Credit card companies typically report to the credit bureaus monthly. This usually happens at the end of your card’s monthly billing cycle, also known as your statement or billing cycle date. Credit card companies typically spread statement dates throughout the month, so your date may not be the same as your significant other’s or your best friend’s.
The credit reporting bureaus then use this data to update your credit score. Here’s a closer look at how payments are reported to the credit reporting bureaus as well as how factors like on-time payments can affect your three-digit score.
How Credit Card Payments Are Reported to Bureaus
Credit card issuers typically report to credit bureaus on your regular billing cycle date. Each credit card may report at different times, and they may report to some of the major credit bureaus and not others. Reporting is up to the lender’s discretion, so it is also entirely possible that they won’t make a report at all.
Credit bureaus, such as Experian®, Equifax®, and TransUnion®, may collect a variety of information, including:
• Personal information, such as name, address, date of birth, Social Security number, and employer
• Credit account information, such as balances, payments, credit limits, credit usage, and when accounts are opened or closed
• Credit inquiries
How Credit Scores and Reports Are Updated
The credit reporting bureaus will generally update your credit score as soon as they receive information from your credit card company. That means that your credit score could change relatively frequently as you make credit card charges, especially if you have multiple credit cards.
Also, because credit card companies only report credit activity periodically, there can be a bit of a lag in how long it takes for a payment to show on your credit card report. When you read your credit report, it may not match your current account balances, instead reflecting the last information reported to the bureaus. This situation may be particularly irksome if you’ve paid off debts in hope of building your credit score. Fortunately, your information should be updated during the next reporting period.
However, if you notice that no changes are made after a number of months, it’s worth contacting your lender to make sure changes are reported correctly. If they can’t resolve it, you can contact the credit bureau.
Credit reporting bureaus may collect information about your credit card balance. There is a popular misconception that carrying a credit card balance from month to month will help you positively impact your credit score. However, this is a myth. In fact, carrying a balance can actually hurt your score.
An unpaid balance is not necessarily seen as a bad thing. However, credit utilization — how much of your available credit you’re using — can have an impact on your score. If your balance exceeds 30% of your borrowing limit, it may have a negative impact on your score. Those who keep their credit utilization below 10% tend to have the highest credit scores.
It’s best to pay off your credit card balance each month to protect your credit score and to avoid racking up costly interest charges, which can cause your credit card debt to balloon.
How Applying to Credit Cards Affects Credit Score
Before you apply for a credit card, it’s important to know the difference between a hard and soft inquiry. When you apply, you will trigger what’s known as a hard inquiry when a lender requests to see your credit report.
In contrast, a soft inquiry occurs when you check your own credit or use a credit monitoring service, for example. Hard inquiries will generally have a negative impact on your credit score (though often only by several points temporarily), while soft inquiries will not.
Hard inquiries suggest that you are in the market for new credit. That may seem like a no-brainer. But in the eyes of other lenders, a hard inquiry suggests that you may be in some sort of financial stress that makes you a bigger risk for borrowing money. This is especially true if you have many hard inquiries in a short period of time.
Luckily, the hard inquiry’s effects fade relatively quickly.
In general, it’s wise to avoid causing many hard inquiries in a short period of time. There are some exceptions to that rule. If you’re shopping for a mortgage, auto loan, or new utility providers, multiple inquiries in a short period — typically 14 to 45 days — are usually counted as just one inquiry.
How On-Time Payments Affect Credit Score
Your payment history is one of the biggest factors that goes into calculating your credit score. As a result, making payments on time is one of the best things you can do to maintain a strong credit score or to positively impact your score.
Even a single late payment can have a negative impact on your score, though the missed payment likely will not show up on your credit report for 30 days. If you can make up the payment within that time period, your lender may not report it, though you may still be subject to late penalties.
It’s also important to understand that if you only make a partial payment, that will still usually be counted as late and reported as such to the credit bureaus.
To make sure that you pay bills on time, consider setting up a budget to help control your spending. You might also automate your payments to ensure you don’t miss any payment due dates. But if you do so, make sure that you have enough money in your account to cover your credit card balance.
The credit reporting bureaus collect all sorts of financial information from your various lenders to create your credit score. Your credit card company likely reports your card activity about once a month, on your statement or billing cycle date. Understanding what information has an impact on your score, as well as the impact of on-time payments and credit inquiries, can help you keep your score as high as possible and help keep credit card costs down.
Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.
FAQ
What time of the month do creditors report to credit bureaus?
Creditors may report to the credit bureaus at any time of the month, though credit card companies will usually make their reports at the end of the billing cycle, or on your statement date.
How often do companies report credit?
Credit card companies usually report to the credit bureaus once a month. However, they do so at their own discretion.
How long after paying off debt until you see an impact on your credit score?
Your credit score should see an impact after paying off a debt as soon as that debt payment is reported to the reporting bureaus, usually within 30 days. If your payment doesn’t show up on your report after a few months, contact your lender to make sure it was reported correctly.
Photo credit: iStock/iamnoonmai
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.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
If you’ve ever returned from a trip and wondered if it’s possible to deposit foreign currency into your U.S. bank account, the answer is yes — but not directly. Typically, you need to convert the money back to U.S. dollars first, then make the deposit. And there may be a few steps — and costs — involved in that process.
Let’s take a look at the five steps involved in depositing foreign currency to a bank account, as well as your alternatives.
Key Points
• Depositing foreign currency into a U.S. bank account requires converting it to U.S. dollars first.
• Initial contact with your bank is advised to check if they offer currency exchange services.
• If your bank doesn’t offer the service, other financial institutions might help convert the currency.
• Understanding the official exchange rate and potential fees is crucial before converting currency.
• After conversion, the U.S. dollars can be deposited into your bank account.
🛈 Currently, SoFi does not offer currency exchange services or accept deposits in foreign currencies. The only acceptable currency for deposits is USD.
How to Deposit Foreign Currency into a Bank Account
If your pockets are jingling with foreign currency and you want to deposit it into your bank, you’ll have to exchange it into U.S. dollars first. If you live in a major city or have an account at a larger bank, you may not have too much trouble accomplishing this. If not, you might have to shop around a bit for another bank or business that can help. Let’s take a closer look at how this works.
1. Check With Your Bank First
It may save time if you contact your own bank or credit union (or look on its website) to see if it offers foreign currency exchange services. Many financial institutions require that you have a checking or savings account with them in order to do an exchange. This could wind up being a win-win for you.
If they do offer to exchange foreign currency, you may want to schedule an appointment to make the exchange instead of just going in and heading to the nearest teller. That way, you can be sure the bank staff is ready for the transaction, that it can take the currency you’re carrying, and that a knowledgeable person will be on hand to assist you and answer your questions. You can call your branch, or you may be able to make the appointment online or on the bank’s mobile app.
2. Find a Bank to Convert Foreign Currency to U.S. Dollars
If your bank can’t do the exchange, another financial institution may be willing to work with you. It’s a good idea to reach out in advance and be clear about the type of currency you have, how much you have, and whether you have to have an account with that financial institution. This will save you time and energy versus just strolling into local brick-and-mortar banks.
Whether it’s your local branch bank, your bank’s larger main office, or a different bank than you usually use, you’ll likely have to do the transaction in person. It’s a good idea to come prepared with a current photo ID and some understanding of what will happen when you get there. Here are a few things to be aware of:
• The bank may have a required minimum value — $20 in U.S. dollars, for example — for the currency you hope to exchange. If you don’t have that much leftover currency to exchange, you might decide to just keep what you have as a souvenir, save it for another trip, or give it to a friend or family member who plans to travel abroad.
• The bank may only be able to exchange commonly requested foreign currencies. If you have Canadian dollars, Euros, or Mexican pesos, for example, things should go smoothly. But if you come in with paper money you picked up a bit off the tourist-beaten path, you may be out of luck. Checking in advance about services offered can be a very good idea before you head to a location.
4. Learn the Official Exchange Rate
Before you went on your trip, you probably had to figure out how much of the country’s currency you needed and how much getting that money would cost you in U.S. dollars. (Or perhaps your banker or travel agent did the math for you.)
That amount was calculated using the current exchange rate (the basic cost to exchange one country’s currency for another), plus whatever the bank charged you to convert your dollars prior to your trip.
The process is the same when you return and want to convert back to U.S. dollars. The amount of money you’ll get when you hand over your leftover currency (Euros, yen, rupees, pesos, etc.) will be based on the current rate of exchange for that currency, plus the bank’s markup.
It’s important to note that exchange rates fluctuate frequently, based on what’s happening in foreign currency markets. It’s probable that the exchange rate when you get home from your trip may not be the same as when you were preparing to travel.
You can check the exchange rate online at sites like Google Finance, Xe, and Oanda. Just keep in mind that wherever you end up exchanging your currency, a fee will likely be added.
The bank also may charge a transaction fee that’s based on how much currency you’re converting. This could be on top of the fee that’s already figured into the exchange rate.
5. Deposit the Money in Your Bank Account
Can you deposit foreign currency directly into your account? No. But once you’ve exchanged your foreign currency to U.S. dollars, go right ahead! You can deposit the money into your bank account — or do anything with it you like.
What Banks Will Not Accept
While you may want to exchange and deposit all of your foreign currency after you travel, be prepared to hear a couple of “sorry, but no” responses. Specifically, banks generally won’t accept any foreign coins. They also won’t exchange old foreign currency that isn’t in use anymore (so if you were hoarding some French francs or Italian lira, you are out of luck unfortunately). And if the bills you have are in bad condition, you may have trouble exchanging them.
Other Places to Exchange Foreign Currency
If you can’t find a bank that can exchange your leftover foreign currency, you may have a few other options, depending on where you live. It can take a bit of research and/or legwork, but if you have more than a few dollars left from your travels, it can be well worth it.
Some possibilities include:
• You can try a large hotel. If you live near a hotel that’s popular with international visitors, you may be able to sell your currency there. There could be an exchange desk or the front desk could prove helpful.
• Your travel agency may be able to help. If you worked with a travel agent, see if they might be willing to exchange your foreign currency back to U.S. dollars. Or your agency may have suggestions for where you can go to have the currency converted.
• You can exchange money at an airport kiosk. If you’re flying into an international airport, you can convert your remaining foreign currency at a booth that sells this service. But customers typically pay a higher markup for this easy access, so you might want to weigh the cost vs. the convenience.
• You can look for a nearby currency exchange storefront. One way to find local businesses that might exchange your foreign currency is to simply do an online search of the term “currency exchanges near me.” Once you get a list and/or map of local exchanges, you can check out their websites or contact them to see if they will convert your money, what they’re charging, and if they’re licensed. Remember, the markup will be higher at some locations than others, so you may be able to save money by doing a little research.
In the future, if you want to avoid the inconvenience and cost of coming home with foreign currency, you could go old-school with traveler’s checks. But they can be more difficult to get and use than in the past — and they also may come with a cost.
If you come home from a trip (welcome back, btw) with leftover foreign currency, don’t expect to deposit that money directly into your bank account. You’ll likely have to exchange those foreign funds to U.S. dollars first, then make the deposit.
A local bank or credit union may be willing to convert your foreign currency if you have an account there. But if not, you’ll likely have to do some research to find the most convenient and affordable alternative for making the exchange.
FAQ
Can you deposit foreign currency into an ATM?
Probably not. ATMs generally accept only one type of currency. Instead of using an ATM, you likely will have to go in person to your local branch bank to exchange foreign currency, then deposit it into your checking, savings, or money market account. Or, you may need to seek out another location to complete your currency exchange.
Can I receive money from abroad into my bank account?
Yes, you can use an international money transfer service to send money from abroad directly into your bank account. The process may differ depending on the service provider you choose to send the funds, but you should be prepared with some key bits of information.
You typically need to provide your full bank account number, your full name (as it appears on your account), the bank’s address for incoming wire transfers, and a Swift Code that identifies your bank. The fees involved will vary. And the current exchange rate will apply, as your foreign currency will be converted into U.S. dollars before the funds are credited to your account.
Photo credit: iStock/Agustin Vai
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.
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.
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/.
A certificate of deposit (CD) can be a good savings vehicle, and an add-on CD can be even better if you crave more flexibility. Traditional CDs allow you to save money for a set term while earning interest. Typically, when you open a CD, you make a one-time opening deposit and leave it in the account until the end of the term.
But add-on CDs offer a convenient twist on that basic principle: They are CDs which permit you to deposit additional funds after the account is opened.
Banks and credit unions may offer add-on CD accounts alongside other types of CDs. Whether it makes sense to open an add-on CD can depend on your financial goals.
Key Points
• An add-on certificate of deposit (CD) allows additional deposits after the initial investment.
• This flexibility can be beneficial for those who want to increase their savings gradually.
• Add-on CDs typically offer lower initial deposit requirements compared to traditional CDs.
• Interest rates for add-on CDs might be lower than those for traditional CDs.
• Early withdrawal penalties may apply, which could affect the total interest earned.
What Is an Add-On CD?
Certificates of Deposit (CDs) are designed to help you save money that you can afford to “lock up” for a period of time. Generally, when you open a CD account, you make an initial deposit. That deposit earns interest throughout the CD’s term until it matures, or becomes accessible again. The term can be anywhere from a month to 10 years, but many people opt for several months or a few years.
Once the CD matures, you can withdraw your initial deposit and the interest earned, or you can opt to roll the entire amount into a new CD. CDs typically pay a higher interest rate than a traditional savings account but still keep your money safe, since these accounts are federally insured.
Add-on certificates of deposit, sometimes referred to as add-to CDs, give you the option to make additional deposits to your CD after opening the account. So, for example, you might open an add-on CD with an initial deposit of $500. You might then choose to deposit $100 per month into the CD account for the remainder of the maturity term.
The bank or credit union with which you open the add-on certificate of deposit account might require additional deposits to be made via automatic transfer. There may also be a minimum amount that you’re required to deposit monthly or bimonthly.
💡 Quick Tip: Help your money earn more money! Opening a bank account online often gets you higher-than-average rates.
How an Add-On CD Works
An add-on certificate of deposit account works much the same as any other CD, with one exception: You can make additional deposits to the account. Opening an account for a CD add-on starts with choosing a CD term. This is the length of time you’ll leave the money in your account.
Choosing the right term for an add-on CD matters for two reasons. First, it can determine how much interest you’ll earn on deposits. The longer the term, the more time your money has for compound interest to accrue. Banks and credit unions may also reward you with a higher interest rate and annual percentage yield (APY) for choosing a longer add-on CD term.
Second, you need to be fairly certain that you won’t need to withdraw money from an add-on CD account before it matures. Banks can impose penalties for early CD withdrawals, which can be equivalent to some or all of the interest earned. The penalties might even take a bite out of your principal.
Once you choose an add-on CD to open, you can complete the application and make the initial deposit. The amount required to open an add-on certificate of deposit accounts can vary from bank to bank. It’s typically less than for a traditional CD; perhaps $100. You can also decide how much you’d like to contribute to your add-on CD each month going forward.
As you make new deposits to your add-on CDs, that amount gets added to the principal and earns interest. You’ll then earn interest on the principal and interest as the CD compounds over time.
Generally, you cannot add money to a traditional CD beyond the initial deposit you make when you open the account. Once the CD reaches maturity, your bank may allow you a grace period of seven to 10 days in which you can make new deposits to the account. You might choose to add money during the grace period if you plan to roll the funds into a new CD account.
Add-on CDs give you more flexibility since you’re not bound by such strict rules for deposits. You can set up additional deposits to your CD to continue growing your balance, based on an amount that fits your budget and savings goals. You could even take investing in CDs a step further and create a CD ladder.
A CD ladder strategy involves opening multiple CDs, add-on or otherwise, with varying maturity terms and interest rates. Rolling maturity dates mean you may not have to worry about triggering early withdrawal penalties if you need cash. Why? Because with the staggered terms, you can always have a CD getting close to its maturity. This means you’re likely to soon have access to your cash. Laddering also allows you to take advantage of interest rate hikes if they occur.
You might consider add-on CDs and traditional CDs if you’re comparing different types of high-interest accounts. Either type of CD could help you to achieve your savings goals. Before opening an add-on or traditional CD, it helps to know how they compare.
• Add-on CDs allow you to add money after account opening; traditional CDs do not.
• Minimum deposit amounts may be lower for add-on certificate of deposits versus traditional CDs.
• Banks may offer different interest rates for add-on CDs vs. traditional CDs.
• Different early withdrawal rules and penalties may apply.
When deciding where to open a certificate of deposit account, first consider whether add-on CDs are an option. Then you can look at the interest rates offered and the CD terms available.
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No account or overdraft fees. No minimum balance.
Up to 4.00% APY on savings balances.
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Advantages of Add-On CDs
Opening an add-on certificate of deposit account is something you might consider if you’re looking for something other than a traditional CD or a more flexible financial vehicle. Understanding the benefits of add-on CDs can help you decide if this is the right savings option for you.
Low Minimum Deposit
CDs impose a minimum deposit requirement; otherwise, you’d have no money to earn interest on. These minimums are often around $500 or $1000 or more. Banks may offer lower initial deposits for add-on CD accounts to get you to open them and continue depositing money later. You might find ones in the $100 range. That can be an advantage if you want to save with CDs but you don’t have a large amount of money in your bank account to deposit up front.
Guaranteed Return
If you’re looking for safe investments, it doesn’t get much safer than CDs. Add-on CDs can offer a guaranteed return for your money since you’ll know what the interest rate and APY are before opening the account. You can then use a CD calculator to estimate how much of a return you’ll get for your money over the maturity term.
Flexibility
Perhaps the biggest advantage of add-on CDs is the flexibility they offer. With a traditional CD, you make one deposit and that’s it. You can’t add anything else until the CD matures. An add-on CD, however, gives you the option to continue saving at a pace you can afford.
Disadvantages of Add-On CDs
Add-on CDs have some attractive features but they aren’t necessarily right for everyone. There are few potential drawbacks to keep in mind if you’re debating whether an add-on CD account might fit into your savings plan.
Lower Rates
Banks may offer lower interest rates for add-on CDs and reserve higher rates for traditional CDs. When comparing add-on CDs, consider the different rates you might get at traditional banks vs. online banks. An online bank may be the better choice if you’re hoping to get the highest rate possible for add-on CDs. Or, check and see what kinds of interest rates are being offered on high-yield savings accounts. You might find you fare better with one of those.
Early Withdrawal Penalties
Add-on CDs allow you to add money on your own terms but there are restrictions on when you can take money back out. Remember, the bank can charge an early withdrawal penalty if you decide to pull money from your CD before maturity. Penalties could cost you some or all of the interest earned.
Guaranteed Return
An add-on CD can offer a guaranteed return but it might not match the return you could get by investing your money elsewhere. Trading stocks, exchange-traded funds (ETFs), or IPOs, for example, could yield a better return on your money but there’s risk involved — you could also lose your money.
💡 Quick Tip: Most savings accounts only earn a fraction of a percentage in interest. Not at SoFi. Our high-yield savings account can help you make meaningful progress towards your financial goals.
Example of an Add-On CD
Now that you know the pros and cons of add-on CDs, let’s zoom in on how exactly one might be set up to help you save. Let’s say you open an add-on 12-month CD that earns 5% APY and make an initial deposit of $1,000. At the six-month point, you’ve earned $24.70 in interest and your balance is now $1,024.70. You decide to deposit another $1,000. That extra cash earns the same 5% APY. When the CD matures, you’ll have around $2,075.
The Takeaway
Add-on CD accounts can help you reach your savings goals while offering more flexibility than other CDs. Before opening an add-on CD, it’s helpful to shop around to see which banks or credit unions offer them and how much interest you might be able to earn. You may also want to compare rates to what you could earn in a high-yield savings account (which offers even more flexibility). Also check into the minimum deposit required and different term lengths to find the best match for your needs and financial goals.
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 4.00% APY on SoFi Checking and Savings.
FAQ
What is an add-on CD?
An add-on CD is a certificate of deposit account with more flexibility. It allows you to make additional deposits after the CD has been opened. Banks may impose a minimum deposit requirement, and you may need to automate deposits to add-on CDs.
Can you add additional funds to a CD?
CDs typically do not allow you to make additional deposits once your CD account has been opened. Add-on CDs, however, are designed to allow additional deposits before the CD matures.
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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.
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.
Online bill pay can automate payments of one-time and recurring bills, allowing you to seamlessly transfer funds from your bank account to a payee. Using technology in this way can not only be convenient, it may reduce the odds that you’ll forget to pay a bill and end up getting hit with a late fee.
If you’re curious to know the answer to, “What is bill pay and how does it work?” and understand how it could simplify your life and possibly save you money, read on.
Key Points
• Online bill pay automates the payment process, allowing seamless fund transfers from your bank account to payees.
• It eliminates the need for check writing and can be managed via digital devices.
• Users can schedule payments in advance, optimizing their time and managing cash flow effectively.
• Bill pay and autopay are distinct; bill pay involves user-directed payments, while autopay allows automatic withdrawals by creditors.
• Setting up bill pay involves selecting bills to automate, entering payee information, and scheduling payments.
What Is Online Bill Pay?
Bill pay is a way of paying your bills online and automating your finances. It allows you to use your mobile device, laptop, or tablet to send money from your account to that of another person or business. No check writing required.
You specify the funds and provide details on the recipient, and the amount is automatically taken from your account and sent to the payee.
Yes, you can do this in real time, but you can also determine the “when.” That means you can schedule bills for payment in advance whenever you have time free, which can be a huge life hack.
Bill Pay vs. Autopay
You may be tempted to use the terms bill pay and autopay interchangeably, but they are actually two different processes.
• With bill pay, you are set up one or more payments; you are establishing when and how much money will be taken out of your bank account and transferred to the payee.
• With autopay, however, you are authorizing a creditor to take money out of your account (which can make some people feel as if they are sacrificing control) or to use your bank’s bill payment system to do so.
💡 Quick Tip: Don’t think too hard about your money. Automate your budgeting, saving, and spending with SoFi’s seamless and secure online banking app.
What Is Online Bill Pay Used For?
When you set up online bill pay, it can be a good opportunity to review your finances and the money you have coming in and going out.
You might also decide to stagger the payment dates on your bills to enhance your cash flow. To help with this, you may be able to change due dates on your bills by contacting your creditor.
Here are some of the ways you might use online bill pay services:
• Mortgage or rent
• Utilities
• Car loan payments
• Credit card bill
• Gym memberships
• Streaming channel and other subscriptions
• Student loans
• Charity donations.
How to Set Up Online Bill Pay
While bill pay can help make managing finances simpler, it does require some initial manual set-up. But, once you’ve learned how bill pay works, this automatic feature can make keeping track of and paying bills less cumbersome. Here are some ways to get started:
1. Find a Financial Partner that Offers Bill Pay
While many financial institutions offer digital payment tools, like online bill pay, it’s worth investigating the features that are included at each before opening up an account. Online billing is free with some accounts, while some providers may charge for each transaction — either per bill or on a repeating monthly basis.
2. Determine Which Bills to Automate with Bill Pay
Next, think about which ongoing bills you want to automate.
• Predictable expenses (or fixed vs. variable expenses) that don’t fluctuate from month to month, such as loan and mortgage payments or the internet bill, are solid candidates for recurring automated payments. You may want to schedule payment for a time each month when you know there’ll be sufficient funds in your account to cover what’s come due. Some service providers may even allow you to change the due date on certain bills.
• Bills that change every month may be more challenging to automate. For instance, if your credit card bill might be $300 one month and $1,300 the next, it can be hard to be certain you’ll have enough money in your checking account to cover the cost.
3. Gather Together All Bills
Once you figure out which bills to pay automatically, you still might want to gather together all your regular bills in one place. (Organizing your bills can really help you see exactly where your money goes.)
While individual bills are generally due at the same time each month, bills from different businesses or providers will have different due dates. With all the bills in one place, you can be ready to enter the various billing accounts into your bank’s bill pay system.
4. Log into Your Online Financial Account
When you’re ready to make a payment with bill pay or set up recurring payments, sign onto your bank’s website or app and search for the “Pay a Bill” or “Online Bill Pay” function.
5. Add Your Billing Information
Once logged on, you might follow the prompts to add individual billing accounts, indicating for each the funds you wish to pay with.
• You’ll likely be asked to input the name of the business or service whose payments you’re seeking to automate. You may also be asked for more specific details, such as your individual account number.
• If you can’t find the business or service provider listed, you want to try spelling out the full name, removing abbreviations.
• If you still can’t find the payee, it’s possible that you can still utilize online bill pay, but you may need to manually add in the payment details.
• You’ll need to add your account number so that your payment is properly credited to you.
• You can also add the amount and frequency of payments, selecting a specific payment date (for one-time payments) or a regular schedule (for repeat bills that get paid on the same date every month).
Some financial institutions place a cap on the amount of money that can be transferred electronically through bill pay. If an automatic payment exceeds that designated transaction limit, users may then need to pay via a physical method, such as a personal or cashier’s check.
6. Take Note of the Billing Schedule
Doing a little homework ahead of time can save a financial headache later on.
While bill pay may ease the burden of remembering when bills are due, it’s still important to stay on top of the days each payment will go out. Here’s why:
• Knowing this ahead of time can help make sure there’s enough money in the linked accounts to cover bills paid on different days.
• Otherwise, you may run the risk of a payment being declined (which can incur extra fees or charges) or overdrawing funds (which can incur even more fees and charges).
• Doing a little homework ahead of time can save a financial headache later on. Check with your financial institution to find out when automated payments will begin (and how long it takes for funds to be transferred from your accounts). In some cases, funds may be drawn several days before a bill is “due” to be paid. This information will help you make sure payments are credited before any late fees can kick in.
💡 Quick Tip: Your money deserves a higher rate. You earned it! Consider opening a high-yield checking account online and earn 0.50% APY.
Understand the Cost of Overdue Bills
The Census Bureau’s most recent Household Pulse survey found that 36% of Americans said they had found it somewhat or very difficult to pay their bills over the previous week. That’s more than one in three consumers.
Many Americans occasionally, rarely, or never pay bills on time.
When bills are not paid on time, you incur late and/or overdraft or NSF fees. These can add up on multiple bills, adding to any cash flow issues you may be experiencing. Curious about the costs? A typical overdraft fee is about $35, and consumers in the US pay $14.5 billion a year in credit card late fees alone, according to the Consumer Financial Protection bureau.
Given the magnitude of this issue, it can make sense to take a closer look at your bills and use bill pay to avoid incurring unnecessary fees.
Here are more details about some of the consequences of not paying bills on time.
Imposing Late Fees
One of the ways companies or service providers enforce on-time payments is by penalizing people for, well, paying late. Whether it’s a credit card, utility bill or simply missing a payment date by a single day, submitting a late payment can result in late fees, higher interest rates, or other charges.
Accruing Interest Charges
On top of late penalties, some providers may also charge interest on the balance owed, essentially creating a double wallop of fees if you’re late paying a bill.
• In some cases, the interest may be charged starting the day an account becomes overdue. In others, it may accrue going back to the purchase date or transaction day.
• Depending on the interest rate charged and how frequently that interest compounds, this fee could quickly balloon to more than the initial fee assessed.
Experiencing Service Disruptions
In some cases, a provider may have the right to shut off your service if you pay a bill late. Not only are such disruptions a major interruption to daily life (ahem, no water or electricity or WiFi), but individuals may also have to pay a reinstatement fee once account has been paid just to reactivate the service.
Declining Credit Rating
Payment history on outstanding debts is the single biggest contributing factor at 35% to your FICO® credit score. And payment history reflects whether you have been paying your bills on time. So, things like overdue credit card bills, unpaid mortgage or car payments, and other late payments can erode an individual’s credit score.
Building and/or protecting your credit score can help you get approved for loans and lines of credit. Even if approved, having a lower credit score could mean you’re offered a less favorable APR (annual percentage rate) on funds you borrow or lines of credit, potentially costing you thousands of additional dollars over time.
• It’s secure. Financial institutions typically use state-of-the-art protocols to protect your account, and there’s no worry about a check getting lost or stolen.
• Paperless transactions means there are fewer documents to manage and organize.
• The automatic nature of bill pay means you don’t have to remember to pay bills or set up elaborate systems of alerts. (That’s also a benefit of automating your savings as well.)
• A corollary to the above point is that bill pay can help you avoid missing payments or making them late and paying related fees.
Bill Pay Disadvantages
• There’s the possibility that you enter incorrect details and the wrong amount gets transferred or the funds get sent to the wrong person.
• In any form of digital financial transaction, there is a very small chance of fraud or hacking.
• If you don’t keep very careful tabs on your money, you could risk overdraft. Say you have unusually high expenses one month; your bank balance might be lower than needed to cover your automated bill payments. This could lead to fees and headaches.
• Payment processing times can vary. Check with your bank to make sure you understand the timelines involved with bill pay so you don’t wind up with late charges.
• You may need extra organization to manage, say, quarterly or other irregularly occurring bills. If you pay different bills from separate accounts, paying bills can become even more tangled.
Bill paying is a fact of life, but there are tools that can make it quicker and more convenient. Signing up for automated online bill pay can put you in control. It can ensure that outstanding bills get paid on time or when you have more money in your accounts, reducing the likelihood of late-payment or overdraft fees. It can be a smart move to see what your bank offers in terms of this service and whether it can simplify your financial life.
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 4.00% APY on SoFi Checking and Savings.
FAQ
How long does bill pay take to send money?
Check with your bank about typical processing times. This may range from a couple to several days. Knowing the typical timing can help you make sure to set up payments to arrive on time..
Is bill pay the same as a check?
Online bill pay is an electronic process that moves funds from one account to another. You do not have to write a paper check, nor does the payee receive one.
Can I use bill pay to pay another person?
While many people may think of bill pay as being used to send funds to, say, a utility or other company, you can often use bill pay to send funds to an individual (say, your landscaper or babysitter).
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.
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.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
For millennia, humans have used precious metals such as silver as a way to barter and exchange value. And even in today’s modern economy, many people believe that there is room for investing in silver and other precious metals as a way to diversify their overall portfolio.
Investing in silver can come in many different ways, from buying stocks or mutual funds focused on precious metals to holding the actual silver metal yourself. Depending on how you are investing in silver, it can be considered a valuable hedge against inflation and one way to diversify your overall investment portfolio.
Key Points
• Investing in silver can help diversify an investment portfolio and act as a hedge against inflation.
• Silver is considered valuable due to its historical use in coins, jewelry, and industrial applications.
• Silver and gold are both precious metals that have been used as currency and for portfolio diversification.
• Investing in silver can offer advantages such as portfolio diversification and lower cost compared to gold.
• However, investing in silver carries risks, including price volatility and the need for secure storage for physical silver holdings.
Why Is Silver Considered Valuable?
Silver is a type of alternative investment, in that it’s different from a conventional stock or other type of security. And similar to how those types of securities or investments hold value, silver does as well.
At its most basic, silver is valuable for the same reason that anything is considered “valuable” — because we as a society have decided that it is valuable. Silver has been used for making coins and jewelry since the early days of history, which is one reason that silver is considered valuable. Silver is also quite conductive, which means that it has uses in industry as well.
Silver has many of the same qualities as gold, which is why many investors have similarly looked for different ways to invest in precious metals.
Silver vs Gold
Silver and gold have both been used as currency and jewelry since nearly the beginning of human civilization. They are both considered valuable precious metals and useful for portfolio diversification and as an inflation hedge. Deciding whether to invest in gold or invest in silver is in some ways a personal choice, and many investors decide to invest in both.
💡 Quick Tip: While investing directly in alternative assets often requires high minimum amounts, investing in alts through a mutual fund or ETF generally involves a low minimum requirement, making them accessible to retail investors.
Alternative investments, now for the rest of us.
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What Are the Advantages of Investing in Silver?
One of the biggest advantages of investing in silver is that it can help diversify your portfolio. The rate of return for silver and other precious metals is not always correlated with that of other investments, which means that it can be a useful form of portfolio diversification. Silver is also cheaper than gold on a per-ounce basis.
Many investors also consider investing in precious metals to be an inflation hedge – it’s commonly believed that precious metals like silver or gold hold their value more efficiently or for a longer-term than cash or other assets.
If you invest in actual physical silver, another advantage is that it is a hard asset — it cannot be hacked or erased. Silver and other precious metals are one of the few investments that you can actually hold in your hand. Unlike other investments, your holdings in silver can also be as private as you want them to be.
What Are the Potential Drawbacks?
One drawback of investing in silver is that its price is considered fairly volatile. That doesn’t make it a great investment if you are only holding for the short-term. Prices for precious metals can fluctuate wildly over the short-term, and even over the long-term, may not provide investors with the type of appreciation they may have seen if they had invested in other assets.
Further, if you hold physical silver, you do run the risk of having it stolen. Unlike digital assets, physical silver may not be recoverable if it is lost or stolen. As such, if you are buying physical silver coins or bars, you will need to find a safe and secure way to store them.
💡 Quick Tip: Look for an online brokerage with low trading commissions as well as no account minimum. Higher fees can cut into investment returns over time.
Is Silver an Inflation Hedge?
As noted, investing in precious metals is often considered an inflation hedge.
Inflation is a natural phenomenon that gradually increases the cost of many goods and services. Silver has many uses – it can be used to mint coins, for instance, and be used as an actual currency, or be incorporated into other products. For that reason, it may hold its value more effectively than cash or other assets.
But there’s no guarantee that silver will always be an effective inflation hedge, and it’s important to remember that it’s a volatile asset.
How Can I Invest in Silver?
There are a number of different ways to invest in silver, depending on what you’re looking for in your portfolio. One popular way to invest in silver is by buying physical bars or coins of silver. Another possible way to invest in silver is by investing in the stocks of silver mining companies.
Silver Funds
It may also be possible to invest in silver using various types of funds, such as exchange traded funds (ETFs) that own silver or silver mining companies. There may also be options for investors to invest in mutual funds with concentrations in the silver industry or market, too – doing a bit of research to see what your options are in relation to silver investments is likely to yield results.
The Takeaway
Investing in silver offers investors a way to add an alternative asset to their portfolio, which can help them diversify, and hedge against inflation. There are many ways to invest in silver — including investing in silver mining companies, silver ETFs or owning physical silver like coins or silver bullion.
But investing in silver has its risks, and investing in precious metals typically means investors are okay with adding a relatively volatile asset to their portfolios. As always, if you have questions, it may be a good idea to speak with a financial professional.
Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).
Invest in alts to take your portfolio beyond stocks and bonds.
FAQ
Does owning silver diversify your portfolio?
Depending on the composition of your investment portfolio, owning silver can diversify your portfolio. Silver and other precious metals are often considered an inflation hedge, meaning that their price generally holds its value, regardless of the inflation rate. The rate of return on investing in silver and other precious metals is also not often correlated with returns of other types of investments, like the stock market or real estate.
Will the price of silver always go up?
Like all investments, there is no guarantee that the price of silver will always go up. The price of silver can fluctuate wildly, which means that depending on when you buy and/or sell, you may lose money. Before investing in silver, make sure you understand the risks and drawbacks of silver investing.
What are some alternative metals to silver?
Probably the most popular alternative precious metal to silver is gold. Like silver, gold has been used in currency and jewelry for most of the length of human civilization. Other options for investing in precious metals if you’d rather not own gold or silver are platinum or titanium.
Photo credit: iStock/oatawa
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SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below:
Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
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Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.
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.
An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. This and other important information are contained in the Fund’s prospectus. For a current prospectus, please click the Prospectus link on the Fund’s respective page. The prospectus should be read carefully prior to investing.
Alternative investments, including funds that invest in alternative investments, are risky and may not be suitable for all investors. Alternative investments often employ leveraging and other speculative practices that increase an investor's risk of loss to include complete loss of investment, often charge high fees, and can be highly illiquid and volatile. Alternative investments may lack diversification, involve complex tax structures and have delays in reporting important tax information. Registered and unregistered alternative investments are not subject to the same regulatory requirements as mutual funds.
Please note that Interval Funds are illiquid instruments, hence the ability to trade on your timeline may be restricted. Investors should review the fee schedule for Interval Funds via the prospectus.
[cd_ETFs]
Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.
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