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SoFi started its life primarily as an online investment service, much like Robinhood and Webull, but took virtually no time to expand to other financial and banking services. As individuals began to demand services from SoFi, such as credit and debit cards issued against their investment accounts, it simply made sense for the company to begin offering the services inherently. SoFi operates somewhat differently from traditional banking accounts, however. Most banks keep checking and savings accounts separate, with checking serving as a spending account and savings serving as a place to save money for later use.With SoFi, these are packaged together, with low fees and competitive interest rates. So what do you need to know about the various offerings of SoFi banking and the recent changes and evolutions with which the company is moving forward?
Changes in SoFi Banking
The process of opening additional financial accounts will be a breeze if you already have an investment account with SoFi. If you are a new user, you will have to follow a few steps, but can typically gain approval within a few days. Even those who have previously used SoFi’s services should be aware of the upcoming changes that will affect both current and new account holders.
SoFi Checking and Savings launched in February 2022, offering a 1.25% annual percentage yield on accounts, no overdraft fees, and a two-day early paycheck deposit. In the past, SoFi Money accounts served this purpose, as a single FDIC insured account that worked both as a savings and checking account in one. The hybrid model worked well to allow users to earn interest without paying account fees, using borrowing and saving, spending and investing all in one product. However, as of June 2022, the Money accounts will no longer earn interest, encouraging users to transfer to Checking and Savings accounts. This is considered an upgrade, and it is likely that money accounts will be phased out in favor of checking and savings.
The SoFi Checking and Savings accounts were launched in early 2022 by the newly formed SoFi Bank. For this reason, new members will no longer be offered a SoFi Money account. It is FDIC-insured, and one of its first orders of business was to increase the APY on money accounts from 1% to 1.25%.It helps SoFi stand out from SoFi Invest, which is a separate division of the company.
SoFi has evolved into a full-service online bank from its original incarnation as a purely investment app. Customers of SoFi Checking and Savings can expect to see additional enhancements to their accounts as the year progresses, including perhaps the addition of new features and services. As a result, the company is able to maintain its banking and investment services in separate divisions while still operating as a single entity.
What is the current status of SoFi Money?
Presently, it is still active, and users can access their money. However, the plan is for SoFi to focus on building Checking and Savings accounts and reduce the support of SoFi Money in the coming months, with an eventual phasing out.
What is necessary to upgrade from SoFi Money to SoFi Checking and Savings?
In most cases, all account holders need to do is accept the new terms and conditions, put in the request for the upgrade, and within a few hours to a day, allow SoFi to proceed with the transfer. During this time, the money in the account is still accessible. The account numbers and routing numbers remain the same.
Does it cost the account holder to upgrade?
It cost absolutely nothing. Upgrading is free and takes only a few hours. Please note that June 5 was the cutoff date for SoFi Money to earn interest, so those who have not made the upgrade should do so to continue earning interest.
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