Guide to Direct Deposit

If you’re like most Americans, your paycheck turns up in your bank account automatically, without any check to sign and then make a trip to the bank to deposit.

With direct deposit, funds are electronically transferred out of one bank account and deposited into another. It’s a convenient way to automate one’s finances, and it’s not limited to paychecks. It can streamline other financial transactions as well.

Here, you’ll learn more about this process, the pros and cons of direct deposit, and ways you might want to put it to work for you.

Key Points

•   Direct deposit is an electronic transfer of funds from one bank account to another, commonly used for payroll.

•   It was introduced in 1972 with the formation of the first Automated Clearing House (ACH) network.

•   Approximately 92% of employed Americans receive their salaries via direct deposit.

•   The process involves employers sending an electronic file to the bank, which then distributes funds to employees’ accounts.

•   Direct deposit is also utilized for government benefits, tax refunds, and other payments.

What Is Direct Deposit?

As mentioned above, direct deposit is a way of electronically transferring funds between bank accounts.

It was pioneered more than 50 years ago. In 1972, the first automated clearing house (ACH) network formed to manage electronic payments, with other networks quickly following. In 1975, the Social Security Administration (SSA) decided to test the system of direct deposit for payments they issued. Today, nearly 99% of SSA’s payments are directly deposited.

According to a 2024 survey, approximately 92% of employed people in the United States receive their salaries or wages this way.

What’s more, these automatic bank transfers are used today in ways beyond having paychecks directly deposited, including bill pay, retirement account contributions, and more.

💡 Quick Tip: Did you know online banking can help you get paid sooner? Feel the magic of payday up to two days earlier when you set up direct deposit with SoFi.^

How Does Direct Deposit Work?

You’ve now learned a bit about what direct deposit is and how the ACH system facilitates direct deposit, allowing funds to flow seamlessly and quickly from one account to another.

Here, a bit more intel on how this process can be put to work for you and how to set up direct deposit.

Direct Deposit for Payroll

Let’s say that an individual is ready to start a new job. The human resources department explains how the company either requires direct deposit or offers the option.

•  If that employee wants to set up direct deposit, they would need to share bank information with their new employer, including the bank’s name, the routing number that identifies the financial institution, and the employee’s bank account number. Sometimes, a voided check is requested.

•  This information would then be entered into the company’s payroll system and, whenever payroll rolls around, the company would send an electronic file to this employee’s financial institute. The file would share how much money should be transferred from the company’s (the “originator’s”) bank account to accounts for each of the employees whose direct deposit accounts are located at that particular financial institution.

•  If, for example, three employees of a company all share Bank A, then let’s say this bank receives an electronic transfer of $4,345. Bank A would then distribute the money appropriately into the proper bank accounts, such as:

◦  $2,000 in Person A’s checking account and $500 into their savings account

◦  $1,350 in Person B’s account

◦  $445 in Person C’s checking account and $50 into their savings account.

•  Then, if the employees (known as “receivers”) check their bank balances, they’ll see the deposits made through this direct deposit process. As noted in this example, money may be directly deposited to a checking account or into a savings account. Or some money can be put into a savings account with the rest in a checking account.

•  How long does direct deposit take? Typically, the funds go through like clockwork and are there waiting on payday. Some banks may offer the ability to access your direct deposit up to two days sooner.

What Are the Uses of Direct Deposit?

There are several uses for direct deposit:

•  Payroll. As noted, the vast majority of Americans get paid this way.

•  Tax refund. This can be among the quickest ways to get your tax refund. The IRS can process a direct deposit refund for an electronically filed return in as little as seven to 10 days of receipt; however, most refunds are issued in less than 21 days.

•  Government benefits. Social Security and Supplemental Security Income benefits, VA, unemployment, and other benefits can be paid via direct deposit.

•  Commissions, rental income, vendor payments and other earnings can be automated with direct deposit.

•  Dividends. Shareholders may receive dividends by direct deposit.

•  Child support. This may also be automated.

Benefits of Payroll Direct Deposits

Direct deposit of paychecks has many benefits. Here’s a closer look:

•  Convenience: With a direct deposit of their paycheck, employees can skip the step of physically depositing a paycheck into their accounts, which can be a timesaver.

This can be especially true if the employee telecommutes from home, is on vacation, or is otherwise out of the office when payday comes, because that employee doesn’t have to go into the office to retrieve the paper check.

•  Speed: With direct deposit, the money is typically in an employee’s bank account at the start of the designated payment date, which gives them access to the funds that day. No waiting for checks to clear.

•  Security: With paper checks, there’s always the possibility that they will get lost or stolen. Payroll direct deposit can add a layer of security to the process.

Many times banks will waive fees for customers who have direct deposits set up.

•  Savings: Many banks will waive fees for customers who have direct deposits set up, although there may be a minimum deposit amount required for this to happen.

•  Better money management: If an employee puts a percentage of each paycheck automatically into a savings account, this can help get them into a regular savings habit.

Downsides of Payroll Direct Deposit

Now, for the other side of the coin, these are the cons of direct deposit:

•  Inconvenience: When people receiving direct deposits decide to change banks, it may be a hassle. It may take workplaces a period of time to change where paychecks are sent, which means that the old account might need to be kept open longer to make sure all paychecks are received.

How long that period of time may be can vary. But, before you close your old account, ensure that all direct deposits are being put into the new account. Also make sure that all withdrawals and checks have cleared at your old bank and that any automated payments are coming out of the new bank.

•  Scheduling: With direct deposit, it’s important to make sure the correct deposit dates and amounts are recorded. Otherwise, account holders could write checks beyond what’s available, which could trigger overdraft or non-sufficient fund (NSF) fees — which can be costly, especially when they add up.

•  Lack of access: Not everyone in the U.S. has a bank account (this is often referred to as being “unbanked”). If an employee doesn’t but their employer requires direct deposit (more about that next), then employees without a bank account would likely receive their paychecks through a prepaid debit card. These can come with fees and, like paper checks, can be lost or stolen.

Here are the pros and cons in chart form for easy comparison:

Pros of Direct Deposit

Cons of Direct Deposit

Convenience receiving fundsInconvenience if you change banks
Speed (no waiting for checks to clear)Scheduling; must be sure funds arrive when needed
Security (no carrying around cash or checks getting lost in the mail)Lack of access for those who are unbanked
Savings; banks may offer discounts or bonuses if you receive qualifying direct deposits
Better money management

Employers Requiring Direct Deposit

Just as there are benefits to payroll direct deposit for employees, there are also benefits for employers. For instance, it’s cheaper to manage payroll payments this way, versus physical checks.

Plus, employers have a record of accounts, which makes it easier for companies when they’re reviewing expenses — and they don’t have to reissue a check if an employee loses one.

And, after a person’s payroll information has been entered into the system, paying employees can be faster and easier with direct deposit.

Laws governing payroll direct deposit vary by state and, if a state has no specific laws on this subject, it defaults to federal regulations. Federal law states that employers must give each employee using direct deposit a summary of rights and liabilities and must get their signature on an authorization form along with relevant banking information.

Some states allow employers to actually require direct deposit for payroll, as long as the program is administered in a way that’s consistent with federal regulations. (In some cases, the rule only applies to public sector workers.) Most states, however, still give employees the choice between direct deposit and receiving a physical check.

A handful of states have laws that are unique to them, ones that don’t fit into any of the broad categories already described.

Automating Your Finances

The concept of electronic funds transfers is at the heart of payroll direct deposits, but goes beyond that. Here are additional ways to benefit from automating your finances.

•  Automation is a tool that can also help people to build an emergency savings fund. In general, traditional wisdom says this account should contain three to six months’ worth of living expenses.

That way, if an emergency arises (whether that’s a job loss, an unanticipated repair, or unexpected medical expenses), a financial cushion exists. By setting up a regular funds transfer to a savings account, this can make it easier to build up that emergency fund.

•  Another way to streamline your financial life: paying bills through autopay. In some instances, lenders may offer a discounted interest rate for borrowers who use automated payments to pay their bills. Autopay can help borrowers make their payments on time, rather than forgetting them when life gets hectic. This can mean fewer or no late fees.

•  Because payment history plays a key role (35%) in a person’s FICO® Score, autopay can help you establish and maintain your credit score. By automating payments (as long as enough money is in your checking or savings account when the payment is due) you can optimize this aspect of your cash management.

•  Autopay helps to reduce the number of paper bills that need to be sent out and the number of paper checks that may be written to pay those bills. This means that automated funds transfers can therefore be an eco-friendly choice to make.

•  Whenever funds are electronically transferred, either in or out of a bank account, a digital record is automatically created. This can be helpful when balancing accounts, creating a budget, looking for tax deductible items, searching for ways to trim discretionary spending, and more.

•  Autopay might also be a good strategy to use to contribute to a retirement account. Employers may automatically deduct an amount from employee paychecks to transfer it into a retirement account that’s set up by the company, such as a 401(k). That can make saving easy.

Increase your savings
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*Earn up to 4.00% Annual Percentage Yield (APY) on SoFi Savings with a 0.20% APY Boost (added to the 3.80% APY as of 7/10/25) for up to 6 months. Open a new SoFi Checking & Savings account and enroll in SoFi Plus by 8/12/25. Rates variable, subject to change. Terms apply here. SoFi Bank, N.A. Member FDIC.

Types of Accounts for Direct Deposits

For people who decide to use automated funds transfers, here are some options to consider for receiving direct deposit:

•  Checking accounts

•  Savings accounts

•  Money market account

•  Investment accounts

•  Some prepaid debit cards

•  Some payment apps, such as PayPal or Cash App.

Getting Direct Deposit With SoFi

If you’re interested in opening a bank account to receive direct deposits, take a look at what SoFI offers and see if SoFi direct deposit is a good fit for you.

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


Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.80% APY on SoFi Checking and Savings.

FAQ

What is the meaning of direct deposit?

Direct deposit refers to the automated transfer of funds from one bank account to another. This means cash doesn’t need to change hands, nor does a check need to be written and then deposited.

How do you get direct deposit?

Typically, signing up for direct deposit involves sharing your bank account and routing number with, say, your employer or the government so they can direct deposit funds in your account. In some cases, you may be asked to share a voided check.

Is direct deposit only for paychecks?

Direct deposit is not only for paychecks. It can also be used for government benefits (such as Social Security), commissions, tax refunds, investment dividends, and other forms of payment.



SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2025 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
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SoFi members with Eligible Direct Deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below).

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning 3.80% APY, we encourage you to check your APY Details page the day after your Eligible Direct Deposit arrives. If your APY is not showing as 3.80%, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning 3.80% APY from the date you contact SoFi for the rest of the current 30-day Evaluation Period. You will also be eligible for 3.80% APY on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi members with Eligible Direct Deposit are eligible for other SoFi Plus benefits.

As an alternative to Direct Deposit, SoFi members with Qualifying Deposits can earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Eligible Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving an Eligible Direct Deposit or receipt of $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Eligible Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

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

Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.

Members without either Eligible Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, or who do not enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days, will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 1/24/25. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
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/.

1SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per depositor per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $3M through participation in the program. See full terms at SoFi.com/banking/fdic/sidpterms. See list of participating banks at SoFi.com/banking/fdic/participatingbanks.

^Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.


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.

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

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

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Keeping in Touch With Your College Student

As a parent, learning how to communicate with college students can be a challenge. Adjusting to college is an emotional transition for the whole family, but keep in mind that this is an important phase in a young adult’s life that helps to prepare them for the real world.

To help keep the lines of communication open, it can be a good idea to set up regular calls and do your best to support your child without nagging. If you maintain a strong connection without overdoing it, they might even divulge more of the good times, and you’ll be able to share in the full experience of their new adventure.

Here are some tips for parents on how to stay close with college students, even if they now live many miles away from home.

Key Points

•   Maintain a consistent communication schedule with your child to stay connected without being overbearing.

•   Allow your student to handle their own responsibilities, fostering growth and self-reliance.

•   Leverage tools like video calls, messaging apps, and shared calendars to stay in touch.

•   Offer emotional support and be a listening ear, especially during challenging times.

•   Establish clear boundaries to respect your student’s new independence and their need for space.

Tips for Communicating with College Kids

Be Their Ally

It’s tempting to want to make sure your kid is taking care of themselves: Are they eating enough vegetables? Are they making friends? Are they partying too much?

Your parental instincts are inevitable, but you’ll want to avoid nagging. Try to be their ally instead. Of course, it’s important to check in on them and make sure everything’s okay, but you’d be surprised to find that the more freedom you give them to make their own decisions, the more they may share with you.

Recommended: College Freshman Checklist for the Upcoming School Year

Let Them Know They Can Talk to You

Along with being their ally, it’s also important for them to feel comfortable talking to you about more serious things. College is a major transition and many incoming students struggle with the adjustment.

If they are unhappy at their new school, they may be considering the possibility of transferring schools. It can be a good idea to make sure your child knows that they can talk to you about anything. That’s what parents are for, after all.


💡 Quick Tip: Parents and sponsors with strong credit and income may find much lower rates on no-fee private parent student loans than federal parent PLUS loans. Federal PLUS loans also come with an origination fee.

Utilize Technology

Video chat is an incredible tool that wasn’t around back when parents were in college. These days, there are seemingly endless options to connect via video from FaceTime to Zoom to Google Hangouts and more. Video calls can be especially helpful for students who are far away from home.

If your child is not one to call you every day, you could set up a time once a week to catch up.

What to Talk About

Talking to your child will, of course, come naturally. However, it’s always nice to have some topics in your back pocket to refer to.

Academics

While it may be forgotten among all the exciting aspects of college, taking advantage of the incredible educational resources on campus, studying, and getting a solid education are some of the main reasons for attending university.

Without overwhelming your student, remind them that grades could have an impact on their plans after graduation.

Play to Your Strengths

While we’re on the topic of academics, you can also get involved in your child’s studies, if they ask for help. Aside from reminding them to focus, you can help them choose classes for their first semester, reread some Nietzsche or Aristotle along with them, or offer to be a second set of eyes for their papers. When they are choosing their major, you could help them realize what it is they’re passionate about.

Finances and Budgeting

There are some things you may want to periodically bring up with your student that they likely won’t enjoy talking about, which involves money management, including student loans and budgeting. While these might not be on anyone’s list of the best ways to communicate with college students, it’s your duty as the parent to remind them.

It can be a good idea to have an ongoing dialogue about student loans — including both federal student loans and private student loans — and educate them on how not to make their debt even higher.

This is a conversation that can begin in high school when making the decision on which college to attend and what the financial impact will be for them and for you in the years to come.

As for budgeting, know that many young adults make financial mistakes in their early twenties. It’s okay — mistakes allow students to learn and adjust their habits moving forward.

However, if you can teach your student good spending habits, especially if this is their first time with a credit card, they’ll be thankful to you in the long run.

Recommended: How Do Student Loans Work?

Future Plans

You may have a son or daughter who has dreamed of going to med school since they were little, but most students are unsure of what they want to do with their futures or what life after graduation will look like. This might be a common thread throughout their four years in college.

Find ways to make this conversation exciting and optimistic without asking the question they’ve heard a million times: “What do you want to do with your life?” The truth is, they might not know, even upon graduation, and that’s okay.

If they are considering graduate school, it could be useful to discuss what’s involved financially. Will they need additional student loans for grad school? Will you be able to help with any costs?

While these are just some guidelines on how to communicate with college students, ultimately, the best approach for you and your child depends on your relationship and your personality.

It’s recommended for a parent to find a healthy balance between staying involved and being overbearing. You can watch with pride from a healthy distance and still experience this exciting time in your child’s journey through young adulthood.

The Takeaway

The transition to college can be an overwhelming one for both students and their parents. While your student is building their new life at school, you may find it challenging to keep in touch with them. Try setting a time for a weekly catch-up session with your child. Be open and honest with them and make sure they know that they can come to you with any questions, concerns, or issues they may be facing at school.

In addition to providing advice and guidance, you may also be helping your child pay for school. If your financial aid package (which may include grants, work-study, and federal loans) isn’t enough to cover the costs, you might also consider private student loans. If your child hasn’t yet established much credit, you will likely need to be a cosigner. Or, you might consider a private parent student loan.

Just keep in mind that private loans don’t offer government-sponsored protections, like forgiveness or forbearance, that come with federal 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.


Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

What are some ways I can maintain a relationship with my college-aged child?

To maintain a relationship with your child in college, stay connected through regular check-ins, use technology like video calls and messaging apps, be a supportive listener, encourage their independence, and respect their need for space and new experiences.

How often should you call your child in college?

You can aim to call your college-aged child once or twice a week to stay connected without being overbearing. This allows you to check in and offer support while respecting their newfound independence and busy schedule.

What is the best way to communicate with college students?

The best way to communicate with college students is through a mix of video calls, text messages, and emails. Use their preferred method, be flexible, and keep conversations brief and supportive to respect their busy schedule.


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., Puerto Rico, U.S. Virgin Islands, or American Samoa, 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 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

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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.

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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College Freshman Checklist for the Upcoming School Year

Going to college is an exciting adventure, but it can also be incredibly nerve wracking, especially as a college freshman. With so much new and unknown ahead of you, it’s easy to let the stress build.

Being prepared for what’s ahead could help alleviate some of the first-year worries. This checklist is filled with things that you can do to prepare for your freshman year, starting with things like filling out the FAFSA, getting your packing list and school supplies together, and preparing financially for your life on campus.

Key Points

•   Before the school year begins, create a detailed budget to manage tuition, textbooks, housing, and other expenses.

•   Purchase or rent textbooks early, and review the syllabus for each class to get a head start on assignments.

•   Take advantage of campus resources such as the library, tutoring centers, and career services.

•   Prioritize your physical and mental health by signing up for a campus health plan, joining fitness classes, and connecting with counseling services if needed.

•   Get involved in campus life by joining clubs, attending events, and participating in extracurricular activities.

Checklist for Preparing for Freshman Year

Acclimating to life on campus can be a big transition. Fortunately, there are things you can do to smooth the way before you even arrive.

Registering for Classes

Registration will likely take place before you get to campus for the school year. Some schools have freshman register during orientation, which gives them the opportunity to connect with an on-campus advisor. Once enrolled, check out the syllabus for each class to help you gauge expectations and determine what books and supplies you’ll need.

Recommended: 5 Ways to Start Preparing For College

Order Books and Other Supplies

Once you’re registered for classes, you’ll likely have a good idea of the books and supplies you’ll need. Cut costs on college textbooks by ordering used copies or renting the book.

Touching Base With Your Roommate

If you’re going to be living with a roommate, it’s a good idea to reach out to them before you get to campus. Open the lines of communication so you can discuss things like who’ll bring what. This is someone you’ll probably be spending a lot of time with, so establishing a friendly relationship, setting roommate guidelines, and discussing how you’ll share expenses with your roommate are important.

Packing for College

Making your college feel like home may take some careful preparation. To create the ultimate college packing list, think of things you use regularly that you’ll need on-campus. This might include clothes, bedding for your mattress, towels, toiletries, and more. Some schools may have restrictions on certain items, such as candles, so read any guidelines provided by the residential life office at your school.

Don’t forget to pack the supplies you’ll need for classes — depending on your course of study, this may include things like books, a computer, a calculator, and lab safety equipment.

Preparing Important Documents

Make sure you have identification information like your driver’s license or passport. Make a copy of your health insurance card so you’re prepared in the event of any issues.

Filling Out the FAFSA

The Free Application for Federal Student Aid, better known as the FAFSA®, is the application students fill out each year to apply for federal financial aid, including grants, scholarships, work-study, and federal student loans. If you are a dependent student, the FAFSA will also generally require your parent’s financial information as well.

Some aid is awarded on a first-come-first-served basis, so it may be beneficial to submit your application as early as possible. Schools may use information from the FAFSA to determine awards for school-specific scholarships, too.

Understanding how much aid, and what types of aid you can expect, will be important as you craft a plan to pay for college. Some students may consider private student loans in the event that other funding streams, like savings, federal student loans, and scholarships aren’t enough to cover their tuition. While private student loans can help fill in any financial gaps, they don’t always offer the same borrower protections — like deferment or the option to pursue Public Service Loan Forgiveness — as federal student loans. As a result, they are generally only considered after all other sources of aid have been exhausted.

Recommended: How to Complete the FAFSA

Getting Your Finances in Order

As a college student, this may be one of your first steps toward financial independence. Here are a few tips to help you prepare for the financial responsibilities that await you on campus.

Opening a Checking Account

As a college student, you may be living away from home for the first time. Now that you’re starting to be independent, you may find the need to open a checking account of your own (if you don’t have one already).

Some colleges have banks on campus that make it easy and convenient for you to open a checking account. It’s worth comparing different banks and credit unions before you make your final decision. Look at fees, minimum balance requirements, ease of online or app use, and branch locations.

Tracking Your Spending

Creating a budget can help you stay on top of your spending. If you’ve never stuck to a budget before, there’s no time like the present. Begin by listing all your monthly income, whether it comes from a job, helpful parents, or both. Then list your expenses, like car insurance, a phone bill, or books for school.

Also include your “fun” money for things like dining out, shopping, or travel. If your expenses are more than your income, you’ll need to make adjustments. You can find budget spreadsheets online or convenient apps to keep track of your spending if you don’t want to start from scratch.

And remember, a budget isn’t set in stone. It’s a living document that is always changing based on your financial situation. Try your best and always look to improve it.

Looking Into Getting a Credit Card (and Handling It Responsibly)

Now that you’re on your way to adulthood, it may be worth starting to build your credit history. If you can be responsible with the credit card, having one in college is one way to help you establish a baseline for your credit history.

If you do open a credit card, it’s important to make an effort to pay your bills on time and in full every month. Once credit card debt starts to build, it can be difficult to get out from under it, so it’s wise to take steps to avoid it in the first place.

Responsibly using a credit card is one thing that can help you establish and build credit history. Whether it’s to buy a home or a new car, a better credit score could help potential borrowers secure more favorable loan terms.

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Company by U.S. News & World Report.


When You Get to Campus

Hopefully, all your preparation will help streamline your college transition. These final few tips could help you find your footing at school.

Exploring Campus and the Surrounding Area

College is a whole new world. Take some time to walk around and explore the campus, and make sure to know where the dining halls and libraries are in relation to your dorm. As you explore the campus, map out where each of your classes are located. This may help mitigate some of your college nerves.

Venture off campus and check out the town. You may just find a cute cafe perfect for study sessions.

Connecting with Professors and Advisors

Your professors are there to teach and want you to succeed. Take a few minutes to get to know them and don’t shy away from office hours. Go often and early with any questions or concerns.

Finding Extracurriculars

Colleges usually have a variety of extracurricular activities and clubs for students to join. Visit any activity fairs and find the clubs that interest you. Maybe it’s working for the school TV or radio station, intramural soccer, or an acapella club. Getting involved on campus can be a great way to get to know new people and make friends.

Establishing a Routine

As a college student, you’re likely experiencing a ton of newfound freedom. While all this autonomy is exciting, establishing a routine that works for you is important. For example, if you find you are most productive in the morning, block that time for classes and any top priority assignments. Then a break for a quick workout or lunch, followed by some studying. In addition to studying and classwork, it’s important to create healthy habits and space for self-care.

Checking Your List and Following Your Needs

College is a time to get out of your comfort zone and challenge yourself. It’s a learning experience in every sense of the word. This college freshman checklist is just a starting point to help you get acclimated.

Don’t forget to check in on — and add to — your college checklist as you continue your education. It can be easy to get swept up in the excitement of college, but it’s important not to lose sight of your financial and professional goals. Committing to your financial health and literacy now will help you even after graduation. Skills like budgeting and networking will always be applicable.

The Takeaway

With these tips in mind, you can put together a personalized freshman year checklist. This may include things like filling out the FAFSA, registering for classes, connecting with your roommate, and packing for the move to college. Getting ready for freshman year might seem overwhelming at first, but breaking down to digestible action items may make it feel more manageable.

Part of preparing for freshman year is figuring out how you’re going to pay for college. Once you fill out your FAFSA and receive your award letter, you’ll know where you stand, and whether you need to seek out any additional sources of funding.

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.


Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

What should I pack for freshman year of college?

For freshman year, pack essentials like bedding, towels, toiletries, a laptop, textbooks, a planner, comfortable clothing, a first-aid kit, and basic kitchen supplies. Don’t forget a few sentimental items to make your dorm feel like home.

How many towels does a college freshman need?

A college freshman typically needs two to three towels: one for daily use, one for backup, and an extra for guests or emergencies.

How much should I budget for college freshman supplies?

Budget around $500 to $1,000 for college freshman supplies, including dorm essentials and personal items. This can vary based on your specific needs and the cost of living at your college.


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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., Puerto Rico, U.S. Virgin Islands, or American Samoa, 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 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

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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.

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How Can I Pay My Bills When I Lost My Job?

Paying Bills When You’ve Lost Your Job

Key Points

•   When you lose your job, prioritize essential bills like rent, mortgage, and utilities to ensure basic needs are met.

•   Negotiate with creditors for lower or deferred payments to manage debt.

•   Create a survival budget focusing on necessities to control spending.

•   Explore alternative income sources like freelancing, selling items, or participating in market research.

•   Use an emergency fund and consider opening a high-interest savings account for financial stability.

If you’ve lost your job and your income stream along with it, figuring out how to pay your bills can be a difficult task. You probably know to cut back on dining out and movie nights, but what can you do about bills for your rent, student loans, and other vital expenses?

Plenty of people confront this situation, and there are ways to navigate this challenge. It’s often a matter of knowing how to recognize the most pressing bills, organize your assets, and seek additional income and assistance if needed.

What Bills Should I Prioritize?

If you’ve lost your job, you may feel as if you can’t pay all your bills. In this situation, it’s crucial to prioritize certain ones to make sure you can meet your basic necessities. This means looking at your list of bills and determining ones that should be at the top of your list (or close to it).

In addition to the bills that keep your daily life running, you also want to consider the damage unpaid charges can do to your credit rating. The goal is to balance these factors with the funds you do have available.

Bills you should probably prioritize include:

Rent

Having a roof over your head is important for you and those who live with you, so contact your landlord as soon as possible to discuss alternative payment arrangements. Perhaps you can negotiate lower payments for a window of time. Otherwise, if you don’t communicate and don’t pay, you could find yourself facing eviction.

Mortgage Payments

If you have a home loan, falling behind on payments can have serious consequences, one of which is foreclosure. Non-payment can lead to default and the bank has the right to recoup their property (aka the home) and sell it to attempt to make back the money it lost.

If you’re wondering what to do about loans when you’ve lost your job, contact your lenders as soon as possible. Many offer forbearance or alternative repayment programs.

Student Loans

Falling behind on student loans could mean you’ll go into default. In some cases, the lender may have the right to garnish your wages. If you’re handling student loans during a job loss, consider applying for an income-driven repayment plan for federal student loans or contacting your private lender to see what options are available.

Car Loans

You’ll most likely need your car to run errands or look for work. Staying on top of payments for your loan or lease can help ensure you won’t risk having your vehicle repossessed.

Insurance

Non-payment could result in denial of coverage, which might not be helpful if you need to see medical treatment or are in a traffic accident, for instance.

Utilities

Not paying these types of bills can result in your electricity, water, phone, and internet being shut off. These are obviously vital for daily life and, in terms of connectivity, job hunting.

Increase your savings
with a limited-time APY boost.*


*Earn up to 4.00% Annual Percentage Yield (APY) on SoFi Savings with a 0.20% APY Boost (added to the 3.80% APY as of 7/10/25) for up to 6 months. Open a new SoFi Checking & Savings account and enroll in SoFi Plus by 8/12/25. Rates variable, subject to change. Terms apply here. SoFi Bank, N.A. Member FDIC.

How to Create a Survival Budget

If you’ve lost your job, it’s important to create a survival budget to help prepare for the lean times ahead. This type of budget only takes into account the bare necessities with whatever savings or income sources like unemployment benefits you currently have.

The main goals of a survival budget: to ensure you and your family are taken care of, and then turn your attention to any creditors as necessary. What this means is that even without a job, you pay the bills that will ensure you can survive first — such as food and housing — with the funds in your checking account.

Taking Stock of Your Expenses

To start, look at all of your current expenses and eliminate anything that isn’t really and truly a necessity.

•   You can’t get rid of your food expenses, but you can temporarily cut back on dining out to stop overspending. Cook your meals instead, and ditch your takeout coffee habit for now.

•   If you have a cell phone, you can consider downgrading your service for a cheaper plan to save some money.

Look at the funds you have available for the next couple of months as you job hunt. Deduct the priority expenses, and then evaluate what is left and how you can budget those funds. Be strict with yourself: Now is the time to unsubscribe from all those streaming services and save your money for what’s vital.

If you’re not sure if you have enough cash to pay for the necessities and debt payments, it’s best to seek options like forbearance and deferment — negotiate with your lenders to see what you can do.

If your unemployment stretches on for a period, you may want to take bigger steps at lowering your expenses. For example, you might consider taking in a roommate or looking to move elsewhere to lower your rent.

Where Can I Turn for Money?

Here are some income sources you can turn to when you’re unemployed. It’s hard to pay bills with no job, but these resources may get you through a tough time:

Credit Cards

Using credit cards or even taking out a personal loan when unemployed can be a quick source of funds if you need to make purchases such as groceries and gas. While the interest rates tend to be high, you’ll have a grace period before your balance is due, giving you a buffer to get another income source.

Otherwise, you can make the minimum payment for the time being and make a plan to pay it back once you’re employed again.

Also, see if you can negotiate with your card’s issuing company; you might be able to delay credit card payments. You may also want to explore balance transfer credit card offers, which give you a window of low or no interest.

Retirement Accounts

Tapping into a retirement account like a 401(k) or an IRA is typically seen as the last resort because the downsides typically outweigh the benefits. However, if you’re running out of resources and you have a decent chunk in there, you may not have another choice.

You can choose to tap into your retirement accounts in the following ways:

•   Take out a 401(k) loan: Depending on the terms of your 401(k) plan, you may be able to borrow up to a certain amount — usually up to $50,000 or half of your vested amount — and pay it back within a predetermined amount of time (in most cases, five years). Keep in mind you could face additional penalties if you don’t pay back the loan, such as the loan amount being subject to taxes. In addition, loan and management fees may apply.

•   Withdraw from your retirement accounts: If you have an IRA or taxable brokerage account, you can make withdrawals. Keep in mind with IRA accounts, you may be subject to a penalty and taxes on the amount you withdraw.

Government Assistance

You’ll want to find out how unemployment works if you lose your job; it can help get some cash flowing your way. Those funds can help you pay for your necessities as you seek other work.

If you’ve been unemployed for a while or face mounting pressures on things like an unexpected medical expense, you may be able to seek other forms of government assistance. These sources can be helpful if you feel as if you’ve lost your job and can’t pay your bills. To see what you may qualify for, you can search on Benefits.gov , your local state or municipal office, and even local charity organizations and churches.

How Setting Up a Bank Account Can Help You When You Are Not Working

When you’re unemployed, setting up a bank account (if you don’t already have one or one you love) may seem like the last thing on your mind, but doing so can help. For one, it can help you to keep track of your finances and apply for products such as credit cards and loans if you need these sources of income.

Plus, many banks offer tools to help you budget your money, a useful feature considering you need to watch your money more carefully. These pros of opening an account can make this moment of unemployment a good one to explore your options.

How to Budget and Save with a Bank Account

Here are some ways in which you can make a budget and save using a bank account when you are unemployed and navigating the job market:

•   Divide money into multiple checking or savings accounts for each type of expenses so you can ensure you have enough money for necessities as well as bills.

•   Set up automatic transfers so you can ensure you’re setting aside money from any income to save or pay bills on time.

•   Set up direct deposit for unemployment benefits or government assistance.

•   Set up card controls or features from your bank to restrict spending.

•   Turn on balance alerts to notify you when your account falls below a certain balance, so you can decide to pause or delay certain purchases.

•   Earn interest with a high-interest savings account.

Alternative Sources of Possible Income

For some people, the above options for money won’t be a good fit; for others, additional funds will be needed. If you have learned how to apply for unemployment and taken other steps to get money but are still seeking other sources of income, consider these options to get cash flowing:

•   Borrow from friends and family.

•   Look for work on freelance marketplace sites like Upwork and Fiverr.

•   Sell things you own or make online via eBay, Etsy, or other sites.

•   Participate in paid market research.

•   Look locally for jobs like dog-walking.

•   Explore passive income ideas, including renting out your car or your tools.

Protecting Your Finances from Future Job Loss

There are also steps you can take to bring in income and prepare for any future financial setbacks you may endure. Consider these options:

Starting a Side Hustle

A side hustle is a gig you start that doesn’t have to be full-time but fits into pockets of time you have available. One of the key benefits of a side hustle is bringing in income.

Side hustles can include anything from driving a rideshare to delivering food. You might sell your nature photography online or help local businesses with their social media part-time.

Building an Emergency Fund

Starting an emergency fund can help protect your finances if you were to lose your job. This involves saving money so it’s there if you are laid off or encounter an unexpected expense, such as a major car repair or dental bill.

In terms of how much money should be in an emergency fund, aim for three to six months’ worth of basic living expenses. Of course, it’s fine to build that up over time versus coming up with the whole amount. Even putting aside $20 a month is a start. And by keeping the funds in a high-interest savings account, you’ll help it grow.

It’s important to know when to use an emergency fund. Losing one’s job is an emergency; it’s exactly what the money is there to pay for. However, the opportunity to travel at a deeply discounted rate or buy designer shoes for 50% off are not good reasons to tap this account.

Recommended: Emergency Fund Calculator

Starting a Budget

Developing a budget and following it can help you get through challenging financial moments and thrive in good times. A budget helps you balance the money you have coming in, your spending, and your savings. It helps you get a better handle on your financial situation and make adjustments in real time.

•   One popular budget is the 50/30/20 budget rule. This says that, of your take-home pay, 50% should go to basic living expenses, 30% to spending on your wants (such as eating out), and 20% should go to savings and debt payments beyond the minimum.

•   If you have lost your job, you can minimize the 30% by trimming back your spending on wants as much as possible and then attributing more to the basic living expenses and debt payments.

•   The 20% saving figure can be a way to plump up that emergency fund that can help sustain you during a job loss.

Recommended: 50/30/20 Calculator

The Takeaway

Paying bills when you lose your job can feel stressful, but it’s not impossible. Some key steps may include prioritizing your bills and focusing on budgeting for the bare necessities. It’s also wise to negotiate lower or delayed payments where possible and look for other interim streams of income while you look for your next job. Also aim to have a banking partner which pays a favorable rate of interest while offering low- or no-fee accounts.

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


Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.80% APY on SoFi Checking and Savings.

FAQ

What happens to debt when you lose your job?

Your debt does not go away when you lose your job. You want to keep paying at least the minimum due. However, you may be able to negotiate a way to lower your interest rates or defer payment while you are out of work. Contact your creditors and see what can be worked out.

What bills should I pay first?

When you are unemployed and need to pay bills, prioritize basic living expenses, such as housing, food, and healthcare. It’s also important to stay current on loans, such as student or car loans.

How do you budget if you are unemployed?

If you are unemployed, focus your budget on paying for your basic living expenses (food, shelter, healthcare, etc.) and paying the minimum on your debt. Trim down your discretionary spending; negotiate with creditors to keep debt manageable; and look into borrowing or earning additional funds.


Photo credit: iStock/Delmaine Donson

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2025 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.


SoFi members with Eligible Direct Deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below).

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning 3.80% APY, we encourage you to check your APY Details page the day after your Eligible Direct Deposit arrives. If your APY is not showing as 3.80%, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning 3.80% APY from the date you contact SoFi for the rest of the current 30-day Evaluation Period. You will also be eligible for 3.80% APY on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi members with Eligible Direct Deposit are eligible for other SoFi Plus benefits.

As an alternative to Direct Deposit, SoFi members with Qualifying Deposits can earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Eligible Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving an Eligible Direct Deposit or receipt of $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Eligible Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

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

Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.

Members without either Eligible Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, or who do not enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days, will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 1/24/25. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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


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.


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.


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.

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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How to Make Money on YouTube

12 Ways to Make Money on YouTube

Wondering how to get paid on YouTube? Nearly 400,000 people have made YouTube a full-time job, and nearly 114 million channels now exist across the video platform. From ads to affiliate marketing to content licensing, average Americans have ample opportunities to make money off their YouTube videos.

Not exactly sure how to make money off YouTube though? This guide contains 12 ways to generate revenue from your video content — plus helpful tips for getting started.

Key Points

•   Joining the YouTube Partner Program enables creators to earn ad revenue.

•   Redirecting viewers to an ad-optimized blog can increase income.

•   Integrating links to an e-commerce site can help creators generate sales.

•   YouTube channel memberships offering members exclusive perks can boost earnings.

•   Utilizing affiliate links for products is a way to earn commissions on YouTube.

The Popularity of Content Creation

The internet has enabled anyone and everyone to become content creators. Brands now rely on content creators and influencers to advertise products across industries, and sites like YouTube, TikTok, and Instagram have enabled people with something to say to earn income just for posting photos, videos, and reviews.

YouTube’s continued popularity (it’s the second most visited website in the world) and TikTok’s growth explosion, underscore that content creation plays an important role in our culture. And if you know how to make good content on YouTube in particular, you could make a lot of money.

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12 Ways to Get Paid on YouTube

YouTube offers creators an opportunity to make good money, but how exactly? It actually takes a lot of hard work, fresh ideas, and regular posting, but if you’ve got a knack for it, it could be an easy way to make money through social media.

Here are 12 YouTube monetization ideas to get you started:

1. Joining the YouTube Partner Program

The most common way to make money off YouTube is by joining the YouTube Partner Program. Doing so allows you to run ads on your videos — before, during, and after — as you see fit.

At one time, YouTubers could count on $1 per 1,000 views, give or take, but it’s a little more complicated today. There’s really no guarantee how much money you’ll make by running ads on your videos, though the average YouTuber now sees $10 to $30 per 1,000 video views.

According to social media management company Sprout Social, your revenue can vary depending on:

•   Your target demographic (there are some strict regulations about ads on videos intended for children)

•   How relevant the ad content is to your video

•   What kind of content you produce.

How Does the YouTube Partner Program Work?

Not every content creator can slap ads onto the front of their videos. To run ads, you have to qualify for the YouTube Partner Program. Requirements include:

•   1,000 subscribers

•   4,000+ valid public watch hours in the last year

•   A linked Google AdSense account.

Your video content must also abide by all Community Guidelines, and you must live in a country where the program is available.

And here’s the kicker: You’ve got to stay active. YouTube can turn off monetization for channels that haven’t put out new content in the last six months.

2. Sending Viewers to Your Blog

If you have a blog with ads, you can encourage your viewers to check it out during your video and include a link to it in your video description. YouTube video descriptions can be up to 5,000 characters (roughly 800 words), though shorter descriptions tend to perform better.

By steering viewers to your ad-optimized blog site, you can earn additional ad revenue with every pageview. Common examples where this make sense include:

•   Recipe videos paired with your recipe website

•   Travel product review videos paired with your travel blog

•   Car maintenance instructional videos paired with your how-to blog content.

3. Sending Viewers to Your Commerce Site

There are other similar ideas for how to get paid on YouTube. For instance, you can use your YouTube video description to link viewers to your e-commerce site. If your channel is popular enough to warrant branded merch, this could be a good way to generate additional revenue. Alternatively, if you run your own shop selling goods like artwork, candles, or apparel, you may want to create product videos on YouTube that send viewers to your site.

If you don’t have your own merch site but instead sell items on Amazon, Etsy, or eBay, you can also send viewers there.

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4. Using Lead Magnets

Lead magnets are another idea for how to get paid on YouTube, though it’s a more indirect way of making money.

Your YouTube video description might send viewers to a free resource that you’ve created, like an ebook, template, or online course. When the viewer signs up for or downloads their freebie, you can collect their contact information for a newsletter and future sale alerts, which can in turn grow your business and earnings.

5. Starting a Channel Membership

YouTube has another great built-in feature for popular content creators: channel memberships. This enables creators to charge a monthly membership fee. In return for the fee, your viewers will expect certain perks like badges and members-only content.

Channel membership usually only makes sense if you post content everyday, especially YouTube livestreams. You must be a part of the YouTube Partner Program to offer channel memberships.

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6. Encouraging the Use of Super Chat and Super Stickers

Content creators who are part of the YouTube Partner Program can also encourage viewers to utilize Super Chat and Super Stickers during live streams. How does this help to get paid off YouTube videos? To access these features, viewers pay a small fee to pin their comments and stickers to the top of a live chat feed.

7. Encouraging YouTube Premium

While you won’t get money directly for encouraging a subscriber to sign up for YouTube Premium, you will get a cut of a viewer’s monthly membership fee when they watch your videos. If your subscribers are loyal and watch your videos regularly, encouraging them to become YouTube Premium members could put more money in your pocket.

Note: YouTube Premium members don’t see ads. If your viewers are increasingly Premium members, your ad revenue may go down.

8. Crowdfunding

YouTube creators can also make money by crowdfunding. What is crowdfunding? It’s a process by which many people contribute small amounts of money, often to help an entrepreneur reach a particular business goal. Patreon is a popular choice for YouTubers, though there are plenty of crowdfunding sites to use. If you have loyal viewers who are willing to donate toward a specific goal or project, crowdfunding could be lucrative for you.

9. Using Affiliate Links in the Description

Links in video descriptions don’t just have to go to your own site. You can also add affiliate links to relevant products. For example, if your video talks about the 10 best ways to save money on a vacation, you can include affiliate links to any products or services in the description. For every viewer who clicks the link and purchases the item, you’ll earn a commission.

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10. Getting Brand Sponsorships

YouTubers may also work directly with brand sponsors. For example, a recipe video for a dessert may be sponsored by a specific brand of cake mix. The YouTuber will mention the cake mix directly in the video and may even offer a code to get a discount on the product, and the brand will pay the YouTuber for the exposure.

It’s a good idea to thoroughly vet a sponsor to ensure their brand aligns with your values — and makes sense alongside your video content. Always be transparent with viewers by letting them know in the video and the description that this is a paid sponsorship.

11. Publishing Product Reviews

Similarly, YouTubers may review a specific product in a video. In these instances, the brand may specify talking points for the reviewer to discuss. These kinds of videos are common in the beauty, health, and fitness industries. Proceed carefully, though; they may be off-putting to viewers who view the content as inauthentic.

12. Licensing Content to the Media

If one of your videos goes viral, news outlets may want to report on it and show it to their audiences. Legally, they cannot do this without paying you. Thus, media companies often approach YouTube content creators to license their content.

Just make sure your contact info is clear on your channel so that members of the media know how to find you. You could profit from this as another way to earn money off YouTube.

Tips for Starting Your Own YouTube Channel

Ready to start making money on YouTube? Here are a few tips for starting a YouTube channel:

•   Follow YouTube’s guidelines and best practices for setting up an account. YouTube will walk you through all the major steps so you don’t miss anything. You can also search the web for tips on optimizing your channel as well.

•   Think about your target audience. Creating content for the sake of creating content may be fun for you. However, if you want to make money online, you should focus on content that your target audience actually wants.

•   Invest in the right equipment. Depending on the level of quality you’re aiming for, you may need to invest in high-quality light equipment, an external microphone, a video camera, and video editing software.

•   Know how to optimize your videos. There’s a science to YouTube. Research everything from writing strong video titles and descriptions to popular video trends to creating click-worthy thumbnails to optimizing videos for search.

•   Don’t quit your day job just yet. YouTube has nearly 114 million channels, but less than 1% of those have 100,000 or more subscribers. Subscribers will be key to your success. If you can, build up your channel and subscribers while relying on income from another avenue — until you’re confident you can make the leap.

The Takeaway

YouTube is a source of entertainment for viewers, but it also can create real revenue opportunities for content creators. There are plenty of ways to make money on YouTube, but it requires hard work, dedication, fresh ideas, and a bit of luck. Those creators who are successful can start putting away their hard-earned money to save for future goals.

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FAQ

How many people make money on YouTube?

According to some estimates, just 0.25% of the nearly 144 million channels on YouTube make money. But keep in mind that some people could be making passive income off a few videos on YouTube, even if they have other full-time jobs.

How many people are on YouTube?

YouTube has nearly 114 million channels with approximately 2.70 billion monthly active users consuming content. In fact, YouTube is the second largest search engine in the world behind Google.

On average, how much do YouTubers make per year?

With AdSense, YouTube content creators can expect to make between $0.01 and $0.03 per ad view; the average content creator earns $18 for every 1,000 ad views and $10 to $30 per 1,000 video views. Calculating an annual salary largely depends on how many views a content creator can amass.

For YouTubers with at least one million subscribers, a creator could make $60,000 and far more, depending on a variety of factors. But less than 60,000 YouTube channels worldwide actually have more than one million subscribers.

How can you make money on YouTube without making videos?

Though it’s technically possible to make money on YouTube without making videos, it may be a much more challenging path to financial success. However, you might be able to generate revenue on a YouTube channel by reposting reels or TikToks as YouTube Shorts, uploading your Twitch streams or Instagram Lives to the YouTube platform, or even transforming an existing webinar or slideshow presentation to a video format on YouTube.

In all of these cases, you’re still technically creating video content — but you’re using content optimized for another platform and recycled for YouTube, so you may be less successful.


Photo credit: iStock/mapodile

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