Taking another look at what SoFi offers. This time we are all about SoFi Banking reviews.
Is SoFi Banking a Scam?
SoFi Banking, including SoFi checking and SoFi savings are products of SoFi Bank, which is a member of FDIC. FDIC membership comes with numerous rules and regulations that are actively policed by several federal regulators. So, we can be quite sure that SoFi is not a scam at least in the stealing your money and disappearing sense. In fact, even if SoFi goes bankrupt, FDIC insurance ensures that you won’t lose a penny, up to $250,000 per account.
Is SoFi Banking Legit?
So, is SoFi Banking legit? Yes, but like many companies the bold face type, and look here hand waving, hides a few catches to SoFi Banking you might want to keep an eye on. Let’s take a review of SoFi banking and see what it offers.
First, SoFi banking offers a very good 1.25% interest rate on your checking and savings deposits. That makes SoFi Checking and SoFi Savings worth having because that is the highest interest rate on savings or checking that you will find that applies to the whole balance. (Lots of banks advertise the highest interest rates but only apply that rate to the first $500, or something like that.)
What’s the catch?
In the fine print you will see that you can only qualify for the 1.25% interest rate with direct deposit. If you are a freelancer or entrepreneur, you are out of luck. Without direct deposit the SoFi banking interest rate is 0.70%, which is still one of the highest online savings account interest rates around. So, this isn’t a scam, it’s just some fine print that you need to know about. 0.70% is still probably killing what your local bank offers for interest rates.
Other SoFi Banking Benefits
The latest, great thing, that online banks and regular banks are touting is the so-called getting your paycheck early feature. Here is how early paycheck benefits work.
SoFi Banking Early Paycheck
First, it is important to remember that the early paycheck thing only works with direct deposit. This is the key to the whole early paycheck thing. In order to pay employees correctly and have time to correct any errors, employers and paycheck service providers post a pending deposit to your account. That deposit comes with instructions about when the money should be released into your checking account, or whatever. The bank on the other end, which is receiving that deposit can obviously see these pending transactions. So, early paycheck is nothing more than your bank trusting that the coming transaction happens as planned, which is usually the case. The reason it says “up to two days earlier” is because some payroll systems post the pending transaction two days in advance, while others only post one day in advance. You have no control over which one you get.
SoFi Banking Fees
SoFi Banking claims no fees and for the most part delivers. There are no minimum balance fees, and you can use the Allpoint Network of ATMs for free. SoFi does NOT reimburse other ATM fees like some other banks and ATM cards do.
No-fee Overdraft Coverage
No-fee overdraft coverage is kind of a scam. First, in order to qualify you have to have at least $1,000 of direct deposits and then you only get up to $50 of overdraft coverage. If you are asking, how do I have an overdraft if I have money in savings, that’s the kind of crappy things banks pull where you try and use your ATM card to buy something for $50, but you only have $40 in your checking account. The bank will tell the card reader to go ahead and okay your transaction. Then, they charge you an overdraft fee. They have the nerve to say that they do it as a benefit, because then your card isn’t declined. They also won’t automatically transfer money from your savings account. This is also for your own good because banking rules prohibit more than six transactions per month, and they don’t want to use one of them up for you. The best thing for you is to opt out of any overdraft protection and instead have your card declined. Then you never have to worry about overdrafts at all.
Where did SoFi Money go? SoFi expanded its operations as a bank, and therefore can offer the more familiar checking and savings accounts. It figured for better branding they would call it SoFi Bank vs SoFi Money. SoFi Money is gone and has been replaced by SoFi Bank.
SoFi Review Score
Overall, SoFi Banking is a great choice as your high-interest online savings account bank. SoFi is better than Marcus for interest rates by 0.10% even without direct deposit. With direct deposit and the 1.25% interest rate it is no contest. SoFi vs Marcus is a no brainer. SoFi vs Robinhood or SoFi vs Wealthfront really depend more on if, and how, you are using their market trading features to buy and sell stock or not. – If you are looking for a more overall look, then check out our SoFi reviews.
As with all online banks, you have to deal with potential delays caused by electronically transferring your money around, but with a little planning, and smart use of the free ATM withdrawals, it should be fine. As always, I recommend having a brick-and-mortar bank in your home city even if you only keep a minimal amount of funds in the account.