Quick update. SoFi became a bank not too far ago. That allows them to pay higher rates of interest on your checking and savings balances. What they are paying now is far above the national savings average interest rate of 0.06%, according to Bankrate. NerdWallet shows the best savings rates this year range from 0.50% to 0.55% per year. Both the national average and best savings rate are pathetic. SoFi is now offering 1% interest rates on savings, which is double the best savings rates available, and 16x the national average. Awful, but a bit less awful than others.
Our main checking account pays 0.10%. Most banks don’t pay a balance on checking balances. SoFi gives you 1% on checking too. That’s 10x what we are getting. The banks charge 2% to 8% for car loans, and 15% and higher for credit cards. The spread between what they pay us and what they make is gargantuan.
As the Federal Reserve raises interest rates in March, the amount SoFi pays us should increase accordingly. JP Morgan Chase is estimating the Federal Reserve will raise interest rates 9 times over the next two years. That hurts people looking to buy a house or car. It does help savers and retirees, who are badly damaged by current high inflation.
If your emergency cash is not earning much, it may be worth checking SoFi out. Make your money work harder for you. You earned it. Hopefully, SoFi can add Zelle soon, now that they are a bank.
Warmest regards,
smilingdad
smilingdad 