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Deciding to pursue a master’s degree during a recession can be a strategic move or a financial risk, depending on your circumstances. While economic downturns often reduce job opportunities, they can also provide a chance to invest in education, build new skills, and enhance career prospects.

Historically, times of economic turmoil have seen big upticks in graduate school enrollment. But is this the right move for you now?

This guide explores the pros and cons of pursuing a master’s degree during uncertain economic times to help you make an informed decision.

Why People Go Back To School During Recessions

Periods of decline in economic activity (aka recessions) are commonly accompanied by corporate layoffs, rising unemployment, and dwindling wage growth. Because there are fewer employment opportunities, job hunting and career advancement become more competitive. Many workers decide a return to school, often to earn a master’s degree, makes sense in a tough employment market.

Earning an advanced degree can boost your earning power in your chosen field or provide an opportunity to change fields. Career changers may gravitate to growing, “recession-proof” industries and fields that they are passionate about.

Recommended: 12 High Income Skills to Learn

Who Should Get a Master’s Degree?

Whether you should get a master’s degree depends on your professional and academic goals. A master’s degree indicates a high level of knowledge in a profession or research area. It takes anywhere from one to three years of full-time study to complete a master’s. A bachelor’s degree is required to apply for a master’s program.

For academics, a master’s is usually a stepping stone to a Ph.D. or other doctoral degree. Professional master’s degrees can also be the first step toward advanced degrees required for doctors, pharmacists, and lawyers, and are a necessary part of education for those careers.

Master’s degrees can also be required or particularly helpful in education, social service, health care, business, and STEM fields (science, technology, engineering, and mathematics).

Recommended: What Should I Do After My Master’s Degree?

Pros of Getting a Master’s Degree in a Recession

For many people, a recession is a good time to go back to school, either full- or part-time. Here’s why.

Potential Salary Boost

In many careers, a master’s degree will command a higher salary and increase job security. According to the Bureau of Labor Statistics (BLS), workers with graduate degrees (master’s, professional, and doctoral) have the highest earnings.

The median weekly earnings for full-time workers over 25 with a master’s degree is $1,737, compared to $1,493 for employees with a bachelor’s degree only.

Increased Job Security

Workers with graduate degrees also experience lower levels of unemployment, according to BLS data. The unemployment rate in 2023 for people with a master’s was 2.0%, compared to 2.2% for workers with bachelor’s degrees.

People who have been negatively affected by a recession — either laid off or unemployed for an extended period — often find that an advanced degree can lead to more job security and advancement. As mentioned above, recessions can also be a good time for workers in hard-hit industries to gain skills and knowledge through a master’s in a fast-growing field.

Many grad school students find that networking with other students, faculty, and alumni helps them find new opportunities, especially in a competitive job market.

Easy Access To High Quality Programs

Hundreds of high-quality, in-demand graduate degree programs are now available online from prestigious colleges and universities. Remote learning makes these programs accessible to students anywhere in the country. Online programs often cost less than in-person learning and can offer more flexibility for students who need to continue working full- or part-time.

Recommended: 10 Most Affordable Online Colleges in the United States

Cons of Getting a Master’s Degree in a Recession

Grad school isn’t right for everyone, and making this move demands careful consideration. Potential cons of going to grad school in a recession include:

Costs and Potential Debt

The average cost of a master’s degree is $62,820, according to a 2024 report from the Education Data Initiative. That does not include living expenses or lost wages from taking time off work. And people with a master’s degree carry an average of $69,140 in student loan debt.

Determining whether taking on federal or private student loan debt is worth the increased earning potential or career satisfaction is an important step in your decision-making process.

Increased Competition for Admissions

You’re not the only one debating whether to ride out tough economic times by going back to grad school. That can mean increased competition for the best programs. If a degree from a particular college or university is part of your career plan, carefully consider your timing.

Missed Work Experience

If you’re considering leaving a job to attend grad school, keep in mind that you may miss valuable work experience that can put you in a better position when the recession ends. Working part-time can help pay for grad school and sometimes alleviates missed work experience, but not always. That’s because part-time employees don’t always encounter the same opportunities to gain valuable experience as full-time staffers.

Recommended: Undergraduate vs. Graduate Student Loans: How They Differ

How Much Does a Master’s Degree Cost?

Depending on the field of study and institution, master’s programs range from $18,000 to $47,000 per year. Unlike many doctorate programs that waive tuition and fees and even offer a stipend, master’s degrees are not fully funded.

Ways To Pay for a Master’s Degree

Most students rely on a combination of savings, scholarships, grants, federal loans, private loans, and help from employers to pay for graduate school.

Federal Grants

Federal grant programs include the Pell Grant, which is generally available only to undergrads who demonstrate exceptional financial need. However, it may be possible to receive some grant funding to help you pay for grad school during a recession. Remember, this time around you’re an independent student, and you won’t be tied to your family’s income to determine need.

Another federal grant that may be available to graduate students is the Teacher Education Assistance for College and Higher Education, or TEACH Grant. This grant has relatively stringent requirements and is available for students pursuing a teaching career who are willing to fulfill a service obligation after graduation.

Filling out the Federal Application for Student Aid (FAFSA) is the first step to determining whether you’re eligible for federal grants.

Scholarships

The FAFSA also gives you access to many scholarships. There are scholarships offered in every field imaginable. Start your search with these online tools:

•   Graduate School Scholarship Search at Sallie Mae

•   Scholarship Search Engine at CollegeScholarship.org

•   SoFi’s State Scholarship Search

Federal Student Loans

Grad students may be offered loans as part of their financial aid offer. A loan is money you borrow and must pay back with interest. Loans made by the federal government, called federal student loans, usually have more benefits than loans from banks or other private sources.

The lifetime limit for Direct Subsidized and Unsubsidized student loans is $138,500 for graduate or professional students. Of this amount, no more than $65,500 can be in subsidized loans. This includes student loans borrowed during undergraduate study.

Private Student Loans

Many students also rely on private student loans to help pay for graduate school. The maximum amount that students can borrow with a private student loan varies by lender, but can’t exceed the cost of attendance.

The cost of attendance is the combined total of tuition and fees, books and supplies, living expenses, transportation, and miscellaneous expenses. This estimate may also include dependent care, study-abroad, and costs related to disabilities.

Recommended: A Complete Guide to Private Student Loans

The Takeaway

Pursuing a master’s degree can be a great way to enhance your skills and career opportunities. Taking advantage of a slow or troubled economic time to do so can help ensure your job security in the future. That said, it’s important to consider the tuition costs associated with a graduate degree, the potential for taking on debt, and the effects of missed earnings and opportunities if you take time off work to go back to school.

Ways to pay for graduate school include cash savings, tuition assistance from your employer, scholarships, grants, and federal and private student loans.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

FAQ

Is grad school a good place to ride out a recession?

It can be. Recessions are usually accompanied by high unemployment and layoffs. For many people, gaining new skills and expertise in a graduate program can be a good way to make yourself recession-proof in the future.

Do more people head for grad school during a recession?

Yes, more people often pursue graduate school during a recession as job opportunities shrink and individuals look to enhance skills or change careers. Higher education can provide a competitive edge, but it’s crucial to weigh the costs, especially when taking on debt during uncertain economic times.

What are worthwhile master’s degrees to get during a recession?

Master’s degrees in fields with strong job stability and growth potential are worthwhile during a recession. Examples include health care, data science, cybersecurity, education, and business administration (MBA). These fields often offer consistent demand, diverse career opportunities, and higher earning potential, making them strategic choices in uncertain economic times.

Photo credit: iStock/izusek

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

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

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SOISL-Q424-046

A trade school, often called a vocational or technical school, provides specific job skills to start a career quickly in a given trade, with the requisite certifications and licenses. That career can range from being an electrician to a physician’s assistant to a cook. As opposed to a four-year college, a trade school education is generally completed in just two years and focuses on getting students hands-on experience and securing the job they want.

Trade school costs an average of $12,000 to $20,000+ per year. While trade school can be significantly less costly and require less time than a four year degree, there are still expenses to consider. Continue reading for more information on how expensive trade school is and planning for trade school costs.

What Is Trade School?

College is not for everyone. Trade school can provide a path to a rewarding career, without the time and money required to pursue a four-year degree.

Trade school is a type of education that provides training in a specific job or skill set to allow students to start a given trade or career with the requisite certifications and appropriate licenses. Also known as vocational or technical schools, trade school can be a stepping stone into a career as a plumber, electrician, dental hygienist, pharmacy technician, paralegal, and more.

Trade schools may be private or public institutions, and it can take as little as a few months to two plus years to complete a trade school program. Community colleges may offer vocational programs or more general education classes for students planning to transfer to a four-year institution.

How Much Does Trade School Cost

The cost of trade school varies widely based on factors including the school, the program you are pursuing, and your location. According to the Integrated Postsecondary Education Data System (IPEDs), the average cost of trade school was $15,070 for the 2022-23 school year.

Tuition

The cost of tuition for trade school can range dramatically, from $4,200 to $25,000+ per year. Here is the average cost of tuition and fees for popular trade school programs, according to IPEDs:

•   Patient Care Assistant/Aide: $4,280

•   Welder: $11,230

•   HVAC Tech: $11,630

•   Licensed Practical Nurse: $14,700

•   Cosmetologist: $16,230

•   Auto Tech: $25,870

Books and Supplies

The cost of books and supplies will vary based on the vocational program or trade school. According to data from IPEDs, the average cost of books at a two-year public institution was $1,720 for the 2022-23 school year.

Living Expenses

Unsurprisingly, the cost of living expenses can also vary quite dramatically from student to student. Some students who are attending trade school may be able to live at home with family members. This could help them reduce costs because they may have little to no rent, and share meals with family members.

Trade school students who are living on their own may need to budget for more expensive living costs.

Recommended: What Is the Cost of Attendance in College?

Paying for Trade School

When it comes to paying for college, or trade school, there are a few options available to students, including loans, federal aid, grants, and more.

Trade School Loans

The term “trade school loan” is just a way to refer to a student loan, personal loan, or outside funding measure used to pay one’s way through a training or vocational school.

Many trade and vocational schools may qualify for federal student loans and other forms of federal financial aid. To apply for federal loans, students will need to fill out the Free Application for Federal Student Aid (FAFSA®) each year.

There are limits for federal student loans, and some students may consider a private student loan to supplement the cost of tuition and living expenses. Private student loans are available from private institutions, but they may not offer the same benefits or protections as federal student loans.

Working Part-Time

Trade schools generally offer flexible programming — for example, night classes — so students may be able to work part-time to fund their education. Students may consider getting a part-time job in the field they are studying, or working at a gig that is willing to accommodate their school schedule so they have enough time to take classes and study.

Financial Aid for Trade School

As already mentioned, trade schools may qualify for federal financial aid — including student loans, grants, and scholarships. Federal aid can be used for technical schools and some certificate programs as long as the schools are accredited and eligible for federal funds. You can check the Department of Education’s database of qualifying schools to confirm your chosen trade school program qualifies.

Grants

Students at eligible trade schools may qualify for a Pell Grant. A Pell Grant is a type of federal grant that is awarded to students who demonstrate exceptional financial need. The maximum amount for the 2024-25 school year is $7,395.

Scholarships

There may also be scholarships available for trade school students. Certain trade schools may offer scholarships, and there are vocational school scholarships available from private organizations, as well. To find trade school scholarships, check with your school’s financial aid office or search online scholarship databases.

Recommended: SoFi’s Scholarship Search Tool

Tips on Selecting a Worthwhile Program

Trade school can make sense for students who are interested in pursuing a specific vocation and are not interested in attending a more traditional four-year school. To evaluate trade schools, consider the following factors:

•   Program accreditation: This can give you an idea of a program’s reputation. Accredited schools may qualify for federal financial aid, as well.

•   Time to complete: This will tell you how long it will take you to complete the program, along with the total cost of the program.

•   Opportunities for paid, on-the-job training: Some programs may offer a combination of in-classroom learning and paid job training. Gaining this real world experience can be valuable.

•   Employment assistance or support: Some trade schools have close connections with local businesses or industries. Find out if there is a career connections office or any job placement assistance from your school.

Private Student Loans for Trade School

SoFi doesn’t offer student loans for trade school programs, but does offer private student loans for eligible graduate certificate programs. If you’re a college student interested in pursuing a certificate program, a SoFi private loan could be a tool to help you finance the program.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

FAQ

Are trade schools more affordable than four-year universities?

Trade schools are generally more affordable than a college or university. In addition to having a more affordable annual tuition, typically trade school programs can be completed in less than four years.

What are the most high-paying trade jobs?

Some of the highest-paying trade jobs include elevator and escalator installers, radiation therapists, dental hygienists, aircraft mechanics, and construction managers. These roles typically require specialized training or certification from trade schools and offer competitive salaries, job stability, and opportunities for career growth in high-demand industries.

How long is trade school?

The length of trade school can vary based on the program. Some trade school programs can be completed in a few months while others may take two years to complete.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 04/24/2024 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org).

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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.

SOISL-Q424-043

The IRS Form 1099 can be an important part of filing annual income taxes for some earners, such as freelancers, independent contractors, some retirees, and income-earning stock investors. The 1099 form captures information about income earned from a non-employer source or salary. It can be filed by either a company or individual who paid the recipient of the form.

But these documents can at times get confusing because of the multiple varieties of 1099s. These can include 1099-MISC, 1099-DIV, 1099-INT, and more. Each shows a different sort of financial transaction that occurred in a given tax year.

To get help understanding these critical tax documents, read on.

What Does IRS 1099 Form Document?

IRS Form 1099 reports income earned from self-employment, interest, dividends, and other sources. 1099 recipients can get the IRS form from the company, state, individual, or organization that paid them potentially taxable income.

Since this document can contain information about possibly taxable income (pre-deductions), it’s worth holding on to all 1099s received — whether printed or sent electronically. IRS 1099 forms can be helpful when filing both state and federal income taxes. Knowing how to read these forms can play a key role in understanding your taxes.

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Who Gets a 1099?

Should you expect a 1099? Well, it depends. If you do any work as a freelancer or an independent contractor, then it’s likely that you will receive one for pretax, non-employee compensation.

More specifically, the answer is yes if you’ve received at least:

•   $600 in business rental income

•   $600 for services from a person or business that is not your employer

•   $600 in prizes or awards

•   Other non-employee income — including $10 or more in royalty income, $600 of business attorney fees, or $5,000 in direct sales.

Another common reason you may receive an IRS Form 1099 is investment income. If you own bonds, dividend-paying stocks, or mutual funds that produce income, it’s likely that you’ll receive a 1099 that outlines the income for which you’ll be liable. Even if you reinvest those dividends immediately, you’ll have to pay income tax on dividends that have been paid out.

Like an IRS W-2 form, a 1099 reflects your income for a given year. But a W-2 reflects income from wages or a salary, which come to you with the taxes already having been deducted. A 1099 shows gross, or raw, income that has yet to be taxed. Some (but not all) recipients may qualify for further tax deductions on the income listed on the 1099 form.

Different Types of 1099 Forms

What is a Form 1099? As briefly mentioned above, there are multiple types of 1099s, reflecting different kinds of money that you may receive in a given year. Some might show active income, such as money you earned as a freelancer or by starting a side hustle. Others might capture passive income, money that’s earned on, say, renting a second home as an Airbnb. You might also have received funds that are interest earned on your stock portfolio.

Whether you’re filing taxes for the first time or have been doing so for years, keep reading to learn a bit more about these different forms.

1099 Forms for Earned Income

Here are some of the 1099 forms you may receive as you prepare for tax season, reflecting income earned as a non-employee in the previous year:

•   1099-NEC: The IRS implemented this form in 2020 for non-employee compensation (hence the initials NEC). It is replacing the 1099-MISC for many non-employee workers. It is what you may receive if you freelanced for clients, are a self-employed contractor, or if you have a side gig of some sort.

•   1099-K: This form has new guidelines. For tax year 2024, 1099-K forms will be issued by payment apps and online marketplaces when the total payments were more than $5,000. In tax year 2025, the threshold will be reduced to $2,500, and in tax year 2026 and onward, it will be further lowered to $600 in payments.

1099 Forms for Passive Income

What’s a 1099 for passive income? First, you need to know that passive income is money you earn from such endeavors as a limited partnership, a rental property, or another enterprise that doesn’t require active participation.

The 1099 forms you may receive to show earnings of this kind include:

•   1099-MISC: In the past, independent contractors and freelancers would receive this from those who have paid them at least $600. Now, that kind of income, which is subject to self-employment tax, is shared via a 1099-NEC (see below). The 1099-MISC has shifted to show income that is not subject to self-employment taxes, such as rent or prize money.

1099 Forms for Portfolio Income

Next, explore what is a 1099 form for portfolio income. Some people would say that your investment portfolio’s gains are a kind of passive income since you aren’t actively working to make the money; others would disagree.

That noted, here you’ll learn about 1099 forms for portfolio income as a separate entity from passive earnings such as earning money on a rental property you own.

The 1099-DIV and 1099-INT are perhaps the most pertinent types of 1099s for anyone who invests. It’s important to note that anyone who takes in more than $1,500 in interest or dividends during a given year will also have to file a Schedule B as part of their tax return.

Investment dividends and interest are both considered income and are taxed at your income tax rate. At the same time, capital gains made on short-term investments may also be taxed at your income tax rate.

It’s important to factor in any returns you’ve made on investments held for less than a year when tallying your tax return at the end of the year.

The 1099-DIV and 1099-INT are perhaps the most pertinent types of 1099s for anyone who invests.

Next, a closer look at the 1099s that are used to show earnings:

•   1099-B: Are you an income-earning investor? If you trade or barter securities, this form is the official record of the income you received on those trades, and it’s usually filed by the broker or clearing firm. This form can help you manage capital gains and losses on your income tax return.

•   1099-DIV: Annual dividends and distributions from any type of investment will show up on this form.

•   1099-INT: This reports interest income. It usually comes from a financial institution for interest income from a CD or savings account, as well as from Treasury bills and U.S. Savings Bonds.

•   1099-R is used to report distributions you may receive from retirement plans, IRAs, profit-sharing plans, annuities, and the like.

Other 1099 Forms You May Receive

In addition to the 1099 forms already noted, there are several more you may well encounter. These include:

•   1099-A: You’ll receive this form if your lender canceled some or all of your loan, usually because of a foreclosure.

•   1099-C: Debt forgiveness is considered income, and 1099-C tracks that income. (There’s an IRS Form 982 which, in certain circumstances, may allow you to exclude this income from your return.)

•   1099-G: If you received unemployment benefits or any other money from a state, local, or federal government, such as a tax refund or credit, you may receive one of these.

•   1099-S: Income earned on real estate transactions will be reflected in this form.

•   SSA-1099: This reflects the Social Security payments you’ve received in the past year.

Recommended: What Triggers an IRS Audit?

Tabulating Tax Deductions for the Year

While wage and salary income are usually taxed before being disbursed to employees, other types of income usually aren’t. But that fact doesn’t mean 1099 recipients necessarily owe taxes on all of the income listed on the IRS 1099 form.

For instance, freelancers and independent contractors generally can, or must, pay estimated quarterly taxes to avoid a big tax bill each year. In these cases, they may even receive a tax return on their 1099-reported income (assuming overpayment).

At the same time, some 1099 recipients could have deductions that offset the income. Simply put, deductions reduce tax liability by lowering one’s taxable income for a given year. The standard deduction for tax year 2024 for a single person is $14,600 and, for joint filers, is $29,200. But itemized deductions might include:

•   Student loan interest

•   Mortgage interest

•   Qualifying charitable donations

•   Medical expenses (for those who itemize deductions).

If you’re a freelancer or independent contractor, you may be able to deduct a wide range of business-related expenses — including a home office, supplies, travel, and client dinners. This can lower your tax burden and possibly leave you with more money in your checking account.

Regardless of which deductions you claim, it’s important to invest time and thought on your tax return, perhaps using tax software or consulting with a tax professional, to make sure you’re neither overpaying nor underpaying your taxes. And also, of course, to make sure you aren’t missing the tax-filing deadline.

One more tip on getting organized: It can also be wise to check this year’s forms against the documents you received the previous year, to make sure you aren’t missing any tax forms.

For additional specifics on this tax filing season, 1099 recipients may want to check the IRS Filing and Payment Deadlines Questions and Answers page or contact the IRS at 800-829-1040 toll-free for help.

Tips for Filling Out a Form 1099

If you receive a 1099, you don’t need to fill it out in any way; you just need to account for it when filing your tax return.

If, however, you are the person responsible for filling it out, keep these tips in mind:

•   The payer information is where the name, address, taxpayer identification information, and other details about the issuing entity are added.

•   The recipient information is where you’ll fill in the specifics about the person who will receive the form. This is typically their name, address, and identifying information, such as a Social Security number (SSN).

•   Carefully fill out such applicable areas as non-employee compensation and federal and state income tax withheld when completing 1099-NEC forms.

Recommended: How to File for a Tax Extension

The Takeaway

IRS Form 1099 documents income earned from non-employer sources and can be used when filing and calculating one’s annual tax liability. It’s commonly sent to freelancers, independent contractors, investors, Social Security recipients, and those whose forgiven debts count as taxable income.

While thinking about your taxes, you may want to consider whether your banking partner is helping you keep your funds well organized.

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FAQ

What should I do if I do not get all of my 1099 forms?

If you don’t receive your 1099 forms by January 31st, which is the date they should be issued by, you might wait a couple of days to see if they arrive by mail. If not, reach out to the issuer to request your form; perhaps it can be downloaded quickly. If it is February 15th and you still don’t have the form, you can try to get the information you need from other sources (such as a bank statement) or else call the IRS helpline at 800-829-1040. Some services, such as TurboTax, may allow you to account for a missing 1099 while using their software.

What should I do if I make an error on a 1099 form?

If you receive an incorrect 1099 and inform the issuer, they can create and file a corrected version, which means both you and the IRS will have the updated document. If you are the issuer, it’s your responsibility to rectify the error and re-issue the form.

Is a 1099 the same as a W-2?

A W-2 is a form issued to employees to show their earnings and the taxes withheld. On the other hand, 1099s track financial transactions during a tax year, such as non-employee earnings, interest and dividends, rental income, and more. These transactions may be taxable events and have implications as you file your annual tax return.

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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.

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