SoFi has long been known as one of the lowest interest rate lenders for student loan refinances, but the so-called not-a-bank recently rolled out an even more exciting financial product.SoFi Money(TM) is a high-interest (0.20% APY) cash management account with no monthly fee, no ATM fees, and no overdraft fees. The APY is variable and subject to change.See how SoFi Money compares to our picks for the best free checking accounts.
SoFi Money isn’t exactly a traditional checking account – it’s technically a cash management account. With a 0.20% annual yield, SoFi Money has the interest rate of a savings account (remember, the rate is variable and subject to change). But unlike a savings account, the no-fee account allows users to spend money via a debit card or even through physical checks. The result is a hybrid between savings and checking.If you’re the type of person who keeps your emergency fund in your checking account, this is the ideal account for you.
Opening a SoFi Money account takes just a minute at the SoFi website. The account has no minimum, so you can open an account with as little as one penny. You must be at least 18 years old and a permanent resident or citizen of the United States to open an account.
SoFi Money is as close to fee-free as it comes. You don’t pay monthly fees, overdraft fees, or ATM fees (including ATMs abroad).If you use an ATM with a Visa®, Plus®, or NYCE® logo, SoFi will reimburse you for third-party ATM fees.SoFi also doesn’t charge a foreign transaction fee, but it warns that Visa charges a 1% foreign conversion fee which SoFi doesn’t reimburse.There are a very limited number of miscellaneous fees (such as a replacement debit card fee of $20 after your first card). However, most people won’t run into those issues.Remember, this is also subject to change – but we’ll let you know if we find any fees.
The only concerning fine print with SoFi Money is its withdrawal limits. You can never take out more than $610 from an ATM in a day and you can only do $250 worth of peer-to-peer transfers in a day. If you’re the type that wants to withdraw a few thousand dollars to buy a used car, you’re going to have to plan ahead.The other concerning fine print has to do with a lack of print regarding wire transfers. At this time it is not clear whether SoFi Money will allow account holders to do a wire transfer.Finally, SoFi Money operates as a cash management account. This means it’s not subject to FDIC insurance, but is subject to the SIPC rules governing cash. Your money is protected, just differently that it would be at a bank.Once your money arrives at one of their partner banks, it is FDIC insured up to $1.5 million.
The SoFi Money account is a great deal, but I have questions about its value as a hybrid savings and checking account. If you’re prone to spending every dollar in your checking account, SoFi money is not a good place to keep your savings. It’s better to put savings into a savings account rather than a checking account.That said, SoFi Money is an excellent checking account. With no fees, ATM reimbursements, no foreign transaction fees, and great yield, it’s a tough account to beat. If you’re looking for a new checking account, go with SoFi Money.
Disclosures: SoFi Money is a cash management account offered by SoFi Securities LLC, member FINRA/SIPC and is not a bank account. Neither SoFi nor its affiliates are a bank.