A savings account is an integral bank account that accumulates interest over time. These accounts give you a safe place to store your money for long-term financial goals. Savings accounts give out interest rates that exceed the rates you can find with checking accounts. The interest payments are a big perk for many of these accounts.
Some bank accounts have higher interest rates than others, and SoFi has some of the highest rates in the nation. The 4.00% APY (*) is enough to draw plenty of attention, but the fintech company has a lot of other perks. This SoFi High Yield Savings Account review will explore some of the advantages and details to consider.
About SoFi Bank
SoFi Bank is a personal finance company and online bank that trades on the NASDAQ Stock Exchange under the ticker symbol SOFI. The bank offers various financial products, such as bank accounts, mortgages, credit cards, investment accounts, and other resources. The fintech company acts as a one-stop shop for your financial needs and has FDIC insurance for its accounts.
SoFi Bank is headquartered in San Francisco and was founded in 2011 by Stanford Business School students. SoFi Bank became the first company to refinance federal and private student loans in 2012. Anthony Noto currently serves as the CEO and has held the helm since 2018. SoFi continues to launch various products and optimize its current offerings. The fintech company reached 1 million users in January 2020. The company now has over six million members.
Sofi Bank strives to help its members get their money right. The company has helped fund over $73 billion in loans, and its members have paid off over $34 billion in debt.
SoFi Bank Member Benefits
Opening a high yield savings account with SoFi Bank allows you to unlock the key benefits of membership. These are some of the top perks:
- Financial planning: SoFi handpicks credible advisors who can give you personalized feedback on your finances. Financial planning can give you clarity on how to address short-term and long-term financial goals. A good financial planner allows you to work smarter instead of only working harder.
- Referral bonuses: You can receive cash by referring your friends and family to SoFi Bank. These referrals can add up and depend on how frequently you talk about SoFi Bank with others.
- Rate Discounts: Members receive rate reductions and discounts on the next eligible loan. Those discounts can free up more space in your budget to address other expenses or get a head start on your loan.
- Estate Plan Discount: SoFi Bank offers a 15% discount on estate planning services through a partnership with Trust & Will.
- Online community: SoFi has an exclusive online community where members can discuss their financial goals, strategies, and other details. Surrounding yourself with like-minded people in a healthy online group can help you achieve your goals and avoid common mistakes.
- Events: SoFi Bank holds many events for its members. Some of these events are local, while others are big conferences. You can find events that include dinners and happy hours. Attending events allows you to connect with peers and sharpen your financial knowledge.
- SoFi Stadium Lounge: The new LA arena has a special member lounge for SoFi Bank members. It’s a great place to connect with other members.
- Personalized Career Advice: Members can jump on the phone with a professional to discuss your career direction and options. These one-on-one coaching calls are complementary and can offer more information than non-personalized videos and courses.
- Unemployment Protection: You can temporarily modify your loan payments and receive assistance with your job search if you get unemployed. This feature allows you to flexibly handle other expenses while unemployed and gives you a buffer to get back on your feet.
- College Hotline: Receive free, personalized guidance from a specialist who can answer questions about FAFSA, loans, and other details about paying for college. The college process can be complicated, and having a trustworthy expert on call makes it easier.
Is SoFi Bank a Good Place to Store Your Savings?
SoFi Bank is a reliable institution that has its savings accounts insured by the FDIC. The bank has $53 billion in assets under management and offers its members many benefits. The bank offers competitive perks and savings rates for its members.
Sofi Bank offers features that align with consumers’ investing goals and need for extra cash. While some online banks don’t have all of the features you need, SoFi Bank checks all of the boxes for most consumers. The bank has been growing at a rapid pace and has become one of the top banks. Its continued evolution and innovation can lead to more features that further strengthen the value proposition.
The fintech company is a reliable bank, but you should compare SoFi Bank with other banks before committing to a savings account. It is also a good idea to assess your financial goals and what you want from a bank before getting started or embarking on a new path.
Can You Withdraw Money from Your SoFi Savings Account?
You can withdraw money from your SoFi Savings Account. Unlike most banks, SoFi does not have any limits on how many withdrawals you can make each month. Most banks charge fees after you exceed six withdrawals from your savings account within one month. SoFi Bank removed this limit shortly after the Federal Reserve no longer made it a requirement.
This designation is important and helps SoFi Bank set itself apart from competitors. Having a checking account doesn’t make as much sense when you can secure a 4.00% APY (*) from a high-yield SoFi Savings Account.
Key Features of the SoFi High Yield Savings Account
SoFi Bank offers several advantages for its members. These are some of the perks you will receive as part of your SoFi banking experience.
Automatic Savings: Vaults and Round-Ups
Saving money for your retirement portfolio is a critical element of financial freedom. Funds that grow over time allow your money to work hard for you, but it’s easy to forget and fall behind. SoFi uses automatic savings features to help consumers grow their portfolios even if they aren’t actively looking at their bank accounts. SoFi Bank has two features that help with automatic savings.
The first feature is the vault. SoFi Bank vaults allow you to set goals for your SoFi Bank Savings Account. You can set the goal to save an additional $5,000 for a vacation or an additional $70,000 for a down payment.
SoFi Bank makes these goals visible in your dashboard so you can actively track your progress. Reminding yourself of goals through Vaults can help you stay focused on them and take a long-term approach to your finances. These are not separate savings accounts, but they let you track the progress within your current savings account.
Round-ups are another feature that turns every purchase into an opportunity to grow wealth. When you use your debit card linked to your checking account, SoFi Bank rounds up the purchase to the next dollar. For instance, if you spend $62.67 on a purchase, it rounds up to $63. The extra $0.33 goes into your Sofi Bank savings account, which has a much higher APY.
An extra $0.33 won’t change your finances, but each of these purchases adds up. More importantly, you can build good financial habits that result in more savings in the future. You can decide how you use the money and may want to consider stocks for higher returns. However, knowing that your money is growing at 4.00% APY (*) before taxes is more reassuring than an APY well below 1%. SoFi Bank has exceptional checking accounts, but most financial institutions set APYs below 0.10% for their accounts.
Interest Earned
The interest rate for a savings account can make a difference in the entire banking experience. Some people view extra financial tools and resources as nice bonuses and prioritize the APY. SoFi Bank delivers in this regard with its 4.00% APY (*) for its savings accounts. It’s one of the top rates among financial institutions and is 10 times higher than the national average.
Interest allows your savings account to grow each year. The best part is that interest compounds, so each payment will be higher than the last if you keep your money in the account. If you have $50,000 in your savings account at 4.00% APY (*) , you will receive $2,000 just for keeping your money in the bank. The following year, you will earn $2,080. This example shows the power of compounding and highlights how much of a difference a high interest rate makes. This is all risk-free money.
Interest rates fluctuate, but SoFi Bank is among the leaders in the industry. Other banks require you to take out certificates of deposit to achieve those same rates. SoFi members can withdraw funds at any time, which stands in contrast to the banks that require CDs to reach 4.00% APY (*) . Some banks don’t even offer CDs with the same interest rate you can find in a Sofi Bank Savings Account.
Accessibility
SoFi’s savings accounts are far more accessible than most banks. You can access these accounts through a smartphone, desktop, tablet, and other devices. That’s a common feature among many banks, but SoFi Bank stands out with no limits on transactions. You can make more than six monthly withdrawals from your SoFi Bank Savings Account. That’s something most banks do not permit.
Fees and Costs
Many banks charge fees for various activities, and if you do not fulfill a few requirements. These fees can ruin the banking experience, especially if banks use hidden fees. Fewer banks have hidden fees, but these same banks list numerous fees. A long list of fees makes detecting some of the most expensive fees harder. Luckily, SoFi members have a different experience.
SoFi Bank does not have account fees or overdraft fees. You won’t have to worry about monthly maintenance fees, account minimums, initial deposits, or other expenses you may face with another financial institution. SoFi Bank has several protections in place to prevent you from overdrawing your account. However, even if you overdraft your account, SoFi Bank still does not charge.
SoFi has a network of over 55,000 ATMs that do not result in any fees for members. SoFi Bank has established this ATM network through a partnership with AllPoint. You will have to pay fees for an out-of-network ATM, but that’s a standard rule for most banks. SoFi Bank does have a reimbursement policy for out-of-network ATM transactions that can change at any moment.
FDIC Insurance
The Federal Deposit Insurance Corporation offers consumers a greater sense of safety when they put their money into a checking or savings account. The FDIC insures up to $250,000 per account, and SoFi Bank offers this insurance for its members. SoFi Bank actually goes a step ahead and has up to $2 million in additional FDIC insurance available through its partnerships. You should only work with a bank that is FDIC-insured or offers FDIC-insured accounts through a partnership with an FDIC-insured bank. You should stay away if a bank does not have this insurance policy.
Other Account Features
SoFi Bank has several features that add to its value proposition. The bank’s accounts come with early paydays (up to two days early), no overdraft fees, cashback rewards that reach up to 15% for qualifying purchases, and other perks. SoFi Bank offers various personal finance tools that can help you get closer to your goals and lead to better decisions. You can also take out various loans, such as mortgages, personal loans, student loans, and other financial products.
What are the Pros and Cons of a SoFi High Yield Savings Account?
A Sofi High Yield Savings Account can be enticing, but it is important to know the account’s strengths and weaknesses. These are the pros and cons to keep in mind.
Pros of SoFi High Yield Savings Account
- High APY: You can earn up to 4.00% APY (*) on the money you store in your SoFisavings account. That’s more than what most banks have for their CDs.
- Unlimited withdrawals: You don’t have to worry about paying fees or facing a restriction if you want to make more than six withdrawals from your savings account each month.
- No overdraft fees: Overdraft fees are one of the most expensive fees that regularly come up for checking and savings accounts. You will have to pay $30-$35 each time you overdraw your balance. SoFi has several protections in place to mitigate over-drafting, and there’s no fee if you end up overdrawing your account.
- Automatic savings features: Grow your savings account with built-in features you receive as a Sofi member.
- Access to Sofi Bank’s additional products: Credit cards, investment portfolios, loans, insurance policies, free one-on-one coaching calls, and estate planning services are some of the resources available through SoFi Bank’s platform.
Cons of SoFi High Yield Savings Account
- No physical branches: If you want to reach out to a SoFi representative in your area, you are out of luck. SoFi is an online-only bank that does not have the same coverage as traditional banks. Some people can overlook this disadvantage if they do not visit their local bank as it is.
- Out-of-network ATM fees: You may incur a fee if you make a cash deposit at an out-of-network ATM fee. SoFi Bank does have over 55,000 ATMs in its network to mitigate this risk.
Should You Open a SoFi High Yield Savings Account?
A Sofi Bank High Yield Savings Account offers many advantages for consumers. The account’s high-interest rate immediately puts it in contention with some of the top high yield savings accounts. A 4.00% APY (*) is hard to get while also maintaining unrestricted, penalty-free access to your money.
A SoFi Bank account also gives you exposure to the fintech company’s additional resources. Those resources can help you save money and get your finances in order. A Sofi High Yield Savings Account can make your long-term financial goals more attainable and is a great choice for many people.
How to Open a SoFi High Yield Savings Account
Opening a Sofi Bank account is straightforward. You can open a high yield savings account by visiting SoFi’s website and entering your details. SoFi will then direct you to create your login and fill out the application. Then, you will have your high yield savings account open and ready to go.
Other SoFi Bank Products
SoFi Bank has several products that can enhance your banking experience. These are two of the highlights:
- Checking Account: Earn interest on the money that you use for everyday purchases.
- Investing: Diversify your portfolio and buy various assets within the same dashboard as your savings account.