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Pros and Cons, Costs, Who Should Open an Account

Pros and Cons, Costs, Who Should Open an Account

Contents

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Account Minimum


$0 ($1 to start investing)


Fees


0% for active trading and automated investing (1.25% for cryptocurrencies)


Investment Types


Stocks, ETFs, and cryptocurrencies


Account Minimum


$0 ($1 to start investing)


Fees


0% for active trading and automated investing (1.25% for cryptocurrencies)


Investment Types


Stocks, ETFs, and cryptocurrencies

Pros

  • No minimum to start investing
  • No account or trading fees, and low fees to own funds
  • Access to Certified Financial Planners at no additional charge
  • Cryptocurrency trading available

Cons

  • No tax-loss harvesting, an advanced investing technique where you sell a stock or mutual fund at a loss for a tax benefit
  • No option for stop-loss orders when actively investing. SoFi’s active investing account only uses market orders
  • Currently only available to US residents

Read Our Review
Read Our Review A looong arrow, pointing right

More Information

  • Promotion: Get up to $100 in bitcoin when you make your first trade.
  • App store rating: 4.8 iOS/4.2 Android
  • Consider it if: You want an easy-to-use platform paired with rock-bottom pricing.

Overall rating

Is SoFi Invest right for you?

SoFi (short for “social finance”) started out as a company focusing on student loan refinancing and personal loans. Since then, it has branched out into several other areas of personal finance, including investment accounts and checking and savings accounts.

Plus, the company’s stock recently rose after the Office of the Comptroller of the Currency (OCC) approved its request for a national bank charter. The decision comes months after SoFi acquired Golden Pacific Bancorp, Inc., a California-based community bank.

Sofi Invest is also a great option if you already have other SoFi accounts. This is because SoFi makes it very easy to move money between SoFi Money and SoFi Invest accounts.

If you are a more advanced investor, SoFi may not be a great choice, since SoFi does not offer stop-loss orders or tax-loss harvesting. But if you’re simply looking to get started with investing, SoFi has all you need, with complimentary access to Certified Financial Planners if you have questions. 

SoFi is currently only available to residents of the United States, so residents of other countries will want to choose a different brokerage.

SoFi Invest vs. Robinhood

Sofi Invest and Robinhood are both competitive investment options for those in search of low fees and simple user interfaces. However, each platform offers different account types and investment choices.

While both are best for traders of stocks, ETFs, and cryptocurrencies, SoFi offers a wider range of account types (e.g., automated investing accounts and IRAs). Robinhood only offers active trading accounts.

Note that if you are investing in ETFs, most funds do have expense ratio fees that are included in the price of the fund. Both of these brokerages offer several different funds, including those with very low expense ratios.

SoFi Invest vs. Wealthfront

SoFi and Wealthfront mainly differ when it comes to account types and investment types. While SoFi offers both self-directed and automated accounts, Wealthfront best suits those solely in search of automated portfolio management. 

In addition, SoFi is the better option for stock investing. With Wealthfront, you can only invest in ETFs, index funds, and crypto trusts. 

Ways to invest with SoFi

SoFi Invest is best for beginner investors who are looking for a simple way to get started with investing. SoFi has no minimum amount to open an account, so even if you don’t have very much to invest, you can still get started. It has a very basic set of features:

  • No account or management fees and very low fees on funds
  • Complimentary access to Certified Financial Planners (CFPs)
  • The ability to invest in fractional shares of company stock
  • Active or automated investing
  • Access to cryptocurrency

Its active investing account gives you complete control of buying and selling whichever stocks and funds you prefer, while its automated investing account (or


robo-advisor

) offers users pre-built portfolios based on risk level and financial situation. SoFi’s 10 robo-advisor portfolios are built by humans to reflect a range of financial situations.

SoFi also offers another option for investors who want to give newly public companies a shot: IPO investing. 

If all you’re looking to do is put your money in low-cost Vanguard or other index ETFs, then SoFi’s fee-free accounts may be all that you need. If you are interested in tax-loss harvesting or trading more actively with stop-loss orders, you may want to consider other brokerages.

When it comes to cryptocurrencies, SoFi offers bitcoin, ethereum, litecoin, and 27 other coins and tokens. SoFi charges a markup fee for each crypto transaction, so be prepared to pay an additional 1.25% in trading fees. You can find its complete list of cryptocurrencies here.

Account setup

Opening a new SoFi Invest account is a straightforward process. You will enter your name and a few basic identification questions, as well as questions about your risk tolerance and investing experience. The entire signup process only takes about two minutes. SoFi offers several different types of accounts, including taxable brokerage accounts as well as traditional, Roth, and SEP IRAs. Each of these accounts can use SoFi’s automated investing system (also known as ”


passive investing

“) or be actively invested and controlled by you.

SoFi Invest regularly offers bonuses for opening up new accounts. Sometimes these bonuses are publicly available, and other times they’re only available through a referral from a current customer. These new account bonuses change over time, and there’s no guarantee that there will be a bonus offer. Still, these offers can be worth hundreds of dollars, so it pays to check before opening a new account.

SoFi Invest: Is it trustworthy?

SoFi has received an A+ rating with the Better Business Bureau. The BBB uses a grade range of A+ to F when evaluating company trustworthiness and considers a number of factors — including customer complaint history, licensing and government actions, and advertising issues — when reaching a final rating.

Out of the 508 complaints SoFi received in the past 3 years, it closed 330 in the last 12 months. The platform’s BBB profile shows that it has zero unresolved complaints at this time. Though SoFi’s A rating indicates that it interacts exceptionally well with clients, it’s also important that you do your own due diligence on the company. The BBB says its ratings don’t guarantee a company’s reliability or performance.

In 2018, the Federal Trade Commission (FTC) alleged that SoFi provided false information on how much customers saved through its loan options. The FTC approved a Consent Order with SoFi in 2019 that prohibited the company from providing misleading information about its loan refinancing savings. SoFi neither confirmed nor denied the allegations.

SoFi has closed 330 complaints in the last 12 months, according to the BBB.

SoFi — Frequently asked questions (FAQ)

Is SoFi Invest really free?

SoFi offers commission-free stock and ETF trading, and it even provides automated investing for free. Crypto traders, however, should be prepared to pay when exchanging different assets. SoFi currently charges a 1.25% markup on each crypto transaction.

Is buying crypto on SoFi safe?

SoFi takes numerous measures to ensure crypto transactions and client data remain secure. It says it partners with crypto exchanges like Coinbase to complete transactions, and it keeps customer information hidden from custodians and crypto trading partners. SoFi also employs two-factor authentication and SSL encryption.

Is SoFi legit?

Yes. In addition to recently receiving a national bank charter, SoFi has been a trusted space in the personal finance and investing world for quite some time. On the investing end, its active trading services are offered by SoFi Securities LLC, a FINRA- and SIPC-registered business. SoFi Wealth LLC, which provides automated investing, is an SEC-registered business.

SoFi Digital Assets, LLC, oversees the platform’s crypto products and currently holds registration as a Money Service Business with FinCEN.

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