SoFi is a very good high yield savings account, especially for people who can set up a direct deposit to have money deposited monthly into the SoFi high yield savings account.
SoFi high yield savings accounts offer a competitive APY and has no monthly fees and a full e of integrated financial services, although the high interest rate requires that you meet certain conditions.
SoFi also offers a strong APY or Annual Percentage Yield, which is much higher than the national average, although you often need to set up an eligible direct deposit of any amount or deposit of at least $5,000.00 every 31 days to qualify for SoFi's top tier rate.
The SoFi high yield savings account has no monthly maintenance fees, no minimum balance requirements and no overdraft fees and SoFi also provides an all in one financial app, that allows you to manage your checking, savings and investing as well as loans in one single place, which is also a great convenience for many people.
SoFi also has features like Vaults that allow you to set aside some money for specific savings goals and Roundups, automatically save some spare change from debit card purchases.
And deposits in SoFi high yield savings accounts are also FDIC insured up to the standard $250,000.00 per depositor, with an option to opt into a program, which extends coverage up to $3 million across any partner banks and customers of SoFi high yield savings accounts also have access to over 55,000 fee free Allpoint ATM machines nationwide.
Although the primary drawback of SoFi high yield savings accounts is that the highest APY is dependent on having an eligible direct deposit, which might not work for everyone, like freelancers or people without regular paychecks and without it, the rate also drops significantly.
SoFi is also an online only bank and has no physical branch locations, which means that you have to be comfortable with digital banking and depositing physical cash can also involve, third party fees up to around $4.95 at Walmart or Walgreens for example and you must also open both a checking and savings account with SoFi and cannot have one without another.
You are allowed to take money out of a high yield savings account as high yield savings accounts are designed for liquidity.
Although you should also be aware of any potential monthly withdrawal limits which is often around 6 monthly withdrawals, which is set by the bank, and you can incur fees or account issues if the monthly withdrawal limit is exceeded on the high yield savings accounts.
You can access and withdraw the money from your high yield savings account through checks and debit cards for some high yield savings accounts or through an ATM card or electronic transfers.
Electronic transfers are the most common way of taking money out of high yield savings accounts that is linked to your checking through ACH transfer.
Federal regulations also used to limit savings withdrawals to 6 per month and while that rule is now relaxed, many banks still impose their own withdrawal limits which is often around 6 and might charge a fee or fees or convert your account if you exceed the withdrawal limits.
Transfers from high yield savings accounts is not always instant and can take a couple of business days for the money to become available in your linked account.
High Yield Savings accounts offer great liquidity, which makes them ideal for emergency funds or for short term goals, unlike CDs in which early withdrawals incur penalties.
Opening a high-yield savings account does not affect your credit score because the high-yield savings account is a deposit account and not a loan and so opening the high-yield savings account is not reported to the credit bureaus.
However when you do open a high-yield savings account a soft inquiry may be placed on your credit report, which is harmless though and will not lower or affect your credit score.
Although poor management of the high-yield savings account could result in harm to your credit score.
But when used properly the high-yield savings account won't hurt your credit score as you're saving money using the high-yield savings account and not borrowing money, so it does not show up on your credit report as any debt.
The banks though usually run a soft pull on your credit report when opening up a high-yield savings account to verify your identity, which does not impact your credit score.
And savings activity including on high-yield savings accounts are not listed on your standard credit reports like TransUnion, Equifax and Experian.
Having the savings account and savings in the high-yield savings account reduces the need for other loans, credit cards etc for emergencies, and prevents missed payments or high credit utilization which would hurt your credit score.
The highest yielding savings accounts offer Annual Percentage Yields (APYs) around 4.20% to 4.35%, with some potentially reaching up to 5.00% with specific conditions like direct deposits, though these rates fluctuate and depend on the bank and account requirements.
Top contenders for high yield savings account to consider include Newtek Bank, Peak Bank, Openbank, and potentially Varo Bank, but always check for minimum balances, direct deposit requirements, and withdrawal limits when comparing options.