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Whether you’re borrowing money from a lender or depositing money in a savings account, interest rates will play into your financial picture. And understanding exactly how they work is crucial to making the best possible decisions for your money.

Here’s the scoop.

Interest Rate Definition

Interest rate is the cost of borrowing or the payoff of saving. Specifically, it refers to the percentage of interest a lender charges for a loan as well as the percentage of interest earned on an interest-bearing account or security.

Interest rates change frequently, but the average personal loan interest rate is dependent on several factors, including the amount borrowed, credit history, and income, among others. A borrower with an excellent credit score and a dependable income, for instance, will likely be considered low risk and may be offered a lower interest rate. On the flip side, some vehicles like payday loans are considered riskier for lenders and tend to have higher interest rates.

Recommended: What Is a No-Interest Loan? A Personal Loan Guide

How Interest Rates Work

Whether you’re borrowing or saving money, the interest rate is applied to the balance during set periods of time called compounding periods.

For borrowers, this extra charge can add to outstanding debt. For savers, savings interest can be one way to earn money without much effort.

Let’s look at some specific examples.

You might take out a personal loan with an APR of 5.99%. That means you’ll pay an additional 5.99% of the loan balance each year in addition to the principal payments, which is paid to the lender for servicing the loan.

Or, if you hold a high-yield savings account that offers a 1% APY return, you can expect that account to grow by 1% of its balance each year.

Of course, the interest you might earn in a savings account is usually substantially lower than what you might earn on higher-risk investments.

And when it comes to any of the multiple uses of a personal loan, paying interest means you’re paying substantially more than you would if you were able to cover the expense out of pocket.

Fixed vs Variable Interest Rates

Lenders charge fixed or variable interest rates. What’s the difference between the two? Let’s take a look.

As the name suggests, fixed interest rates remain the same throughout a set period of time or the entire term of the loan. Fixed rates can be higher than variable rates. Borrowers who prefer more predictable payments — or are borrowing when interest rates are low — may decide to go with a fixed-rate loan.

Variable interest rates change periodically, depending on changes in the market. This means the amount of your payments will vary. Generally speaking, variable-rate loans can be riskier for consumers, so they tend to have lower initial rates than fixed-rate loans. However, it’s important to note that when interest rates rise, so can the cost of borrowing. When borrowers decide to renegotiate from a variable-rate to a fixed-rate loan, they may face additional fees and a new loan length.

A variable-rate loan may be a good move for borrowers who plan to pay off the loan quickly or can take on the risk.

Types of Interest

While all interest does one of two things — accrue as a result of saving money or in payment to the bank for a loan — it can be calculated and assessed in different ways. Here are a few common types of interest rates explained.

Simple Interest

Simple interest is interest that is calculated, simply, based on the balance of your account or loan. This is unlike compound interest, which is based on the principal balance (the original money you borrowed) as well as interest accrued over time.

Most mortgages and auto loans are calculated using simple interest. That means you won’t pay additional interest on any interest charged on the loan.

For example, let’s say a driver takes out a simple interest loan to pay for a new car. The loan amount is $31,500, and the annual interest rate on the loan is 4%. The term of the loan is five years. The driver will pay $580.12 per month. After five years, when the loan is satisfied, they will have paid a total of $34,807.23.

Compound Interest

Compound interest, on the other hand, means that interest is charged on not only the principal but also whatever interest accrues over the lifetime of that loan.

Say you take out an unsecured personal loan in the amount of $20,000 to pay for home remodeling. The loan is offered to you at an interest rate of 6.99% compounded monthly, and you must also pay an upfront fee of $500 for the loan. You’ll pay it back over the course of five years.

Over the course of those 60 payments, you’ll pay $3,755.78 in interest, not including the $500 extra you paid in fees. Each month, you’ll pay back some of the principal as well as the interest charged to you.

By the time you’re done with your home remodel, you’ll have paid $24,255.78 altogether, and that’s on a personal loan with a fairly low rate. In other words, you’ll have paid 20% more for the project than you would have if you’d funded it out of pocket.

Recommended: Simple Interest vs. Compound Interest

Amortized Interest

Amortizing loans are common in personal finance. If you have a home loan, auto loan, personal loan, or student loan, you likely have an amortizing loan.

Amortization is when a borrower makes monthly (usually equal) payments toward the loan principal and interest. Early payments largely go toward the calculated interest, while payments closer to the end of the loan term go more toward the principal.

The interest on an amortized loan is calculated based on the balance of the loan every time a payment is made. As you make more payments, the amount of interest you owe will decrease.

To see how payments are spread out over the life of the loan, borrowers can consult an amortization schedule. A mortgage calculator also shows amortization over time for a loan.

But here’s a look at a sample calculation:

Let’s say you take out a $200,000 mortgage over 10 years at a 5% fixed interest rate. Your monthly payments will be $2,121.31. Next, divide the interest rate by 12 equal monthly payments. That equals 0.4166% of interest per month. This means that in the first month of your loan, you’ll pay $833.33 toward interest and the remaining $1,287.98 toward your principal.

Now, how about the second month? To calculate what you’ll owe, deduct your monthly payment from the starting balance. (This will give you the “balance after payment” for the chart.) Be sure to add to the chart the $833.33 you paid in interest and the $1,287.98 you paid toward the principal. Repeat the calculation of monthly interest and principal breakdown for the rest of the chart, which includes 12 months of payments.

Precomputed Interest

Loans that calculate interest on a pre-computed basis are less common than loans with either simple or compound interest. They’re also controversial and have been banned in some states. Precomputed interest has been banned nationally since 1992 for loans with terms longer than 61 months.

This method of computing interest is also known as the Rule of 78 and was originally based on a 12-month loan. The name is taken from adding up the numbers of the months in a year (or a 12-month loan), the sum of which is 78.

Interest is calculated ahead — precomputed — for each month and added to each month’s payment, giving more weight to interest in the beginning of the loan and tapering off until the end of the loan term. In the case of a 12-month loan, the first month’s interest would be 12/78 of the total interest, the second month’s interest would be 11/78 of the total interest, and so on.

Here’s an example: Let’s say a borrower takes out a personal loan with a 12-month term that will accrue $5,000 in interest charges. According to the Rule of 78, here’s what the borrower would pay in interest each month:

A loan with precomputed interest has a greater effect on someone who plans to pay off their loan early than one who plans to make regular payments over the entire life of the loan.

APR vs APY

Whether compound or simple, interest rates are generally expressed as APR (Annual Percentage Rate) or APY (Annual Percentage Yield). These figures make it easier for borrowers to see what they can expect to pay or earn in interest over the course of an entire year of the loan or interest-bearing account’s lifetime.

However, APY takes compound interest into account, whereas usually APR does not — but on the other hand, APR takes into account various loan fees and other costs, which APY might skip.

Recommended: APY vs. Interest Rate: What’s the Difference?

How Are Interest Rates Determined?

Lenders use several factors to determine the interest rate on a personal loan, including details about your financial background and about the loan itself. What kind of financial questions can you expect?

When lenders talk about a borrower’s creditworthiness, they’re usually referring to elements of your financial background. This may include:

•   Your credit history

•   Your income and employment

•   How much debt you already have

•   Whether you have a cosigner

The loan terms can also affect the rate. For example, personal loan rates can be affected by:

•   The size of the loan

•   The duration of the loan

Loan term is something borrowers should be thinking about as well. A longer loan term might sound appealing because it makes each monthly payment lower. But it’s important to understand that a longer-term loan may cost you significantly more over time due to interest charges.


💡 Quick Tip: In a climate where interest rates are rising, you’re likely better off with a fixed interest rate than a variable rate, even though the variable rate is initially lower. On the flip side, if rates are falling, you may be better off with a variable interest rate.

Interest Rates and Discrimination

Generally speaking, the higher your credit score and income level, the easier it is to qualify for loans with better terms and lower interest rates — which, of course, can make it more difficult for people in lower socioeconomic positions to climb their way out.

Discriminatory lending has had a long history in the U.S. Before federal laws protecting against discrimination in lending practice, lenders would regularly base credit decisions on factors such as applicant’s race, color, religion, sex, and other group identifiers rather than their creditworthiness.

The practice of “redlining” was begun in the 1930s as a way to restrict federal funding for neighborhoods deemed risky by federal mortgage lenders. It persisted for decades, and the detrimental effects can still be felt today by residents of minority neighborhoods.

Since residents of redlined neighborhoods were excluded from approval for regular mortgage loans, they were forced to look for other financing options, which were often exploitive. If they could not find any lender willing to loan to them, they continued renting, unable to gain equity in homeownership.

The Takeaway

The interest rate is the cost of borrowing money — it’s a percentage of the total amount of the loan. It can also refer to the rate at which interest is earned on money in a savings account, certificate of deposit, or certain investments. The amount of interest you’ll pay is usually expressed using percentages, which will be listed as either APR (Annual Percentage Rate) or APY (Annual Percentage Yield), depending on which kind of financial product you’re talking about.

Lenders charge fixed or variable interest rates. Fixed interest rates remain unchanged for a set period of time or for the life of the loan, and may be a smart choice for borrowers who want a predictable payment schedule or are taking out a loan when interest rates are low. Variable interest rates can change depending on the market, which means the payment amount will vary. Though potentially riskier, these loans may offer lower initial rates. However, when interest rates rise, so can the cost of borrowing.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

FAQ

What is the definition of interest rate?

An interest rate is expressed as a percentage and is used to calculate how much interest you would pay on a loan in one year (APR), or how much you would earn on an interest-bearing account in one year (APY).

What is an example of an interest rate?

Simple, compound, or precomputed interest rates are types of interest rates commonly used.

What is the difference between interest and interest rate?

Interest is the money you’re charged when you take out a loan — or earn for leaving your money in a deposit account to grow. Interest rate is the percentage you’re being charged or are earning.

What happens when interest rates are high?

Interest rate increases tend to lead to higher interest rates on personal loans, mortgages, and credit cards. It can also mean costlier financing for borrowers.

Can you adjust the interest rate on a personal loan?

Possibly. One way to lower the interest rate on a personal loan is to refinance it with another lender.

Photo credit: iStock/Remitski

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Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

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.

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The cost of owning a car is significant, and maintaining it can be pricey too. But it’s what keeps your wheels running, whether that means commuting to work, doing school drop-off, shopping, road tripping, and beyond.

You’ll likely deal with lots of expenses, such as oil changes, new tires, shock and spark plug replacement, and more as you navigate car ownership.

Here, learn how you can save big on the typical services most cars need so you can hold onto more of your hard-earned cash.

How to Lower the Cost of Owning a Car

What follows are 31 ways to make vehicle maintenance less expensive. Some of these strategies help you save money right away, while others can lead to serious savings down the road.

1. Buying the Right Car

One of the best opportunities you have to lower your maintenance costs comes before you actually buy the car.

If you’re looking to buy a new car–or for a good deal on a used car–it can be wise to not only consider the purchase price, but also the long-term costs. With a little bit of research, you can likely find out the model’s repair record, and the average annual cost of upkeep.

Recommended: How to Save Up for a Car

2. Keeping Up With Oil Changes

It’s inconvenient and, with synthetic oil and filter changes running around $65 to $125 a pop, the money you may not feel like spending. But this regular expense will almost certainly save you money in the long run. Oil lubricates your engine and keeps it from overheating. And, replacing the whole engine will definitely cost a whole lot more.

3. Reading Your Owner’s Manual

Unless you’re a serious car geek, you probably haven’t spent a lot of time perusing your owner’s manual. But this guide contains key information about what maintenance services need to be done and when making it essential reading. (If you’ve misplaced yours, you can probably find it online — just search for your car’s make, model, year, and the words “owner’s manual.”)

4. Timing Your Maintenance Properly

The maintenance schedule set out in the owner’s manual was created by your car’s designers to help you keep ahead of major repairs that would pop up if you didn’t intervene. Skipping preventative maintenance can be penny-wise, but pound-foolish.

5. Knowing Fair Maintenance Prices

Charges for car maintenance services, like tune-ups and tire rotations, can vary widely depending on the shop. One way to find out if you’re being charged fairly is to research rates before you bring the car in. Websites like RepairPal can tell you what you should expect to pay for a particular maintenance task — and can even connect you with certified shops.

6. Patronizing a Mom-and-Pop Mechanic

Want a way to save money daily? Think small. Independent mechanics can sometimes offer lower pricing (and potentially better customer service) than auto repair chains, which have to cover the cost of being part of a franchise. So it can be worth shopping around. Exception: If your car is still under warranty at the dealership, you might void the agreement by taking it anywhere else, so it may be best to stick with them.

7. Sticking With the Same Shop

Although it might not matter for minor maintenance issues like oil changes, bigger services can be costly — and if you continually take your car to new mechanics, they won’t know your vehicle’s service history, which could lead you to pay for the same service twice.

8. Getting Your Transmission Fluid Changed

Transmission fluid is as vital to your transmission as oil is to your engine. This fluid is a lubricant that helps keep all of the moving parts inside of your transmission functioning properly. Transmission work can be some of the priciest projects you can face, running anywhere from $800 for a repair to a couple thousand or more for a rebuild to $4,000 to $7,000 for a replacement.

9. Getting Your Coolant Fluid Flushed

Yet another important fluid to keep an eye on, your coolant protects your engine from overheating, as well as offering more lubrication for certain engine parts. It usually needs to be changed out every 10,000 to 50,000 miles (you can find out in your manual), and failing to do so can lead to rust and dirt clogging up the system.

10. Cleaning Your Battery

You may not think about your battery very much…until the morning your car doesn’t start. To keep your battery in good working order, and avoid surprises, it can be good to occasionally clean the corrosion off the terminals using a small brush, some water, and baking soda.

11. Keeping Up With Your Transfer Case Fluid

This one only applies to those with four-wheel drive vehicles — but if you have one of those, you’ll likely need to familiarize yourself with the transfer case. That’s the part that shifts power from the transmission to the axles so the wheels can turn. And, like other parts, it has its own special lubricating fluid which needs to be regularly checked and changed.

12. Getting your Tires Rotated Regularly

You’ve probably already noticed how expensive tires are to replace — so chances are, you want to replace them as seldom as possible. Getting your tires regularly rotated and balanced can help ensure they wear evenly, which extends their overall longevity. This can be an especially good thing to do before you take an affordable road trip.

13. Carrying an Air Pressure Gauge

DIY moves can not only enhance your self-confidence, they can also be ways to save dollars and improve your money mindset.

One example: Maintaining optimum air pressure in your tires can improve your mileage (and save you money in gas) and also extend the life of those expensive tires. It also keeps your vehicle safe to drive. You can check your tires free of charge by keeping a tire gauge (typically less than $10) in your glove box.

14. Refilling Your Tires as Needed

As you roll around on them, your tires will gradually seep air over time — but you usually don’t need to schedule a special maintenance trip to refill them. Most gas stations offer coin-operated air pumps, and many even allow you to pre-set the proper PSI, or pounds per square inch. (Otherwise, you can grab your pressure gauge.)

15. Regularly Checking Your Alignment

Alignment controls the angle at which your tires meet the road, and is important for making sure your tires wear evenly. Proper alignment also helps increase your vehicle’s gas efficiency, so it’s worth getting it checked at least once yearly, or sooner if you notice a pull as you’re driving.

16. Inspecting Your Shocks and Struts

Your shocks and struts, which keep your car from bouncing, also impact how quickly your tires wear, as well as your vehicle’s fuel efficiency. Depending on your driving habits, these generally need to be replaced roughly every 50,000 to 75,000, depending on how heavy your use is.

17. Shopping Around for Tires

No matter how assiduous you are maintaining your tires, you’re eventually going to have to replace them. But unlike other car parts that may be proprietary to your car’s make and model, tires are pretty easy to shop for yourself — and doing so can lead to major savings. Warehouse discount or wholesale clubs like Costco and Sam’s Club sell tires, as do online retailers like Discount Tire Direct.

18. Using Winter Tires Only in the Winter

Using winter tires can make driving in snowy conditions much safer. But these tires wear considerably faster than all-season tires, especially in non-winter conditions. So it can be a good idea to change your tires back to all-weathers as soon as the last frost has thawed.

19. Skipping the Winterization Package

Many mechanics will offer you a “winterization” service that involves flushing and replacing your coolant (also called antifreeze). However, you only need to have that done every 30,000 miles or so, as noted above. If it hasn’t been that long since your coolant has been replaced, you don’t need this service.

20. Having Your Spark Plugs Inspected

Spark plugs literally spark the fuel that runs your engine. When the spark plugs start to fail, your engine won’t run as efficiently, and eventually, their misfiring could put stress on your catalytic converter, which is costly to repair. Check your owner’s manual for advice on how often spark plugs should be replaced. The number can vary widely, from 18,000 to 100,000 miles. When the time comes, however, it can be wise not to hesitate.

21. Changing Your Own Engine Air Filter

In most cases, paying a professional to do your maintenance and repair work is worthwhile in the long run (and less costly than making a mistake and hiring someone to repair it). But changing your engine air filter is actually easy. Since that filter keeps dirt and debris out of your engine, keeping it clean is key to your car’s longevity. There are plenty of YouTube tutorials you can check out to learn how.

22. Keeping Jumper Cables in the Trunk

This might not seem entirely necessary, but if your battery dies and you’re not near home, you’ll likely be glad you didn’t have to rely on a tow truck for such a simple problem.

23. Making Sure You Have Roadside Assistance

…That said, every once in a while, you might need a tow. If you do, having access to a roadside assistance program can be major cost savings. And, it can pay to shop around for this service. AAA might offer perks, like hotel discounts, but the roadside assistance package offered by your car insurance company might cost less.

24. Heading to the Car Wash

It may seem like a minor detail, but keeping your car’s exterior clean can help the paint job last longer by removing road grime and residues that can eat through the finish. A $10 drive-through wash is way better than paying up to 10 times that for a new paint job.

25. Detailing the Interior

Your car’s interior is also vulnerable to staining and residue build-up that can lower your car’s overall value. At many car washes, you can access a powerful vacuum that can get rid of loose debris, but giving your car’s interior more thorough attention every few months may help you resell it for a higher price later.

26. Waxing Your Vehicle Every Six Months

Waxing your vehicle twice a year is another important way to help keep the paint job looking fresh and new. It can also help to avoid rust build-up that can cause structural damage to the body of your car.

27. Changing Your Own Light Bulbs

For most bulbs on your car, changing them isn’t difficult. They typically have a twist-and-pull bayonet base or simply pull out and push in. You can usually find replacement bulbs in any auto parts store, and sometimes even hardware stores. In some cases, accessing a bulb can be tricky, so you may want to check the manual or look online if getting the bulb out isn’t obvious.

28. Paying Attention to Recalls

If your car’s manufacturer sends out a notice about a recall, it’s likely worth making an appointment at your local dealership — no matter how insignificant the problem may seem. The recall repair will be free at the dealership, and it could save you from more extensive damage that would not be covered.

29. Buying Some Touch-Up Paint

Just like washing and waxing, using touch-up paint can be a smart maintenance measure. With a little bit of touch-up paint, you can seal chips and cracks early on before they have a chance to become a real (and real expensive) problem like rust or paint decay.

30. Heeding the Check Engine Light

It may be annoying, but your check engine light is trying to tell you that something needs your attention. And, typically, it’s better to pay attention sooner rather than later. A small repair cost now is better than a large one later on if you let that light go for a few months.

31. Driving Less

The less you drive, the less wear-and-tear you put on your vehicle, and the lower your maintenance and repair costs are likely to be. While it’s hard to save money these days, when it’s possible, you may want to consider walking, biking, or carpooling. These moves can not only be wallet-friendly but also good for the environment.

Recommended: 7 Ways to Save Money on Commuting to Work

The Takeaway

Generally speaking, the best way to keep your car maintenance costs low is to keep up with maintenance in the first place. That means referring to your manual and following the recommended service schedule.

You can also save money on car ownership by doing some basic vehicle care yourself, such as keeping your car clean and inflating your tires properly, as well as shopping around for a mechanic who charges fair prices.

To make sure you have enough money to cover all the expenses of car ownership, it can be a good idea to set up a car fund, which is easy to do with a dedicated bank account.

Photo credit: iStock/MrJub

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SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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

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

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