SoFi has been sending out emails recently to SoFi Money account holders encouraging them to upgrade their account to a SoFi Checking & Savings account now that they’re officially a bank.
Doing so will earn you 1.00% APY which is better than what a lot of other checking accounts offer. However, The Flight Deal has pointed out a potentially big drawback with doing this – you could lose ATM fee reimbursements.
I say could because it depends on when you opened your SoFi Money account. If you opened your account on or after June 9, 2020 then there’d be no change to the ATM policy on your account. In fact, it’d likely be best for you to upgrade your account to get access to the 1.00% APY.
However, if you opened a SoFi Money account on or before June 8, 2020, you were grandfathered into a benefit that offers ATM fee reimbursements worldwide. That’s had the potential to be an incredibly valuable perk on the card because you could save substantially on fees when withdrawing cash and meant many used SoFi Money to withdraw cash while overseas rather than a Schwab checking account which offers a similar benefit.
Upgrading your older SoFi Money account to a SoFi Checking & Savings account will get you access to 1.00% APY interest, but you’ll lose those ATM fee reimbursements. Instead, you’ll get the same ATM policy that everyone has received when signing up since June 8, 2020. You’ll get free ATM access when using the Allpoint network which includes 55,000+ ATMs, but you’ll no longer be reimbursed for fees incurred when using any other ATMs.
Whether or not you’d be worse off depends on how frequently you use the ATM fee reimbursement benefit, whether you have Allpoint ATMs near you and how much money you keep in your SoFi Money account.
For example, if you have a number of Allpoint ATMs near where you live and where you travel (which includes Allpoint ATMs in Canada, Mexico, Puerto Rico, the UK and Australia), it might not take too much effort to seek those out to avoid fees after upgrading your account.
If you only withdraw cash from your SoFi account using an ATM once or twice a year but have $1,000+ sitting in your account most of the year, earning 1.00% APY could still make you marginally better off.
However, if you frequently withdraw cash from non-Allpoint ATMs using your SoFi debit card, you’d need a significant amount of cash sitting in your account to have the 1.00% interest you’d earn outweigh the ATM fees you’d incur.
Upgrading your SoFi Money account to a SoFi Checking & Savings Account is currently optional. If this change would make you worse off, keep your account as-is and hope that SoFi doesn’t eventually force customers to upgrade to a version of the account that loses those ATM fee reimbursements.
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Not sure what advantages the SoFi debit is supposed to have over Schwab card for foreign ATM fees. I’ve always had foreign ATM fees reimbursed with Schwab and the exchange rate I get ends up being the same as the Visa exchange rate delayed by a couple days. Same with the Fidelity card which my spouse uses. IIRC either the Schwab or Fidelity card says that there is some foreign transaction fee for debit transactions (for which we would be using a credit card anyway) but there are no foreign transaction fees for ATM usage and foreign ATM fees are fully reimbursed.
I keep most of my cash in a 1% checking account and have just a couple hundred in Schwab for ATM use. I might transfer over some more before I go traveling overseas but there’s no need to keep all my cash in one account.
SoFi already confirmed on Facebook that everyone’ll be forced over anyway to the new platform, but agree there’s no reason for grandfathered customers to upgrade today. Maybe it’ll take them awhile.
does this mean we all lose ATM rebates? This is the main reason for me to keep this card.
At some point, yup – they said everyone will have to move over. But, might as well keep it for now – this card saved me over $100 in a single transaction at an absurdly high-priced foreign ATM once, and saves me hundreds of dollars at ATMs over the course of a year. I’ll keep it til they turn it off, then back to Schwab.
I signed up in 2019, foreign ATMs rebates are crucial to me. I guess Schwab it is then.
This makes no sense. It’s not as if anyone has a choice. If you don’t opt to convert accounts, they’ll do it for you. The “voluntary” illusion was just to beta test the system, as they say in their notes.
Really good catch! I was reading through the email and trying to find out if that was the case this morning but couldn’t really figure it out.
This is perfect example why I check TFM out mult times per day. Always timely valuable insightful info.
Thanks Stephen and TFM team
You act as if you have a choice. If you dob’t “voluntarily” convert, they’ll do it for you in a few weeks. This was a beta test of the news system.
Oh no, are you or anyone else aware of other ways (outside Schwab) to withdraw money abroad and have fees refunded?
Fidelity Cash Management Account
“Please note, for foreign transactions, there may be a 1% fee included in the amount charged to your account.” – for atm withdrawals?
They don’t charge it for ATM withdrawals in my experience, just debit card purchases.