Whether you attend a public or private college—in your home state or another—costs are higher than they’ve ever been. In fact, college tuition costs have nearly tripled over the last 40 years, according to Bankrate.
“The cost of college has gotten completely out of control,” agrees Maggie Germano, a financial coach. And it’s not only tuition. “The cost of room and board, books, and other necessary expenses have been going up, too. This can end up putting students and graduates in lots of debt that may make it difficult for them to get ahead in life.”
That’s why earning money as a student in college can be so beneficial to your financial health, both for today and tomorrow. Not only is the money helpful, but it also gives you a chance to build a budget and manage your own finances—critical skills for being financially secure throughout life.
So, how to make money as a college student? The reality is that it can be difficult for students to earn money while keeping up with their studies. But by taking advantage of scholarship opportunities and choosing part-time jobs for students that fit with their schedule, undergrads can enter the next stage of life with a more stable fiscal foundation.
How can students help pay for college?
It’s never too early to begin planning for the cost of college. Even if your parents started a 529 college savings plan for you when you were young, you can look for additional opportunities to lighten the financial load.
The two most common ways to do that, Germano says, are scholarships and financial aid.
Scholarships and grants
“Students should take steps to apply for as many scholarships and grants as they can even before the start of their senior year of high school,” Germano says. “This will help lower the cost burden for them once they begin school.”
Students should speak with their high school guidance counselor to learn about available local, state, and national scholarship programs. Germano also suggests they take the initiative to research online, as new programs are constantly being created.
Financial aid and loans
Many colleges offer financial aid programs for students from lower socioeconomic backgrounds. While it’s important to speak to your university’s financial aid office directly, students should also consider filling out the FAFSA form, as many schools rely on it to assess eligibility for assistance. FAFSA stands for Free Application for Federal Student Aid, and by filling it out, students will learn which federal aid and loan programs they may qualify for.
Even with a scholarship and other types of aid, many students will still need to take out a student loan, Germano says.
Be cautious, though. “Most students take out student loans without understanding the terms or how much it will really cost over time,” she says. “Talk to your parents, guidance counselor, or other trusted adults about this process so that you’re going into it with as much understanding as possible.”
What bank accounts do students need?
Before applying for jobs, students should be sure they have a place to put their money. Germano suggests students open a checking account and a savings account so they can best manage their money in both the near and long term.
Rewards checking account
Opening a rewards checking account is a great place to start because it can provide cash-back benefits similar to credit cards—and offer the flexibility to make purchases online and with your debit card.
Earn cash back with your debit card
Discover Bank, Member FDIC
Just make sure your checking account features overdraft protection in case you accidentally overdraw your account.
High-yield savings account
Many students find it difficult to keep up with their bills, let alone put money away for savings. It’s important to make an effort, however, since any money deposited in a high-yield savings account can earn compound interest, potentially leading to significant growth over time.
You can also use different high-yield savings accounts to save for multiple savings goals, such as buying a car, paying off student loans, and building an emergency fund.
How can you find the best part-time jobs for students?
If you’re wondering how to make money as a student, a smart first step is to see what part-time jobs are available. The right part-time job can provide you with a reliable income without having to sacrifice time for studying and socializing. Check out these ideas for both on-campus and off-campus part-time jobs for students:
On-campus jobs
Finding a job on campus is a convenient option for how to make money as a college student. You won’t have to worry about commuting, and the workplace is designed to accommodate your student schedule.
In addition to searching around your campus, Germano recommends finding out if you qualify for the federal work-study program at your school, based on your FAFSA application.
To get your wheels turning, Germano suggests these on-campus job ideas:
Resident assistant
Administrative assistant for a department office
Campus bookstore associate
Campus café barista
Tour guide
Tutor
IT assistant
Mail room assistant
Research assistant
Dining hall worker
Off-campus jobs
Consider applying for a job off campus. Restaurants, theaters, and stores near campus are often open to hiring students, though these jobs may not be as accommodating as those on campus.
Germano recommends asking upperclassmen what the best part-time jobs for students are. They may point you in the right direction and could even be willing to give you a referral.
You can also look into remote part-time jobs for students that you can do from your dorm room.
What is a good part-time job for students online?
If you’re wondering how to earn money online for students or how to make money from home for students, you can check job boards for part-time remote work.
Translation work, being a digital assistant, and tutoring are some potential online jobs for students to earn money.
If you speak two or more languages, then translation work could be one of the first places to turn when looking for online part-time jobs from home for students. These roles often involve translating videos, podcasts, or documents—and, if you have knowledge in the medical or legal sphere, it can be more lucrative.
Digital assistants can provide a range of services, from social media management to responding to email or scheduling appointments. These jobs may require a certain level of availability, so be certain to discuss the expectations of this job so you know if you can balance the role with your classes and social life.
If there’s one or more subjects where you really excel, online tutoring could be a good way to make extra money without leaving your dorm. It can also be rewarding to help your fellow students find success.
Can side hustles help with earning money as a student?
If you can’t consistently work at a part-time job, consider more convenient ways to make money as a student—like a side hustle.
There are plenty of side hustles to choose from, including driving for a ride-share app, house sitting, and pet sitting.
Many modern side hustles can be managed through an app, offering a lot of flexibility. It means you can adjust your work schedule based on when you’re available, for example pulling back during finals week so you have time to study. It’s how to make money as a college student without having to take on too big a commitment.
How can college students manage their time between work and school?
It’s important to make sure your money-making ventures don’t interfere with your studies.
“Some students need to work in order to live and support themselves in school, so those students will have to work as much as will support them,” Germano says. “But for those who have more flexibility, try to be realistic about how much work you can take on without sacrificing your schooling and other responsibilities.”
She recommends reducing your work hours if your grades are being negatively affected. One tip: Try designating specific blocks of time for your academic tasks. With your work and school time clearly defined, you can then enjoy any free time you have to the fullest, without stressing about how you’ll get everything done.
Germano says it’s also important to set realistic goals. If anything, plan for a little more time than you think you might actually need to write an essay or study for a test. Finishing early will be more motivating than failing to accomplish a task in time.
You can also try different time management and finance apps. There are plenty of free apps out there that can help you organize your time and money.
Get ready for a fun, financially secure college experience
While keeping your finances in line and building a strong foundation for the future is essential, you should be enjoying this time of your life.
“Many students who have to work to put themselves through school can have a difficult time balancing work and school in a healthy, sustainable way,” Germano says. Finding time for fun and relaxation is critical and should be top of mind to avoid burnout and maintain positive mental health.
With these tips, you can find the way to make money as a college student that works best for you. Once the cash starts coming in, be sure you know how to budget as a college student and how to save money as a student. Earning extra money is only one part of money management for students. You also want to know that every dollar is being spent wisely.
Articles may contain information from third parties. The inclusion of such information does not imply an affiliation with the bank or bank sponsorship, endorsement, or verification regarding the third party or information.
Discover Bank does not sell non-deposit investment products (“NDIP”) or provide recommendations regarding NDIP. NDIP are NOT FDIC insured.
How fast is fast enough? Ask Guaranteed Rate, which just launched “5 Minute Approval” for mortgage applications.
This new “innovation” from the Chicago-based mortgage lender allows borrowers to get approved for a home loan in just five minutes.
Interestingly, it comes not long after their Same Day Mortgage, which apparently wasn’t quick enough for some.
It might also be a sign of the times, with mortgage application volume at its lowest levels since the 1990s.
As the name suggests, customers can get approved for a home loan in as little as five minutes and possibly close in just 10 days.
How Does This New 5 Minute Mortgage Approval Work?
Those who are in a really big rush to get a mortgage can now take advantage of Guaranteed Rate’s so-called 5 Minute Approval.
As noted, the company only just launched Same Day Mortgage back in March, but apparently they had their sights set on faster.
And faster is exactly what this is. How it works appears relatively simple.
You visit their website, access the secure portal, sign the initial application package, then upload any requested documents.
This can apparently be done without any human interaction as well, and is about three minutes faster than Rocket Mortgage’s 8-minute full approval launched back in 2015.
To date, Guaranteed Rate has “successfully approved” more than 100 loans within 5 minutes via their pilot program.
It’s unclear how much is needed from the borrower as they didn’t provide the details, but that obviously seems lightning fast.
Also not totally clear if this is a full loan approval or a more basic mortgage pre-approval.
Simply visiting a website and filling out a form can easily take five minutes, so my assumption is they aren’t asking for much here. It’s unclear if credit is pulled, but I’d guess at least a soft pull is required.
If document upload is needed, that would likely take several minutes to track down from other websites.
Perhaps they allow applicants to link bank accounts, pay stubs, and other key information to speed up this process.
Either way, only a cookie-cutter vanilla loan scenario is going to get a mortgage approval in as little as five minutes.
This means a W-2 borrower with good credit and nothing out of the ordinary. And perhaps really fast fingers and a fiber internet connection to make it through the application in record time.
Jokes aside, it’s available for both home purchases and mortgage refinances, assuming you’re the impatient type. Okay, I guess one more joke.
Guaranteed Rate President and CEO Victor Ciardelli notes that you can even be touring a house and generate the insanely fast approval while you’re walking around.
Is Speed Still Necessary in Today’s Cooler Housing Market?
While it feels like a distant memory, there used to be a waiting list to refinance a mortgage at certain banks.
And many loans took two months or longer to close, due to unprecedented demand related to record low mortgage rates.
Several years ago, just getting an underwriting decision could take a couple weeks.
Not so today, with mortgage application volume down to 1996 levels, per the latest report from the Mortgage Bankers Association (MBA).
But despite depressed levels of demand, there are still bidding wars and multiple offers on many home sales because inventory is also rock-bottom.
At last glance, months’ supply was hovering around three months, which is well below a healthy market at 4-5 months of supply or more.
So it’s not just low demand, it’s also a story of very limited supply.
Guaranteed Rate cited Zillow data that found 48% of homes for sale still receive three or more offers.
This means it can still pay to have a mortgage approval in-hand if and when you tour a property.
Of course, a same day approval vs. five minute approval might just be splitting hairs.
Perhaps more importantly, Guaranteed Rate says applicants can close on their home loan in as little as 10 days.
Getting to the finish line that quickly seems a lot more valuable than rushing through an approval at the start.
Read more: Guaranteed Rate’s OneDown Offers a 1% Mortgage and $1,000 Toward Lender Fees
For many people, college is the first time they’re truly in charge of their own finances. While it’s often a challenge, creating and maintaining a savings account for students is a foundational lesson for building healthy financial habits that last a lifetime.
And saving money as a student has its short-term, practical benefits, too.
“Life throws a lot of expenses our way that are hard to plan for—like when your car suddenly refuses to start when you’re running late for class,” says Jacqueline DeMarco, a freelance writer specializing in personal finance content. “That’s why building out a solid emergency fund is something that every college student should prioritize.”
So, how can you save money as a student in college? These savings tips can help give you some monetary breathing room and a financially secure start in adulthood.
Can you make your bank accounts work for you?
First things first: Make sure you have a good place to keep your savings. That means finding a bank that’s convenient and offers the features and benefits that work best for you.
DeMarco notes that students may feel limited to banks available on or near campus.
“If they aren’t happy with their on-campus bank options, college students may find that an online bank is a better fit for them,” DeMarco says. “Not only do online-only banks offer all of their services digitally, they also tend to have lower fees and offer higher interest rates than banks with expensive brick-and-mortar locations to pay for.”
Whichever bank you choose, DeMarco says there are two accounts every new student should strongly consider opening: a checking account and a savings account.
Setting up both a savings account and a checking account can be done online within a few hours at the bank of your choice.
How can students save money?
Once you’ve set up your checking and saving accounts, it’s time to take the next step toward financial responsibility. One of the best ways to save money for students is by setting up a budget.
How much should a college student spend per month? To determine that, DeMarco recommends subtracting your monthly expenses (essentials like food, utility bills, etc.) from your monthly income (whether it’s from a part-time job, student loans, or money from a parent). Doing this simple math will help reveal how much you can safely spend each month on fun stuff like new clothes or going to the movies—after you’ve put aside a portion for your savings, of course.
Looking to add more wiggle room to your budget? Try these money-saving tips for students:
Shop at consignment and thrift stores
Consignment and thrift stores offer previously owned clothes and other items at a discount. The primary differences are that thrift stores tend to be nonprofit organizations, accept more donations, and are generally less selective in what they choose to sell. Consignment stores are often more selective about the donations they accept, and they pass a portion of the sale to the person who donated—or consigned—the product.
DeMarco notes that consignment stores are not only a smart option for saving money—they’re also a way for students to make extra money by selling unwanted items.
Buy used textbooks
Textbooks can cost students hundreds of dollars if they’re new. Instead of paying full price, consider buying or renting used textbooks. “Many college bookstores offer used options, and online platforms often provide affordable alternatives,” DeMarco says.
You might also be able to recoup some of the money you spent once you’ve finished a class by reselling your textbooks to a used bookstore or an online vendor. “Sometimes I could even sell a book for more than I bought it,” DeMarco says, referencing her time as a student. Cha-ching!
Think about meal planning
So busy with classes and assignments that you find spending money at vending machines for on-the-go snacks easier than planning ahead? Stop, shop, and save. Set aside a few hours each weekend to prepare all of your meals for the week to come. Or, if you live in a dorm, hoard some extra items from the dining hall so you’re ready when those late-night study session cravings inevitably strike.
“Planning meals in advance gives students the chance to make a shopping list and stick to it,” DeMarco says. “As a bonus, having their meals planned will make it easier to avoid the temptation to dine out after a long day of classes.”
Explore free activities
Who says you need to splurge to have a good time? There are plenty of ways to have fun without spending money. Chances are, multiple free activities are happening on and around your campus on any given night. You can look up event calendars online or keep an eye out for announcements. Groups and clubs are always looking for participants and potential new members, so you can bet they’ll be happy to have you. (Plus, a lot of these events have free food.)
Ask for student discounts
It’s common for stores on and off campus to offer student discounts. To reap the benefits, always keep your student ID in your wallet, purse, or cellphone case so you can flash it and save some money.
“You’d be surprised how many retailers, restaurants, theaters, and entertainment venues offer discounts specifically for students,” says DeMarco, who relied on student discounts to help build her professional wardrobe as she neared graduation. “Plenty of major mall brands offer these discounts.”
Get a cheap coffee maker
Relying on caffeine to get through those late-night study sessions—or just to get moving each morning? Save money on java by buying a coffee maker and becoming your own barista. DeMarco says that a cheap or used French press is easy to use and could save you hundreds of dollars over the course of a year.
Rethink the car
It can be tempting to bring a car to college—whether for grocery runs or the occasional road trip. But the costs of gas, maintenance, and parking can add up quickly, DeMarco says. So leaving that set of wheels at home is another way for students to save money. Most college campuses are great for biking and walking. And many also provide shuttle buses and rides to essential off-campus places like grocery stores—as well as safe rides at night.
Track your savings
As you put these ways for students to save money into practice, DeMarco suggests tracking their positive impact on your budget. That way, you can see how your small saving techniques can add up over time. There are even money-saving apps for students you can download to measure your progress.
Where should college students keep their savings?
As you’re finding new ways to trim your budget, where should you put the money you’ve set aside? DeMarco says you’ve got a few options to consider:
Rewards checking account
While there are better places for long-term savings, rewards checking accounts are a valuable tool for college students as they begin to manage their own finances. Certain online checking accounts will provide cash back rewards based on how much you spend. For example, the Discover® Cashback Debit Account provides a 1% cash back bonus1 as well as overdraft protection if you overdraw your account.
Checking accounts are an ideal place to keep your spending money, funds for paying bills, and income earnings from part-time jobs or side hustles since they allow you to access the cash you need at any time.
High-yield savings account
Starting a high-yield savings account, like the Discover Online Savings Account, in college can make a dramatically positive impact on the rest of your financial life.
DeMarco recommends a high-yield savings account for any money that students may not immediately need but still want to keep available. “That way, their savings can earn interest, but they can access those funds if needed,” she says.
Call it a sunny day fund—online savings with no monthly fees
Discover Bank, Member FDIC
And putting aside a set amount of money each month into a high-yield savings account can start earning you compound interest. Even depositing a small amount of savings while you’re in college can add up over the years to make a sizable stash down the line.
CD
CDs, or certificates of deposit—especially those with a longer maturity term—can provide a higher return than a savings account. Use CDs for savings that you don’t expect to need over the CD’s term. The term length for CDs can vary widely. For example, Discover Certificate of Deposit terms range between three months and 10 years, with competitive annual percentage yields.
“If a student has a solid chunk of savings they know they won’t touch for a while, they may want to consider keeping their money safe in a CD, where it’s guaranteed to experience growth,” DeMarco suggests.
Retirement account
If you’re ready to start preparing for the more distant future (always a good idea), you can start by contributing money to an IRA, or individual retirement account. While some college students wait until they have a full-time job that offers a 401(k) plan to begin saving for retirement, the sooner you can get a head start, the better.
Discover offers both IRA CDs and IRA savings accounts.
Why not start saving while in college?
There’s really no better time to start saving than in college. To make your savings dreams a reality, set goals at the start of each semester and check your progress periodically. Maybe even reward yourself (nothing too extravagant, of course) for staying on track. Something as small as the occasional special meal or an activity that doesn’t blow your budget can be a fun way to celebrate those financial milestones.
Saving money can also create some amazing memories with the new friends you’ll be making. Ramen might seem dull, but challenging friends to see who can come up with the best recipe using cheap instant noodles can spice up the fun.
College can be a wonderful experience. And weaving these saving tips into that experience can help build the foundation for a comfortable and secure financial future. Just think: It could all start with a high-yield savings account.
Articles may contain information from third parties. The inclusion of such information does not imply an affiliation with the bank or bank sponsorship, endorsement, or verification regarding the third-party or information.
1 ATM transactions, the purchase of money orders or other cash equivalents, cash over portions of point-of-sale transactions, Peer-to-Peer (P2P) payments (such as Apple Pay Cash), online sports betting and internet gambling transactions, and loan payments or account funding made with your debit card are not eligible for cash back rewards. In addition, purchases made using third-party payment accounts (services such as Venmo® and PayPal®, who also provide P2P payments) may not be eligible for cash back rewards. Apple Pay® is a trademark of Apple Inc. Venmo and PayPal are registered trademarks of PayPal, Inc. Samsung Pay is a registered trademark of Samsung Electronics Co., Ltd. Google, Google Pay, and Android are trademarks of Google LLC.
Looking for an app that does it all – automate savings, track spending, investing, and get a free $250 cash advance?
Welcome to my Albert App Review.
Looking for an all-in-one personal finance app that will help you manage your money, save for your future, or even get a free cash advance when you need it?
In that case, you’ve come to the right spot!
In this Albert App Review, I’ll go over everything you need to know about the popular Albert app, and I will discuss its features, benefits, how the app can help you, and more.
You can sign up for the Albert app here.
The Albert app is becoming more and more popular as a money tool that can simplify your life. Instead of needing a bunch of different financial apps, Albert can help you consolidate your phone and need less. The app is a one-stop shop for your monthly financial needs – it automates savings, helps you manage your budget, and has spending, borrowing, and investing tools. With this easy app and the wide range of tools that you can use, Albert has many benefits.
This app reduces the need for multiple apps since it offers a wide range of tools and features.
If you’re looking for a money saving app, Albert can be a great option to start with. There’s a reason why it’s one of the top money apps in the App Store!
9
Albert is one of the most popular personal finance apps, and it is designed to make it easier to save and invest all in one place. This app has features for saving, investing, and budgeting.
Quick Summary – Albert App Review
Albert app is a financial management tool that helps you to save, spend, and invest right in the app
The Genius feature allows you to ask any money question and get a real response from a real person
Albert app’s cash advance feature can get you up to $250
The app is free, but some features do require a monthly subscription
Albert App Review
What Is The Albert App?
The Albert app is a personal finance app that will help you manage your money better by making it easier to save and invest all in one place. This app has features for saving, investing, budgeting, and more.
It has many different features, such as budgeting tools, real-time alerts, and a helpful service where you can ask an expert money questions and get real answers catered to your situation. The app strives to make financial management easier and more organized for everyone.
Albert makes it easy to manage your finances, eliminating the need for visits to physical bank branches or formal phone calls with a financial expert. With the ease of using an app, you can easily track your financial well-being, helping you stay organized, reach goals, and find smart ways to save, spend, and invest. Albert stands out by simplifying your personal finances, all while keeping things very easy to use.
Albert also has a feature where you can get a small cash advance of up to $250 with no late fees, interest, or credit check. This advance is repaid from your next paycheck, giving you the option to avoid high-interest personal loan lenders for those in need of quick cash.
There are no hidden fees, and it is free to sign up. They do have a paid subscription plan that you can sign up for which will give you access to different features such as financial advice from experts. I talk about the paid part further below.
Does The Albert App Give You Money?
Albert provides instant cash advances to users who need small amounts of money before their payday. They do not charge late fees, interest, or run a credit check for this feature.
This can be a great way to not pay high rates on payday loans for when you just need a little bit of cash.
How it works is that the Albert app will send you up to $250 from your next paycheck straight to your bank account. Then, you simply repay them when you get paid. You can pay a small fee to get your money instantly, or you can wait 2-3 days and get the cash advance for free.
Albert Instant is available to all members of the Albert app who qualify, whether they are a paid subscriber or not. Now, not everyone will qualify. To determine your eligibility for a cash advance, they look at things such as if your income is direct deposited into your connected bank account, if your bank account has been open for at least 2 months and has a balance greater than $0, and if you’ve received consistent income in the past 2 months from the same employer.
Albert App Features
The Albert App has many other features, such as:
Banking with Albert
Albert has a user-friendly banking service through its partnership with FDIC-insured Sutton Bank. This includes features like no minimum balance requirement and access to your paycheck up to two days early.
With an Albert account, you can also earn cash back rewards, such as getting a cash back bonus on gas, groceries, and more when you purchase items with your Albert debit card. You can earn an average of $2.00 per gas tank fill-up. You do need to be a Genius subscriber to take advantage of this benefit.
The app also has fee-free ATMs for their paid subscribers at over 55,000 ATMs (when using the Albert Mastercard debit card).
Albert Savings
Albert Savings is the app’s automatic savings tool that is available to Genius subscribers. It saves money from your linked bank account to your Albert Savings account.
This automated savings tool helps you build up your funds without the stress of manual transfers. It analyzes your income and expenses to calculate the amount you can save comfortably. Or, you can manually set your own savings schedule.
The Albert saving feature can help you to save more money and reach your goals.
The money in your Albert Savings account is yours, and you can withdraw it at any time.
Albert Budgeting
The Albert Budgeting feature is super handy and packed with a bunch of useful tools to help you manage your money with ease.
The Albert app has budgeting tools to help you track your income and expenses, find fees that you shouldn’t be paying, and watch your financial progress. The app will send real-time alerts and notifications to help you stay on track with your budget. But, that’s not all.
Other features of Albert Budgeting include:
The Albert app can negotiate your bills so that you can save money. The app will help you lower your bills such as for cable TV, internet, cell phone, and more.
The Albert app also makes it easy to see all of your budgeting info in one quick place, such as tracking your recent bills, seeing how much you’re spending in different categories, and more.
The app will categorize your spending so that you can see where your money is going (this can help you to realize where you may need to cut back)
Also, the app will help you find hidden charges and subscriptions that you may not be using.
These are all very helpful features that can help you save a lot of money in the long run.
Albert Investing
If you’re new to investing or you’re looking for an easier way to invest, the Albert Investing side of the app can make getting started much, much easier.
With Albert Investing, you can start an investment portfolio that matches the amount of investment risk you want to take on and your financial goals. The app even provides investment guidance and lets you start investing without any minimum investment amount needed.
So, that means that you can start investing with Albert Investing with just $1.
You can get started investing in the app by answering some questions (the app wants to learn more about you so that it can make selections based on your personal situation). The app will then choose individual stocks or funds for you to invest in (or, you can choose these yourself if you know what you want to invest in). You can even ask the app to only invest in themes as well, such as companies that are interested in sustainability and the environment. You can then continue to invest automatically or on a recurring schedule. The auto-investing feature can be a great tool if you are looking to save time and invest regularly without really thinking about it.
Albert Genius
This is one of my favorite parts in the app.
The Albert Genius service gives you financial advice from a team of expert financial advisors (this is a team of real human experts that you are able to talk to – not a robot), available through a paid monthly subscription in the app.
You can ask their experts any money question that you have, whether it’s a big or small question, a general question, or something more specific to your personal situation. Your questions can be about anything from credit cards, budgeting, student loans, investing, credit card rewards, life insurance, your personal financial life, and more. These experts will help you answer your questions 7 days a week too. And, there’s no limit to the amount of questions you can ask.
This is a very nice feature to have access to.
Some of the questions you can ask include:
How do I start a budget?
How do I lower my car insurance? Am I paying too much?
How much can I personally afford to spend on a house?
How can I improve my credit score?
How much money should I have in my emergency fund?
Should I use extra cash to pay off debt or invest?
Can you help me to better under travel miles and credit cards?
There are so many different questions that you can ask the team at Albert!
Albert Protect
Albert Protect is a feature for paid subscribers on the app.
The Albert Protect feature monitors your money around the clock. The app will alert you if something suspicious comes up for any of your connected financial accounts or your identity. The app continuously watches for suspicious activity on your credit report, the dark web, data breaches, and unusual charges.
How Does The Albert App Work?
Signing up for Albert is easy!
Simply click here to get started.
Or, you can head to the Google Play or App Store, depending on your device (Android or iOS), and download the app. Once installed, the app will walk you through the setup process. There’s no need to worry about a credit check as Albert doesn’t require one for signing up.
Next, you’ll be asked some questions about yourself such as your name and age. The app is trying to learn more about you. Here’s what Albert says specifically about the questions that they ask: “We do this in order to best serve your needs: a 19-year-old single student has different financial objectives and priorities than a 37-year-old professional with two kids who will be starting college soon.”
Then, you’ll be asked to connect your financial accounts to the app. So, you may connect your bank account that your bills come out of, your credit card accounts, student loans, mortgage, investments accounts, and more. You can connect as many or as little as you want. This information helps the app better serve you so that it can give you recommendations, track your spending, give you alerts, and more.
After you sign up, you’ll have access to the many features mentioned above to help you manage your finances. As you learned above, there are a lot of tools in this app, so I recommend just playing around in the app at first to better familiarize yourself with it and see how it can help you. Maybe sit down for a few minutes at a time until you understand how to use the app in the best way for your financial situation. That’s exactly what I did when I first downloaded the app because it was a little intimidating at first trying to see all of the different things that the app can do. But, it’s so nice that everything can be done right from one app!
To sign up for the app, they do require that you be a U.S. citizen or resident, be at least 18 years old, and have a bank account with a U.S. financial institution. Unfortunately, at this time, the app is not available to those outside the U.S.
How Much Does Albert App Cost?
The Albert app has a lot of different features, so you may be wondering what the cost is or if there are any monthly fees.
The great thing is that many of the tools and features on the Albert app are free.
For example, the Albert App has a fee-free cash advance feature to help you cover unexpected expenses. If you need some extra cash until your next paycheck, you can get up to $250 as a cash advance, with no cost. There are no late fees, overdraft fees, or maintenance fees associated with this service.
You can also start investing with as little as $1 and use the free cash advances feature (as long as you meet eligibility requirements) without the need for a subscription.
Now, the Genius subscription does have a cost.
If you’re looking to unlock all of Albert’s helpful budgeting, saving, and investing tools, you might want to consider their Genius subscription. This subscription starts at just $14.99 per month and gives you access to some helpful benefits like cash bonuses and personalized financial advice. Keep in mind that the true value of the Genius subscription depends on how often you use the app and all its features. So, if you’re a frequent user of the app, it could be a great investment in your financial well-being.
Is Albert App Safe to Use?
Yes, Albert is safe to use.
Let’s start with the basics – the Albert app isn’t a bank, but it teams up with FDIC-insured Sutton Bank to offer you banking services. That means that the money in your Albert Cash account is safe because it’s protected by the Federal Deposit Insurance Corporation (also known as FDIC). That’s a fancy way of saying your funds are insured for up to $250,000.
Your Albert Savings accounts are held at FDIC-insured banks, including Coastal Community Bank, Axos Bank, and Wells Fargo.
When it comes to data security and privacy, Albert takes that seriously too. The app has security measures to protect your sensitive personal and financial information.
As for customer service, if you ever face any issues with the Albert app, you can easily reach out to their support team for assistance. Many Albert app reviews have mentioned their responsive customer service.
Pros and Cons of Albert
Like with any personal finance app, there are pros and cons. I can’t write an Albert app Review and not talk about the pros and cons, so that you can make the best decision for yourself.
Some of the benefits of using Albert include:
The app aggregates all of your accounts – Albert gives you an overview of your financial life by combining all your accounts in one place.
Savings and investments – The app offers customizable savings goals and can create a custom portfolio for your investment needs. It will also keep track of your transactions and help you identify potential savings opportunities as well as avoid late fees.
The Albert app is safe – Your information is kept safe with the same level of security used by major banks, as well as FDIC insurance.
Albert Genius – This feature provides personalized money advice from financial experts (real people, not a robot!) to help you make smarter financial decisions. You can ask any money question and will get personalized advice.
Free cash advance – Get a cash advance on your next paycheck without any late fees using Albert Instant, or access your paycheck up to two days early with direct deposit.
Free ATM withdrawals – This is a feature paid monthly members get to have.
While Albert has many helpful tools and features, there are some potential downsides to using the app such as:
App-only functionality – All features of Albert are limited to the app, which may be inconvenient for some people who prefer to be on their computer instead of their cell phone.
Fees – While many features in Albert are free to use, some, such as the Albert Genius service, require a subscription fee. The fee is quite affordable for the services you receive, though.
No phone calls – If you need to talk to customer support, there is no phone number to call. Instead, it’s all done through the app, text message, or email.
Frequently Asked Questions
Here are answers to commonly asked questions about the Albert app.
Is Albert a trustworthy app?
Yes, Albert is a trustworthy app. Your banking money is FDIC-insured, with coverage up to $250,000, and your investments are SIPC-insured. The app has many financial tools and you can even get personalized advice from experts.
How much can you borrow with Albert?
The maximum for a cash advance is $250.
How do you get $250 from Albert app?
Albert offers a cash advance feature called Albert Instant. After you enable this feature and meet the requirements, you can access funds quickly, sometimes up to $250.
Does Albert give you money right away?
In some cases, Albert can provide instant cash advances or help you get your paycheck up to two days early via direct deposit, depending on your employer and banking situation.
How long does it take to get money from Albert?
Getting your hands on the cash you need from Albert is all about the service you’re using. If you’re in a hurry, instant cash advances could have those funds in your pocket right away. But for paycheck advances and other features, it might take a couple of days before you see the money.
What are the requirements to get a cash advance on Albert?
Requirements for a cash advance with Albert include a history of consistent income, using the Albert app for a certain period, and having a bank account linked.
Does Albert hurt your credit?
Albert does not directly impact your credit score as it is not a lender. However, using the app’s guidance to improve financial management can help you work towards building or maintaining a higher credit score.
Does Albert need your social security number?
Yes, when signing up for the Albert app, it will ask you for your SSN. This is because it is an investment app and they need to verify that it is actually you signing up.
Is Albert or Chime better?
Albert and Chime are different financial apps with different features. Albert focuses on money management, investing, and advice, while Chime is a mobile banking app offering checking and savings account services. Your choice should depend on your financial goals and preferences.
Why is Albert taking money from my account?
If you’re already an Albert user, this may be a troubleshooting question that you have (and perhaps you searched Google and found this blog post). Albert takes money from your account (such as your bank checking account) to fund the services you’ve opted into, such as investments or automatic savings. You can check the app’s settings or contact Albert to learn more,
Is Albert app affiliated with a specific local bank?
Albert is backed by Sutton Bank.
Is the Albert app reliable and secure for banking?
Yes, Albert is a reliable and secure app for managing your finances. It is FDIC and SIPC-insured and has a variety of financial tools and resources to help you improve your financial situation.
How is Albert app customer service?
I did some research and I found great Albert app reviews on their customer service. The Albert app has customer service options within the app and online. They do not have an option to call their customer service and speak on the phone. But, if you’re like me, you probably prefer to get your questions answered via text message or email anyways.
Is Albert app legit?
Yes, the Albert app is a legitimate personal finance app that can help you manage and improve your finances. Millions of people (last I checked, over 10,000,000 people use this app) use the app’s many helpful tools. The app is available for people on Apple or Android devices and it has great reviews.
Who is Albert app best for? Who should not use it?
The Albert app is a helpful all-around financial app that can help many different people. If you’re looking for an all-in-one app to help you save, spend, borrow, and invest, Albert might be a good fit for you. The app is helpful for people who:
Want fee-free cash advances up to $250 (this is a feature that many people like because they don’t have to sign up for high-interest rate loans when they just need something for a short amount of time)
Need an app that gives you an overview of all your accounts in one place
Are interested in automatic savings and easy investing tools
Albert takes the work out of managing your finances and may be helpful for people who are trying to stay on top of their personal budget without having to juggle multiple apps.
However, Albert may not be the best fit for everyone and not everyone needs to have it. So, if you fall into any of the below, then this may not be the app for you
If you’re an experienced investor looking for more advanced trading tools, then this may not be the best investing app for you (the Albert app is basic in this area because I think it caters more to those who are new investors or are looking for something easier to manage)
If you’re someone who doesn’t feel comfortable linking their bank accounts to a third-party app (you will need to link accounts in order to get full use of the app – I understand that some people may not want to do this)
Albert App Review – Summary
I hope you enjoyed my Albert App Review.
I think this is a very helpful app, and I can see why it’s one of the most popular money apps today.
Albert is an app designed to help manage your saving, budgeting, investing, and more, all in one easy app. The app has all of the different money tools that you would want, plus some extras that you may have not realized you needed yet.
Albert is an app that helps you to manage many different parts of your financial life right from your cell phone (it’s not available on computers).
They even have the Genius feature (one of my favorite parts of the app), which is an in-app chat where you can ask one of their experts anything related to money, from credit cards, buying a car, student loans, and more. This is very helpful if you ever have questions about money.
And, if you need cash now, Albert may be able to give you a small advance of up to $250. There are no late fees, interest, or a credit check. If you want to avoid personal loan lenders who have high-interest rates, and only need a small cash advance, then Albert may be a place to start with. How this works is that they send you $250 from your next paycheck. You simply repay them when you receive your next paycheck.
You should keep in mind that investment options don’t include retirement plans and customer service can only be reached via email and text. Though the app’s budgeting tools are more basic compared to budgeting-focused apps, the Albert app still has many, many benefits to help you manage your finances effectively and it’s all from one easy-to-use app.
You can learn more about Albert here.
What’s your favorite personal finance app? Do you use the Albert app?
During the early 2000s, you didn’t need to prove much to qualify for a mortgage.
In fact, it got to a point where it was kind of rare to provide “full documentation” when applying for a mortgage.
The most common doc type at that time was stated income, where a borrower would simply write in their monthly income on the loan application form, without the need for tax returns or pay stubs to back it up.
This was designed for the self-employed and others with complicated financials that didn’t want to provide hundreds of pages of documentation to get the deal done.
These types of loans became extremely popular when home prices surged in value and mortgage payments were no longer manageable for some borrowers.
In order to comply with DTI limits, borrowers simply stated their income and moved on.
Unfortunately, this eventually led to the advent of no doc lending, which didn’t require income, asset, or employment documentation. Instead, it simply required a credit report to determine eligibility.
That Was Then, This Is Now
Today, it’s quite the opposite. Because of the obvious missteps made during the housing run-up, lenders now require all types of documentation to get the deal done.
Most borrowers now need to provide two years of tax returns and two months of bank statements, along with countless disclosures that seem to be growing in number year after year.
In fact, the paperwork situation has gotten so bad that the average mortgage application file now contains some 500 pages, according to Mortgage Bankers Association (MBA) CEO David Stevens.
Included in that estimate are the tax returns, which can easily be 100 pages, along with disclosures, which can total 50 or more pages.
Then there’s the credit report and the asset documentation, the latter of which can be quite extensive depending on how many accounts are submitted to the lender.
And once those accounts are verified, the underwriter might ask for sourcing of funds, or LOEs (Letters of Explanation) for anything unusual.
Along with all that there’s the home appraisal, natural hazard disclosure, title and escrow documents, purchase contract (if applicable), insurance documents, closing documents, and much more.
How You Can Reduce the Paperwork
At the end of the day, you’re not buying a microwave, you’re buying a house, and so the documentation is going to be great no matter how you slice it.
But there are ways you can reduce the load. The best way is to get all your ducks in a row before you even apply for a mortgage.
Yes, disclosures will need to be signed, and reports will need to be ordered. But you can cut down on the amount of paperwork by keeping things clear for the underwriter.
Run your credit a few months before you apply for a mortgage. If there are unwanted surprises, clear them up before the lender pulls your credit.
And don’t apply for any new credit before or during the loan process. That could be grounds for more paperwork and/or flat-out denial.
The same goes for your bank accounts and other assets. Don’t move money around or it’ll just beg for an explanation, aka paperwork.
The cleaner your original loan file, the less you’ll be asked to provide once the underwriter lays eyes on it.
Put simply, be boring and normal. Anything perceived as out of the ordinary will be scrutinized. And you’ll be faxing and scanning documents until the cows come home.
Also remember to provide all pages when asked to submit statements and other documents. Failure to do so will require the re-sending of documents until you get it right.
Finally, create a folder on your computer and label and organize all your loan documents so they can be re-sent to the lender if necessary. Things do get lost in the shuffle, so it’s best to have everything in one convenient place if it’s needed once more.
Business cash management accounts are a hybrid business checking, savings and investment account. This combination lets business owners earn above-average interest while maintaining easy access to their funds.
These accounts typically leverage sweep networks, which distribute your funds across a number of Federal Deposit Insurance Corp. members. This allows you to maximize FDIC insurance coverage without juggling multiple business banks.
Cash management accounts can be a good solution if your business has a lot of idle cash to invest — think startups with seed funding or companies with large operating budgets. But if your margins are thinner, a high-yield business checking or savings account will likely meet your needs.
Business cash management accounts
Brex
Brex’s business account has no monthly fees or minimum opening deposit. You can open up to eight accounts under one employer identification number, allowing you to have separate operating accounts for different business functions, like payroll and accounts payable.
Account holders can designate a portion of their balance to be invested in a business money market account that earns 4.92% annual percentage yield (APY), as of this writing. Funds deposited in a Brex business account are held across a network of FDIC-insured banks, providing up to $6 million in coverage.
You cannot deposit or withdraw cash from a Brex business account. Instead, you can add or move funds via check, ACH or wire transfer. Read our full review.
Mercury
Mercury’s free business checking and savings accounts are eligible for up to $5 million in FDIC coverage through its partner banks, which participate in sweep networks to maximize coverage. These accounts do not earn interest, but eligible businesses can apply for a Mercury Treasury account to unlock the higher yields characteristic of a cash management account.
Mercury Treasury accounts tap into low-risk investments, like Treasury bills and money market accounts, and earn up to 5.43% APY as of this writing. Investments made through your Treasury account are insured by the Securities Investor Protection Corp. (SIPC) for up to $500,000 — not the $5 million in FDIC insurance.
You need at least $500,000 in your Mercury Checking and savings accounts to open a Mercury Treasury account. Monthly fees for Mercury Treasury start at 0.05% of your deposits across all Mercury accounts. Read our full review.
Arc
Arc’s cash management account is comprised of three accounts: Operating, Reserve and Treasury. There’s no monthly fee for operating and reserve accounts; treasury accounts have a monthly fee that starts at 0.02% of your account’s value annually.
Arc’s reserve account earns up to 4.00% APY and its treasury account boasts an APY of up to 5.26%, as of this writing. The actual yield on Arc Treasury accounts will depend on how you divvy up funds between money market and Treasury bills.
Money held in Arc Treasury accounts is FDIC insured up to $5 million through sweep networks and partner banks. Operating and Reserve accounts are FDIC insured up to the standard $250,000 per depositor, per account.
Rho
Rho offers business checking and treasury accounts, as well as corporate cards and accounts payable services, for incorporated businesses with at least $1 million in annual revenue or equity capital.
Treasury accounts earn up to 5.06% APY, as of this writing, and offer up to $75 million in FDIC insurance via a partner network. Checking accounts do not earn interest and are FDIC-insured up to $250,000. Rho accounts do not include ATM access, so you can’t withdraw cash, but there are no fees for ACH or wire transfers.
All Rho account holders are paired with a dedicated support specialist, plus general customer support (via phone or live chat) from 8 a.m. to 9 p.m. ET, seven days a week.
What is a business cash management account?
Business cash management accounts are a combination of multiple business bank accounts offered by one financial institution, allowing you to easily manage and move funds between accounts. Most business cash management accounts include the following:
Operating account: Used for day-to-day operating expenses, this account functions similar to a business checking account. Some cash management accounts allow for multiple operating accounts, so you may have one for payroll and another for vendor payments, for instance.
Reserve account: This is essentially a savings account, and it may or may not earn interest, depending on the financial institution. At Mercury, for example, savings accounts do not earn interest, but Mercury Treasury accounts earn up to 5.43% APY. Arc’s reserve accounts do earn interest — up to 4.00% APY — but Arc’s Treasury account earns up to 5.27% APY, as of this writing.
Treasury account: Most business cash management accounts let you allocate funds in your treasury account across high-yield savings, business money market accounts and treasury bills. Money in treasury accounts can earn 5% APY or more, depending on the account and where you allot your money.
Personal cash management accounts are usually offered by brokerages. However, business cash accounts are typically available through fintech companies like Brex and Arc, which offer business banking services through an FDIC-insured bank or investment broker. And most leverage sweep networks to offer FDIC insurance well beyond the standard limit ($250,000 per depositor, per account type).
Benefits of a business cash management account
Potentially high APY. The best business cash management accounts advertise rates of 5.00% APY or higher. But what you actually earn depends on the account you choose and how you allocate your funds.
Streamlined money management. Business cash management accounts may consist of multiple accounts, with funds spread across varying investments. But you can easily view and manage everything from one dashboard.
No transaction limits. Brick-and-mortar business banks typically limit how many transactions you can process each month. And most business savings accounts only allow six transfers or withdrawals per month. But business cash accounts have no such limits. Account holders can move money in and out of accounts as needed, though some withdrawals may be delayed — more on that below.
Increased FDIC coverage. Deposit accounts are typically insured by the FDIC for up to $250,000 per depositor, per account. But business cash management accounts often partner with a network of banks to spread funds across multiple institutions. These “sweep” networks allow you to unlock greater FDIC insurance coverage while only dealing with one financial institution.
That extended FDIC coverage may not apply to all of the funds in your cash management account, though. With Arc, for example, funds allocated to the Treasury account are FDIC insured up to $5 million, but money held in your operating or reserve accounts is subject to the standard FDIC coverage limit.
Drawbacks of a business cash management account
Substantial cash flow needed. While some business cash management accounts don’t have a minimum balance requirement, you do need a large operating budget and a chunk of idle cash to reap the benefits of this type of account. Companies with smaller cash reserves can achieve similar benefits with separate business checking and high-yield business savings accounts.
Limited access to cash. Cash management accounts are generous with free ACH and wire transfers, but cash is less accessible. Most business cash accounts don’t allow cash deposits, and some, like Brex, do not allow you to withdraw money at an ATM.
Lack of banking diversity. While business cash management accounts do leverage a network of banks to extend FDIC insurance coverage, you’re still dealing with a singular entity — typically a financial technology company. Should the fintech or its banking partner fail, your funds, while insured, may be unavailable for a time. Using separate accounts across multiple business banks can help minimize the disruption to your operations should any one of those banks collapse.
Before most house hunters can close the deal, they need to qualify for a mortgage. Learning how to apply for a mortgage in advance — and breaking the process down into digestible steps — can help applicants feel better prepared and avoid any unpleasant surprises during the process. (Good news: The mortgage application process is one of those things that is more complicated to explain than to experience!)
Ready to learn how to apply for a home loan? Here are the nine steps in the mortgage process, including moves you can make that may expedite your approval.
1. Estimate Your Budget
Before any mortgage application, your first step should be figuring out how much house you can afford. Being realistic about your budget — factoring in income, debts, monthly spending, down payment savings, and more — can keep you from shopping outside your budget.
Certain budgeting guidelines can help you determine what kind of monthly mortgage payment you can afford. You’ll also want to figure in homeowners insurance, property taxes, and (possibly) private mortgage insurance, or PMI. Some popular methods for calculating your mortgage budget include:
• The 28% rule: No more than 28% of your gross monthly income should go to a mortgage payment.
• The 35% / 45% guideline: Your total monthly debt should be no more than 35% of your pre-tax income or 45% of your post-tax income.
First-time homebuyers can prequalify for a SoFi mortgage loan, with as little as 3% down.
When calculating your budget, don’t forget the down payment. A higher down payment can yield a lower monthly payment — and putting down 20% or more could help you avoid PMI — but don’t drain your savings for a down payment. You want to have savings on hand should you need to cover emergency home repair costs down the line.
💡 Quick Tip: SoFi Home Loans are available with flexible term options and down payments as low as 3%.*
2. Choose a Mortgage Type and Term
There are many different mortgage types, and choosing one will depend on your income, down payment, location, financial approach, and lifestyle.
Some choices you’ll need to make at this stage of the mortgage process are:
• A conventional home loan or government-insured loan (FHA loan, USDA loan, or VA loan)
• A fixed-rate or adjustable-rate mortgage
• Your repayment term: typically 15, 20, or 30 years
• A conforming or nonconforming loan (such as a jumbo loan)
• If you should opt for an interest-only mortgage
A good lender will walk you through your options, whether it’s a HUD home requiring an FHA mortgage or a high-priced home with a jumbo loan.
3. Get Preapproved
At this stage in the mortgage application process, you can shop around for multiple mortgage lenders and even get prequalified. Look for lenders that not only offer you a great rate but that are also willing to help you navigate the mortgage process. Here are a few questions to ask a lender to narrow down your list.
Found the perfect lender? Then it’s time to get preapproved. During the mortgage preapproval process, you’ll complete a full mortgage application. The lender will perform a hard credit inquiry and issue a letter confirming your ability to borrow a certain amount of money.
In general, the better your credit score, the better the mortgage rate you’ll be approved for. If your score is above 740, you’ll qualify for the best rates. But in general, you’ll need a minimum 620 credit score to buy a house.
A preapproval letter, usually good for up to 90 days, can improve your odds of winning over a seller in a bidding war. In competitive markets, having a preapproval letter may even be a requirement.
Getting preapproved requires some work on your part. You’ll need to furnish the lender with proof that you can afford the mortgage, which typically includes the following documents:
• Bank statements
• Paystubs
• Tax returns
• W-2s
• Retirement account statements
• Gift letter (if you received help from a family member to fund your down payment)
• Identification
Mortgage lenders prefer borrowers who have stable, predictable incomes. A steady employment history signals to the lender that you have regular income coming in to make the monthly payments of a mortgage. That’s why it’s easier to get approval as a W-2 employee than as a self-employed worker.
In general, lenders like to see two years of employment on a loan application. Self-employed individuals will submit two years of tax returns.
Recommended: What’s the Difference Between a Hard and Soft Credit Inquiry?
4.Find a Property and Make an Offer
Your real estate agent will guide you through the process of finding a property and making an offer on a house. The offer is typically written by the buyer’s agent on a standardized form.
Only make offers on properties that fall within the amount you’ve been preapproved for. Otherwise, the lender will need to re-process your full application again. If you don’t qualify for the new, larger amount, you may not be able to secure any loan on the property.
Your offer will typically include earnest money — a good-faith deposit you’re making on the house. It’s usually 1% to 3% of the offer price, and it’s meant to make your offer more attractive to the buyer.
If your offer is accepted, you’ll send the signed paperwork to your lender.
5. Submit a Mortgage Application
Lenders are required to do a second credit check before final mortgage loan approval and will likely ask for further documentation. If you’ve opened a new account, changed jobs, or made a major purchase since preapproval, those actions will have to be vetted.
Responding quickly to your lender’s requests for documentation can help keep your application on track. Your lender likely has most of the required forms from your preapproval application, but in general, you’ll need:
• Documentation of income: W-2s or 1099s, profit-and-loss statements if self-employed, paystubs, Social Security and retirement account info, information on alimony and child support, etc.
• Documentation of assets: Bank accounts, real estate, investment accounts, gifted funds, etc.
• Documentation of debts: Any current mortgage if you own a home, car loans, credit cards, student loans, etc.
• Information on property: Street address, sale price, property size, property taxes, etc.
• Employment documentation: Current employer information, salary information, position/title, length of time at employer, etc.
💡 Quick Tip: Your parents or grandparents probably got mortgages for 30 years. But these days, you can get them for 20, 15, or 10 years — and pay less interest over the life of the loan.
6. Be Patient and Avoid New Debt
The average time between submitting a mortgage application and closing is 50 days. During this period, it’s wise to observe a self-imposed “credit freeze.” That is, don’t run up your credit cards beyond what you usually spend each month. Put off major purchases. Don’t apply for new credit cards, auto loans, or take on any other new debt. And, of course, make sure to pay all your bills on time.
If there’s any significant change in your credit history, your closing may be delayed or even derailed. Should something major come up (like an expensive medical emergency), call your lender to let them know.
It can be tough feeling like your life is on hold while you’re waiting for your mortgage application to be processed. Try to be patient and just let the process play out. Now is a good time to reach out to friends and family who have been through the mortgage loan process before and commiserate. Consider this your orientation into the homeownership club.
Recommended: What’s a Mortgage Commitment Letter?
7. Get a Home Inspection
Home inspections may not be required — but they’re a crucial part of the mortgage loan process. Hire an inspector (your real estate agent may have recommendations, but you can shop around) to thoroughly check the property inside and out for undisclosed problems. If the inspector uncovers expensive issues, you may negotiate for a price reduction or back out of the deal without penalty.
Inspectors will look for a wide range of issues, but some inspectors are more thorough than others. Review this home inspection checklist to make sure your inspector will cover all the bases. In some cases, a general home inspector may find an issue that requires a more specific expert to take a look (and yes, that’ll cost more money — but it may be worth the cost).
Don’t let the infatuation with your dream home blind you. If there are serious issues that come up during the inspection and the sellers won’t budge on price (or agree to fix them before closing), seriously consider walking away. You won’t recoup the money you paid for the inspection — a home inspection costs between $300 and $500 — but if it keeps you from investing in a money pit, it’s money well spent.
8. Go Through the Mortgage Underwriting Process
A major part of mortgage loan processing is the underwriting process. But what is underwriting? The underwriting process begins after you complete your mortgage application and ends after all the documentation has been completed and includes the appraisal. During this process, the underwriter examines the borrower’s financials, as well as the appraisal, title search, and proof of homeowners insurance.
An appraisal is an independent property evaluation of a home’s value. It will describe the home and what makes it valuable. Factors that affect the appraisal value include the location, condition, amenities and features, and market conditions in the area.
A lender requires a home appraisal to ensure that it isn’t lending more than the property is worth. If the appraisal comes in too low, the lender won’t lend extra money to cover the gap. Buyers will need to cover the difference with their own money or renegotiate the price with the seller to match the appraisal.
Once the appraisal is complete and all documentation has been reviewed and verified, the underwriter will recommend approval, denial, or pending. A pending decision is given when information is incomplete. You may still be able to get the loan by providing the documentation asked for.
After underwriting approval with a “clear to close,” you’re set to close on your loan.
Recommended: Local Housing Market Trends
9. Close on Your New Home
Closing day is when all parties sign the final documents, and ownership is legally transferred from the sellers.
In the days prior to your close, the lender should provide a final list of closing costs. Closing costs are typically 3% to 6% of the mortgage principal and consist of:
• Lender fees
• Appraisal and survey fees
• Title service
• Recording fees
• Home warranty costs
• First year’s premium of PMI
You can pay closing costs by wire transfer a day or two before, or by cashier’s check or certified check the day of closing.
Before arriving at closing, however, you’ll want to do a final walk-through of the property. During this walk-through, confirm that the sellers have made all the repairs agreed to — and that the buyers haven’t removed anything, like appliances, that were meant to be left, per the purchase agreement.
In the past, buyers and sellers, their agents, and lawyers would gather in the same room to sign the paperwork at closing. In recent years, remote online closings have become more common.
The Takeaway
Applying for and securing a home mortgage loan follows a simple process that can seem complicated the first time you do it. But if you reply to questions promptly and are organized with your documents, it’s actually pretty simple — even if it does involve a little waiting time.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% – 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It’s online, with access to one-on-one help.
SoFi Mortgages: simple, smart, and so affordable.
FAQ
What are the first steps of applying for a mortgage?
The first step when applying for a mortgage is estimating how much house you can actually afford. Once you have an idea of your budget, you can research mortgage types and lenders and get preapproved for a loan.
What are the steps of mortgage loan processing?
During mortgage loan processing, an underwriter will first review your personal information and information about the sale property to determine approval. The potential lender will request an appraisal of the home, and also request additional documents from you as needed. Finally, the underwriter will recommend approval or denial of the loan.
How long is a mortgage loan in processing?
It takes a little under two months from the date you submit your mortgage application and close on the house — the average timeline is 50 days. In some scenarios, you may be able to close in as little as 30 days.
How do you know when your mortgage loan is approved?
Your mortgage loan officer will contact you when your loan is approved. They may call you to give you the good news, but you’ll want to see it in writing so watch for an email as well.
What should I avoid after applying for a mortgage?
You want to keep your financial situation as stable as possible during the mortgage application process. That means don’t open new credit accounts, and keep your credit utilization down (no extra swipes on those credit cards). Don’t fall behind on any bill, either.
Photo credit: iStock/MicroStockHub
*SoFi requires PMI for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Minimum down payment varies by loan type.
SoFi Mortgages Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.
SoFi Loan Products SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
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.
College life is all about getting a great education, getting to know your roommates and classmates, exploring interests and activities, and forging your own adult identity. But it’s also a perfect time to establish some good money habits that will set the scene for success today and tomorrow.
From developing a budget to opening bank accounts, you’ll have ways to make your money work harder for you and grow over time so you can achieve your goals. And it can be pretty simple, too, so it won’t interfere with study sessions or hanging out at the student center.
Learn the 10 best strategies for good money management here.
10 Tips for Managing Your Money As a College Student
Here are 10 money management tips that help you spend less and save more both during and after college.
1. Setting up a Basic Budget
Budgeting may sound complicated, but making a budget is simply a matter of figuring how much is coming into your bank account each month and how much is going out, and making sure the latter doesn’t exceed the former.
To get started, you’ll want to list all of your sources of income, such as from a job or family contributions.
If you are going to be living off a fixed amount of money for each semester, say from summer earnings or money from your family, you may want to divide this lump sum by the number of months you need to make this money last.
Once you know how much you have to live on each month, you’ll want to make a list of fixed expenses that you will be responsible for paying, such as cell phone or car payment, or maybe even rent if you live off campus.
Next, you’ll want to subtract your fixed expense from your monthly spending allotment. This will give you the amount you have left over to cover variable expenses, such as eating out, buying clothes, and entertainment. You can then come up with target spending amounts for each category.
Doing your best to stay within these spending limits can help ensure that your money lasts until the end of the semester, and help you avoid running up costly credit card debt.
💡 Quick Tip: Banish bank fees. Open a new bank account with SoFi and you’ll pay no overdraft, minimum balance, or any monthly fees.
2. Opening up a Savings Account
You might feel like you don’t have enough income to start saving money yet, but even just putting a small amount away each month can add up over time.
For example, if you’re able to set aside $50 a month now, you may soon have a decent nest egg that can help pay for something fun, like a road trip over the next school break.
What’s more, being diligent about saving money each month can help cultivate a habit that will serve you later when you can afford to save more in your nest egg and also for retirement.
Ready for a Better Banking Experience?
Open a SoFi Checking and Savings Account and start earning 1% APY on your cash!
3. Buying Used Textbooks (and Selling Yours When Done)
Textbooks can be so expensive! Fortunately, there are a number of ways to save money here.
One option is to buy used whenever you can. You’ll want to be sure, however, that you are getting the version the professor wants. If you have an earlier edition, you might struggle to find the content if the book has since been modified. Getting the digital version of a book can also yield savings.
Another option is to rent what you need from a third-party bookseller, such as Amazon or Chegg. You can often rent textbooks for an entire semester for significantly less than buying new, and may even be able to highlight them.
For books that you purchase (new or used) that you won’t need to refer to in the future, consider selling them when you’re done to recoup some of the expense.
4. Using Credit Cards Sparingly
Credit card companies love college students, and many may try to lure you into applying for cards. You’ll want to proceed with caution, however.
While having a credit card as a student can be a good idea–for convenience, as a backup for emergencies, and to start building credit history (more on that below), you’ll want to be careful that you don’t run up credit card debt.
If you charge more than you can afford to pay off at the end of the month, you can end up paying a high-interest rate on the balance, which can make it even hard to pay off.
As a result, it can be easy for college students to find themselves digging a debt hole that can be hard to climb out of.
If you choose to sign up for a new card, you may want to look for a rewards credit card. These can let you rack up points you can use to get products or travel perks, but only charge what you can afford to pay back quickly.
If you choose to sign up for a new card, you may want to look for a rewards credit card that will let you rack up points you can use to get products or travel perks–and only charge what you can afford to pay back quickly.
5. Establishing Your Credit Score
A credit score is a three-digit number, typically between 300 and 850, designed to represent your credit risk, or the likelihood you will pay your bills on time.
Building your credit history might not seem like a priority when you’re still in school, but you’ll need it in the future if you want to finance a car, buy a house, or qualify for the best credit card offers. Your credit can even affect your job prospects and your ability to rent an apartment.
One good strategy is to use your credit card judiciously. If you make small purchases and regularly pay the balance off in full, you can avoid racking up interest charges but still get that boost to your credit score.
If you have student loans, you may also want to consider making small payments (even just $25 to $50) while you’re still in school to start paying down interest and have some positive repayment history on record.
If you start building a solid credit history now, you will likely be able to get better deals on lending products like mortgages, car loans, and credit cards in the future.
💡 Quick Tip: Are you paying pointless bank fees? Open a checking account with no account fees and avoid monthly charges (and likely earn a higher rate, too).
6. Finding Free Stuff
One highly effective way to stretch your money is to find freebies.
Facebook has groups where people can post items they no longer want. You might be able to score free clothes, furniture, or room decor.
Freecycle and NextDoor also have listings for things that people are giving away. You can also find free items on Craigslist (you’ll find the “Free” section under the “For Sale” heading on the main page for your city).
7. Learning to Cook and Eating out Less
You may find you get tired of cafeteria fare and ramen. At the same time, you may not want to don’t blow your budget on eating in restaurants every weekend.
If you have access to a kitchen, you might want to consider purchasing ingredients from your local supermarket and putting together some simple, tasty meals, instead of eating out. This can be a major way to save money on food.
If you’re not much of a cook, you may want to go to some food blogs and recipe sites like Allrecipes or Serious Eats to find some easy recipes and watch a few how-to videos. You could also find tons of cooking videos on YouTube.
Having some go-to recipes in your arsenal can pay off now, and also down the line when you’re working and living on your own (and don’t have to rely on expensive take-out or unhealthy fast food for dinner every night).
8. Starting an Emergency Fund
Starting an emergency fund or back-up savings fund is an important part of anyone’s long-term financial health.
Life can be unpredictable, and your emergency fund serves as a safety net that you can fall back on for those “rainy days” where you find yourself facing an unexpected expense or other financial setbacks.
Having an emergency fund can also help keep you from having to rely on credit cards to get through a financial challenge.
How much you should put aside for emergencies each month is up to you and your financial situation. The key is to start saving something each month, no matter how small the amount may initially seem.
When starting your emergency fund, it’s a good idea to fund the account regularly. Consider setting up an automatic transfer to your savings so you do not have to think about it.
Ideally, your emergency fund should also be set up in a separate savings account so you won’t be tempted to spend the money on something else.
9. Getting the Most out of Your Student ID
You may only think of your ID card as a form of identification and a way to get into college sporting events. But there are actually a number of additional benefits that come with a student ID, and many can help you save money.
You may find that businesses, especially those near universities, will offer students discounts when they show a student ID card.
Next time you go to the movies, shop for school supplies, or get a new haircut, it can be a good idea to ask if they offer any discounts for local college students.
In addition, many national and online retailers, including major clothing, sneaker, and computer brands, offer discounts to college students.
You may also be able to use your student ID to get a better deal on your cell phone plan and streaming services.
10. Getting Started with Investing
Investing when you’re young is one of the best ways to help your money grow over time.
That’s thanks to compound earnings, which means that any returns you earn are reinvested to earn additional returns. The earlier you start investing, the more benefit you gain from compounding.
Investing in the stock market also isn’t as complicated as you may think. You can open a retirement account, like a traditional or Roth IRA, or a brokerage account (for nonretirement investing) online, often with a minimal amount of money.
You may also be able to schedule automatic withdrawals from your bank account to your investment account each month.
It’s important to keep in mind, however, that all investments have some level of risk because the market moves up and down over time.
The Takeaway
College can provide a great opportunity to develop the money skills you’ll need after you graduate. By learning some basic money management techniques now, you can feel confident about your ability to handle your finances well after graduation.
In 10 years, you will likely thank yourself for putting in the effort to learn how to set and stick to a monthly budget, use credit cards wisely, save money, and build your credit score.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
Better banking is here with up to 4.50% APY on SoFi Checking and Savings.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
SoFi members with direct deposit activity can earn 4.50% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government 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, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.
SoFi members with Qualifying Deposits can earn 4.50% 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 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 4.50% 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 8/9/2023. There is no minimum balance requirement. Additional information can be found at http://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.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
While federal or state tax debt doesn’t show up on your credit report, it can have an impact on your credit down the line. Find out more about how tax debt impacts your credit, including your ability to pay debts and get loans, below.
In This Piece:
Does the IRS Report to the Credit Bureaus?
The IRS doesn’t report tax debt or payments to the credit bureaus. So, your credit won’t take a direct hit if you’re late on a tax payment. At the same time, you won’t get any sort of positive credit impact for making payments on tax bills on time.
Credit bureaus only report items that are reported to them. Creditors, such as banks and credit card companies, report account information to one, two or three of the credit bureaus. They aren’t required to report to any or all of them, which is why your credit report can be different with each major bureau. The IRS doesn’t report at all, even if you sign an agreement with them to pay off your tax debt in installment payments over time.
Tax liens, which are public records, used to show up on credit reports and seriously impact credit scores. However, in April 2018, the three major credit bureaus agreed to remove tax liens and some other types of public records from credit reports, so they no longer show up.
Consequences of Not Paying Your Taxes or Paying Them Late
If you don’t pay your taxes on time, you can incur interest, fees, and penalties. These amounts substantially drive up how much you owe in taxes, leaving you struggling financially to manage your budget. You might miss payments on other types of debt as you try to pay taxes, and those other missed payments may be reported to the credit bureaus. That can reduce your credit score.
Another tactic for paying off rising tax debt involves taking out a personal loan or using credit cards. This can increase your credit utilization ratio, which can also drive down your credit score.
Tax Liens
If you go for a period of time without paying your taxes or making arrangements with the IRS to do so, the federal government may issue a tax lien. This is true for state tax debt too.
Tax liens are assessed on property you own, such as a home or car. A lien puts the IRS or other tax agency in line to receive profits from the sale of the property in the future. For example:
Levies
Another consequence of not paying your taxes can be a levy. A levy occurs when your property is seized to cover a tax debt. Types of properties that might be levied include homes, cars, certain types of personal property and even cash in bank accounts.
Wage Garnishments
The IRS may also be able to get an order for a wage garnishment. This means a certain amount of every paycheck is paid to the IRS by your employer, reducing how much you take home.
Problems Getting a Loan
While tax debt doesn’t get reported to the credit bureaus, liens are public record. Lenders can look up public records to find out if you have any tax liens, and this can inhibit your ability to get a loan. This is especially true if you’re trying to get a mortgage. Lenders usually require that you make good on any existing tax liens before you can qualify for a mortgage.
What to Do When You Can’t Pay Your Taxes on Time and in Full
None of these consequences occur just because you can’t pay your taxes in full on April 15 of the year. The IRS has programs in place to help people pay their tax debt over time. It’s important to communicate with the IRS as soon as you know you can’t pay your tax debt so you can get an installment plan. If you’ve never had an installment plan and your tax debt is under a certain threshold, you can usually qualify automatically for a payment plan.
Do What’s Best for Your Finances
It’s important to consider your entire financial picture when making decisions about your taxes. If you owe a lot of money to the IRS, consider reaching out to a tax attorney or professional to find out if there are any relief programs you might qualify for. And keep an eye on your credit so you understand what’s impacting it and how you might improve it. Get started with ExtraCredit to see your credit reports and 28 of your FICO scores.
When it comes to your money, safety first. Understand what bank accounts are FDIC-insured to ensure your deposits are protected.*
August 16, 2023
Bank failures aren’t common—but they can happen, typically when a bank is no longer able to cover its liabilities. If depositors get nervous about the viability of their bank, they might withdraw money en masse, known as a bank run. Bank runs can accelerate a bank’s failure, and ultimately the Federal Deposit Insurance Corporation (FDIC) will take control of the bank.
But depositors can rest easy if their bank is FDIC-insured. FDIC insurance is a program managed by an independent agency of the United States government designed to protect customers in the event of bank failure. The standard FDIC insurance amount is $250,000 per depositor, per insured bank, per account ownership category. That maximum amount of $250,000 applies for each bank you have a qualified account with, as long as the bank is an FDIC member. (Discover Bank is an FDIC member.)
So, what bank accounts are FDIC-insured? If you’re opening a bank account, it’s important to understand what FDIC insurance is and what it covers.
What is the history of FDIC insurance?
The Banking Act of 1933 was passed in response to the bank failures of the Great Depression. In addition to other reforms, the act created the Federal Deposit Insurance Corporation. In 1935, the government made the FDIC permanent and tightened its standards.
Banks must be able to prove that they meet certain eligibility requirements to qualify for FDIC insurance, which is funded by payments from covered banks. In the rare event of a bank failure, those funds are used to reimburse the insured accounts of customers at that bank, with certain limits and restrictions.
What are FDIC insurance limits?
Today, FDIC deposit insurance covers up to $250,000 per depositor, per insured bank, for each account ownership category. Coverage wasn’t always that high, however.
When the FDIC was established, accounts were only insured up to $2,500. Over the course of the century, the covered amount was gradually raised in an attempt to keep pace with inflation. According to the FDIC, the most recent coverage increase occurred in response to the 2008 financial crisis, when the covered amount went from $100,000 to the current $250,000.
How do account ownership categories affect FDIC insurance limits?
You can increase your FDIC coverage by opening multiple account ownership categories at the same bank. For example, if you open a business account and a personal checking account at the same bank, each would be covered up to the maximum per law.
A joint bank account, meanwhile, will also be insured separately from a single-ownership account and for each owner of the account. That means if you open an individual checking account and a joint checking with your partner, those two accounts would qualify for $750,000 of total insurance.
Note, however, that this applies to different ownership categories but not to all different types of accounts. That means an individual savings account and an individual checking account belonging to the same owner at the same bank will qualify for a total of $250,000 in FDIC insurance.
Are checking accounts FDIC-insured?
Checking accounts at FDIC-insured institutions are among the deposit products covered by FDIC deposit insurance, according to the FDIC. For your checking account to be eligible, there’s nothing you need to do. The funds you deposit into a checking account at an FDIC-insured bank are automatically protected up to the maximum per law.
Is an online savings account FDIC-insured?
All savings accounts offered by FDIC-insured institutions, including online savings accounts, are covered up to the maximum per law. For all FDIC-covered accounts, both the original deposit amount and the accrued interest within the limit will be protected.
When opening an online account, it’s especially important to double-check that the type of account you’re opening is FDIC-insured. For example, according to the FDIC, crypto savings accounts are not protected by FDIC insurance, even if offered by an institution that is otherwise FDIC-eligible.
Legitimate financial institutions should make clear which accounts are FDIC-insured on their websites. To be certain, always contact the financial institution directly.
Are high-yield savings accounts FDIC-insured?
High-yield savings accounts at FDIC-insured institutions are protected up to the maximum per law, according to the FDIC. If the interest on a savings account causes it to grow beyond $250,000, only the funds up to the limit will be guaranteed protection.
As with checking accounts, if you want to protect more than $250,000 in savings, you’ll need to open accounts under different ownership categories or have accounts at multiple banks.
Is a money market account FDIC-insured?
According to the FDIC, funds deposited into money market accounts offered by FDIC-insured institutions are protected up to the maximum per law, just like FDIC-insured savings accounts.
Money market mutual funds, however, are not protected by the FDIC. Why not? Money market accounts are a type of savings account, while money market mutual funds are a type of investment account. Investments are generally not eligible for FDIC protection.
Is a certificate of deposit (CD) FDIC-insured?
Certificates of deposit at insured institutions are covered by the FDIC up to the maximum per law.
A CD can offer better rates than a high-yield savings account, but CDs work a little differently than savings accounts. With a CD, your money is earning interest at a fixed, guaranteed rate, but if you withdraw the money before the end of its term, you may pay a penalty.
Are Individual Retirement Accounts (IRAs) FDIC-insured?
IRAs, or Individual Retirement Accounts, are also covered up to the maximum per law at FDIC-insured institutions.
For an account to be covered, it generally needs to be “self-directed,” meaning the account holder chooses how their contributions are applied. This could include 401(k)s offered through a job or IRA saving accounts that you choose to open on your own.
IRAs can also include CDs and money market accounts. Retirement CDs, money market accounts, and similar financial products are eligible for coverage.
While stock and bond investments are a common feature of many retirement plans, they are not eligible for FDIC coverage. That means it’s possible that only a portion of your 401(k) or IRA will be covered.
If you’re uncertain if a retirement account or asset is covered, check with the institution providing it.
Can you increase your coverage by adding beneficiaries?
It’s possible to increase your coverage by creating a revocable trust account with multiple beneficiaries.
Trusts are accounts that pay out to a designated beneficiary or beneficiaries after the account holder passes. FDIC coverage applies to each beneficiary for up to five beneficiaries. In other words, a trust account with one owner and five beneficiaries could be covered up to $1,250,000.
If the trust is jointly held between two owners, the FDIC will provide up to $250,000 in coverage per beneficiary per account holder. That means if you want to maximize your coverage to the absolute limit, it would be possible to create a jointly held trust with five beneficiaries insured up to $2,500,000 in total.
It’s important to note that this information is all according to FDIC rules taking effect on April 1, 2024. Under current rules, irrevocable trusts, which cannot be altered after they’re created, can only be insured up to $250,000 regardless of the number of beneficiaries. The new rules treat both types of trusts identically and add the five beneficiary cap for calculating coverage.
Because we’re talking about potentially millions of dollars, it’s all the more essential to consult a financial planning professional about your personal situation.
Will the FDIC insurance limits ever change?
While FDIC insurance limits have been set at $250,000 since 2008, it’s always possible that the insurance limit could be increased in 2023 or down the road, according to Bankrate.
Whether or not that happens in the near future will likely depend on how the current economic and political situation unfolds. If the past decades are any indication, Congress will probably need to raise the limit eventually to account for inflation and other factors. But it’s unclear when that might happen, and savers shouldn’t assume it will be any time soon.
You can contact the FDIC if you have any questions or use their coverage calculator to determine how much of your funds are insured.
What else can you do to protect your money?
Opening an account with an FDIC-insured institution is a wise decision. But bank failures are just one risk to manage. You might also worry about scammers and fraudsters who want access to your hard-earned cash. Learn how to protect your bank account from fraud in 6 steps.
Articles may contain information from third-parties. The inclusion of such information does not imply an affiliation with the bank or bank sponsorship, endorsement, or verification regarding the third-party or information.
* The article and information provided herein are for informational purposes only and are not intended as a substitute for professional advice. Please consult your financial advisor with respect to information contained in this article and how it relates to you.