SoFi Invest review

By   |   Verified by Andrew Boyd   |   Updated 16th November 2021

SoFi Review
  • SoFi Invest offers whole and fractional share trading in US stocks and ETFs in addition to trading in cryptocurrencies.
  • As a no-cost online broker, SoFi Invest charges no commission or custodian fees and requires a minimum balance of $5 to get started.
  • With active and managed investing options, SoFi can help you build a portfolio that suits your investing preferences.

SoFi (short for "Social Finance") is a fintech business based in the United States that was founded in 2011. What began as a student loan refinancing company has now moved into a broad portfolio of services including loans, credit cards, and more recently, online brokerage.

SoFi launched two new products in 2019: SoFi Money and SoFi Invest. SoFi Invest provides both active and passive investment options to trade US stocks, ETFs, and cryptocurrencies.

Below, we review SoFi’s non-commission online brokerage option, SoFi Invest.

Tradable assets

SoFi Invest's product portfolio is limited, consisting mostly of US equities and ETFs, with a few cryptocurrencies thrown in for good measure. A disadvantage is that it lacks investing alternatives such as mutual funds, bonds, currencies, options, and futures.

  • Stocks. Many brokerages charge trading fees to use their platforms. SoFi Invest provides no-commission online stock trading, allowing you to trade whatever you want, whenever you want, all from the SoFi App.
  • ETFs. SoFi's exchange-traded funds are a simple and low-cost solution to diversify your portfolio. They are intelligently weighted and inexpensively priced. SoFi ETFs are tailored to the needs of ambitious individuals with long-term investment objectives. SoFi ETFs, unlike typical ETFs, rank companies based on their growth rather than their market capitalization. Each of the six ETFs offered by SoFi is intelligently diversified and auto-rebalanced to ensure that faster-growing companies are constantly included.
  • Fractional shares. Buying and selling fractional shares on SoFi is considered the same as regular stock trading, with no additional fees for buying or selling a fractional share. Choosing your own stocks for dollar-based investing with an online brokerage like SoFi fractional shares might be an easy way to get started. You can start investing with as little as $5.
  • Cryptocurrency. SoFi Crypto allows customers to purchase and trade up to 20 different coins in real-time, in addition to Bitcoin, Ethereum, Litecoin, Bitcoin Cash, and Ethereum Classic. You can trade crypto 24/7, unlike the traditional market. Weekends, holidays, and all hours of the night are fair game.

Tradable markets

SoFi Invest customers can trade stocks on the 2 major stock exchanges in the US:

  • NYSE. The New York Stock Exchange is an auction market that allows for both electronic and traditional floor trading. The NYSE opens at 9:30 a.m. ET and closes at 4:00 p.m. ET. The opening and closing bells are frequently used to commemorate a financial milestone or a significant event in New York City.
  • NASDAQ. The National Associated of Securities Dealers Automated Quotations System (Nasdaq) allows investors to trade both listed and OTC equities. The Nasdaq is open from 9:30 a.m. to 4:00 p.m. ET, just like the NYSE. Pre-market hours are available from 4:00 a.m. to 9:30 p.m. ET, and post-market hours are available from 4:00 p.m. to 8:00 p.m. ET on the Nasdaq.

Note: The Nasdaq is an electronic-only market, whereas the NYSE is a hybrid electronic and floor exchange.

How it works

SoFi members may access their accounts via the company's web site or its user-friendly mobile app.

Customers of SoFi Automated Investing can pick from 10 investment portfolios with varying risk levels and financial objectives. Don't worry if you're not sure which one to pick; all you have to do is answer a few questions about your financial objectives, existing assets, and income, and SoFi will take care of the rest.

The portfolios are made up of exchange-traded funds (ETFs), which invest in a combination of stocks, bonds, and other asset classes. SoFi, unlike many of its competitors, employs proprietary ETFs in its Automated Investing portfolios, which helps it keep costs low.

Commissions and fees

  • You may trade for free with SoFi Active Investing since there are no trading fees or commissions. It also offers you free access to CFPs.
  • There are no fees associated with establishing a SoFi Automated Investing account.
  • There are no monthly or inactivity fees.
  • The only charge associated with the aforementioned accounts is a $75 fee for rolling them over to another institution or closing them for any reason.
  • ETFs come with fees, but they are charged by the fund, not by SoFi.

Useful trading tools and features

New investors will appreciate SoFi Active Investing features such as IPO, automated and crypto investing, and cutting-edge options such as free financial coaching and fractional shares. Long-term investors may be turned off by the lack of investment alternatives, and advanced investors will have to look elsewhere for options, FX, and futures trading.

  • IPO investing. The IPO Investing feature on SoFi allows investors to purchase pre-IPO shares before they go public. You must have a SoFi Active Invest account with at least $3,000 invested across all SoFi Invest accounts to be eligible for pre-IPO investment.
  • Automated investing. The broker provides a robo advisory service for investors that don't have the time or knowledge to manage their own portfolio. Tax-loss harvesting isn't permitted, unfortunately.
  • Crypto investing. SoFi allows investors to trade more than 20 different cryptocurrencies, including Bitcoin, Ethereum, and Dogecoin around the clock.
  • Stock Bits or fractional shares. SoFi Active Investing allows investors to purchase a fraction of more than 4,000 stocks and ETFs. As the market has led to sky-high stock prices, this is becoming a more appealing alternative, and it provides novice investors with a cost-effective method to construct a diverse portfolio.
  • Accounts for retirement. Different retirement-focused accounts can help investors to increase their financial cushion for their senior years.

Who SoFi Invest is designed for

SoFi Invest's combination of brokerage accounts and robo-advice might be ideal for:

  • New investors. SoFi active investing is an excellent alternative for people just getting started because it has a modest $5 minimum deposit and provides instructional materials on how to get started.
  • Active traders. Active traders don't have to worry about commission-free trades on their brokerage account cutting into their profits.
  • Cryptocurrency investors. Many trading platforms do not allow cryptocurrency trading, but SoFi allows you to trade Bitcoin, Ethereum, and 18 other currencies 24 hours a day, seven days a week.
  • Hands-off investors. Investors who don't want to manage their own portfolios can use SoFi's robo-advisory service.

Pros & cons

Pros

  • Small minimum investment. To begin investing with a Sofi active or automated investment account, you only need $5.
  • No-commission platform. You can keep more of your money because there are no trading, transfer, custodian, or commission fees.
  • Free personalized assistance. Financial advisors at SoFi can assist you in aligning your objectives, portfolio, and strategy with your financial position.
  • Benefits of membership. When you sign up for a SoFi account, you'll have access to local meetings, career counselors, unemployment insurance, and more.
  • Investing in an IPO. The SoFi app provides access to pre-market IPO shares before they are publicly traded.

Cons

  • No tax optimization. SoFi, unlike other providers, is unable to assist you in maximizing your tax losses.
  • Limited account choices. SoFi won't be able to assist you set up a trust or get a head start on saving for your children's education with a 529 account.
  • Only a few securities are available. Bonds, mutual funds, futures, currency, and orders are not available through SoFi.
  • Scarcity in support. On weekdays, customer service professionals are accessible.

Alternatives

  • Webull. It provides a unique community experience as well as user-friendly trading platforms that will appeal to the majority of youthful investors. Webull, on the other hand, lacks the trading tools and capabilities to compete with industry giants that also provide $0 stock and ETF transactions for everyday investment.
  • Moomoo. Its offerings appear to be highly competitive. A prevalent concern among investors is that other free trading applications lack the research tools and data they require. Moomoo has a lot of research options, however it may be overwhelming for a complete beginner.
  • Robinhood. The mobile app and website for Robinhood are both highly user-friendly. It is a great way to get your money into the market. All customers have quick access to deposits and cash after closing positions, and your purchasing power is boosted as soon as you deposit money into your account.
  • Stash. Stash aims to make investing accessible to people who have never done it before. The service has a $0 account minimum and a monthly investing account fee of $1.
  • Betterment. Betterment's goal-oriented tools and tax-saving methods are appealing to a wide range of investors. Human advisors are offered as part of the Premium plan or as a stand-alone guidance package.

Comparisons

How does SoFi Invest compare to similar services? Find out with these side-by-side comparison tables.

FAQs

Is SoFi Invest safe?

SoFi Invest is considered safe because it is regulated by SEC and FINRA and provides up to $500,000 investor protection (including a $250,000 limit for cash) as part of the SIPC protection scheme.

Is SoFi Invest FDIC insured?

Yes. Your funds are FDIC protected up to $1.5 million once they reach SoFi’s partner banks.

Is SoFi Invest a direct access broker?

Yes. SoFi Invest is a platform that allows investors to take advantage of active trading opportunities or invest passively through a robo-advisor.

Does SoFi Invest offer investing through an IRA?

Yes. In addition to regular brokerage accounts, SoFi Automated Investing offers IRAs (traditional and Roth), SEP-IRAs, and allows users roll over existing retirement assets into a SoFi account.

What is the minimum deposit?

SoFi Invest accounts do not have a required minimum deposit. This is the best option if you simply want to spend a modest quantity of money.

How do I deposit funds in SoFi Invest?

You can fund your SoFi Invest account by linking your SoFi Money, checking, or savings account, starting an account transfer (ACAT), rollover, check, or wire, or establishing an account transfer. You can make a one-time payment or set up a regular deposit to ensure you have money available when you wish to buy. It generally takes 1-2 business days for the funds to clear.

Log into your SoFi Invest Active Investing account and follow these steps to link bank accounts for ACH deposits/withdrawals via the mobile app:

  • At the bottom of the screen, click the "Add Money" button.
  • Enter the deposit's monetary amount, frequency, and source. (Deposits are limited to $50,000 each day.)
  • "One-time, today" will be the default frequency.
  • The default source will be the bank you linked when you originally opened the account.
  • The minimum deposit amount is $5.

Does SoFi Invest have short selling?

None. Sofi Invest does not allow you to short sell stocks or ETFs.

Does SoFi Invest do fractional shares?

Yes. SoFi allows investors to acquire fractional shares at no additional cost. Choose one from over 4,000 stocks for dollar-based investing with SoFi fractional shares.

Can you trade OTC on SoFi Invest?

No. Sofi Invest does not invest in over-the-counter (OTC), penny, or pink sheets stocks.

Is SoFi Invest good for day trading?

Yes. If an account's balance falls below $25,000, it will be barred from day trading for 90 days. A pattern day trader account with a balance of $25,000 or more may still be recognized, but day trade activity is permitted as long as it does not exceed the account's day trading buying power.

How do I withdraw money from SoFi Invest?

To withdraw money from an Active Account, follow these steps:

  • On Desktop: Click the following link to initiate a withdrawal: https://www.sofi.com/wealth/app/withdrawal
  • On Mobile:
    • Select the Invest Account you wish to withdraw from, click ‘Manage’, click ‘Withdraw’.
    • Select the amount you wish to withdraw (up to the amount of withdrawable cash available showing).
    • To transfer funds, choose the 'From' and 'To' accounts.
    • Finally, when you're ready to submit your withdrawal, click 'Review.' (Please note: Due to regular ACH deposit timings, it may take 1-3 business days for your cash to post into the chosen account.)

Steps to Withdraw funds from Auto Account:

  • On Desktop: Click the following link to initiate a withdrawal: https://www.sofi.com/wealth/app/withdrawal
  • On Mobile:
  • Select the Invest Account you wish to withdraw from, click ‘Manage’, click ‘Withdraw’.
  • Select the amount you wish to withdraw (up to your full account value will be displayed).
  • To transfer funds, choose the 'From' and 'To' accounts.
  • When a withdrawal is requested, the transaction is triggered to create funds that may be withdrawn. Trades will be processed on the following business day that is available.
  • Finally, 2 business days after the deal execution date, your requested withdrawal will be processed into your chosen account. (Please note: Due to regular ACH deposit timings, it may take 1-3 business days for your cash to post into the chosen account.)

To withdraw crypto money from an active individual account, follow these steps:

  • On Desktop: Click the following link to initiate a withdrawal: https://www.sofi.com/wealth/app/withdrawal
  • On Mobile:
    • Select the Invest Account you wish to withdraw from, click ‘Manage’, click ‘Withdraw’.
    • Choose the amount you would like to withdraw (up to the amount of withdrawable cash available showing).
    • Select the 'From' and 'To' accounts for transfer.
    • Finally, click 'Review' when you are ready to submit your withdrawal. (Please Note: It can take 1-3 business days for your funds to post into the selected account base on normal ACH deposit timeframes).

Verdict

If you are new to trading, SoFi Invest is a great online brokerage to get you started. Whether you are looking for active or managed investing, SoFi Invest offers the right number of stocks, ETFs, and cryptocurrencies to not overwhelm the novice investor. In addition, SoFi Invest offers fractional share and ETF trading so that you can start building a portfolio of quality names without needing to have a lot of money in your account. The no fee commission structure and $5 minimum account balance will appeal to all traders.

SoFi’s broad range of money management options, including credit score monitoring, loans, and credit cards differentiates them from their competitors.

However, if you are an experienced investor, SoFi Invest does not support the tradable assets, short selling capability, and tax minimization strategies you may be looking for but for newer investors, it’s a great contender.