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When college freshmen step foot on campus, they may go to an activity fair and see members of sororities and fraternities encouraging recruits to join. They might want to know that becoming part of Greek life can have its upsides and downsides.

Whether or not students decide to let their Greek flag fly depends on their personality, their specific situation, and their goals while they are in school. Some may find Greek life incredibly enriching, and others could decide it’s a waste of their time.

Here’s a look at what Greek life is like and pros and cons you may want to consider when deciding if joining a fraternity or sorority is right for you.

What Is Greek Life in College?

Greek life is made up of communities of students who live together, volunteer for different organizations, pursue networking opportunities, and much more. The communities consist of sororities for women and fraternities for men.

Sororities and fraternities may have various objectives, but overall they exist so that students can make meaningful connections with one another, develop leadership skills, and give back.

Roughly 15% of men join fraternities at U.S. colleges, while about 18% of women join sororities.

Students who are interested in becoming members must apply and then go through an initiation process. Once accepted, they will live with their sorority or fraternity, usually in a house on campus, and participate in activities like sports, dances, parties, and community service opportunities.

Sorority and fraternity names consist of two or three Greek letters, like Phi Kappa Theta, Sigma Pi, or Delta Zeta, a nod to the first U.S. Greek letter society, Phi Beta Kappa, founded in 1776 at the College of William and Mary as a literary, debating, and social club.

Many students only know about sororities and fraternities from pop culture references like “Revenge of the Nerds,” “Animal House,” “Legally Blonde,” and “Old School,” which depict a perennial party.

While that is certainly true in some instances — and fraternities have come under fire for their alcohol use and hazing rituals — Greek life can be much more meaningful and beneficial than these portrayals.


💡 Quick Tip: SoFi offers low fixed- or variable-interest rates. So you can get a private student loan that fits your budget.

Upsides of Greek Life

Joining a fraternity or sorority comes with a number of advantages. Here’s a look at some of the perks.

Friends

When new students first get to college, they may not know where to turn to make connections. If they become part of a sorority or fraternity, they could make many new friends right away, bond with them through different activities and social events, and remain friends for life.

Networking Opportunities

Students will also have the chance to network with their new peers. When they’re searching for internships or jobs, these connections can prove to be highly valuable.

Plus, if a job hunter lists their sorority or fraternity on a resume and a recruiter is a Greek life alumnus, that could open up a conversation and make a candidate stand out.

Recommended: 3 Summer Jobs Ideas for College Students

Possibly Cheaper Housing

Living in college dorms can be pricey. If students are sharing a house with many members of a sorority or fraternity, they could potentially save money.

They may also save money by having access to a full kitchen, where they can make meals instead of purchasing a meal plan or eating at restaurants all the time.

Recommended: 20 Ways to Save Money in College

Development of Leadership Skills

Sororities and fraternities need leaders who will come up with ideas for activities, pilot volunteering efforts, and recruit members.

If members step up and decide they want to become leaders, then they are taking on new responsibilities and developing crucial skills that will be valuable when they graduate from college and start to look for jobs.

Volunteering Opportunities

Fraternities and sororities are often focused on philanthropy.

Students can participate in different volunteer projects with their fellow Greek life members and contribute to making the world a better place.

Not to mention, this will look good on a resume because it shows that a student is passionate about certain causes and wants to do their part to improve the lives of others.

Recommended: College Freshman Checklist for the Upcoming School Year

Potential Downsides of Greek Life

Like a toga, Greek life isn’t a good look for everyone. Here are some possible cons.

Cost

You typically need to pay membership dues each year you are a member of a fraternity or sorority. The cost varies depending on the school and fraternity/sorority you join but, on average, you can expect to pay around $2,000 to $3,0000 for the first year.

Local and national chapter fees are not always covered in the regular monthly dues.

And if fraternities or sororities get into trouble, members could be fined as well.

Recommended: What Is the Cost of Attendance in College?

Reputation

Fraternities and sororities have gotten a bad rap from movies and TV.

Worse, students have died in hazing accidents throughout the years, leading colleges to take administrative action against fraternities especially.

Some fraternities and sororities do emphasize parties and drinking, which is all fun and games until someone begins to flunk out, becomes addicted, is involved in an assault, or is injured.

It’s best, of course, to socialize responsibly and always make academic studies the priority.

Time Commitment

Because Greek life involves so many events, and members are expected to participate, joining a sorority or fraternity means a huge time commitment.

Spending too much time on Greek life activities and not enough on studying or working at internships could have a negative impact on a student’s future.

Recommended: College Planning Guide for High School Students

Determining Whether or Not to Join Greek Life

Joining a fraternity or a sorority can be a great decision, especially for freshmen who may not know anyone on campus. If they are a part of Greek life, then they will stay busy, make friends, network, and contribute.

On the flipside, if they are in a campus family that is constantly throwing parties and not interested in enriching members’ lives in a meaningful way, then joining might not be a good idea.

If you’re concerned about being able to afford the cost of joining a fraternity or sorority, keep in mind that there are a number of ways to cover the cost of college tuition and living expenses, including grants, scholarships, subsidized and unsubsidized federal student loans, and private student loans.


💡 Quick Tip: It’s a good idea to understand the pros and cons of private student loans and federal student loans before committing to them.

The Takeaway

A sorority or fraternity can provide camaraderie and enduring connections, and enhance a call for service and leadership. It can also be time consuming, expensive, and distracting. Greek life isn’t for everyone, but some will find it a life-changing college choice.

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.

About the author

Julia Califano

Julia Califano is an award-winning journalist who covers banking, small business, personal loans, student loans, and other money issues for SoFi. She has over 20 years of experience writing about personal finance and lifestyle topics. Read full bio.

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After paying for tuition, fees, and housing, you may think you’ve got the cost of college covered. Not so fast. There is a hidden additional expense students face soon after they arrive on campus — the textbooks, online access codes, and supplies required for each class.

Despite increased use of e-books, the cost of course materials — necessary to be students in class — remains steep. According to the Education Data Initiative, the average annual cost of textbooks at a four-year public college is $1,226. If you complete your degree in four years, textbooks can add nearly $5,000 to your overall education expenses.

Fortunately, there are ways to pay for college books, including grants, scholarships, and student loans. You may also be able to get some of your textbooks on the cheap — even free. Here’s what you need to know.

How Much Do College Textbooks Cost?

If you’re wondering how much college books cost, here’s a closer look. Hard copy college textbooks can run as much as $400, with an average price falling somewhere between $80 and $150. You may need more than one book for each class, plus other supplies and materials, which can all add up.

The average college student spends more than $1,200 annually on textbooks and supplies for classes each year. That’s about 39% of tuition in a community college or 14% in a public four-year college.

According to the Bureau of Labor Statistics, prices for college textbooks increased by 7% between 2020 and 2023, which is faster than tuition inflation (which was 4.7%).

Why are textbooks so pricey? One reason is that only a few publishers control the industry. Almost 80% of the textbooks industry in the U.S. is dominated by five publishers. This lack of competition allows publishers to command steep prices. Publishers also know they have a captive audience — textbooks are a college essential so students are forced to pay whatever price the market serves up.

While digital books typically cost less than hardcovers, that’s not always the case with college textbooks. Some schools have online access agreements or contracts with publishers. This means that students must purchase a code to access all of their course materials online, typically at full price. Digital textbooks also eliminate some of the ways students can save money on print versions, like sharing, borrowing, or buying used materials.


💡 Quick Tip: You can fund your education with a low-rate, no-fee private student loan that covers all school-certified costs.

Grants and Scholarships That Pay for College Textbooks

There are a number of private scholarships and grants designed specifically to help pay for college books. You can search for book scholarships using online tools like FastWeb and Scholarships.com . You may also want to check out these book-specific scholarship opportunities:

•   BookScouter Every quarter, BookScouter awards $500 to a student to be used towards purchasing their textbooks. To apply, you need to fill out a questionnaire and record a short video.

•   Book Lover’s Scholarship. Bold.org offers $500 to support students who love reading books and believe in the power of reading to transform their lives. To apply, you need to tell them: If you could have everyone in the world read one book, what book would you choose and why.

•   Wilhelmina Foundation The Wilhelmina Foundation’s Textbook Scholarship offers $500 to qualifying students throughout the state of Florida to help them pay for college books.

•   Carl A. Scott Book Scholarship Every year, the Carl A. Scott Memorial Fund awards two $500 scholarships — one to a student pursuing a bachelor’s of social work, and the other to a student obtaining a master of social work degree.

Recommended: Finding Free Money for College

11 Tips to Spend Less on College Textbooks

These tips can help you keep up with your studies without breaking the bank.

1. Split the Cost with a Classmate

When thinking about how to pay for college textbooks, you might consider splitting the cost of books with a classmate to cut down on textbook expenses. While it may seem inconvenient, it could pay off.

There are a few ways to make sharing a textbook work. Try alternating study days so you each have the time you need to get your work done. Or, alternate highlighter colors to keep your notes straight. And as an added bonus, you have a built-in study buddy.

2. Buy Used Books

Sometimes on- and off-campus books stores will sell used copies of textbooks. You can also find used textbooks online at popular sites like Chegg , Abebooks , and Amazon. While you can’t examine the book before you buy online, you can often select the book’s condition (for example, Like New, Very Good, Good, and Acceptable).

When searching for used books, it’s important to make sure the book is the correct edition. The easiest way to confirm this is by using the book’s ISBN (a code that identifies specific book editions) to search.

Recommended: College Freshman Checklist for the Upcoming School Year

3. Rent Instead of Buy

In some cases, you may not need a particular text book after the semester ends. In those instances, you might consider renting. On average, renting textbooks can save you 50% compared to buying a new, printed textbook.

Some campus bookstores now offer the option of renting textbooks for a semester. Typically, you rent the book at the start of the semester and return it the first business day after finals. You can also rent textbooks through a number of online companies, including Chegg, CampusBooks , eCampus.com , and ValoreBooks . It can be a good idea to shop around and compare rental costs.

4. Get the E-Book

Printing costs are one reason for expensive textbooks. But if you don’t need to have a physical copy, and you’re not required to buy an access code through the school, you could save on college books by going with the e-book version. You can read it anywhere — your computer, tablet, or phone. Going digital can be particularly advantageous for textbooks you will refer to in the future, since the electronic version will typically include free updates.

You can buy e-textbooks from a number of online outlets, including Amazon, BooksRun , and Chegg.

Recommended: How to Save Money in College

5. Find a Book Swap

Some schools have clubs or organizations that run book swaps. This is where you turn in a book you’re not using to get one you need in return. While not all campuses and colleges have this available, it could be worth looking into.

You might also check with upperclassmen to see if they might be willing to sell you a textbook or even let you borrow it for the semester.

6. Settle for an Older Version

Many textbooks have new versions released every year or every few years. Sometimes professors request you have the newest version available, but not always. Check with your professor to see if an older issue is acceptable for the course.

Recommended: 10 Money Management Tips for College Students

7. Try the Library

Some classes don’t rely on books as much as others. If you know that a class will be light on the required reading, you can save on college textbooks by heading to the library. Be mindful that other students in the class might already have the same idea as you. In that case, it’s a gamble to see if you can take out a book that may not be available.

Some schools have reserve copies of textbooks in the library that you can borrow for a specific amount of time. This could mean you can get your assigned reading done without purchasing the book. But know that these library textbooks usually have some borrowing restrictions, so you may need to plan ahead.

Recommended: How to Save Money in College — 20 Ways

8. Tap into Student Loans

When you take out student loans, you can typically use that money to cover the cost of attendance, which includes not only tuition and fees but also other expenses necessary to earn your degree, like textbooks. If you have scholarships and grants, they can typically also go toward your textbooks.

If you aren’t eligible for federal financial aid or have reached the borrowing maximum for federal loans, an in-school private student loan can be a useful alternative.

With private loans, you can borrow up to 100% of the school-certified cost of attendance, and the loans can be used for textbooks, supplies, and other college expenses. Just keep in mind that private student loans may not offer the borrower protections — like income-driven repayment plans and deferment or forbearance — that come with federal student loans.


💡 Quick Tip: Would-be borrowers will want to understand the different types of student loans that are available: private student loans, federal Direct Subsidized and Unsubsidized loans, Direct PLUS loans, and more.

9. Sell Old Textbooks

The cost of college textbooks is an unavoidable expense, but that doesn’t mean you can’t get some of your money back.

You may be able to sell textbooks you’re finished with back to the bookstore where you bought them for immediate cash. Or, you might be able to sell them online at sites like Amazon, BooksRun,
CheapestTextbooks , BookScouter , or Chegg. When you sell online, the process is often as simple as entering your book information, accepting an offer, sending it in, and getting paid.

If you know students who are going to take the same class you just took, you might offer to sell your textbooks to them for less than they would pay for a used book at the bookstore but more than you would get in a buyback, for a win-win.

10. Use Open Educational Resources (OERs)

Open educational resources (OERs) are course materials available for free online that can be downloaded and shared. A growing number of universities are allowing their faculty to adopt OER course materials to help reduce costs for students. You can find these free educational materials at OERCommons .

There are also other sites that offer free access to textbooks, including Project Gutenberg and OpenStax from Rice University.

11. Use Textbook Price Comparison Sites

These days, it’s fairly easy to compare textbook prices before you buy to make sure you’re getting the best deal. Some comparison sites to check out:

•   Amazon Offering one of the largest selections of college textbooks, you can access a large number of sellers on Amazon.

•   AbeBooks This website has a deep database of textbook sellers (including local sellers) to help you find the lowest available price.

•   BigWords This is a search engine designed to help you find the best prices and shipping costs on college textbooks.

•   Bookscouter This site compares a large number of textbook websites to help you find the best price to both buy and sell your textbooks.

•   CheapestTextbooks This is a free price comparison page for buying, renting and selling textbooks. They also price-compare e-books for rent or purchase.

•   SlugBooks Here, you can search by author and title or ISBN to find the best online deal for textbooks.

The Takeaway

Depending on your class needs and personal preference, you may be able to significantly cut the cost of college textbooks by heading to the library or opting for an e-book, a textbook rental, or a used copy of the book.

In addition, you might seek out and apply for a book scholarship to help cover some of your textbook expenses. If you have any type of student loan and can use it to make your textbook purchases, those funds can also be a big help.

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

FAQ

What percent of college students can’t afford textbooks?

Around one in four college students decide not to acquire at least one course material, according to a 2023 survey from the National Association of College Stores. According to the Education Data Initiative:

•   25% of students say they have worked extra hours to pay for their books and materials

•   11% of student report skipping meals in order to afford books and course materials

•   One in five students say that the cost of books and materials directly influences their decision on what classes to take

How much should I budget for textbooks?

The average full-time, in-state undergraduate student at a four-year public university pays $1,226 for books and supplies in one academic year.

How do I use my financial aid to pay for textbooks?

Typically, financial aid money is sent directly to the school. If you have money leftover after covering tuition, fees, and other school charges, the school will make the money available to you to pay for textbooks no later than the seventh day of the term.

About the author

Julia Califano

Julia Califano is an award-winning journalist who covers banking, small business, personal loans, student loans, and other money issues for SoFi. She has over 20 years of experience writing about personal finance and lifestyle topics. Read full bio.

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.

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

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.


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When you’re worried about money and feel your options are limited, debt can feel like a pair of handcuffs. And if it feels like you can’t do what you want to do — which is to pay it all off and get yourself free — there’s the temptation to do nothing. The right debt reduction plan, however, can help you start paying down your balances, stay on track with your budget, and work towards your future financial goals. Here are some options to get you started.

Tips to Build a Debt Reduction Plan

Prioritizing Expenses

A good first step is to look at everything you have coming into your bank account each month (income) and everything that is going out (spending). You can do this with pen and paper, or by leveraging an all-in-one budgeting app, such as SoFi..

Once you have a list of all of your monthly expenses, you can divide them into essential and nonessential expenses. Looking over your nonessential expenses, you may find easy places to cut back (such as streaming services you rarely watch or a membership to a gym you hardly ever use) to free up more funds for debt repayment. You may also need to cut back in other areas, such as meals out, clothing. and other discretionary purchases, at least temporarily.

A budgeting framework you might try is the 50-30-20 rule, which recommends putting 50% of your money toward needs (including minimum debt payments), 30% toward wants, and 20% toward savings and paying more than the minimum on debt payments.

Next, you can come up with a debt repayment strategy. Here are four popular approaches to knocking down debt. The debt avalanche method is probably best suited to those who are analytical, disciplined, and want to pay off their debt in the most efficient manner based solely on the math.

The debt snowball method takes human behavior into consideration and focuses on maintaining motivation as a person pays off their debt.

The debt fireball method is a hybrid approach that combines aspects of the snowball and avalanche methods. Here’s a closer look at each strategy.

Debt Avalanche

The avalanche method puts the focus on interest rates rather than the balance that’s owed on each bill.

1.    The first step is collecting all debt statements and determining the interest rate being charged on each debt.

2.    Next, you’ll want to list all of those debts in order of interest rate, so the debt with highest interest is on top and the debt with the lowest interest rate is at the bottom of the list.

3.    Now, you’ll want to focus on paying more than the minimum monthly payment on the debt that is first on the list, while continuing to make the minimum payments on all the others.

4.    When the first debt is paid off, you can move on to paying more than the minimum on the second debt on your list. By eliminating debts based on interest rate, you can save money on interest.

Debt Snowball

The debt snowball method can be effective in getting a handle on debt by getting rid of debts on your list more quickly than the avalanche method. However, it can cost a bit more.

1.    You’ll start by collecting debt statements and making a list of those debts, but instead of listing them in order of interest rate, organize them in order of size, with the smallest balance on top and the largest balance at the bottom of the list.

2.    Next, you’ll want to put extra money towards the debt at the top of the list, while continuing to pay the minimum on all of the other debts.

3.    Once you wipe away the first debt, you can start putting extra money towards the second debt on the list and, when that is one wiped out, move on to the third, and so on. This method provides early success and, as a result, can motivate you to keep going until you’ve wiped out all of your debts.

Debt Fireball

This strategy is a hybrid approach of the snowball and avalanche methods. It separates debt into two categories and can be helpful when blazing through costly “bad debt” quickly.

1.    You’ll want to start by categorizing all debt either “good” or “bad” debt. “Good” debt is debt that has the potential to increase your net worth, such as student loans, business loans, or mortgages. “Bad” debt, on the other hand, is normally considered to be debt incurred for a depreciating asset, like car loans and credit card debt. These debts also tend to have the highest interest rates.

2.    Next, you can list bad debts from smallest to largest based on their outstanding balances.

3.    Now, you’ll want to make the minimum monthly payment on all outstanding debts — on time, every month — then funnel any excess funds to the smallest of the bad debts. When that balance is paid in full, you can go on to the next-smallest on the bad-debt. This helps to keep the fireball momentum until all the bad debt is repaid.

4.    Once the bad debt is paid off, you can simply keep paying off good debt on the normal schedule. In addition, you may want to apply everything that was being paid toward the bad debt towards a financial goal, such as saving for a house, paying off a mortgage, starting a business, or saving for retirement.

Using Personal Loans for Debt Reduction

Another debt payoff strategy you may want to consider is refinancing your debt. This involves taking out a personal loan, ideally with a lower rate than you are currently paying on your “bad” debts, and using it to pay off your balances.

Personal loans used for debt consolidation can help pull everything together for those who find it easier to keep up with just one monthly payment. A bonus is that because the interest rates for personal loans are typically lower than credit card interest rates, you can end up saving money.

Here’s a look at the process.

1.    You’ll first want to gather all of your high-interest debt statements and total up the debts to be paid.

2.    A good next step is to research your personal loan options, comparing rates, terms, and qualification requirements from different lenders, including traditional banks, online lenders, and credit unions. You may be able to “prequalify” for a personal loan for debt consolidation to get an idea of what rate you are likely to qualify for. This only requires a soft credit check and won’t impact your score.

3.    Once you’ve found a lender you want to work with, you can apply for the debt consolidation loan. Once approved, you can use the loan to pay off your high-interest debts. Moving forward, you only make payments on the new loan.

The Takeaway

Having a debt reduction plan in place is key to getting rid of those financial handcuffs and being able to look forward to a successful financial future. To get started, you’ll want to assess where you currently stand, find ways to free up funds to put towards debt repayment, and choose a debt payoff method, such as the avalanche or snowball approach.

Another option is to get a debt consolidation loan. This can help simplify repayment and also help you save money on interest. If you’re curious about your options, SoFi could help. With a lower fixed interest rate on loan amounts from $5K to $100K, a SoFi debt consolidation loan could substantially lower how much you pay each month. Checking your rate won’t affect your credit score, and it takes just one minute.

About the author

Julia Califano

Julia Califano is an award-winning journalist who covers banking, small business, personal loans, student loans, and other money issues for SoFi. She has over 20 years of experience writing about personal finance and lifestyle topics. Read full bio.

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.

We live in a fast-paced world and are accustomed to immediate gratification. Just as we can get groceries delivered in minutes and order a new movie online with a few clicks, so too do we often expect our bank deposits to be available immediately.

But it doesn’t always work that way when it comes to finances. Some things do require a wait, even though it may seem like they should happen instantaneously. When money is put into a bank account, it can take a while for the deposited funds to appear and become available. Here’s a simple breakdown of how long it takes for funds to clear.

What Are Cleared Funds?

Depositing money into a bank account doesn’t always make those funds appear immediately. It can take time for the funds to clear and become available to use. This is because banks and credit unions may place a temporary hold on the deposit. When this happens, the account holder can see their “total balance” on their account and their “available balance.” The latter is the amount of the total balance minus any pending deposits. The available balance is, as the name indicates, what is available for use.

Why Banks Put a Hold on Deposits

One reason why banks don’t immediately declare deposits to be cleared funds is to help avoid issues that can arise when a deposit bounces. Having a brief waiting period helps protect customers from bank fraud and from paying unnecessary fees. If a bank were to allow a customer to spend funds from a check that ends up bouncing, the customer would then need to repay the bank the amount they deposited and probably pay an overdraft fee (even if the customer wasn’t at fault).

Some holds take longer than others. The federal government regulates the max amount of time a banking institution can hold onto the funds before they make them available to the account holder. Banks and credit unions also have their own policies regarding how long it will take for funds to become available after a deposit, which can be shorter than federal regulations. It can be helpful to review your bank’s policies for holding deposits so you can get a better idea of when cleared funds will become available. That way, you won’t accidentally overdraw your account.

How Do Cleared Funds Work?

Cleared funds appear in a bank account, such as a checking account, after the holding period ends. Usually, this holding period lasts until the next business day, but it can take longer. Weekends and holidays can slow this process down. The type of deposit made can also affect the timeline.

Here’s a specific example: If you deposit a check via an ATM that is not part of your bank’s network, you will probably have to wait a while to access the money. It may take up to five days before that check becomes available cash in your account.

Compare that to the case of electronic deposits made via the Automated Clearing House (ACH). The funds can actually clear and become available as soon as the same day. Having a paycheck deposited via direct deposit can help you access your money a lot faster than if you deposited a check at an ATM.

Breakdown of Times of Cleared Funds

All banks and credit unions have their own timeline they follow surrounding cleared funds. In addition, the federal government sets a maximum limit for how long they can make consumers wait to access their deposit.

Here’s a quick breakdown of the federally allowed wait times for different types of transactions, from wiring money to check deposits.

*Deposited in person.

It’s worth noting that these are the maximum hold times allowed; in many cases these deposits happen much quicker. Again, it’s worth reviewing the bank’s funds availability policy. This will be listed in the account agreement given to you, the account holder, when you opened an account. You can also ask the bank for a copy of their holding policies or look online for it.

When Can You Withdrawal Cleared Funds?

Deposits often clear in segments. That is, a portion of the funds will become available in your checking account before the whole amount deposited is ready for use. In most cases, the bank has to allow the customer to access $225 from the deposit at the start of the next business day. You could either withdraw cash or write a check. Usually the rest of the deposit is available on the second business day, unless something occurs to trigger a delay.

Cleared Funds vs Available Funds

The terms “cleared funds” and “available funds” both refer to funds that are available for immediate withdrawal or use. It’s important to keep in mind that simply depositing a check doesn’t mean you can use the money right away.

•   Regarding a deposit, the $225 that must be made available by the next business day is known as your cleared or available funds. So on the next day, you can go ahead and use that amount.

•   However, the rest of your deposit may not yet be available. If you try to draw against it, you are risking overdraft and charges. The full amount of the deposit may take up to a few more days to become ready for use.

Reasons Why Deposits May Be Delayed Until They Become Cleared Funds

There are a few different reasons why deposits can be delayed on their path to becoming cleared funds. Let’s examine some of these.

Deposits Over $5,000

When it comes to large deposits (excluding cash or electronic payments), the bank is typically required to make the first $5,525 of the deposit available by the second business day and the remainder available on the seventh business day, or later.

Recommended: Where to Cash a Check Without Paying a Fee

Brand New Customer Accounts

Newer customer accounts (less than 30 days old) can experience deposit delays up to nine days. Although with official checks and electronic payments, partial funds can be available the next day. (If you are in this situation and in a rush to make a payment, you can look into other ways to send money to another’s bank account, such as P2P apps. These can draw upon other available funds.)

Post-Dated or Fraudulent Checks

If a bank has reason to suspect a deposit is suspicious (such as if a check appears to be fraudulent), then it may hold the funds for longer than normal. A couple of examples of what might cause this kind of hold:

•   A check is post-dated, meaning it’s been filled out to show a date that is in the future.

•   A check is more than 60 days old.

The Takeaway

Cleared funds are the funds that become available once a deposit to a bank account clears. That means the money is ready for use. The timeline for funds clearing depends on several factors, such as where, when, and how the deposit was made and how large the amount is. Some funds may clear right away, while others can take a few days. However, federal laws are in place regarding how long a bank can wait to clear funds. By understanding this process, you can likely manage your financial life a little better and avoid situations that involve overdrafts or bounced checks.

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

What is the difference between a cleared balance and an available balance?

A cleared balance (or cleared funds) and an available balance are the same thing — it’s the amount of money in your account that is available for immediate withdrawal or use.

How long does it take to get money cleared?

Some deposits clear as soon as the same day, but most generally clear the next business day. In some cases, though, a deposit can take as long as nine days to clear. Check with your bank to know their timelines.

Can you reverse a cleared check?

Once a check has cleared, there is little that can be done to reverse the transaction. If, however, a cleared check is to be found fraudulent, it may be possible for a bank to intervene.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

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.
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