annual percentage rate)

•   Any fees charged during the reporting period

•   Deposits, withdrawals, and transfers

•   Starting and ending balance

The purpose of a bank statement is to help you understand exactly what is happening with your bank account and keep track of what is going in and coming out.

How Do You Receive Bank Statements?

You may have the option to receive paper or electronic bank statements.

With paper bank statements, your financial institution will mail you a copy each month, or you can head to your local branch (if you have the option) and request one. If you sign up for electronic statements (or e-statements), the bank will typically send you an email notification that your e-statement is available, along with a link to access it securely through their online banking platform.

Whether you receive paper statements or opt to go paperless, you can typically access your current and previous bank statements any time by logging into your online account. You can simply look at the statement online or you can opt to download a copy to your computer.

Recommended: What Is a Debit Card?

Benefits of Keeping Bank Statements

You generally want to keep your bank statements going back at least 12 months, and possibly longer. Here’s a look at why it’s a good idea to keep them around:

Refer to Them at Tax Time

You want to be sure you have accurate numbers when it comes to filing your taxes, and having bank statements makes it easier to do your calculations. It can be especially helpful if you’re self-employed and are reporting income and business expenses.

Though you may not need to hang onto your bank statements after 12 months, it may make sense to hold onto them for three years (or even up to seven) in case you need information so you can file an amended tax return or in the event that you get audited. In fact, there are IRS guidelines on how long you should hang onto your bank statements depending on your financial and tax scenario.

Provide Proof of Payment

You can use your bank statements to track any payments you’ve made in case there are any issues. For example, if your lender believes you missed your monthly mortgage payment, you can provide them with a copy of your bank statement to show the transaction went through.

Or if you’re unsure whether your employer paid out your semiannual bonus, you can look at your bank statement to make sure they did. If not, you can show this documentation when you contact your payroll department.

Some lenders for various loan applications may also want to take a look at your bank statements to verify your income.

How long you should keep your bank statements for this specific reason is up to you. Keep in mind that banks are legally required to keep customers’ statements for at least five years, but many keep them for longer. It’s a good idea to ask your bank how long they hold onto your statements. If you want to hang onto them for longer, it’s best to download or save a copy for your own records.

Spot Fraud or Identity Theft

If you’re concerned about fraudulent transactions or just want to keep an eye on your bank account, regularly reviewing your bank statements gives you insights into your account. It can help you spot any suspicious activity. The sooner you can see these types of transactions, the sooner you can report them to your bank and get matters resolved.

Recommended: How Many Bank Accounts Should You Have?

Where to Keep Bank Statements

Where to keep bank statements will depend on whether they are paper or digital:

Paper Bank Statements

You’ll need to find physical space if you want to store paper statements. Depending on how many bank accounts you have, you might use an accordion file with a pocket for every month of the year, or you might use a single filing folder for each year. Either way, keep these folders in a safe, out-of-the-way place where they will be protected from damage or theft.

Electronic Bank Statements

Electronic statements don’t require as much physical space, which can be an advantage of online banking, but you will need some type of system for storing them. You might create one main digital folder on your computer or cloud storage service for your bank statements, the set up subfolders for each year. This can make it easy to find the right documents when you need them, such as during tax season or should you ever get audited by the IRS.

What to Do With Older Bank Statements

If you no longer need your bank statements, you’ll want to dispose of them safely and securely. That’s because they contain sensitive information that you don’t want going into the wrong hands.

Shredding Your Documents

You can shred your documents to protect your sensitive information by either purchasing your own shredder or heading to your local office supply store and paying for professional shredding. (Some communities may offer free paper shredding days throughout the year.)

Completely Delete Electronic Copies

If you have electronic copies, make sure to delete them from your computer and any backup sources. Check your computer’s trash bin or other folders to ensure they’re completely wiped from your device.

The Takeaway

Keeping bank statements is an important part of your overall financial health. It can help you with tasks such as accurately filing tax returns and providing proof of payment. Whether you keep hard copies or electronic statements securely, they can enhance your personal finance management.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible 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

How many months’ worth of bank statements do you need to keep?

It’s generally recommended that you hold onto your bank statements for 12 months. If the statements contain any information related to your tax returns, it’s a good idea to keep them for at least three years and possibly as long as seven years.

Is it OK to throw away old bank statements?

You can get rid of old bank statements that you no longer need. However, you want to dispose of them securely (often by shredding them) since they contain sensitive information.

Do banks destroy records after 7 years?

Banks are legally required to keep records for at least five years, but some may hang onto them for seven years. If you’re unsure, contact your bank to find out how long they hold on to your statements before destroying them.

Photo credit: iStock/fizkes

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The money you’ll need for a down payment on a $100,000 home could be $0 or $20,000 – or more. The answer is specific to you, and it comes down to two factors: One, the type of home mortgage loan you opt for and other personal preferences, and two, your qualifications as a borrower.

If you’re ready to buy a $100K house, you’ll want to know where you fit in the equation when it comes to your down payment. That’s where we come in. This is a comprehensive guide with real examples and numbers to help you understand how much down payment you’ll need for a home of your own. We’ll cover how much income you should have, how different factors affect your down payment, and the process of getting a mortgage.

How Much Income Do I Need to Afford a $100K Home?

If you don’t have any debt (no auto loan, student loan, or credit-card debt, for example), you need a minimum of $2,650 per month, or $31,800 per year to afford a $100K home loan. That’s assuming a 7.00% interest rate and no down payment. If you have $500 in debt payments every month, the income requirement increases to $4,000 per month, or $48,000 per year.

Keep in mind that qualifying for a mortgage depends on more than your income. There are several factors your lender will consider to qualify you for a mortgage. It’s always best to find out exactly what a lender requires, but in general, these tend to be:

Credit score: For any lender to approve your mortgage, you’ll need a credit score high enough for the loan you want. If you’re looking at an FHA loan, backed by the Federal Housing Administration, and have a 10% down payment, you could qualify with a credit score as low as 500. Other government-backed loans from the USDA and VA have no minimum credit score requirement, while a conventional mortgage often requires a credit score of 620 or above.

Income: You need to make enough income to cover your mortgage and your monthly obligations.

Debt: Your monthly debt obligations are factored into the equation. Any monthly debt you have decreases the monthly mortgage payment you qualify for. Lenders also look for your debt-to-income (DTI) ratio – all of your debt added together divided by your gross income – to be no more than 36% of your income.

Type of loan: The type of mortgage loan affects how much income you’ll need to afford a $100,000 mortgage. This is because different types of loans have different interest rates and down payment requirements.

Interest rate: The interest rate environment affects home affordability and changes how much income you need to afford a $100,000 mortgage. Remember that if rates drop after you purchase, you can always consider a mortgage refinance.

Property details: Property details matter – such as location and age – because it will affect your affordability. The age and build details of the house affect homeowners insurance and property taxes. This changes how much income you need.

These are examples of how much income you need to afford a $100,000 home. There are various loan terms, interest rates, down payments, and debt loads.

How Much Is the Down Payment for a $100K House?

The down payment needed for a $100,000 house varies by loan type. In some cases, such as with a VA loan (backed by the U.S. Department of Veterans Affairs) or a United States Department of Agriculture (USDA) loan, you may be able to avoid a down payment altogether. In most cases, if you’re a first-time homebuyer or haven’t owned a primary residence in the last three years, you’ll need between 3% and 3.5% ($3,000 to $3,500) for the down payment on a $100,000 home.

Here’s a breakdown of the minimum down payment by loan type for a first-time buyer. (A $100,000 home is within the conforming loan limits and is not considered a jumbo loan.) Keep in mind, putting down less than 20% requires you to purchase some type of mortgage insurance, the costs of which will be included in your loan.

What Are the Down Payment Options for a Home Worth $100K?

First of all, congratulations if you have found a home valued at $100,000. Given that the average U.S. home price is much higher than that, you must be shopping in one of the best affordable places in the U.S.!

Purchasing a home for $100,000 will help keep your overall cost of living in line. Your down payment options on a $100K mortgage depend on your loan type. As mentioned above, there are some options where you don’t have to put any money down, and others where you need to put down at least 3%. Here are some common down payment options for a home worth $100K:

•   0% = $0

•   3% = $3,000

•   3.5% = $3,500

•   5% = $5,000

•   20% = $20,000

If you’re worried about coming up with a down payment, there are down payment assistance programs that might be able to help. You need to meet the program requirements, which are often geared toward first-time homebuyers located in a specific area who need financial assistance. The property itself also must meet certain conditions outlined by the program.

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What Does the Monthly Mortgage Payment Look Like for a $100K Home?

The monthly mortgage payment for a $100,000 home works out to roughly $665 for principal and interest. When you add in taxes, homeowners insurance, and mortgage insurance, you’ll be closer to $925 per month. These numbers assume a 7.00% interest rate on a 30-year loan with property taxes of $1,250 and a homeowners insurance premium of $750. These numbers will be different, of course, depending on your area, property, and personal qualification factors.

The following is a sample table of the different monthly mortgage payments you could see on a $100K mortgage with varying down payment amounts, interest rates, and loan terms.

As you can see, there’s a wide variance in monthly payments for a $100,000 mortgage. Shorter terms, higher interest rates, and lower down payments result in higher monthly payments — although with a shorter term, borrowers will pay less interest over the life of the loan. Longer loan terms, lower interest rates, and higher down payments result in lower monthly payments.

What to Do Before You Apply for a Mortgage on a $100K Home

If you’re not quite ready to apply for a mortgage on a property valued at $100,000, there are some steps you can take in the meantime to help you qualify as a first-time homebuyer or even as a repeat homebuyer.

•   Talk to a lender. Even if you’re not ready to apply for a $100,000 mortgage, it’s better to get your questions answered sooner rather than later. A good lender can explain your options and help get you on the path to mortgage qualification.

•   Set your goals. Write down what you want and how you’re going to get it. Put a plan in place for qualifying for a mortgage. You might consider paying down debt or saving for a down payment.

•   Check your credit. See where you’re at and what you need to do to improve your credit score. A good credit score will get you the best interest rates and save you money for years.

•   Shop around for a loan Look at different lenders with different loan options. Get loan estimates and be sure you’re comparing apples to apples. Look at the loan’s annual percentage rate (APR), which includes fees.

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Should I Get Preapproved Before Applying for a Mortgage?

Getting preapproved for a mortgage is a great strategy. Mortgage preapproval is a strong indication that you’ll be approved for the loan. It can help you make decisions about what loan will be best for you and puts you in a better position to negotiate with sellers. Going through the mortgage preapproval process helps your true financial picture become clear.

How to Get a $100K Mortgage

Getting a mortgage on a $100,000 home is a simple process if you’re qualified, but you might not be familiar with it if you’re buying your first home. According to the Consumer Financial Protection Bureau, the process looks like this:

Prepare to shop for a loan

This step involves getting your finances in order. You’ll assess your spending, figure out how much you want to spend, how much you can save for a down payment, and pull all your documents together (tax return, bank statement, etc.)

Explore loan choices

You’ll learn about the different types of loans, loan costs, and shop around for a lender.

Choose a loan offer

Request loan estimates and preapprovals from several different lenders, look closely for loan details that matter most to you, and choose a lender you can trust and that can offer you competitive pricing.

Close on the new loan

Once you’ve selected a loan officer, you’ll send over the contract to them to get the mortgage process started. You’ll submit required documents, schedule a home inspection and other due diligence items, obtain title and homeowners insurance, and review documents before closing.

The Takeaway

The down payment for a mortgage on a home valued at $100,000 ranges from $0 to $20,000, though you could put down even more. The factors that affect how much you need for a down payment depend on your loan type and personal preference and qualifications. If you go with a VA loan, for example, you might not need a down payment at all. If you have a credit score above 580 and you opt for an FHA loan, your down payment will be a minimum of 3.5%. And a qualified first-time homebuyer can get a conventional mortgage from some lenders with a downpayment as low as 3%.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

FAQ

How much should I make to afford a $100,000 house?

How much you need to make to afford a $100,000 house starts at about $32,000 per year. This assumes you have no debt and can secure a 7.00% interest rate on your mortgage. Your debt and interest rate are some of the biggest factors determining how much you need to make to afford a $100,000 home.

What credit score is needed to buy a $100,000 house?

The credit score needed to buy a $100,000 house depends on the type of mortgage you get. The credit score requirements for an FHA loan is generally 580, unless you’re able to make a down payment of 10% or more, in which case, you can have a credit score as low as 500. For a conventional loan, it’s 620. For a USDA or VA loan, there’s no minimum credit score requirement for the program, though a lender may impose one.

How much is a $100K mortgage per month?

A $100,000 mortgage with a 7.00% interest rate and a 30-year term is roughly $924 per month. That amount includes $665 in principal and interest, $167 for taxes and insurance, and $92 for mortgage insurance.

Photo credit: iStock/Mariia Vitkovska

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