MoneyUn Archives | Page 36 of 57

Sep

2023

Money Market Account vs. Savings Account

Savings Account vs Money Market Comparison

By Rebecca Lake | Budgeting & Goals, Growing Wealth, money | Comments Off

There are plenty of ways to stow your money for future use, and two popular options are savings accounts and money market accounts. These financial products have similarities, such as both being interest-earning, insured ways to stash cash for future needs. However, one may better suit your particular situation better than another.

If you’re wondering how to pick between a money market or savings account, you’re in the right place. Here, you’ll get the intel you need, including:

• What is a savings account?

• What is a money market account?

• What are the differences between a savings and a money market account?

• When should you use a money market vs. a savings account?

• What are the risks for savings and money market accounts?

What Is a Money Market Account?

A money market account is a type of deposit account offered by banks and credit unions. These accounts can also be referred to as money market deposit accounts, money market savings accounts, or by their acronym, MMAs.

So how does a money market account work?

• Money market accounts allow you to deposit money and earn interest on those deposits.

• The interest rate and annual percentage yield (APY) earned can depend on the bank and the terms of the account.

• If you need to withdraw money from a money market account, you will probably find quite a lot of flexibility. You may be able to do it via ACH transfer, debit card, check, or ATM withdrawal.

While Federal Reserve rules limiting you to six withdrawals per month from a money market account have been suspended, banks can still impose withdrawal limits. If you exceed the allowed number of withdrawals, your bank can charge an excess withdrawal fee for each transaction over the limit. It can be wise to check with your bank about their policies.

Worth noting: If you are wondering about a money market account vs. a money market fund, know that the latter is a type of mutual fund. Since it’s an investment, it is neither insured by the FDIC nor is it backed by the U.S. government.

💡 Quick Tip: Help your money earn more money! Opening a bank account online often gets you higher-than-average rates.

What Is a Savings Account?

A savings account is also a deposit account that can be used to hold money you don’t plan to spend right away. Banks and credit unions can pay interest to savers, though there can be a significant difference in rates from one financial institution to the next. Online search tools will quickly and conveniently show you some options.

Can you spend money from a savings account? Technically, a savings account is meant for funds you’ll eventually spend. For example, you might open a savings account to hold money for an emergency fund or for a wedding you’re planning. But you typically can’t spend freely from a savings account the way you would a checking account.

Access may be somewhat limited. Savings accounts usually don’t come with a debit card, ATM card, or checks. If you need to take money from savings, you will probably either transfer funds using your financial institution’s website or an app, by phone, or by visiting a branch if your account is held at a traditional bank. And again, banks can limit the number of withdrawals you’re allowed to make per month.

3 Main Differences Between Money Market vs. Savings Account

Both money market and savings accounts are interest-bearing deposit account options. We’ve just noted another similarity: They can both be subject to monthly withdrawal limits. But now, let’s take a closer look at the differences between money market vs. savings accounts. This intel may help you decide which kind of account best suits your particular needs.

1. Access and Flexibility

A money market account can offer an advantage over a savings account when it comes to how you can access your money. Depending on the bank, your options for making deposits and withdrawals might include:

• Debit card

• ATM card

• Paper checks

• Electronic transfers

• Remote deposit capture (for mobile check deposit)

• Teller withdrawals/deposits

Access to a savings account, on the other hand, is usually limited to electronic, ATM, or teller transactions.

With online banks, ACH transfers to and from a linked account at an external bank, wire transfers, mobile check deposit, or mailed paper checks may be your only option for making deposits or withdrawals. Some online banks enable you to make withdrawals from certain ATM networks, however, which adds to their convenience.

2. Account Opening

A number of banks allow you to open both money market and savings accounts online — a nice convenience. However, there may be differences in the minimum deposit requirement. Generally, money market accounts tend to require a higher minimum deposit to open.

So instead of being able to open a new account with a minimal amount (even no money), which may be the case with a savings account, you might need $100, $1,000, or more instead. Again, how much cash you’ll need to open a money market account vs. savings acct can depend on the bank.

3. Interest and Fees

Money market accounts and savings accounts can also differ when it comes to the interest you can earn and the fees you might pay. If you put a regular savings account vs. money market account from an online bank side by side, for example, the regular savings account is more likely to offer a lower rate and APY, or annual percentage yield. In addition, it’s more likely to charge a monthly maintenance fee.

An online money market account, on the other hand, may have no monthly maintenance fee at all and may offer considerably higher interest rates vs. traditional banks.

Additionally, money market accounts often offer tiered rates, meaning the more you have on deposit, the higher the rate you may qualify for.

💡 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.

Similarities Between Money Market and Savings Accounts

Here’s a closer look at ways in which savings and money market accounts are similar.

Earning Interest

Both money market accounts and savings accounts pay you interest. When you keep money at a financial institution, they use some of it for other aspects of their business, such as loans to other customers. For the privilege of using some of your funds this way, they pay you interest. Usually, this interest rate will vary with economic factors.

Being Insured

Money market and savings accounts are both likely to be insured by the Federal Deposit Insurance Corporation (FDIC) or NCUA, the National Credit Union Administration. Typically, accounts are insured for $250,000 per depositor, per financial institution, per ownership category.

Offering Accessibility and Liquidity

Unlike time deposits (such as certificates of deposit, or CDs), savings and money market accounts allow you to withdraw funds at will vs. waiting for the maturation date. However, there may be limits on how many outbound transactions you can make per month, depending upon the institution.

When You Should Use a Savings Account

A savings account could be a good fit in several scenarios:

• One good reason to use a savings account is if you want a safe place to set aside money for future expenses. Maybe you are gathering funds to landscape your yard next spring. Or perhaps you just want to be prepared and several months’ worth of living expenses stashed away in case of emergency (which is a very good idea).

• You might opt for a savings account vs. money market account if you don’t necessarily need a debit card, ATM card, or checks to access funds.

• Where you decide to open a savings account can depend on your needs and personal banking preferences. Online banks may appeal to you if you’re looking for long-term savings account options that pay the best interest rates and charge the fewest fees.

On the other hand, you might choose a regular savings account at a brick-and-mortar bank instead if you want to be able to get cash at a teller or drive-thru in a pinch. It’s your call.

When You Should Use a Money Market Account

Money market accounts definitely have their appeal, too. They are attractive if you need a low-risk option to put cash away for a rainy day or until you’re ready to spend it on a planned expense. For example, you might consider opening a money market account if you’re saving toward any of these goals:

• Down payment on a home

• New (or used) car

• Vacation

• Wedding

• Education expenses

• Home renovations or repairs

In any of those scenarios, a money market account could offer convenience if you need to write a check or use your debit card to pay for something. If you’re upgrading your kitchen, for example, you could write a check to your contractor from your money market account.

Here’s an overview of the pros and cons of savings vs. money market accounts:

Pros of Savings Accounts	Pros of Money Market Accounts	Cons of Savings Accounts	Cons of Money Market Accounts
Insured	Insured	May be charged for excess withdrawals	May be charged for excess withdrawals
Earns interest	Earns interest	Less access	May have higher balance requirements
Secure way to save	Secure way to save	No tax benefits	No tax benefits
	Easy access/withdrawals		May have more fees

Potential Risks of Using a Money Market or Savings Account

Ready to take a look at the potential downsides of having a money market or savings account? In general, you don’t have too much to worry about. Money market accounts and savings accounts are both quite low-risk since these products can be FDIC-insured.

FDIC insurance applies in the rare event that a bank fails. In that case, as noted above, protection extends up to $250,000 per depositor, per account ownership category, per insured financial institution.

That said, there are some potential drawbacks to these accounts. Being aware of the risks is of course a good idea as you choose the best type of savings account.

Money Market Account

Here are some of the main risks associated with money market accounts:

• Monthly maintenance fees may apply if your balance falls below the required minimum.

• Interest rates are not fixed, so you’re not guaranteed to earn a higher APY.

• Additional withdrawals from a money market account may trigger fees.

• There aren’t tax benefits for saving this way.

Savings Account

Consider these risks before opening a savings account:

• Interest rates may be well below what you could get with a money market account (though typically online banks offer a higher APY than traditional ones).

• Accessing cash in an emergency may be difficult if you don’t have an ATM card and/or your money is at an online bank without an extensive ATM network.

• You may be penalized for withdrawals over and above your limit.

• You won’t enjoy tax benefits for saving with this kind of account.

Recommended: Ways to Earn Interest on Your Money

Opening a SoFi Savings Account

Money market accounts and savings accounts can both offer ways to earn interest on your money while safely stowing it away. Whether you’ll benefit more from a money market account vs. savings account can depend on how much you plan to keep in the account, the interest rate and APY you’re hoping to earn, and how you’d like to be able to access your money. Those fine points can make the difference between growing your money in a way that’s frustrating or fabulous.

On the topic of fabulous: Finding the right banking partner for your funds can enhance your money management.

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

Is a money market better than a savings account?

A money market account might be better than a savings account for people who want to be able to make purchases from the account using a debit card, write checks against their balances, or withdraw cash at an ATM. When comparing money market vs. savings accounts, it’s important to compare the accessibility, fees, interest rates, and other features.

Can you lose your money in a money market account?

Money market accounts are some of the safest places to keep your money. Even if your bank fails, which happens rarely, you’d still be protected by FDIC coverage up to the applicable limit.

Do you get taxed on money market accounts?

Interest earned in a money market account is considered to be taxable by the IRS. If your money market account earns interest for the year, your bank will send you a Form 1099-INT to report interest income. The bank will also send a copy of this form to the IRS on your behalf.

What is the downside of a money market account?

A money market account may have a higher opening deposit and ongoing minimum balance requirement vs. a savings account. Also, it may have limits on the number of withdrawals you can make.

Is a money market account safer than a savings account?

Both money market accounts and savings accounts are typically insured by either the FDIC or NCUA, depending on your financial institution, for $250,000 per depositor, per account ownership category, per insured institution.

Photo credit: iStock/akinbostanci

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.

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.

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

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Sep

2023

What Credit Score Do You Need to Lease a Car?

What Credit Score Is Needed to Lease a Car?

By Diana Kelly Levey | Budgeting & Goals, Financial Independence, money | Comments Off

If you are thinking about getting a car, you likely are deciding between buying or leasing. And if leasing seems like the right option for your finances and lifestyle, then you probably want to know what is needed to seal that deal.

Leasing a car typically requires both some cash and a solid credit score. If you have a high credit score, you may snag the best possible (meaning lowest) interest rate. If your credit history is not solid, then you may face higher rates or have difficulty getting approved.

Here, you can learn about:

• What are car lease requirements?

• Can you lease a car with a credit score under 680?

• Can you build your credit?

• Can leasing help or hurt your credit score?

What Are Car Lease Requirements?

It’s a good idea to know your credit score before you start shopping around; your credit score is an important factor influencing the final lease amount. If you have poor credit and only have $300 a month to spend on the lease and insurance, a lot of that amount might be going to the higher interest rate a lender could potentially offer you.

If, on the other hand, you have good credit and $300 a month to spend on the lease and insurance, you may be able to lease a better quality car. Here’s why: Not as much money will be going to interest payments. (It’s always a good idea to weigh the pros and cons of leasing vs. buying a car before pulling the trigger on either financial decision.)

A couple of points to consider:

• When you’re wondering, “Do you need good credit to lease a car,” the answer is typically yes. Having good credit may make it easier to lease a car because a leasing company may not see you as financially risky as someone who has poor credit. Not all leasing companies will necessarily approve a car lease for someone who has a low credit score.

• You might also need to prove that you have a job with a certain income when you’re leasing a car, show recent bank statements, or that you have a cosigner with a good credit history.

What Credit Score Do You Need to Lease a Car?

As you may know, credit scores typically go from 300 to 850, with five credit score ranges:

• Poor credit score, 300-579

• Fair credit score, 580-669

• Good credit score, 670-739

• Very good credit score, 740-799

• Exceptional credit score, 800-850.

That said, what credit score do you need to lease a car? The average credit score of people who leased cars in late 2022 was 736 — generally at the high end of the good credit score range. If you have excellent credit, the upfront costs of leasing a car might be lower than if your credit isn’t so great.

Typically, leasing a car might require the first month’s payment, a security deposit, taxes, registration, and an acquisition fee. Someone whose credit score is in the low 600s might need to put money down on the lease in addition. Keep reading to find out more about how different credit scores affect leasing a car.

💡 Quick Tip: Make money easy. Enjoy the convenience of managing bills, deposits, and transfers from one online bank account with SoFi.

Leasing With a Credit Score Above 680

The credit score to lease a car and get favorable rates is one that’s considered a “prime” or “good” credit score, meaning between 670 and 739, or higher. Having good credit typically makes it more justifiable for lenders to approve you for the lease because it’s less of a risk to them.

Just as with any type of financing, applicants who have good credit may be offered lower interest rates on auto leases. Having an above-average credit score could give you more negotiating power over the rates and terms of the car lease.

Leasing With a Credit Score Lower Than 680

Having a lower credit score means you’ll likely have difficulty finding a company willing to lease to you or you’ll pay more to lease a car. Leasing companies may see you as a risk-based on your credit history. You might find that having a trustworthy cosigner on the lease could help you get a lower interest rate or better terms than if you’re applying on your own.

If your credit score is lower than 680, you might want to work on building it before leasing a car so you get a better deal. A good place to start is by checking your credit report which you can do for free once a year at Annual Credit Report.

It’s important to check your report for accuracy — if there are any errors, contact the credit bureau that issued the report. Factors that affect your credit score are your payment history, length of your credit history, how much you owe compared to how much available credit you have, types of credit you have, and any new applications for credit that show up on your credit report. (You’ll learn more about these below.)

💡 Quick Tip: Want a simple way to save more everyday? When you turn on Roundups, all of your debit card purchases are automatically rounded up to the next dollar and deposited into your online savings account.

Building Your Credit Before Leasing

There are several ways to build your credit before leasing a car. Two of the most important to consider:

• Pay down debt. This will lower your credit utilization ratio or rate, meaning the percentage of your credit limit you are using. The lower that ratio (preferably no more than 10%), the better your credit can look.

• Pay on time. Be meticulous about paying your bills on time or even early. Just one or two late payments can cause your credit score to dip.

Can Leasing a Car Build Credit?

Any time you apply for credit, you have the opportunity to build your credit. A car lease is credit, just as a car loan would be credit.

How you manage your lease payments affects your credit report just as a loan would. Making regular, on-time monthly payments will affect your credit in a positive way. In other words, yes, leasing a car can help build your credit.

Can Leasing a Car Affect Your Credit Score?

As just mentioned, paying a car lease on time can be a positive thing. However, missing payments or being late with payments will hurt your credit and may negatively affect your credit score.

You may also see a small drop in your credit score when the lease begins because your credit report will show a new account is open. You may see a similar small drop when the lease is terminated because the account is closed. Both of these credit events — opening and closing a credit account — can affect your credit score.

If you’re shopping around at different leasing companies over the course of a few weeks and apply for leases at those places, there will be inquiries into your credit history by the leasing companies. However, those multiple inquiries may show up as just one query on your credit report and minimally affect your credit score.

Recommended: Should You Buy a New or Used Car?

5 Things That Impact Your Credit Score

Here are factors that can influence your score:

1. Your Payment History

The single biggest factor in your credit score is your payment history, which can boil down to making payments on time, month after month. That can help build your credit score. Paying late or not at all can trigger your score to drop.

2. The Amount Owed

It can reflect positively on your credit score if you have a low credit utilization rate or ratio. This means that you are using little of your credit limit. Using 10% or less of your credit limit can benefit your score; using 30% or more can have a negative impact.

3. The Length of Your Credit History

Having a longer credit history and having managed lines of credit well for years can benefit your credit score. It shows that you can successfully borrow and pay back money.

4. Your Credit Mix

Having more than one kind of credit account can show that you manage borrowed funds well. For instance, it could be helpful if you have handled both installment debt (student loans and car loans are examples of this) and revolving accounts (such as credit cards) well.

5. New Credit

If you apply for a number of new lines of credit and have what are known as hard credit pulls vs. soft pulls done as part of this, your credit score could suffer. It can look as if you are applying for new debt and could then wind up financially overextended.

The Takeaway

It’s important you know your credit score to lease a car before you go car shopping. Checking your credit reports in advance will uncover any surprises before you’re at the dealership. Knowing your credit score and working to build it as much as possible before applying for a car lease may help you save money on your car lease and give you more negotiating power.

The less you have to spend on interest and fees, the farther your money can go while leasing. Successfully managing leases, loans, and credit in general is part of good financial habits. Having the right banking partner can also enhance how well you handle your cash.

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 lease a car with a 600 credit score?

You may wonder what does your credit score have to be to lease a car. While it’s not impossible to lease a car with a 600 credit score, it will likely take more time and energy to find an offer. You will also probably pay a higher interest rate than those with a higher credit score (680+), meaning you will pay more over the long term.

Does leasing a car hurt your credit?

When you apply for a car lease and the leasing company pulls your credit file, you may see a dip in your credit score in the short term. After that, whether the lease hurts your credit depends on how well you manage the account. If you pay late or miss payments, your credit score could suffer.

Is it better to lease or finance a car?

Whether it’s better to lease or finance a car will depend on your particular financial situation and aspirations. When you finance a car, you can eventually own it outright. It’s similar to buying a home with a mortgage. Leasing, on the other hand, is similar to renting. You never own the car or have it as an asset, but then again, you might like “trading up” every few years.

Photo credit: iStock/dusanpetkovic

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.

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.

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 .

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

SOBK0723046

Sep

2023

How to Have a Baby Shower on a Budget

By Diana Kelly Levey | Budgeting & Goals, Financial Independence, money | Comments Off

Congratulations! Someone close to you is going to be a parent, and you have the honor of throwing the baby shower. You are probably excited to come up with some great ideas for the food, the decor, the party favors, and more, and need to sort out the guest list. But along with these organizing responsibilities can come a steep price tag.

The truth is, though, with a bit of planning and creativity, you can host a very fun, very memorable party for the parents-to-be, their friends, and their family without breaking the bank. You might be able to find a venue that’s totally free, create the centerpieces yourself, and otherwise keep costs under control and on budget.

Read on for some inspiration.

Tips for Throwing a Great Baby Shower on a Budget

These inexpensive baby shower ideas can help you throw a memorable celebration for a mom-to-be and help her become better financially prepared for a baby.

Coming up with a Baby Shower Budget

Before you begin the planning process, it can help to determine the total you can spend on the event and then create a budget. You may also want to find out if family members from either side are willing to chip in financially or by offering to help make something for the party. When setting up your baby shower budget, you’ll likely want to include: the venue, invitations, decorations, food and drinks, entertainment and/or games, prizes and party favors.

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Finding a Free (or Low-Cost) Venue

A baby shower doesn’t have to be at a fancy restaurant, hotel, or banquet hall to be festive. It could take place at your, or someone else’s, home. If you’re hosting a baby shower in warm weather. You might consider having it outdoors, such as in your backyard. You could even host a more casual shower with an outdoor barbeque or even a poolside party.

Other low-cost locales options include: a nearby park, the clubhouse of your (or someone else’s) apartment complex, or the meeting room at someone’s place of business.

Recommended: How to Save Money Daily

Limiting the Baby Shower Guest List

Generally, the more people you invite to the shower, the more money you will spend. To keep costs in check, you may want to consider limiting the invite list to the parent-to-be’s closest family and friends.

A smaller group not only cuts down on costs, but can also help to create a more intimate gathering that allows the guest of honor to spend time with each guest. It can be a good idea, however, to run the invite list by the expectant mom to be sure that you don’t exclude any important people.

Going Digital With Invitations

You can save money on baby shower invitations by using a digital service, such as Evite, Punchbowl, or Paperless Post. These sites and apps typically allow you to choose from a range of free baby shower invitation templates or, for a small fee, upgrade to a more elaborate design.

These sites also make it easy to keep track of responses. And, guests will likely appreciate the ability to RSVP with the click of a button. You may, however, want to send paper invites to older guests, particularly if they don’t use an email address often.

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Ditching the Caterer

Feeding guests typically takes up the biggest portion of a baby shower budget. One way to help keep the cost of food down is to forgo the caterer and head to your local warehouse club (like Costco or Sam’s Club). You’ll likely be able to create a delicious spread of appetizers, finger foods, and desserts for a lot less than ordering trays from a catering company or restaurant.

Timing It Right

You can also cut down on food costs by not holding the shower right at lunch or dinner time. That way, guests won’t arrive expecting a full meal, and you’ll be able to serve a lighter menu that includes simple appetizers and snacks. A late-morning party can be particularly wallet-friendly. You might simply offer coffee, juice, fruit, and pastries. Or, you might opt for an afternoon tea and serve sweets and finger sandwiches.

Keeping the Cake Simple

Here’s another way to save money on food: A gourmet bakery cake can look beautiful, but it could easily bust your budget. To cut costs without sacrificing on taste, you might consider ordering a cake at your local grocery store’s bakery or the bakery at a wholesale club, then having it personalized (which the store will often do free of charge).

DIYing Centerpieces

It’s a basic rule of personal finance that you’ll pay more when you farm tasks out versus doing them yourself, whether that means doing car maintenance or decorating for a party.

Fresh flowers look lovely, but they can get expensive if you order arrangements from a professional florist. Instead, you may want to head to your local farmers market, grocery store, or warehouse club to find flowers at reasonable prices that fit your color scheme, then make your own centerpieces.

A simple way to get great results is to use flowers in the same color family (like shades of pink or all white). You can pick up vases at the dollar store, or go with Mason jars, which look trendy and can be used for other purposes after the shower is over.

Printing Decor and Games for Free

Instead of racking up a big bill at the party store, you may want to comb the web for free baby shower printables. You can likely find food signs, games (like baby shower bingo), decorations, and favor tags that you can simply print right from your computer.

Making Edible Favors

Another baby shower budgeting tip for beginners: Sweets can make great favors, and you can easily bake them yourself without spending a lot. You may also find that there is a family member who would be delighted to take on this task. Edible favors can be as simple as iced sugar cookies (in your color scheme) or as elaborate as cake pops that look like baby rattles.

Recommended: Passive Income Ideas

Considering a Virtual Baby Shower

If the guest of honor’s family and friends are spread out all over the country, having a virtual baby shower is one way to include everyone that’s important, and also keep costs down. You can set a celebratory mood by choosing a Zoom background that fits the theme of your shower, and also include a link so guests can download the background as well.

Friends and family can watch the mom-to-be open gifts that were sent to her ahead of time. (In fact, you might save so much by doing a virtual shower that you can be more lavish with gifts. That might help your guests of honor save for the new baby.)

You can also organize games throughout the virtual baby shower and create a digital guest book that attendees can sign and share their words of wisdom for the expecting parents.

The Takeaway

You can plan a memorable baby shower even on a limited budget. And, spending less doesn’t mean the event will be any less special.

Some easy ways to trim the cost of having a baby shower include: hosting the shower in your home or backyard, heading to your local warehouse club (for food, flowers, and even the cake), using free printables for decor and games, and giving homemade sweets as favors.

You can also make a baby shower more affordable by setting a budget and saving up enough money to cover it in advance (so you don’t end up relying on credit cards). Looking for a good place to build your party fund? Look for a bank account with low or no fees and a high interest rate.

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.

Photo credit: iStock/vejaa

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.

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.

SOBK0923004

Sep

2023

Is it Smart to Buy Your Leased Car_780x440

Guide to Buying out a Car Lease

By David Wolinsky | Budgeting & Goals, money | Comments Off

When a car lease is expiring, you will likely need to decide whether to return the car and find a new one or do a lease buy-out and purchase the car.

Similar to buying a used car, when buying a leased car, you may be able to finance the transaction or pay for it with cash. But how can you know if buying out a car lease makes sense?

The decision will depend on your budget, how much you enjoy driving your leased car, the mileage you’ve put on the car, and the buyout price.

Read on for some key information about a car lease buyout that can help you make an informed decision.

What Does It Mean To Buy Out a Car Lease?

Buying out a car lease involves purchasing the car when your lease agreement comes to an end. It’s a fairly common process, and most lease agreements offer a buyout option. Your leasing company may even reach out to you with different options as the lease agreement nears its end.

Sometimes you can even purchase the car before the lease officially ends. Check your lease agreement to see what the terms are.

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How Does Buying Out a Car Lease Work

Wondering how to buy your leased car? First, consult your lease contract to find out the terms and the buyout price. If you don’t see the information there, contact the car dealership.

Next, evaluate the condition of the car. How much is your car really worth? Is it in good enough shape that buying it makes sense? Or does it have a lot of wear and tear or require repairs or expensive maintenance? Then, shop around to see if you can get a better price on the same car elsewhere. You may even be able to negotiate the price of your leased car with the dealership. This isn’t always an option, but it’s worth a try since you want to get the best rates for a lease buyout.

If you decide to go ahead with the purchase of the leased car, apply for financing if needed, and follow the process for purchasing the car.

Pros and Cons of Buying Out a Car Lease

Buying a leased car can sometimes make sense, but it’s not always the best option, depending on the purchase price and the condition of the car. Here are some advantages and disadvantages to consider before buying out a car lease.

Pros of Buying Out a Car Lease

One of the most obvious benefits of a lease buyout is that you already know the car’s history, which is something you likely won’t have when buying a used car (even if you get a used vehicle report, it won’t contain every detail).

If you’ve maintained your car meticulously and always kept it garaged, then you know that you would be purchasing a car that is in excellent condition.

On the flip side, if you haven’t cared for the car as well as you could have, a buyout can be an advantage as well.

That’s because most leases include extra fees for unusual wear and tear on a vehicle, which may show up during the inspection. Keeping the car can be a way to stave off that extra expense.

The same goes if you’ve put a lot of mileage on the car. If you’ve gone way over your lease’s mileage limits, a buyout can be more enticing because it allows you to avoid paying penalties for going over your lease’s limits.

Another potential plus to a buyout is that it can get you out of the lease cycle. When it comes to buying vs. leasing, purchasing a car may end up costing you less in the long run.

While buying typically involves higher monthly costs than leasing, you actually own something in the end. With leasing, you may have lower payments, but you can also get stuck in a cycle of never-ending car payments since you’ll never own the car free and clear. Creating a budget can help you see which option makes more financial sense for you.

Cons of Buying Out a Car Lease

One of the nice things about a lease is that you will always experience a relatively new vehicle every time you renew. For many drivers, the potential extra cost of perpetually leasing is worth that peace of mind.

If you opt to end the lease cycle and buy your car, one downside is that you’ll no longer be driving a new car. In determining the cost of ownership, you will likely also want to factor in the cost (and hassle) of car maintenance and repairs as the car gets older.

Your monthly expenses might also go up. If you buy out your lease and don’t make a new down payment, your monthly payments will likely be more expensive than your current lease payment. This is something to consider if you’re working to manage your money better.

Another potential downside to buying your leased car is that you may not be getting the best possible price for a used car.

When you get the option to buy a leased car, the vehicle is typically just a few years old and its residual value can be pretty high. It’s possible you could get a better deal by saving up for a car and buying a similar used vehicle on the open market.

Is Buying Your Leased Car a Good Idea?

Before deciding whether to buy your leased car, you may want to compare the buyback price from your lease to the current resale value of the car.

The price of a lease buyout will be based on the car’s residual value, which is the purchase amount set at lease signing, based on the predicted value of the vehicle at the end of the lease.

You can often find this number — it may be called the “buyout amount”, “residual amount,” or “purchase option price” — on your lease contract. If you make your payment online, you may be able to find it by logging onto your account or by calling the bank that holds your lease.

Once you’ve got this number, you can use one of the many online car appraisal tools — such as Kelly Blue Book, Edmunds, or the National Automobile Dealers Association — to help you calculate the trade-in, buyback, and new car fair purchase price of your leased car.

To get the most reliable numbers, you’ll want to be as accurate as you can when you plug in the information about your car, including the manufacturer, options, and current condition.

If your buyout amount is considerably less than the average retail price, and you like the car, buying your car from the leasing company could indeed be a good deal.

Even if it looks like you would end up slightly overpaying, you may not want to dismiss the buyout option altogether.

Buying your leased car may still be a good idea if you’re going to get hit with pricey mileage charges when you return the car. This could end up making the buyout price a better deal than buying a similar used car on the open market.

💡 Quick Tip: Want a simple way to save more each month? Grow your personal savings by opening an online savings account. SoFi offers high-interest savings accounts with no account fees. Open your savings account today!

3 Tips for Getting a Good Price on a Car Lease Buyout

It can be tricky to try to haggle the price of a buyout, since dealerships typically don’t net a profit from selling you a leased car. But it makes sense to try negotiating for a better deal. These tips could help.

Opt for dealer financing

One technique that might motivate the dealer to help you is to agree to get your financing from the dealership. This could work to your financial benefit as well: Since dealers often have a number of lenders to choose from, they may also be able to get you a lower interest rate for the buyout loan than you might be able to get from your own bank or credit union.

Get a preapproved loan

It can still be a good idea to get a preapproved car loan from your bank or credit union before you go to the dealer so you know what rate you can qualify for. If you originally had a good credit score to lease a car in the first place, and you still do, that may help you get a more favorable rate.

Some people even work at building credit by leasing a car. If you made your lease payments on time and your credit strengthened in the process — again, that might work to your advantage in terms of rates you might qualify for.

Once you see what rate you can get for a car loan, you can then decide later if you want to go with the dealer’s financing for the car lease buyout.

Negotiate fees

If you can’t get a lower buyout price for the car, ask to have fees such as transaction or document fees waived or lowered. You can request an itemized list of buyout fees from the dealer and see if you can get them to bargain with you on some of them. If so, this could help you save money.

The Takeaway

Deciding what to do with your leased vehicle when the contract is up can require a little bit of research, and also some math.

It can be a good idea to compare the buyback price to what the car would go for on the open market. You may also want to factor in any additional charges, such as mileage fees, that could make buying out the lease more attractive.

Should you decide to buy the car (or to purchase a different car) and would need to take out a loan to do so, it can also be important to consider what kind of price, down payment, loan term, and interest rate you can afford. Then you can start putting away money in a savings account to buy out your lease, or purchase a different car.

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 negotiate the buyout of a lease?

You may be able to negotiate the buyout of a car lease — it typically depends on where the lease contract originated. If it came from the finance department of the car manufacturer, you may not have much leeway. These finance departments are considered “captive lenders,” which means they likely won’t negotiate with you. If your car lease was written by a bank, however, you may have more flexibility for negotiation.

What is the downside to buying out a lease?

One disadvantage of buying out a lease is that you’ll no longer be driving a new car every few years. And once you own the car, it may cost more to maintain and repair it as it gets older.

In addition, if you buy out your lease and don’t make a new down payment, your monthly payments will likely be more expensive than your current lease payment.

Finally, by buying your leased car, you may not be getting the best possible price for a used car. You might be able to buy a similar used vehicle on the open market for a better price.

Is it smart to buy a car that you have leased?

It can sometimes be beneficial to buy a car you’ve leased. For instance, if the buyout price of the car is a lot less than the average retail price, buying out your car could be a good deal.

Also, if you’ve kept the car in excellent condition, it may make sense to buy out the lease rather than buying another used car and not knowing the true condition of the vehicle. Plus, you’ll actually own something in the end once the lease is paid off.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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

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.

SOBK0923001U

Sep

2023

Can Food Stamps Be Used Online?

By Ashley Kilroy | Budgeting & Goals, Financial Independence, money | Comments Off

Food stamps, or SNAP (Supplemental Nutrition Assistance Program) benefits, help millions of Americans who earn lower incomes or face economic hardship feed their families. In one recent year, 12% of all Americans accessed this benefit.

In the not too distant past, however, SNAP benefits weren’t always the most convenient way to go food shopping. A person had to go to the store and pay for their groceries with the program’s EBT card. Today, however, as so much of life is going digital, the United States Department of Agriculture (USDA) offers an online purchasing program to make food stamps more convenient for residents of every state. It’s becoming easier to use SNAP benefits online.

Here, you’ll learn more about how, where, and when you can use these benefits to grocery-shop online.

What Are Food Stamps?

“Food stamps” is an older, but still commonly used term to describe SNAP, or the Supplemental Nutrition Assistance Program.

SNAP is designed to provide nutritional assistance to low-income families, as well as the elderly, disabled, and people who have filed for unemployment. SNAP is a federal program administered by the USDA’s Food and Nutrition Service, which has a network of local offices.

While SNAP doesn’t cover all the items you might pick up at the supermarket, it can significantly cut your grocery bill.

• You can use food stamps to purchase meat, poultry, and fish; vegetables and fruit; bread and cereal; dairy products; snack food; and seeds and plants that produce food.

• However, you can’t use them to purchase tobacco, wine, beer, liquor, vitamins, prepared food, and nonfood items like cosmetics, hygiene items, and cleaning supplies.

Everyone on food stamps has a bank card called an EBT card, backed by the government. The program allows for customers to pay in-store and increasingly online, using their EBT just like a debit or credit card.

The maximum monthly food-stamp assistance you can get varies by where you live and how many people are in your household. A family of four living in the U.S. can now receive around $939 a month.

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Who Qualifies for Food Stamps?

A household is eligible for Food Stamps, or SNAP, when it meets specific criteria. Each state has an income limit that SNAP households must stay under. Additionally, they may factor in your finances and savings to determine your eligibility.

To apply for food stamp benefits or to get information about the SNAP program in your area, you can contact your local SNAP office. You can find local offices and each State’s application on the USDA national map .

Each state has its own application form. If your state’s form is not on the web yet, you can contact your local SNAP office to request a paper form.

Can You Use Food Stamps Online?

Yes, food stamps can be used online. Thanks to the expedited expansion of an online purchasing pilot program run by the USDA’s Food and Nutrition Service, households receiving SNAP benefits in any of the 50 participating states (along with the District of Columbia) can now use EBT to pay for groceries online from select retailers.

If a retailer is enrolled in SNAP’s online program, people on food stamps can select foods eligible for EBT benefits online and then arrange for in-store or curbside pickup. In some cases, it may be possible to have your groceries delivered. If the retailer charges a delivery fee, however, you cannot use your benefits to cover that fee.

What Stores Accept Food Stamps Online?

You now know the answer to “Can food stamps be used online?” The next question is probably, “Where exactly can I use food stamps online?”

Fortunately, many stores now accept food stamps online. While Amazon and Walmart are among the best known retailers for online EBT shopping, the number of stores accepting EBT card payment online is continuing to expand.

• FreshDirect, an online grocery delivery service, now delivers for free to SNAP participants in some zip codes in the New York metropolitan area.

• Instacart, a grocery delivery service, is currently partnering with many local stores in the U.S. to offer SNAP EBT benefits. The latest version of the Instacart app should display whether your local store offers EBT SNAP.

Which retailers (and which specific locations) participate in the online SNAP program will vary from one state to another, so it’s a wise idea to check which options are available in your area.

Here are some of the retailers that are now accepting food stamps for online shopping (for either delivery or pickup):

• Walmart

• Amazon

• Aldi

• Food Lion

• Publix

• FreshDirect

• BJ’S Wholesale Club

• Kroger

• ShopRite

• Fred Meyer

• Safeway

• Albertsons

• Vons

• Hy-Vee

5 Ways to Use Food Stamps to Buy Groceries Online

The rules for using food stamps online will vary by retailer. Here are some ways this transaction might work.

1. Use Food Stamps on Amazon

For example, when shopping on Amazon, you can add your SNAP EBT card, shop for groceries, and when you check out, you enter your EBT PIN to pay for eligible purchases.

2. Order Groceries With Food Stamps at Walmart

For Walmart, you can order groceries online or through the store’s grocery mobile app. You first need to sign into your Pickup & Delivery account and then select Payment Methods.

3. Use Food Stamps Online at a Local Store

If your local store accepts EBT Online, you’ll see an option to add your EBT card to your account and can then add your card. During checkout, you select EBT as your payment method. You can then enter your PIN and complete your order.

For instance, at ShopRite, you can order groceries online at Shoprite.com or via the store’s mobile app. During checkout, you can select Pay Online and then click the Place Order button. You can then choose the EBT Snap Card as the payment method to complete checkout. That’s another way to use food stamps online.

4. Know Which Are Non-SNAP Items

At some retailers, you can also include non-SNAP items in the same order, but you’d need to pay for them separately with a debit or credit card. If the store charges a delivery fee, that charge would also need to be paid via a separate payment card since service fees are not included in SNAP benefits.

5. Continue to Check As Options Expand

If you don’t find EBT SNAP as a payment option when attempting to order from your preferred grocery store, you may want to keep checking back — the coverage areas and list of participating stores continue to expand.

Other Ways to Save on Groceries

If you don’t qualify for SNAP benefits or are looking for additional ways to trim your grocery budget, try these tips. They can help you save, regardless of how much you usually spend on food per month.

Plan Your Meals

By planning your meals ahead and buying in bulk, you can save money on food. Say you decide in advance that you’ll buy chicken that’s on sale and make a stir-fry one day, a sheet pan dinner the next, and will grill it as well. You might even double up on your cooking and freeze leftovers for the following week.

Shop Solo and Stick to Your List

Impulse buys have a way of wrecking your food budget, and if you have your family with you at the supermarket, it can be more likely that they will spot enticing and expensive items. It can be more economical to hit the grocery store on your own and stay laser-focused on your list.

Use Coupons

Whether you choose to clip the old-school paper coupons or use some of the digital couponing options, those deals can help you stay on your budget. You may even be able to use coupons in a way that doubles their saving power for even lower prices.

The Takeaway

The Supplemental Nutrition Assistance Program (SNAP) — better known as food stamps — provides assistance to low-income people in the form of an EBT card that can be used to purchase certain types of food.

Many national retailers and supermarket chains now allow SNAP recipients to order eligible groceries online and then go into the store to pick them up, either in-store or curbside, or have them delivered.

Looking to keep better tabs on your grocery (and other) spending? Finding the right banking partner could help.

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 use EBT anywhere in the US?

Yes, if you qualify for EBT, you can use your benefits anywhere in the U.S.

Can EBT be used on DoorDash?

Yes, it can: DoorDash is partnering with Safeway and Albertson to enable shoppers to use EBT as payment in the app.

How much do you get for one person on SNAP?

In 2023, the average benefit for SNAP for a single person is $195 per month, though the benefit could be as high as $281.

Photo credit: iStock/Yana Tatevosian

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