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Jan

2023

What Is Green Banking?

By Rebecca Lake | Family Finances, money, Terminology | Comments Off

Green banking is a branch of the financial industry that focuses on promoting environmentally-friendly practices. Similar to sustainable investing, green banks emphasize the importance of reducing negative environmental impacts as they go about their business.

The latest data indicates that global warming is likely increasing, and, in response, so is the market for renewable energy sources and other green solutions. The emergence of green banking may also reflect this rising interest in being more eco-conscious.

This is a relatively new concept, and you may have questions about what it really means. In this guide, you’ll learn answers to:

• What is green banking?

• How does green banking work?

• What are examples of green banks?

What Are Green Banks?

There is no standard way to define what is a green bank. According to the Environmental Protection Agency (EPA), green banks are financial institutions that may leverage public funding to attract private capital for clean energy projects. These can include energy efficiency, renewable energy, and other distributed energy resources), as well as other “green” investments.

In simpler terms, green banks are mission-driven. They work to further environmentally-sound goals alongside financial goals. Those objectives can include:

• Financing projects that will create green jobs

• Expanding solar power

• Lowering energy costs

• Reducing greenhouse gas emissions

• Building green infrastructure

• Closing funding gaps for green energy retrofitting projects

• Advancing sustainability.

As of 2022, there were 22 financial institutions in the U.S. operating as green banks, according to the Green Bank Consortium. Collectively, those banks have helped to drive $9 billion in clean energy investment since 2011.

Recommended: Green Investing Guide

How Do Green Banks Work?

Broadly speaking, green banks work by adhering to practices that promote sustainability. Sustainable banking encompasses two different things:

• Green banking

• Sustainable finance

So what does that mean? When you’re talking about green banking, you’re referring to implementing practices that are designed to reduce a bank’s environmental footprint.

Sustainable finance, on the other hand, involves the use of financial products to support or encourage environmentally-friendly behavior.

Green banks work by incorporating aspects of sustainability into their operations. That spans everything from the products and services the bank offers to its IT strategy to the way it hires and retains employees. It may encompass socially responsible investing as well.

It’s important to note that it can be easy to confuse banks that are authentically green with financial institutions that engage in greenwashing. Greenwashing happens when companies have the appearance of being environmentally-friendly or sustainable, based on their marketing claims, but in reality are not. It may require a bit of consumer research to make sure you can differentiate what is a green bank and what isn’t.

Recommended: A Guide to Ethical Shopping

Sustainable Banking Examples

The number of green banks in the U.S. is still relatively low, and they don’t exist in every state yet. You may not see them among your local retail banks. However, there are some notable examples of financial institutions that are focused on sustainable banking. These include:

California Infrastructure and Economic Development Bank

The California Infrastructure and Economic Development Bank (known as IBank) offers a variety of paths to sustainable banking. The bank offers infrastructure loans, bonds, small business financing, and climate financing in order to create jobs, bolster the economy, and improve quality of life for Californians. IBank financing accounts for more than $52 billion in infrastructure and economic development within the state.

Connecticut Green Bank

Connecticut Green Bank is the nation’s first green bank, established in 2011. The bank evolved from the Connecticut Green Energy Fund and bases its business model on the use of sustainable financing to maximize the use of public funds. As of 2022, the bank and its partners have helped $2.26 billion in capital to find its way into clean energy projects across the state.

NY Green Bank

NY Green Bank is a state-sponsored financial institution operating in New York that works with the private sector to increase investments into clean energy markets. The bank is specifically interested in projects that are both financially sound and focus on creating energy savings or clean energy that helps reduce greenhouse gas emissions. Many of the bank’s funding projects revolve around the expansion of solar energy.

Advantages and Disadvantages of Green Banks

Green banks and sustainable banking aim to play a role in environmental preservation. However, they aren’t the same thing as your standard traditional bank or online bank. While you may never use a green bank directly, it’s important to understand how they can still affect you. Here’s what to know about the advantages and potential downsides associated with sustainable banking.

Banking Advantages	Banking Disadvantages
• Green banks help to advance the use of clean energy technology. • Clean energy projects funded by sustainable banking can help to increase job growth and promote economic development. • Green banking can attract large-scale private investment, which can help to accelerate clean energy projects.	• Green banks are not widespread, and their reach may be limited. • Sustainable banking is still a relatively new subset of the banking industry, which can translate to higher credit risk. • Banks that engage in greenwashing can taint the image of sustainable banking and lead investors to look elsewhere.

Banking Advantages

Banking Disadvantages

• Green banks help to advance the use of clean energy technology.

• Clean energy projects funded by sustainable banking can help to increase job growth and promote economic development.

• Green banking can attract large-scale private investment, which can help to accelerate clean energy projects.

• Green banks are not widespread, and their reach may be limited.

• Sustainable banking is still a relatively new subset of the banking industry, which can translate to higher credit risk.

• Banks that engage in greenwashing can taint the image of sustainable banking and lead investors to look elsewhere.

The Future of Green Banking

Predicting the future of sustainable banking is difficult, though signs indicate a growing interest in how green banks might help create a cleaner environment. At the federal level, for instance, the passage of the 2022 Inflation Reduction Act notably included a provision allowing for the establishment of a national green bank.

Globally, sustainable banking is increasingly in the spotlight in emerging markets. There’s growing interest in the positive environmental gains that may be made through green banking. That said, there are still questions about how to encourage sustainable finance in economies that are still developing. This could in turn lead to more global collaboration among banks in furthering sustainable finance worldwide.

One potential result of sustainable banking: There may be greater carryover in the traditional banking sector. For example, there may be a push for banks to offer personal or small-business banking products and services that have a sustainable or green angle. Green loans and mortgages could end up being another byproduct of enhanced attention on sustainable finance.

As the spotlight on green banking grows, you may begin to notice changes at the retail banking level. For example, Citigroup issues an annual report on its ESG (Environmental, Social and Governance) program results. And it’s not just traditional banks showing dedication to this topic; online banks are part of the effort, too. In March 2022, SoFi announced the launch of its ESG Committee to help formulate strategies for positive environmental, social, and governance impacts.

The Takeaway

Many people are adopting a greener lifestyle and finding ways to reduce their carbon footprint. Where you choose to bank could make a difference in your efforts if you’re keeping your money at a financial institution that advocates sustainability. Green banking is the term used to describe financial institutions that try to both make their business practices more sustainable as well as invest funds towards eco-conscious goals. This segment of the market may well grow in the years ahead.

Switching to an online bank is something you might consider if you’d like to streamline the way you manage your money. Instead of driving to a bank or receiving paper statements in the mail, you could track your finances online without leaving home. When you open a checking and savings account with SoFi, you can get all the banking tools you need to stay on top of your finances. Sign up with direct deposit, and you’ll enjoy the terrific combination of an and no fees, which can help your money grow faster.

Bank smarter with SoFi today and enjoy a hyper competitive interest rate, plus zero fees.

FAQ

What is sustainable banking?

Sustainable banking encourages environmentally-friendly practices, products, and services. A sustainable bank or green bank may be committed to specific environmental goals, such as reducing greenhouse gas emissions, promoting the advancement of clean energy, or funding green building projects.

How can banks be more sustainable?

Banks can encourage sustainability by reviewing their environmental footprint and addressing areas that could improve. The types of changes banks can implement may be large or small, but the end goal is fostering a cleaner environment. Reducing paper waste, for example, is one simple way to be more sustainable.

Which banks are green banks?

There are a handful of banks operating in the U.S. that are designated as green banks, according to the Green Bank Consortium. Whether a bank is considered “green” or not can depend on the type of certifications they hold. Examples of green banks include IBank, Connecticut Green Bank, and NY Green Bank.

Photo credit: iStock/baona

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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.

SOBK1022016

Dec

2022

How to Transfer Brokerage Accounts: 6 Steps

By Michael Flannelly | Growing Wealth, Investing | No Comments

If an investor is unhappy with their current brokerage firm’s service or tools, they shouldn’t let the hassle of the transfer process keep them from switching to brokerages. Putting off a transfer may keep investors from future portfolio growth because they don’t enjoy using the platform or are paying high fees.

Transferring brokerage accounts is not the huge hassle people might think it is. While it’s not as fast as certain cash payment services, the process only requires a few forms and patience to get it done. Keep reading to learn more about moving your investments from one account to another.

When to Consider Switching Brokers

There are several reasons why an investor might consider switching brokers, including the following:

• High fees: If you pay high investment fees and commissions to your current broker, you may find a more cost-effective option by switching to a different broker. Many online brokerage firms now offer very low or no commissions.

• Lack of customer service: If your current broker is not meeting your needs in terms of the types of investment products they offer, the level of customer service they provide, or the quality of their trading platform, you may want to consider switching to a different broker that better meets your needs.

• Changes in your investment strategy: If you plan to make significant changes to your investment strategy, such as switching to a new asset class or adopting a new approach to trading, you may want to consider switching to a broker better equipped to support your new strategy. For example, your current broker may not offer options trading, but you’d like to start using options to speculate, generate income, or hedge risk.

• Changes in your financial situation: If your personal finances change significantly, consider reviewing your broker to ensure it is still the best fit for your needs. For instance, your current broker may have a minimum account balance you can no longer meet.

However, switching brokerage accounts can be time-consuming and potentially costly, so it’s important to consider whether the benefits outweigh the costs.

Two Ways to Transfer Assets to Another Broker

When transferring a brokerage account from one broker to another, there are two main ways investors can transfer assets: cash transfer and in-kind transfer.

Cash Transfer

A cash transfer involves selling the assets in the account and transferring the proceeds to the new broker in the form of cash. A cash transfer is a straightforward and quick way to transfer an account, but it may not be the most tax-efficient option, as it could trigger capital gains or losses that may be subject to taxes.

💡 Recommended: Capital Gains Tax Guide: Short and Long-Term

In-Kind Transfer

An in-kind transfer involves transferring the assets in the account directly to the new broker without selling them. This may be a more tax-efficient investing option, as it allows you to carry over the cost basis of the assets to the new broker. However, executing an in-kind transfer may be more complex and time-consuming, as it may require the transfer of specific securities or other assets rather than just cash.

How to Move Investments From One Brokerage Account to Another

The process for transferring cash or securities from one brokerage account to another typically involves the following steps:

1. Confirming Account Information

Before an investor starts the transfer process, they should take some time to review their existing account, taking note of the assets they hold, total amounts held, and basics like account numbers and information on file.

Having a snapshot of account totals can serve as a backup if anything goes wrong in the transfer. Investors might want proof of their assets for confidence before getting started.

2. Contacting the New Broker

To kick off the process, an investor would reach out to their new broker, also known as the “receiving firm,” in the transfer. Each brokerage firm will have a slightly different transfer process, but most accounts will be transferred in an automated process through the help of the National Securities Clearing Corporation (NSCC).

NSCC runs Automated Customer Account Transfer Service (ACATS), a service that allows accounts to be transferred in a standard way from one brokerage firm to another. ACATS should work for most transfers, including cash, stocks, and bonds.

When an investor contacts the receiving firm, they’ll receive instructions and, often, a physical or digital copy of the Transfer Initiation Form (TIF). At this stage, investors don’t need to reach out to their old brokerage firm.

3. Completing a Transfer Initiation Form (TIF)

Completing the standard TIF officially kicks off the process. Once the receiving firm has an investor’s TIF, they’ll start making arrangements with the investor’s old brokerage firm, or “delivering firm,” to send the assets over.

Investors should take care to complete the TIF thoroughly and correctly. If information (such as Social Security number, name, or address) is not the same with both the delivering and receiving firms, the request could be flagged as fraud and rejected.

That means confirming an investor’s receiving and delivering firms have the correct personal information on file.

The most common hold-up in the transfer process is an investor error in the TIF.

TIFs typically include the following information:

• Numbers for both brokerage accounts

• The brokerage account type, such as joint, individual, Roth IRA, trust, estate, limited liability, 401(k), etc.

• Social Security number

• The delivering firm’s contact information

• Specific assets to transfer in the event of a partial transfer

4. Submitting the TIF, and Sitting Tight

The investor will submit the TIF to their receiving firm when everything looks complete. From there, the investor will wait.

While the investor can’t do much more than sit on their hands and wait, the receiving firm is entering the TIF into ACATS. This information becomes a digital request submitted to the delivering firm, requesting a transfer of assets from one brokerage to another.

When the TIF is being reviewed, investors should pay close attention to their email and phone. If there’s any mismatched information on the TIF or between the two firms, the receiving firm will likely reach out to the investor to amend the issue.

Missing outreach could mean an even longer transfer period. That’s why investors should double-check that all the information on the TIF and between the two brokerages is consistent.

If the form is correct and approved by the delivering firm within the appropriate window, they will send a list of assets to the receiving firm. Now, it’s the receiving firm’s time to accept or reject.

While uncommon, a brokerage can reject the assets. Thus, an investor might consider contacting the receiving firm before the transfer to confirm their assets will be accepted. The receiving firm gets to decide if they want to accept or reject those assets.

If the assets are accepted, the delivering firm will digitally move the holdings to the receiving firm.

5. Contacting Your Old Broker (Optional)

In the world of texting, a phone call might be the last thing a person wants to do. But a simple call could save a few bucks in the transfer process. One hiccup that can come from the process is the account transfer fee. In some instances, the delivering firm will charge an “exit fee” when an investor makes a full transfer, partial transfer or decides to close an account entirely.

To avoid the surprise of a fee, an investor may reach out to their old brokerage firm and ask if they’ll be charged a fee for leaving or transferring funds.

If the delivering firm charges a fee, investors could reach out to the receiving firm to ask if they have any promotions for new clients that would cover the cost of transfer fees.

6. Watching the New Account, and Waiting

After the delivering and receiving firms approve the transfer request, it will still take a few days for the investments to move accounts.

Investors shouldn’t be alarmed when assets disappear from both accounts for a day or two, but the process typically takes no more than six business days.

The process may take longer if the delivering firm is not a broker-dealer. The transfer often takes longer than six business days if the delivering firm is a bank, mutual fund, or credit union.

No matter the length of the transfer, it’s common for one or both of the brokerage accounts involved to be frozen. That means no trades are allowed until the process is complete.

Investors may plan ahead and avoid trading during this period. If there is a stock or fund investors are looking to sell in the near future, they might want to sell it before starting a transfer.

Special Circumstances That Can Affect the Stock Transfer Process

Transferring Retirement or Other Tax-Advantaged Accounts

Transferring a tax-advantaged brokerage account, such as an individual retirement account (IRA) or 401(k) account, from one broker to another generally follows a similar process to regular brokerage accounts.

However, if you transfer a tax-advantaged account, you may need to follow certain rollover rules to avoid triggering taxes. For example, if you transfer an IRA, you generally have 60 days to complete the rollover and deposit the assets in the new account to avoid taxes and penalties.

💡 Recommended: IRA Transfer vs Rollover: What’s the Difference?

Transferring Stocks to Another Person

Transferring or gifting stocks to another person may have tax implications. For instance, transferring stocks may trigger gift taxes depending on their value.

Understanding Brokerage Transfer Fees

Brokerage account transfer fees are charges that may be assessed by a broker when an investor transfers their account from one broker to another. The new or old brokerage may charge these fees, which can vary depending on the broker and the assets being transferred.

Some common types of brokerage account transfer fees include:

• Account transfer fees: These are fees that the current broker may charge for transferring the account to the new broker.

• Termination fees: Some brokers may charge termination fees for closing an account or transferring assets out of the account.

• Trade execution fees: If you need to sell any assets in your account to transfer them to the new broker, you may be subject to trade commission fees.

Keeping Records From Your Old Account

It’s generally a good idea to keep records from your old brokerage account following an account transfer, as these records may be helpful for various purposes.

For example, you may need to refer to your old brokerage account records for tax purposes. The information in these records can help you accurately report any capital gains or losses subject to taxes.

You may also need to refer to your old brokerage account records if you need to resolve any disputes or errors related to the transfer of your account or the assets held in the account.

Tax Implications of Switching Brokers

The tax implications of switching brokers will depend on several factors, including the type of assets held in the account, the method used to transfer the assets, and your tax situation.

If you sell and cash out stocks in your account to transfer them to the new broker, you may incur capital gains or losses that could be subject to taxes.

Additionally, the transfer may affect the cost basis and holding period of the assets in your account. The cost basis is the amount you paid for the asset, and the holding period is the length of time you have owned the asset. These factors can affect the amount of any capital gains or losses that may be subject to taxes.

Switching to SoFi Invest

People might put off transferring their brokerage account because they believe it’s involved and complicated. While it’s not instant, the process typically takes just six business days from start to finish. That means investors are only a few days and a simple form away from a new brokerage service. As long as an investor is careful and asks their receiving firm the right questions before getting started, they should avoid any significant roadblocks during the transfer.

By opening an online brokerage account with SoFi Invest®, you can take control of your financial portfolio with a DIY approach. You can trade stocks, exchange-traded funds (ETFs), fractional shares, and more with no commissions, all in the SoFi app.

Take a step toward reaching your financial goals with SoFi Invest.

FAQ

Can you transfer brokerage accounts?

It is generally possible to transfer a brokerage account from one broker to another. Transferring an account typically involves requesting a transfer form from your new broker and completing the transfer form and any other necessary documents.

How do you transfer stock to a family member?

To transfer stock to a family member, you will need to follow the steps for selling or transferring the stock following the policies of your brokerage firm. This may involve completing and submitting a stock transfer form or other required documentation to your broker and paying applicable fees.

What is an Automated Customer Account Transfer Service (ACATS)?

The Automated Customer Account Transfer Service (ACATS) is a system that facilitates the transfer of securities and cash between brokerage firms in the United States. It allows investors to transfer their accounts from one broker to another without manually selling and buying securities or transferring cash balances, which can streamline the process and minimize the risk of errors.

How will I know that my transfer is complete?

Once you have initiated the process of transferring your brokerage account from one broker to another, you should receive confirmation from both the current and new brokers when the transfer is complete. This confirmation may come in the form of a written statement or an email.

SoFi Invest®

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SOIN1022013

Dec

2022

The Envelope Budgeting Method: What You Need to Know

By Janet Siroto | Budgeting & Goals | No Comments

Many Americans would like to get on top of their spending and control their debt, but it can be a struggle. The most recent numbers show that in the U.S., credit card balances rose $121 billion to a staggering total of $925 billion in a single year.

How can you do your part to get on top of your spending and debt? With a budget. Think of it as both guidance to reach your financial goals as well as guardrails to keep your spending and saving on track. Finding the right system to suit your style can take a bit of experimentation, and one path definitely worth considering is the envelope budgeting system. This is a very tangible, physical system in which you divide up a month’s worth of cash to be spent into (you probably already saw this coming) good old-fashioned envelopes, organized by category.

This method can be a great way to literally get in touch with your money and see how it’s spent.

Here, you can take a closer look at this system:

• What is the envelope budgeting method?

• How does the envelope budgeting method work?

• What are the pros and cons of the envelope budgeting method?

What Is the Envelope Budgeting Method?

There are many methods to help you build a budget. The envelope method for budgeting money (also sometimes called the envelope saving method) is a system that helps you track your spending by limiting it to cash transactions. In this way, an otherwise fairly abstract concept — your spending — is turned into something you must literally hold in your hands.

You determine your spending categories, such as entertainment, food, and so forth. You label an envelope for each, and then you divide your monthly available money into the appropriate categories.

Then, as the month goes by and bills come in, you pay with the funds allocated in each envelope. Here’s one of the key points for envelope method budgeting: When the money is gone, it’s gone. The idea is to not dip in elsewhere to come up with cash for, say, a pricey sushi dinner you indulged in on impulse. The point is to get used to sticking to your budget.

Next, you’ll learn the steps to setting up an envelope budget.

How Does the Envelope Method of Budgeting Work?

Here’s a look at how the envelope method of budgeting works.

1. Determining Your Discretionary Income

The envelope method usually works best when you use it to budget for discretionary spending. Your discretionary spending is the money you spend on things you may not really need, such as entertainment.

To determine your discretionary income, take your monthly income and subtract any necessary expenses, including things like housing costs, utilities, and insurance payments.

You may want to include debt payments and savings goals in this category as well. Anything you have left over is your discretionary income.

Budgeting rules of thumb, such as the 50/30/20 rule, can help you determine your discretionary spending as well.

2. Deciding on Budget Categories

Once you have a total for your discretionary income, you can begin to break it down by category. The spending categories you choose will depend on your own habits.

You may want to pay special attention to areas where you already have trouble with overspending. Eat out too much? Grab a latte almost daily? Consider this an opportunity to put a cap on that spending.

Other common areas to consider include groceries, entertainment, clothing, and gas money. You may want to build in a catch-all category that gives you some money to use for fun as well.

Assign a dollar amount to each category. Consider reviewing past bank statements to help you figure out what you normally spend.

Your bank or credit card may even break out your spending into categories for you, making it easy to tell where you typically spend. If you’re trying to cut back, assign dollar amounts that are lower in the categories where you can.

Recommended: Guide to Practicing Financial Self-Care

3. Withdrawing Cash and Putting it into Envelopes

The next step in an envelope method budget is to get one envelope for each category. Write the name of the category on the envelope and the dollar amount you have assigned to it. At the beginning of the month, withdraw enough cash to fill each envelope.

Depending on your situation it may work better for you to spread your withdrawals out to align with your paycheck. If this is the case, you could take half the money out at the beginning of the month and the remaining half when you receive your next paycheck.

When you go to the bank, get the exact denominations that you need. For example, if you assigned $55 to your entertainment budget, make sure you get exactly $55 dollars. Make change if you use an ATM that only spits out $20s. With exact amounts, you’ll avoid the extra work of remembering where you need to shuffle dollars around.

If having a pile of envelopes feels too disorganized, consider using a coupon organizer. These look like little divided wallets or small accordion files. The idea here is the same as with the envelopes, and you should label each section with the category and dollar amount.

4. Spending Only Cash

Then, for the month ahead, the envelope method budget means that when you need to buy something, you take money from the appropriate envelope. You may not want to carry the envelope around with you, which could mean spending more than you need to or risking losing it. If you only bring $50 to the grocery store, make sure that your total doesn’t go beyond $50. Some tips to help this process:

• Try to avoid the temptation to spend with your credit card too. It might help to remove your credit card out of your wallet while you use the envelope method. If you choose to do this, consider storing the card in a secure place where you can access it when you absolutely need it.

• If you choose to purchase something on the internet, such as concert tickets, for example, note the purchase on your envelope immediately. You can then remove the cash you spent online from the envelope.

• When buying things online, continue to keep in mind the dollar amount you set for that category. Try your best to avoid overspending, based on the limits you set for each envelope at the beginning of the month.

Recommended: 18 Common Misconceptions About Money

5. Once Your Cash Is Gone…It’s Gone

Here’s where the real discipline comes in with the envelope method. Once you’ve used up the cash in a given envelope, it’s time for a full stop.

This means no more spending in that specific category for the rest of the month. Remember, you’re trying to control your spending, so avoid borrowing from other categories.

If you deplete your entertainment budget, look for ways to save money on streaming services. Try free alternatives like watching movies at home. If you run out of money for groceries, get creative with leftovers and try to use up whatever food you have left in your cupboards and fridge. These exercises should hopefully help you begin to spend more and more intentionally as time goes on.

Here’s where the real discipline comes in with the envelope method. Once you’ve used up the cash in a given envelope, it’s time for a full stop.

This means no more spending in that specific category for the rest of the month. Remember, you’re trying to control your spending, so avoid borrowing from other categories.

Pros of the Envelope Budgeting Method

Here are some of the most important benefits of the envelope budgeting system:

• It makes spending tangible. Buying things with plastic can make it feel as if you haven’t spent any money at all. When you pay with cash, you’re forced to consider your spending and may spend less.

• This system helps realize just how much you are spending on various expenses. For instance, you may not have realized how much you spend on take-out lunches until you see that $20 bill leave your hands every weekday.

• This budgeting technique also makes it all but impossible to overspend, since you have a hard and fast budget limited by the cash in your envelopes.

Recommended: 5 Ways to Achieve Financial Security

Cons of the Envelope Budgeting Method

Yes, there are good reasons to try this budget system. However, it’s worthwhile to know some disadvantages before you dive in:

• Carrying cash to pay for your daily expenses as part of this system can be risky; you might lose the money or, in rare cases, be robbed.

• The cash-centric nature of the envelope budget can be difficult for people who do a lot of online transactions, like to use a debit card, and/or patronize shops that are cashless.

• If you like to use plastic and get cash-back rewards or other perks, you will not be able to accrue those benefits while following the envelope budgeting method.

Recommended: 23 Tips on Saving Money Daily

The Takeaway

All budgets can require discipline and sometimes a certain level of discomfort as you’re forced to make compromises. But they can also help you better understand your money style, keep your spending in check, and reach your financial goals. The envelope budgeting system is one method that can guide you on your financial journey. By putting cash into envelopes marked for specific purposes, you can gain insight into where your money goes and hopefully rein in areas where you can cut back.

Another way to take control of your money is to find the right banking partner. When you open an online bank account with SoFi, you’ll have access to a suite of tools that help you see where your money goes. In addition, you’ll earn a super competitive APY and pay no account fees, both of which can help your money grow faster.

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.

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

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi members with 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.

SOBK1122022

Nov

2022

12 Real Ways to Save Money on Electronics

By Timothy Moore | Budgeting & Goals, Family Finances, money | Comments Off

Having the newest iPhone and a 60-inch TV in every room of your house might sound like a dream worth aspiring to, but hold that thought. If you are trying to grow your savings, start investing, or get out of debt, it’s important to scale back all kinds of spending, including on electronics.

In today’s digital world, having access to a smartphone and laptop — not to mention things like Bluetooth headphones, a smart TV, and maybe even a smartwatch — can be crucial for our remote jobs, connecting with friends and family, and staying informed about the world around us.

So how can you buy the electronics you need for daily life without going broke? In this article, we’ll explore, among other topics, the following:

• How to save money on electronics

• How to shop at the right time

• How to sell old electronics

• How to get the best discounts.

1. Buying Older Models Instead of the Newest Models

The joke goes that you could buy the newest smartphone today, and it’ll probably be replaced by a newer model within a week. While technology cycles aren’t quite that fast, companies like Apple, Google, and Microsoft do release “newer, better” phones, tablets, computers, and other tech regularly.

Just remember: You don’t always need the newest tablet. You don’t always have to upgrade your phone. If your technology still operates efficiently — allowing you to take decent photos, reply to work emails, and stay connected via social media or phone calls, all without issue — hold onto it longer. With a little money discipline, you could instead use those funds to build your emergency savings, pay down your debt, or start investing.

And when it does come time to buy a new device, consider buying the second-newest generation. Features are likely similar to the newer device, but prices will be lower. This is particularly true right around the launch of the new generation.

2. Avoiding Consumerism

An easy way to save on electronics is to reject the idea of consumerism. Consumerism is the belief that your well-being, happiness, and even sense of self-worth will increase the more that you spend money on goods and services.

But according to the American Psychological Association, the reverse seems to be true. While it’s not fair to generalize, studies typically show that the least materialistic people report the greatest life satisfaction.

Thus, what might feel like an irresistible craving for the latest technology could actually be detrimental to one’s mental health. Consume your technology in moderation — treat yourself to nice things, but remember that spending won’t always lead to fulfillment. In fact, you may find that committing to how much money to save each month brings greater satisfaction.

3. Trading In and Selling Unwanted Electronics

If you have a junk drawer with old smartphones or a storage container with old laptops, you might be leaving money on the table (or in the junk drawer, as it were).

For example, many second-hand stores buy electronics like video game consoles — and they’ll pay you for the controllers and games too. Some smartphone vendors will allow you to trade in an older-model phone when you purchase a new one.

And there’s always the internet. Amazon, eBay, Facebook Marketplace, and other online retailers allow you to easily sell old electronics, including phones, TVs, and even appliances. You can then use that money when it’s time to upgrade to a new electronic device or add it to your emergency fund.

The resale market is soaring; it’s expected to grow to $53 billion a year in 2023. Now is a great time to start selling your old tech.

4. Considering Needs Over Wants

If you are struggling to decide whether you should buy a new phone or computer, assess your needs. Beyond determining if your current phone or computer works well enough for you to do your job and live conveniently, take some time to look at your budget.

Do you have enough money to cover actual needs like housing, food, and utilities? Are you able to pay off your credit card each month and make student loan payments? Can you cover an unexpected hospital bill or emergency car repair and meet other money-saving goals?

If you’re confident that you can successfully meet your needs without too much of a struggle, it can be easier to justify splurging on a want.

5. Unplugging Devices That Are Not in Use

Have you heard of phantom or vampire energy use? That’s when you leave something plugged in when not in use and it continues to draw electrical power, which you wind up paying for.

The U.S. Department of Energy recommends unplugging certain appliances when not in use to decrease your standby power loads and thus reduce your monthly electric bill.

The daily savings are hardly noticeable, but over time, unplugging certain devices when not in use, like a toaster oven or a laptop in sleep mode, can lead to significant savings — about $100 a year for the average household.

6. Researching and Buying Refurbished Electronics

Refurbished electronics are a great way to get a like-new electronic without digging deep into your pocket. Such electronics don’t always have the luxury of an extended warranty, but many are available with some type of warranty (and maybe even a money-back guarantee).

And you can get a deal on more than just refurbished smartphones. According to Consumer Reports, you can find great deals on speakers, tablets, headphones, and smartwatches.

Just make sure you’re buying a refurbished electronic directly from the manufacturer or from an organization that complies with ISO (International Organization for Standardization) or R2 (Responsible Recycling).

7. Buying at the Right Time

Here’s another way to save on electronics: Sync up with sales. You might find better deals if you are strategic about when you purchase TVs, laptops, and video game consoles. Typically, you can find Black Friday and Cyber Monday sales, and the week after Christmas can also be an excellent time of the year to buy electronics.

You can also watch for deals around Tax Day, Memorial Day, and Labor Day. And if you’re buying an older-generation model, try timing it with the release of the newer version for greater discounts.

Recommended: Why You Should Save Money

8. Utilizing Price Matching

It might be challenging to get cell phone providers to match prices of competitors, but when shopping for other electronics, like computers, video game consoles, TVs, and appliances, you might have luck getting big-box retailers to price match.

In fact, some popular stores have official price-matching programs — and may even price-match the deals you find on Amazon. Try price matching when shopping for electronics at stores like Walmart, Target, and Best Buy.

9. Shopping Around and Being Patient

Shopping is usually not a good time to be lazy. While it can be tempting to buy your coveted electronic at the first place you see it, it can be important to do some research. Comparison-shop online, research upcoming sales, and utilize coupons and store discounts to get the best deal at the right time.

10. Taking Advantage of Savings Codes

You won’t always be successful, but it’s worth browsing online for savings codes before any major purchase. Sites like GroupOn, RetailMeNot, and Savings.com all offer discount codes that you may be able to apply to your purchase.

You can also look for promotional codes in circulars that arrive in the mail, during podcasts, or from influencers on social media.

Recommended: How Bill Pay Works

11. Utilizing Student Discounts

If you are a student, it can be a good idea before any purchase to ask if the company offers a student discount. The worst they can say is no. Just keep your student ID in your wallet for verification.

You can also ask about other common discounts you might qualify for, like a military discount or senior discount.

12. Not Always Going for Brand-Name or High-End Products

A brand-new iPhone and Samsung TV may sound like the height of luxury, but if you’re trying to be smart about how you spend your money on electronics, consider skipping the most popular brand name or top-of-the-line product options.

A lesser-known brand may perform well and save you money. Before purchasing an unfamiliar brand, however, it is a good idea to read product reviews on third-party websites.

Recommended: How to Force Yourself to Save Money

Saving Money With SoFi

A savings account with a high APY is a good way to save toward all of life’s goals, including electronics. And having a no-fee checking account makes it easier to spend when you’re ready. SoFi’s online bank account delivers the best of both worlds. Sign up for our Checking and Savings with direct deposit to earn a competitive APY, get cash back on local purchases, and pay no fees.

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

Can you live without electronics?

Technically speaking, it is possible to live without electronics, just as our ancestors did before us. However, technology is now often essential to how we work, how we communicate, how we find information, how we shop, how we find entertainment, and even how we bank and access healthcare. Staying connected and spending money on electronics is fine — everything in moderation.

Can you live while being an electronics minimalist?

Living as an electronics minimalist is possible. You may still need access to a computer for work or online bill pay and a phone to communicate with your family, but you can take specific, impactful steps to otherwise reduce your electronics. For instance, you can sell your TV, downgrade to a basic phone, delete your social media, etc. Then, seek out other experiences, like hiking, attending live theater, and reading.

How much technology should I use per day?

Experts recommend limiting screen time to two hours a day max (outside of work). This includes time spent on your phone or tablet, watching TV, and playing video games. That said, estimates of how much total screen time most Americans invest has been estimated at almost eight hours a day.

Photo credit: iStock/LightFieldStudios

Nov

2022

How To Switch Banks in 3 Easy Steps

By Janet Siroto | Budgeting & Goals, money | No Comments

Do you love your bank? Is it convenient? Do you feel valued? Are you getting a top-notch interest rate? Paying low or no fees?

If you can’t answer “yes” to all of those questions, it might be time to make a switch.

Changing banks can be a surprisingly simple process (though not instantaneous), and it can save you time and money. Here, we’ll break it down for you into three super simple steps, so you can complete the process as quickly and easily as possible. Read on for the guidance you need.

How to Switch Banks: Step-by-Step Guide

1. Choose a New Account for Your Money

Identify the key benefits you want but currently don’t have and do an online search to compare options. For example, if you are looking to eliminate monthly fees, target that; if you are looking for a bank with branches near your home and office, make that your focus. The possible options should quickly come into focus via a search engine.

If lower fees and higher interest rates are driving your decision, you’ll likely want to review online banking options vs. traditional banks. Because these financial institutions don’t have the overhead of bricks-and-mortar locations and staffing, they can often pass those savings onto their customers. That’s a major benefit of online banking.

Similarly, credit unions vs. traditional banks often have lower fees and higher interest rates because they are non-profit organizations and therefore have a different business model.

2. Open Your New Account

Found a new home for your cash? Go and open that account. You can likely transfer funds from your old one to make that initial deposit.

Some bank accounts require no initial deposit if you sign on with direct deposit; others will need a small deposit of perhaps $25. If you are signing up for a premium checking account or high-yield account, there may be higher minimums involved.

Here’s an important point: Don’t whisk every last cent out of your old account into the new account. You may have pending transactions and autopays coming up that will take time to sort out. Leave a cushion in the old account; you’ll learn more about this in the next step.

Make sure to set up direct deposit from your employer directly into your new account. This will ensure that your pay appears in your account without having to deposit a physical check. Visit your HR or pay office and provide them with the new account information, including the new account number and routing number.

You may also want to link a savings account to your new checking account. This can make transfers easier and allow you to opt into overdraft protection.

💡 Recommended: How to Open a Bank Account

3. Close Your Old Bank Account

Now that you have your new account, here’s how to close the old one while tying up any financial loose ends.

Cancel Automatic Payments and Direct Deposits

If you’re like most of us, you rely on autopay to simplify your banking; the pros of automatic payments are hard to ignore. This means that each month your various bills and subscriptions are seamlessly deducted from your primary account on their due date. To avoid falling behind on bills or accidentally getting your streaming service suspended, you need to turn off or redirect every automatic payment that currently comes out of the account you wish to close.

Take a look at your monthly account statement and make a list of every automatic deduction, from your electric bill to newspaper subscriptions. Once you’ve made your list, log in to each of your service provider accounts and change your payment information.

Also consider any automatic deposits you may receive. For instance, do you use P2P transfers on platforms like PayPal and Venmo? Update the info so when you transfer funds from those accounts, they go to your new checking.

Wait For Any Pending Transactions To Clear

After you’ve canceled or rerouted all the automatic payments that deduct from the account you want to close, you will need to wait for any pending transactions to clear. These pending transactions are usually for bills or subscriptions that have one remaining payment left before the company can change your payment information.

Waiting for all pending transactions to clear ensures that your bills will be paid and your subscriptions will continue without facing any overdraft fees. Make sure there is enough money in the account you wish to close to cover any pending payments. Wait two weeks to one month for any automatic payments to be deducted.

Cut the Cord

Once you have transferred all automatic payments and possible deposits and waited a cycle for those to update, you’re done. It’s time to close your old account. Depending on where it’s held, you may be able to finalize this online or by phone. In other cases (usually at smaller local banks or credit unions), you may have to send a written request or turn up in person.

Be sure to transfer out any remaining funds or get a check for the amount left in the account.

Whether you close your account online or in person, make sure to request written confirmation that the account has been closed, says the Consumer Financial Protection Bureau. This is a safety-net move to protect you if some issue were to arise. When you receive the letter confirming your bank account is closed, make sure to save it somewhere safe for future reference.

You’re done! How easy is it to switch banks? Hopefully, you’ve learned that it’s not too hard.

Should You Switch Banks?

There are many good reasons to switch banks. Perhaps one is advertising an incentive (such as a sign-on bonus) that’s too good to pass up. Or is offering a discount on a home loan rate if you open an account, and you want to snag that lower mortgage APR (annual percentage rate).

Or maybe you have realized that bank fees are eating away at your money. Consider these recent stats revealing how expensive banking can be:

• Monthly fees on non-interest checking average $5.08 and $16.35 on interest-bearing accounts.

• Insufficient or non-sufficient funds fees average a dizzying $33.58 each.

• Out-of-network ATM fees are typically $4.59 (ouch) per transaction.

It’s worth noting that fees aren’t the only reason to make a change: Interest rates can vary wildly. On savings accounts, you might earn 0.01% at a traditional bank and 4.00% APY at an online one. Also, for some people, they want a bank that better suits their needs; perhaps a local one that caters to first-time homebuyers or is a niche bank and understands their student-loan debt issues among healthcare professionals.

The Takeaway

As the personal banking market becomes ever more competitive, you may find yourself thinking about changing banks for the sake of better services, greater convenience, lower fees, higher interest rates, or other features. If you do find a new home for your money, it takes just three steps to make the switch. Yes, it’s a bit of effort, but the payoff can be well worth it.

If you are thinking of making a swap, take a look at what SoFi offers. When you open an online bank account with us, your money can grow faster. When you set up Checking and Savings with direct deposit, you won’t pay any account fees and you’ll earn a hyper competitive APY.

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 do I switch banks?

To switch banks, you’ll need to identify a new financial institution and fund your new account. Then, you will need to transfer automatic payments, deposits (say, via direct deposit or PayPal), and wait for them to update. Once that happens, you are ready to transfer any remaining funds and officially close your old account.

Are there downsides to switching banks?

If you’re wondering about cons or how hard it is to switch banks, know that changing banks requires some effort and patience. You will need to complete some forms and move any automatic payments or deposits to your new account, as well as wait a cycle while these update. But changing financial institutions should not involve a charge or impact your credit score.

What documents do I need to switch banks?

Typically, opening a new account requires government-issued photo ID, a Social Security or taxpayer identification number, and possibly proof of your current address (such as a copy of your utility bill). To close an account, you’ll probably need your government-issued photo ID and perhaps a bank statement or your debit card.

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.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

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.

SOBK0422018

What Is Green Banking?

What Are Green Banks?

How Do Green Banks Work?

Sustainable Banking Examples

California Infrastructure and Economic Development Bank

Connecticut Green Bank

NY Green Bank

Get up to $300 when you bank with SoFi.

Advantages and Disadvantages of Green Banks

The Future of Green Banking

The Takeaway

FAQ

What is sustainable banking?

How can banks be more sustainable?

Which banks are green banks?

How to Transfer Brokerage Accounts: 6 Steps

When to Consider Switching Brokers

Two Ways to Transfer Assets to Another Broker

Cash Transfer

In-Kind Transfer

How to Move Investments From One Brokerage Account to Another

1. Confirming Account Information

2. Contacting the New Broker

3. Completing a Transfer Initiation Form (TIF)

4. Submitting the TIF, and Sitting Tight

5. Contacting Your Old Broker (Optional)

6. Watching the New Account, and Waiting

Get up to $1,000 in stock when you fund a new Active Invest account.*

Access stock trading, options, alternative investments, IRAs, and more. Get started in just a few minutes.

Special Circumstances That Can Affect the Stock Transfer Process

Transferring Retirement or Other Tax-Advantaged Accounts

Transferring Stocks to Another Person

Understanding Brokerage Transfer Fees

Keeping Records From Your Old Account

Tax Implications of Switching Brokers

Switching to SoFi Invest

FAQ

Can you transfer brokerage accounts?

How do you transfer stock to a family member?

What is an Automated Customer Account Transfer Service (ACATS)?

How will I know that my transfer is complete?

The Envelope Budgeting Method: What You Need to Know

What Is the Envelope Budgeting Method?

How Does the Envelope Method of Budgeting Work?

1. Determining Your Discretionary Income

3. Withdrawing Cash and Putting it into Envelopes

4. Spending Only Cash

5. Once Your Cash Is Gone…It’s Gone

Get up to $300 when you bank with SoFi.

Pros of the Envelope Budgeting Method

Cons of the Envelope Budgeting Method

The Takeaway

12 Real Ways to Save Money on Electronics

1. Buying Older Models Instead of the Newest Models

2. Avoiding Consumerism

3. Trading In and Selling Unwanted Electronics

4. Considering Needs Over Wants

5. Unplugging Devices That Are Not in Use

6. Researching and Buying Refurbished Electronics

7. Buying at the Right Time

8. Utilizing Price Matching

9. Shopping Around and Being Patient

10. Taking Advantage of Savings Codes

11. Utilizing Student Discounts

12. Not Always Going for Brand-Name or High-End Products

Saving Money With SoFi

FAQ

Can you live without electronics?

Can you live while being an electronics minimalist?

How much technology should I use per day?

How To Switch Banks in 3 Easy Steps

How to Switch Banks: Step-by-Step Guide

1. Choose a New Account for Your Money

2. Open Your New Account

Get up to $300 when you bank with SoFi.

3. Close Your Old Bank Account

Cancel Automatic Payments and Direct Deposits

Wait For Any Pending Transactions To Clear

Cut the Cord

Should You Switch Banks?

Student Loan
Refinancing

Personal
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Online
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