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Preparing to go to college starts long before your senior year in high school. In fact, soon after starting your freshman year in high school, you may want to begin thinking about what you can do to put your best foot forward on your college applications.

With the right college preparedness plan, choosing where to apply, filling out your applications, and (yes) getting in to your top choices can be significantly easier. Here’s a smart 10-step plan that can help ensure you are ready for college when the time comes.

Ways to Get Prepared for College

1. Take the Required Courses

It’s a good idea to consult with your high school guidance counselor about what classes you should take for college preparation. Generally, high school students will take courses like English (American and English literature), Math (Algebra I and II, Geometry, Trigonometry, and Calculus), Science (Biology, Chemistry, Physics, and Earth Science), Social Studies (U.S. History, U.S. Government, World History, and Geography), a Foreign Language, and the Arts.


💡 Quick Tip: You’ll make no payments on some private student loans for six months after graduation.

2. Enroll in AP, IB, and College Courses

Your high school may offer you the opportunity to take Advanced Placement (AP) or International Baccalaureate (IB) classes, which are college-level and will allow you to earn college credit. Then, you can skip these courses when you get to college and ensure you have a head start. Both require that you take exams, and you can send your scores into colleges. Keep in mind that IB classes would be more useful if you plan on going to college outside the U.S., since only U.S.-based schools recognize AP coursework.

3. Do Test Prep

A key step in preparing for college is studying for the SAT or ACT. Taking one of these tests is required for many college applications in the U.S. You can study by forming study groups with friends, taking the PSATs/pre-ACTs and practice tests, getting an SAT/ACT tutor, and enrolling in SAT/ACT practice classes. You may want to look at the average SAT/ACT score of students who have been admitted to your top choice schools and aim to get those scores — or higher — to ensure your application impresses the admissions officers.

If standardized tests aren’t your strong suit, there are some colleges that do not require them as a part of the application process.

Recommended: ACT vs. SAT: Which Do Colleges Prefer?

4. Hone Your Study Skills

In college, you’re going to take a rigorous set of courses. Your academics are likely to be a lot more challenging than they were in high school. This means you should hone your study skills now to prepare for college. Find a quiet place to study, turn off all distractions, organize your lecture notes, join study groups, and take breaks when you need them in order to effectively study.

5. Go to College Fairs

Whenever there is a local college fair happening, try to attend it. That way, you can learn about different colleges you may want to apply to. Typically, a college fair will consist of college representatives who set up booths, give presentations, talk to prospective students, and hand out pamphlets about their schools. College fairs can be a great opportunity to learn about a number of colleges in a short time period.

They also offer the opportunity for you to connect with representatives at the colleges. As an attendee, you’ll have the opportunity to ask the representatives specific questions and take the handouts so you can continue your research at home.

6. Take College Tours

Before applying to a school, try to go on a campus tour to see what it’s all about. A college that has a great website or looks good on paper may not end up being the right fit once you actually visit it. While on the tour, ask your student tour guide and other students around about the pros and cons of the school to get a real feel for whether or not you’d like it there.

Some colleges may do interviews as a part of the application process. If you’re heading to campus for a college interview, make time for a tour too.

7. Meet With Your High School Guidance Counselor

Your high school guidance counselor can help you with preparing for college in a number of different ways. They can advise you on what classes to take and extracurricular activities you can enroll in to ensure you have a competitive college application when the time comes.

Your counselor can also help you determine what you want to major in and the kind of career you might enjoy by steering you towards career fairs and giving you a test that will show your strengths and reveal your talents. If you’re worried about paying for college, they can let you know your options and ensure you fill out all the right forms in time.

8. Fill Out a FAFSA Form

The Free Application for Federal Student Aid (FAFSA®) is the form you need to fill out to apply for federal financial aid. This includes federal grants, scholarships, work-study, and federal student loans. Some schools also use the information provided on the FAFSA to determine scholarship awards.

If you anticipate needing support to cover the cost of attendance in college, this is usually the place to start. The Department of Education is rolling out a new simplified FAFSA for the 2024-2025 academic year. It will be available in December 2023, a delay from the usual October 1.

9. Look Into Student Loans

Filling out the FAFSA isn’t the only thing on your financial to-do list when you’re prepping for college. You could also weigh your student loan options. As mentioned, the FAFSA puts you in contention for federal student loans — among other tuition subsidies like work-study or grants. Federal student loans have fixed interest rates, which means the rate will not change for the duration of the loan.

Each year, Congress determines what the fixed interest rate on federal loans will be — and interest rates vary across federal undergraduate loans, including PLUS loans for parents and grad students. While these loans can be an important resource when it comes to funding your education, there are limits to the amount you can take out each year. For example, first-year undergraduates currently have a federal loan limit of $5,500.

If federal aid and other sources of funding aren’t enough to cover the cost of tuition, you may consider looking into private student loans to fund the rest of your education. Private student loans don’t always offer the same benefits as federal student loans — like the option to pursue Public Service Loan Forgiveness — so they are generally considered only after all other options have been reviewed and exhausted.


💡 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.

10. Apply for Scholarships

Once you start applying to colleges, you may also want to search out and apply for private scholarships. Your school may offer specific scholarships you can apply to that will help you pay for your education. Online databases are another resource to check out. One option, Fastweb , a free national scholarship database that has a scholarship algorithm; it will match you to scholarships, internships, and grants you could potentially qualify for.

The Takeaway

There are many things you can do to prepare for college. Above all else, you’ll want to focus on your academics and make your college application as competitive as possible so that you can get into the school of your dreams. You’ll also want to think about what your education will potentially cost and work with your parents to come up with a plan for how you will pay for college. Your options include savings, grants, scholarships, work-study, and federal or 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.

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.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

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.

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.

SOIS0823015

Can you pay off someone else’s loan? As a general rule, yes — so if you’re a student loan borrower and someone offers you assistance in paying off your loans, you may want to take them up on it. But it’s important to understand the implications. While a parent, grandparent, or even a mysterious benefactor could pay off your student loans, they may be responsible for a gift tax if they contribute more than the annual limit. The gift could also come with emotional strings attached.

Read on to learn about the tax implications of paying off someone else’s student loans — and how to repay your loans if the responsibility is all yours.

Student Loan Repayment

For federal student loan borrowers, the end of the three-year pause on federal student loan payments has made repayment top of mind again. The resumption of federal student loan payments, which was part of the debt ceiling bill President Joe Biden signed into law in early June 2023, requires interest accrual to resume on September 1, 2023, and payments to resume on October 1, 2023. (Borrowers who held private loans did not have any uniform break in payments.)

Additionally, the President’s plan to forgive up to $20,000 in federal student loan debt was struck down by the Supreme Court in late June 2023. That means federal student loan borrowers no longer have that course of action.

The bottom line: If you have a student loan balance, it needs to be paid. If you have a cosigner — which may be the case if you have private student loans or federal PLUS Loans — then that person is legally responsible for repaying the loans if you are unable to do so. But if your student loans are solely in your name, you are responsible for repayment according to the outlined terms.

Getting Help From Your Employer

More employers are offering student loan repayment as a perk. Through CARES Act legislation, employers can contribute up to $5,250 per employee per year toward student loans without the payment counting toward the employee’s taxable income, through 2025.


💡 Quick Tip: Often, the main goal of refinancing is to lower the interest rate on your student loans — federal and/or private — by taking out one loan with a new rate to replace your existing loans. Refinancing makes sense if you qualify for a lower rate and you don’t plan to use federal repayment programs or protections.

Can Parents Pay Off Their Child’s Student Loans?

Yes they can. But can parents pay off student loans without a gift tax? It depends. If a parent is a cosigner, paying the student loans in full will not trigger a gift tax. In the mind of the IRS, the parent is not providing a gift but is paying off a debt.

However, if a parent is not a cosigner, a gift tax could be triggered, depending on how much they pay.

How the Gift Tax Works

The gift tax applies to the transfer of any type of property (including money), or the use of income from property, without expecting to receive something of at least equal value in return, the IRS says — adding that if you make an interest-free or reduced-interest loan, you may be making a gift.

There are some exceptions. Gifts between spouses aren’t included in the gift tax. That means if you are married and your spouse pays off your loans, that would not trigger a gift tax event. (The IRS includes lawfully married same-sex couples.)

Tuition paid directly to qualifying educational institutions in the United States or overseas is also not subject to gift tax. But student loans are different.

The annual exclusion for gifts is $17,000 in 2023. That means an individual can give you up to $17,000 without triggering the gift tax, which the givers, not receivers, generally pay. If your parents file taxes jointly, they would be able to give a combined $34,000 a year, which could include paying down loans. Borrowers who have the good fortune to snag $17,000 from Mom, Dad, Granddad, and Grandma could get a total of $68,000 without any family member having to file a gift tax return.

Note, though, that even a gift of more than $17,000 towards your student loans doesn’t mean that your generous benefactor is on the hook for paying a tax on their gift. The excess amount just gets added to the lifetime exclusion — currently set at $12.92 million. As long as the benefactor’s total lifetime gifts are below that amount, they don’t have to worry about paying a gift tax. Still, if bumping against that lifetime exclusion is a concern, they can spread out their support over the years to avoid gifting you more than $17,000 in a calendar year.

The upshot is that the main concern when it comes to helping children out with their student loans is probably not the gift tax, but whether the parent can afford it. It’s a good idea for parents to consider their retirement plans and test what-ifs before offering to pay their children’s student loans. Working with a financial planner may help parents find a path that works for them and their children.

It’s also not an all-or-nothing decision. Some parents choose to pay a portion of student loans or offer cash toward repayment in lieu of other gifts.

Recommended: Should Parents Cosign on Student Loans?

What Happens When Someone Pays Off Student Loans For You?

A person can pay off student loans for you in a couple of ways:

•   Pay the lender directly

•   Pay you, with the expectation you will pay the lender

But if someone pays off your debt, is that income? Once another person has paid off your student loans, it’s as if you had paid them off yourself. You would not have any tax liability.

Other Options to Pay Off Student Loans

Not everyone has a benefactor, of course. While someone taking your student loan balance down to zero can seem like a dream, there are realistic ways to ease the burden of student loans, no third party required.

These strategies include student loan consolidation, student loan refinancing, and in some cases, student loan forgiveness.

The one thing that won’t help: if you stop paying your student loans. Ignoring your student loan payments will result in an increased balance, additional fees, and a lower credit score.

If you hold federal student loans and stop paying them, part of your wages could be garnished, and your tax refund could be withheld. If you default on a private student loan, the lender might file a suit to collect from you.

In other words, coming up with a repayment plan is crucial.


💡 Quick Tip: When refinancing a student loan, you may shorten or extend the loan term. Shortening your loan term may result in higher monthly payments but significantly less total interest paid. A longer loan term typically results in lower monthly payments but more total interest paid.

What Is Student Loan Consolidation?

If you have federal student loans, you may consider consolidation, or combining multiple loans into one federal loan. The interest rate is the weighted average of all the loans’ rates, rounded up to the nearest one-eighth of one percentage point.

Federal student loan consolidation via a Direct Consolidation Loan can lower your monthly payment by giving you up to 30 years to repay your loans. It can also streamline payment processing.

Consolidating federal loans other than Direct Loans may give borrowers access to programs they might not otherwise be eligible for, including additional income-driven repayment plan options and Public Service Loan Forgiveness.

What Is Student Loan Forgiveness?

Although President Biden’s federal forgiveness program was blocked by the Supreme Court, there are still several paths toward student loan forgiveness for federal student loan holders. They include:

•   Income-based repayment. Federal income-driven repayment plans promise loan forgiveness after a certain amount of time, depending on the plan.

For instance, under President Biden’s new SAVE Plan, which is based on income and family size, qualifying federal student loan borrowers with undergraduate federal loans can get their monthly payments reduced by half — from 10% to 5% of their discretionary income. And after 10 to 20 years of making payments (the number of years depends on how big their original student loan balance was), the remainder of what they owe will be forgiven.

•   Public Student Loan Forgiveness: This federal program was designed to help graduates working in public service have any remaining loan balance forgiven if they meet criteria that include working for a qualifying organization and making 10 years’ worth of payments.

•   Disability discharge: Some people may have their loans forgiven because of total and permanent disability.

What about bankruptcy? It’s extremely difficult to have student loans discharged through bankruptcy.

What Is Student Loan Refinancing?

With student loan refinancing, a borrower takes on one new, private student loan to pay off previous federal and/or private student loans. Ideally, the goal is a lower interest rate. The repayment term might also change.

However, there is a very important caveat for those with federal student loans: Refinancing those federal loans means that borrowers will no longer be eligible for federal repayment plans, forgiveness programs, and other benefits. If a borrower needs access to those programs, student loan refinancing won’t make sense.

But for borrowers who have no plans to use the federal programs, a lower rate could make refinancing worthwhile. Using a student loan refinancing calculator can help a borrower see how much money they might save by refinancing one or all of their loans.

Refinancing Student Loans With SoFi

Even if your parents, grandparents, or others in your life are not in a position to pay off your student loans for you, understanding your options for potentially lowering your monthly payments or saving money over the life of a loan can give you multiple avenues to explore as you work toward taking control of your finances.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

FAQ

Can I pay off my child’s student loans?

Yes, you can pay off your child’s student loans. But, depending on the amount, there may be tax implications.

Is paying off a child’s student loans considered a gift?

Yes. Paying student loans for someone else is considered a gift and would incur a gift tax for any gift above $17,000, which is the gift exclusion cutoff for 2023.

That means both parents can contribute $34,000 per calendar year toward their child’s student loans without owing gift tax.

Can I pay off my sibling’s student loans?

Yes. You can absolutely win sibling of the year and pay off your sibling’s student loans. Just know that any gift above $17,000 in 2023 will trigger a gift tax that you will be responsible for paying.

Photo credit: iStock/Halfpoint

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.

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.

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.

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

Single parents typically carry a lot of weight on their shoulders, paying for their child’s food, clothes, medical care, after-school programs, and more.

It can be challenging to make ends meet and avoid credit card debt. Saving for the future (including college) can be difficult.

But that doesn’t mean it’s impossible. There are smart strategies that help make it possible for single moms and dads and their kids to thrive. Establishing a basic budget, knowing how to handle taxes, and whittling down debt can all play a part in boosting your financial wealth.

Here, learn some important financial moves for single parents.

9 Ways to Budget As a Single Parent

Setting up a simple budget can be a smart move for a single parent. It can help you take control of your cash and also make your money work harder for you.

1. Crunching the Numbers and Creating a Single Parent Budget

A great way to get a better financial path is to first figure out where you currently stand and come up with a monthly budget.

How to budget as a single mom or dad is similar to what anyone else would do. You can do this by gathering your financial statements for the past several months, then using them to figure out your average monthly income (after taxes), including any child support or alimony you receive.

Next, you can tally up your fixed expenses (monthly bills) and variable expenses (clothing, food, entertainment) to see how much, on average, you are spending each month.

Ideally, you want your monthly inflow to be larger than the outflow — that way, you have money left over for savings and paying off debt. One smart technique can be the 50/30/20 budget rule, which divides your income into three parts: 50% for needs, 30% for wants, and 20% for savings and paying off debt beyond the minimum.

If your current income isn’t high enough to make that work, you can re-jigger the percentages and come up with a spending and saving plan that works for you.

2. Trimming Expenses in Your Single Mom Budget

Next, you need to figure out how to live on a budget.

If you find yourself breaking even or, worse, going backwards each month, you may next want to look hard at your list of expenses and start searching for ways to save money.

A key single parent budgeting move is to hone in on your recurring bills to see if there are any ways to lower them. You may now be living on a single income, which can involve some lifestyle tweaks. You might be able to switch to a cheaper cell phone, for example. Or, maybe you can find a better deal on car insurance or ditch your cable subscription.

You can also look for ways to cut everyday spending, such as breaking a morning coffee shop habit, cooking more often and getting less take-out, and using coupons (say, via RetailMeNot or Coupons.com) whenever you shop.

3. Opening an Interest-Bearing Account

Once you start freeing up some money each month, it can be a good idea to start siphoning it off into a high-yield savings account. This can help you create some financial security for your family, as well as help you reach short-term goals, like going on a vacation or putting a downpayment on a home.

Even if you can only afford to set aside $25 or $50 per month, it will begin to add up.

Some good places to stash cash you may need in the next two or three years include a high-yield savings account, an online savings account, or a checking and savings account. These accounts typically earn more interest than a standard savings account, yet allow you to have easy access to your money when you need it.

You may want to keep an eye out for fees, and shop around for financial institutions that won’t charge you monthly and other account fees (which can take a bite out of your hard-earned savings).

4. Prioritizing Emergency Savings

Expensive problems you can’t plan for often come up, like a car or home repair, taking a child to urgent care, or a sudden loss of income. Without a cushion, small money problems can quickly balloon into big ones if you are forced to run up high interest credit card debt to deal with them.

As you start building savings as part of your monthly single parent budget, it can be wise to prioritize emergency savings. Experts often recommend having at least three- to six-months worth of living expenses stashed away in a separate savings account where you won’t be tempted to spend it. That way it’s there when you need it.

5. Paying Off Your Credit Cards

A debt elimination plan can make a significant change in your monthly cash flow. When creating a budget for a single mom (or dad), it can be a good idea to leave room for credit card payments that are higher than the minimum.

You may want to start with the debt that has the highest interest first since borrowing from those creditors is costing you the most money. However, if you’re likely to get discouraged because it’s taking a long time to pay off that debt, you can start with the lowest balance debt. Getting some small debts paid off may motivate you to keep going.

Whatever debt you target, you can then pay more than the minimum payment on that debt while continuing to pay the minimum on others, with the goal to eliminate them one by one.

Another option: personal loans for single moms can help pay off the debt and substitute a lower-interest payment for what you were paying the credit card company. This may be an avenue to explore.

6. Planning for the Future

Once you’ve mastered your day-to-day finances, you may want to look toward your two big long-term financial security goals: retirement and your children’s college education.

If you can’t comfortably save for both at the same time, you may want to begin with retirement. While your kids can likely get loans for college, there aren’t loans for retirement.

You may want to start by contributing to any employer-sponsored 401(k) plan. If your employer is matching contributions, it can be a good idea to chip in at least enough to get the match (otherwise you’re turning away free money!). Or you can set up an IRA; even $25 or $50 a month at first is a start.

When you’re in the habit of regularly contributing to a retirement savings account, you may want to turn your attention to saving for college: An ESA (education savings account) or 529 college savings fund can help you save towards college expenses while getting a tax break.

7. Automating Your Finances

As a single parent, you may be super busy, making it easy to pay bills late simply because you forgot. Automating your finances can simplify your budget (and your life) and help ensure you don’t get slapped with expensive fees or interest charges for being late with payments.

A good place to start is to set up autopay for all your recurring bills, either through your service providers or your bank. This way you don’t have to stay on top of due dates and remember to make every payment.

Automating can also be a great idea when it comes to saving. Often referred to as “paying yourself first,” you may want to set up an automatic transfer of money from your checking to your savings account on the same day each month, perhaps right after your paycheck gets deposited. This prevents you from spending those dollars or having to remember to transfer the funds to your savings at a later time.

8. Increasing Your Income

If your budget is super tight even after cutting expenses, then you may want to find ways to increase your income. This can help take a lot of the stress off budgeting as a single mom or dad.

There are many ways you can increase your income. For starters, if you’ve been at your job for a while and are performing well, you may want to consider asking for a raise. It can be helpful to research what the industry average pay is for your position with your experience to get an idea of how much you should ask for.

Another way to increase your income is to start a side hustle, like walking dogs, becoming a virtual assistant, taking on freelance work in your profession, selling your crafts, becoming a tutor, caring for other people’s kids, or offering music lessons.

9. Taking Advantage of Tax Breaks

Tax credits for single vs. married people can vary. When you’re budgeting as a single mom or dad, it can be smart to be aware of all the tax benefits you may be entitled to. A tax credit is directly subtracted from the amount you owe in taxes, while an exemption means that amount is deducted from your total income before your taxes are calculated.

Here are few tax benefits that may be worth investigating:

•   Filing as “Head of Household” instead of “Single.” If you meet the requirements, you may be able to get a higher standard deduction.

•   The child tax credit. If you share equal custody with your child’s other parent, only one of you can claim this. You may want to consider alternating years.

•   The earned income tax credit. Single working parents with low to moderate incomes often qualify.

•   The child and dependent care credit. If you’ve been paying for childcare so that you can work (or look for work), you may be entitled to this. But only one parent can claim it each year.

The Takeaway

Budgeting as a single mom or dad can be challenging. With some simple financial planning, however, you can start to feel less stressed about money and get closer to both your short- and long-term goals.

Key steps for single moms and dads include taking a close look at your monthly cash flow, trimming expenses, paying off your credit cards, taking advantage of tax benefits for parents, and saving a little each month to create financial security. If you’re looking for a simple way to stay on top of your single parent budget, you may want to consider if you have the right banking partner.

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

FAQ

How do single parents survive financially?

Single parents can survive financially by taking control of their money and budgeting, managing expenses, building up an emergency fund and savings, and minimizing debt. Budgeting for single moms and dads is important since you are likely the only income stream so every dollar counts.

How can a single parent afford everything?

To afford everything (meaning all the expenses related to raising a child), single parents can budget wisely, seek child support, bring in additional income, and seek government assistance if needed.

How much should a single parent have in savings?

It’s important for single parents to have an emergency with a minimum of three to six months’ worth of living expenses set aside. This can help if there’s an unexpected medical or car repair bill or if you are laid off; since you don’t have another income in the family, this is a very important move. Beyond that, experts recommend saving 20% of your salary if possible.

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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.

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Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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