SoFi Broker, also known as SoFi Active Investing, is a popular online brokerage platform that offers a range of investment options, including stocks, ETFs, options, and fractional shares. It’s known for its user-friendly interface, low fees, and additional financial services.
This review includes a complete SoFi trading account review, a breakdown of features, and a clear fee comparsion to help you decide if it fits your investing needs.
SoFi brokerage review
SoFi is a financial services company that offers banking, credit cards, investment, and loan products. Its investment platform, SoFi Invest, allows users to trade stocks, ETFs, mutual funds, alternative funds, and cryptocurrencies.
One standout feature is the ability to purchase fractional shares of over 4,000 stocks and ETFs for as little as $5, making investing more accessible. There are $0 account minimums and no account management fees. SoFi doesn’t charge trading commissions for stock or ETF investing.
The platform also includes IPO and SPAC investing, letting members invest in companies before they go public. Additionally, margin trading is available, allowing users to borrow money to invest more, increasing potential gains and losses. It is a user-friendly platform for diverse investment options.
Features of SoFi invest
Here are the features of SoFi invest are
Regulation of SoFi investment
- Automated investing is managed by SoFi Wealth LLC, which is regulated by the SEC(Securities and Exchange Commission).
- Active investing is provided by SoFi Securities LLC, regulated by FINRA (Financial Industry Regulatory Authority)and SIPC (Securities Investor Protection Corporation) for investor protection. Investments are not FDIC-insured.
Active investing
Active investing, or self-directed investing lets you manage your money by buying and selling stocks and ETFs without paying commissions, so you keep more of your profits.
You can buy fractional shares for as little as $5, making it easier to invest in big companies. You also have the chance to invest in new companies through Initial Public Offerings (IPOs) before they become public.
Automated investing
Automated investing is like having a smart assistant help you invest your money without needing to guess or constantly watch the market. It creates a personalized investment plan based on your goals and risk level. Your money is spread across different ETFs to reduce risk.
It adjusts your investments every few months to keep them balanced. Set up automatic deposits, so you don’t have to transfer money manually. You only need $1 to begin investing. There are no advisory fees for using SoFi’s automated investing service.
Individual Retirement Account (IRA)
An Individual Retirement Account (IRA) is a specialized savings account designed to help you save for retirement. It allows you to save money over time, and you get tax benefits, which means you can save more for the future.
Types of IRAs
Traditional IRA
- Tax benefits: Contributions to an IRA may qualify for tax deductions.
- Growth: Money grows without being taxed until you withdraw it.
- Withdrawals: Taxes are paid when you take money out.
- Minimum Distributions: Required after age 72
Roth IRA
- Tax benefits: Contributions are not eligible for tax-deductible.
- Growth: Money grows tax-free.
- Withdrawals: Qualified withdrawals are tax-free and penalty-free after age 59½ and if the account has been open for 5 years.
- No minimum distributions: No withdrawals are required during your lifetime.
SEP IRA (Simplified Employee Pension)
- It’s for Self-employed individuals and small business owners.
- Tax benefits: Contributions are tax-deductible.
- Contribution limits: Higher than those of Traditional and Roth IRAs.
Rollover IRA
- Purpose: Allows you to combine your old 401(k) accounts into one IRA.
- Tax benefits: No taxes or penalties when transferring funds.
By choosing an IRA account they offer no fees for accounts, maintenance, or minimum deposits. You get free advice from certified planners and a range of investment options like stocks and ETFs. Plus, they provide custom portfolios based on your goals.
IPO investing
Investing in an Initial Public Offering (IPO) means buying shares of a company when it first goes public. If you have a SoFi active investing account, you can participate in IPOs before they start trading on the stock exchange.
No minimum investment amount is required. View available IPOs in the SoFi app or website and choose which ones you’re interested in. Submit an Indication of Interest (IOI) to show how many shares you want. This is like making a reservation. When the IPO is live, SoFi will notify you to confirm your order quickly.
Options trading
Options are contracts that give you the right to buy or sell a stock at a specific price before a certain date. They can help manage risk or benefit from stock price movements. You can invest with a fixed amount of money at risk (the premium paid for the option).
This flexibility allows you to choose between call options (if you expect a stock to rise) or put options (if you expect it to fall). Trade easily via app or desktop. And no contract fees
Fractional shares
Invest in fractional shares with SoFi, allowing you to buy parts of stocks for as little as $5. Trade over 4,000 stocks and ETFs, including major companies like Amazon and Apple, without paying commission fees.
This makes it easy to diversify your portfolio affordably. You can buy and sell fractional shares like regular stocks, and if you want to day trade, keep a $25,000 balance to avoid restrictions.
ETFs
An ETF (Exchange-Traded Fund) is like a basket of different investments, such as stocks or bonds. You can buy and sell it just like a stock.
ETFs are accessible, enabling trading throughout the day, unlike mutual funds. With generally lower fees, they are cost-effective options.
It offers flexibility through top investment strategies and ensures transparency by regularly disclosing holdings. Lastly, it gives you control to manage investments actively or passively via easy-to-use apps.
Types of SoFi ETFs
SFY – SoFi select 500 ETF
- It contains the 500 largest publicly traded U.S. companies.
- Provides broad exposure to the U.S. economy.
SFYX – SoFi next 500 ETF
- Targets 500 mid-sized U.S. companies with growth potential.
- Invests in stocks with strong sales and revenue growth.
SFYF – SoFi social 50 ETF
- Invests in the top 50 stocks favored by SoFi Invest users.
- It reflects community-driven investment choices.
THTA – SoFi enhanced yield ETF
- Combines US Treasury bonds with options trading.
- Aims to deliver monthly income to investors.
SoFi Invest fees comparison
Here are the key fees associated with SoFi accounts:
| Fee type | Amount | Details |
|---|---|---|
| Trading commission | $0 | No commission for stock, options, and ETF trades. |
| Account minimum | $0 | No minimum balance required to open an account. |
| Options trading | $0 | $5 exercise and assignment fee. |
| Inactivity fee | $25 | Charged if the account is inactive for 6 months (can be waived by logging in). |
| Interest rate on uninvested cash | 0.01% | Low interest rate for cash not invested. |
| No-transaction-fee mutual funds | Over 6,000 funds | Available without transaction fees. |
| Deposit/Withdrawal Limit | Up to $50,000 | Up to $50,000 per business day; exceeding this amount will cause rejection. |
| Stock trading fee | $0 | No commission for stock trades. |
| Incoming transfers | $0 | No fees charged for incoming transfers. |
| Outgoing ACAT transfers | $100 | $100 fee for full or partial outgoing account transfers (ACATs) from SoFi invest accounts. |
| Reimbursementfor ACAT fees | Up to $75 | SoFi will reimburse up to $75 for ACAT outgoing fees from other firms if transferring $5,000 or more. Request reimbursement after the transfer is completed. |
| Annual fee | $0 | No annual fees charged. |
| Withdrawal fee | $0 | No fee for ACH withdrawals. |
| Margin annual interest rate | 10.0% | Interest rate on borrowed funds. |
Crypto partner hub
- Crypto Partner Hub connects users to top cryptocurrency platforms, Blockchain.com and BitGo.
- Wide variety: Access over 700 cryptocurrencies.
- Security: Advanced security features for safe trading.
- Easy setup: Quick account creation.
- Advanced tools: Includes staking and DeFi wallets for better asset control.
- You can’t trade crypto directly on SoFi anymore, but you can use the Partner Hub for trading on the linked platforms.
SoFi trading platform
SoFi Invest’s web trading platform is also user-friendly and has a clean design, which makes it easy to navigate. It includes a secure two-step login for safety. However, it lacks options for customization and doesn’t offer unique price alerts or many common order types, which may be a drawback for more advanced traders.
Mobile app
SoFi’s mobile app is user-friendly, allowing you to manage your finances in one place. Whether you’re using SoFi for checking, savings, or trading stocks, you can easily place trades or check your portfolio on the go.
Unlike many brokers, SoFi provides access to all account types through its mobile app, making it a standout choice.
Customer support
SoFi offers an intelligent virtual assistant available 24/7 to help identify and fix problems or connect you with an agent during working hours. You can contact them by phone every day from 5 a.m. to 5 p.m. PT.
SoFi invest pros and cons
Here are the pros and cons of SoFi based on its features:
| Pros | Cons |
|---|---|
| Commission-free stock and ETF trading | Only available to US clients |
| Access to IPOs (initial public offerings) | Low interest rates on uninvested cash |
| No fees for withdrawing money | Lacks advanced charts and limited research tools |
| No fees for inactivity | – |
| Offers alternative investment funds | – |
| Free robo-advisor and financial planning sessions | – |
Conclusion
SoFi Invest review is a user-friendly online platform that offers a variety of investment options, including stocks, ETFs, and cryptocurrencies. Commissions-free trades and a low barrier to entry (fractional shares starting at $5) make investing accessible.
SoFi provides both individual and joint brokerage accounts, traditional, rollover, Roth, and SEP IRAs, catering to various investing needs. The platform also offers active and automated investing options, along with unique features like IPO access and a mobile app for easy management.
While it may lack some advanced trading tools, its strong customer support and integration of various financial services make it a solid choice for both new and experienced investors.
Pro Tip
Explore the features and benefits of SoFi Investing! With no commission fees and the ability to invest in fractional shares for as little as $5, SoFi makes it easy for you to start building your investment portfolio.
Frequently Asked Questions
1. Is SoFi Invest safe?
Yes, SoFi Invest is considered safe as it is regulated in the US and offers SIPC protection.
It follows strict financial regulations to protect investor funds and accounts.
2. What fees does SoFi charge?
SoFi charges $0 in commissions on stocks and ETFs and has no account fees. However, fees may apply for options, margin, and outgoing transfers.
3. Does SoFi offer stock trading?
Yes, SoFi allows commission-free stock trading on thousands of US stocks. You can also invest in fractional shares starting from just $5.
4. Is SoFi good for beginners?
Yes, SoFi is beginner-friendly with a simple interface and no minimum deposit. It also offers automated investing and financial guidance tools.
5. How does SoFi compare with Robinhood?
SoFi offers more features, such as robo-advisors and financial planning, than Robinhood. Robinhood is simpler, but SoFi is better for long-term and all-in-one investing.
6. Is SoFi regulated?
Yes, SoFi is regulated by US authorities like the SEC and FINRA. It also provides SIPC protection for eligible investments.
7. Can I trade stocks with SoFi?
Yes, you can trade stocks easily using SoFi’s app or web platform. It also supports fractional investing for small budgets.
8. Does SoFi offer ETFs?
Yes, SoFi offers a wide range of ETFs, including its own branded ETFs. All ETF trades are commission-free on the platform.
9. Is SoFi suitable for long-term investing?
Yes, SoFi is great for long-term investing with IRAs and automated portfolios. It helps build diversified investments with low fees and easy management.
