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SoFi- Basics: SoFi Invest is the investing arm of the popular SoFi financial platform.
- Pros: SoFi Invest's automated investing features making putting a little bit of money into the market every day, week, or month quite easy.
- Cons: The user interface it mediocre compared to other investing platforms, and there is a lack of investment research tools.
- MINIMUM INVESTMENT:
$1
- FEES:
No management fees for self-directed accounts, 0.25% automated investing accounts
- SIGN-UP BONUS:
Entry into $250,000 Giveaway
- FRACTIONAL SHARES:
Yes
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SoFi (short for Social Finance) is an up-and-coming fintech brokerage that has been gaining popularity lately.
For those who want to see what all the hype is about, we’ve put together an in-depth SoFi Invest review.
Table of Contents
What Is SoFi?
SoFi is a multifaceted fintech giant, offering a wide variety of services aimed at the younger crowd, including banking, credit cards, investing, loans, and more.
For the sake of this review, we’ll be diving into their SoFi Invest account.
This account allows customers to trade stocks, ETFs, and automate their investing if they choose.
SoFi At a Glance
| Minimum Investment | $1 |
| Management Fees | Free for Self Managed Accounts, 0.25% for Automated Investing |
| Account Fees | $0 |
| Trading Commissions | $0 |
| Account Types | Brokerage, Traditional IRA, Roth IRA, SEP IRA |
| Funding Options | (Bank account, others?) |
| Stock Trading | Yes |
| Options Trading | No |
| Crypto Trading | Yes |
| Fractional Shares | Yes |
| Dividend Reinvestment | Yes |
| Tax-Loss Harvesting | No |
| Human Advisor Option | No, however, you can speak with a financial advisor if you are enrolled in automated investing (their robo-advising service) |
| Robo-Advising | Yes |
| Automatic Rebalancing | Yes |
| Automatic Deposits | Yes |
| Mobile Version | Yes |
| Desktop Trading | Yes |
| Sign-Up Bonus | Yes, Entry into $250,000 Giveaway |
| Account Transfer Bonus | No |
| Referral Program | Yes |
| Customer Support | Online Chat & Phone |
How Does SoFi Work?
SoFi is similar to most of the online brokerages out there
They give customers the ability to buy and sell securities, such as stocks and ETFs, as well as cryptocurrencies.
Further down in this article, we’ll show you how you can open an account and start trading.
In this section, we’ll be going over some of SoFi’s distinguishing features.
IPO Investing
One very unique feature that SoFi has for users is the ability to invest in Initial Public Offerings (IPOs).
This is a big deal because generally retail investors don’t get the chance to buy IPOs at their IPO price — this is traditionally reserved for large investment banks.
By the time a hot IPO is available for the general public, the price of the stock is usually driven up much higher than the IPO price.
Oftentimes, a stock can seem fairly valued at IPO price but considerably overvalued by the time it’s available on the NYSE or NASDAQ.
In order to help the everyday retail investor, SoFi tries to get share allocations of hot IPOs and then offers those shares up to their users (at IPO price).
This allows everyday investors the chance to be a part of something traditionally reserved for the largest of institutional investors.
Instant Funding
A major problem with legacy brokers is the fact that most don’t allow instant access to your money when you transfer it.
Since transfers are typically done through an automated clearing house (ACH) transfer, money can take a couple of days to post to your brokerage account.
This can be a serious issue if you’re looking to buy a security as soon as possible.
With SoFi Instant Funding, you can have access to your transfers instantly (as the name suggests).
Gone are the days when you have to wait for the ACH transfer to post to buy a stock.
User Experience
Overall, we found that the SoFi user experience was surprisingly poor, especially when taking into consideration their lack of features.
Usually, when a brokerage has a difficult-to-use interface, there are a lot of things going on (lots of research info, investable securities, etc.).
However, in the case of SoFi, they don’t have many investable securities, and they have next to no research information.
One would assume that SoFi would have an easy-to-use interface, much like Robinhood (a brokerage with similar investable securities and research info), but we found SoFi’s interface to be fairly clunky and not so well put together.
Research Tools
As we mentioned before, SoFi has next to no research tools available for its users.
To be fair, this isn’t a make or break for most people, since most people just invest in index funds.
However, for those who are looking to do some individual stock picking, research tools are very important when looking for a brokerage.
A brokerage with great research tools will have analyst ratings and forecasts, news stories, upcoming corporate events, information on a company’s sector, and much more.
In the case of SoFi, only some recent news stories and basic financial info (that could easily be found on Google Finance) are displayed.
Customer Support
SoFi offers customers support through both phone and online chat, however, their communication lines are only open Monday through Thursday, from 5 AM PST to 5 PM PST, and Friday from 5 AM PST to 4 PM PST.
If you require assistance outside of these hours, there is a moderately helpful virtual assistant that directs you to relevant FAQs/articles (if any).
SoFi Fees and Pricing
SoFi is much like other fintech brokerages – they offer commission-free trades on stocks and ETFs. We’ve put together a table below that discusses their other fees
| Stock & ETF Trades | $0 |
| Management Fees (Self Directed) | 0% |
| Management Fees (Robo-Advisor) | 0.25% |
| Outgoing Account Transfer | $75 |
Overall, SoFi is a fairly inexpensive brokerage to use. Their fees are very similar to that of most up-and-coming fintech brokerages of today.
SoFi Accounts
SoFi offers some of the most widely used investment accounts.
They have almost everything an individual could ask for, and they even have some solutions for those who are self-employed too.
We’ll break down all of their offerings below:
Brokerage Accounts
A traditional brokerage account is one of the most widely used types of accounts to trade stocks.
Traditional brokerage accounts are bare-bones brokerage accounts that don’t come with any sort of tax advantage.
SoFi’s traditional brokerage account allows users to trade stocks, ETFs as well as cryptocurrencies.
Retirement Accounts
In addition to their traditional brokerage accounts, SoFi also offers users the ability to open a Traditional or Roth IRA.
A Traditional IRA allows investors to invest pre-tax income and defer paying their owed taxes until they reach retirement age.
Whereas, Roth IRAs give investors the ability to invest post-tax income, and enjoy tax-free withdrawals when it comes time to retire.
Small Business Retirement Accounts
Aside from Traditional and Roth IRAs, SoFi also gives users the option to open a SEP IRA.
A Simplified Employee Pension Plan IRA (SEP IRA) is a type of Traditional IRA that is offered by employers to employees.
This is a type of IRA that’s commonly used by self-employed individuals, as the contribution limits for SEP IRAs are much higher than that of traditional or Roth IRAs.
Managed Portfolios
Although SoFi does not offer portfolios that are managed by your own personal financial advisor, they do offer robo-advisor services.
Robo-advised accounts are quick and easy to set up – you only have to answer a few questions about your goals and your risk tolerance.
After that, your money will be invested automatically for a fairly low flat rate of 0.25%.
Bank Accounts
Aside from its “Invest” line of business, SoFi has several other arms of the business, including insurance, lending, banking, and credit cards.
SoFi offers their customers the ability to open up a checking account that comes with some pretty great features.
Their checking account is known as “SoFi Money” and comes with $1.5 million dollars in FDIC insurance, as well as no ATM fees, and it also pays a small amount of interest as well!
SoFi Investment Options
Overall, SoFi has a fairly limited selection of investable securities.
In the section below, we’ll walk you through all of the major types of securities, and cover whether or not SoFi supports them.
Stocks
Stocks are small portions of a company that are divided up and sold to investors, big and small.
A share of a stock represents ownership of a small piece of the underlying company.
They are the backbone of the stock market, so all US brokerages support the trading of stocks, including SoFi.
With SoFi, you can trade all stocks that are listed on the New York Stock Exchange, as well as the NASDAQ without any trade commissions.
However, you are unable to trade any over-the-counter (OTC) stocks, as well as stocks listed on international exchanges using SoFi
Options
Options are agreements made between two parties to purchase/sell stock at an agreed-upon price by an agreed-upon date.
They are a fairly complex security that has gained popularity among the retail investing crowd lately.
Although they are fairly complex, options are typically supported by most brokerages.
SoFi does not support options trading as of the time this article was written.
Futures
Futures are a type of security that allows investors to purchase an underlying asset (usually a commodity, such as wheat, corn, oil, etc.) at a certain price on a certain date in the future, as the name would suggest.
These are fairly advanced securities that are only offered by a handful of brokerages.
Unfortunately, SoFi does not allow its users to invest in futures at this point in time.
ETFs
ETFs are essentially a basket of companies that your money is divided up amongst when purchasing a share.
They typically track indices, like the S&P 500 or the Russel 2,000 and are passively managed.
SoFi Invest does allow its users to invest in ETFs, so long as they are listed on a major US stock exchange.
Mutual Funds
Mutual Funds are similar to ETFs in that they’re a basket of companies bundled into one security.
However, the main areas they differ from ETFs are that they usually come with minimum investment amounts, they don’t typically track indices, and they aren’t sold in individual shares.
At this time, SoFi doesn’t offer its users access to any mutual funds.
Bonds and CDs
Bonds and CDS are a very risk-averse way to create a predictable source of interest income for investors.
Individual Bonds and CDs are securities that are typically bought by more advanced investors.
Unfortunately, SoFi Invest does not allow users to buy individual bonds and CDs, however, they can buy bond and CD-based ETFs.
Crypto
Cryptocurrencies have become increasingly popular lately.
They are a type of alternative asset born from the advent of blockchain technology.
As of the time this article is being written, SoFi Invest supports the purchase of more than 25 different cryptocurrencies, including Bitcoin, Ethereum, Dogecoin, and Solana.
Fractional Shares
Up until very recently, only whole shares of stocks could be purchased.
This meant that if you wanted a share of Berkshire Hathaway Class A stock, you would have to fork over more than $400,000 to buy it.
Fortunately for us though, brokerages have started to allow users to purchase a small piece of stock.
This means you could buy just $1 of a stock, instead of purchasing the whole thing.
SoFi is one of the few brokerages out there that support the purchase of fractional shares.
Within their ecosystem, they refer to fractional shares as “Stock Bits”, but they’re one in the same.
Bonuses and Promotions
The account bonuses are fairly lackluster when compared to other competitors within the industry.
Most other fintech brokers offer free stock for signing up, and legacy brokers tend to offer large sums of cash for bringing large portfolios to their platform.
We’ve outlined all of SoFi’s offers below:
SoFi Sign-Up Bonus
SoFi has been known to offer traditional sign up bonuses in the past, where new customers receive cash or stock compensation for creating an account.
However, as of lately, they have been offering new customers the chance to get in on a giveaway in exchange for signing up.
This is incredibly lackluster when compared to their competitors.
SoFi Referral Bonus
SoFi has been known to offer referral bonuses.
As of the time this article is being written, SoFi is offering customers $50 in stock for referring a friend.
Once your friend deposits $100 or more into their SoFi Invest account, you will receive $50, and they will receive $25.
SoFi Account Transfer Bonus
At this point in time, SoFi doesn’t have any account transfer bonuses, however, they will cover your outgoing account transfer fees (up to $75) when moving $5,000 or more to SoFi Invest.
Is SoFi Safe?
It’s completely understandable to be concerned about the safety of your hard earned money.
However, the level of regulation in the US financial space is so high that scams are few and far between when dealing with stock brokerages and banks.
For those who are still concerned, read on for more information:
Regulation
As we mentioned before, the US financial space is highly regulated by the Securities and Exchanges Commission (SEC).
This ensures that all of the companies in the financial space are in good standing, and keep the safety of investors at the front of their minds.
In addition to the high level of regulation, SoFi Invest is also a member of SIPC, a federal entity that certifies brokerages, and insures deposits of up to $250,000.
Security
Aside from the typical username and password that are required to be entered to view your accounts, SoFi also requires a form of two-factor authentication.
This means every time you log into your SoFi account from a new browser, you’ll be prompted to enter a code that’s texted to you.
This is an additional layer of security that helps keep your money safe from any bad actors.
Risks
At the end of the day, most of the risk investors take on when investing in the stock market can be attributed to the individual investor.
In the stock market, there are plenty of complex securities that normal investors can severely harm their financial security with.
Fortunately though, SoFi heavily restricts the securities that can be traded on their platform.
However, keep in mind, that does not mean there aren’t any risks!
SoFi Pros & Cons
SoFi certainly isn’t a perfect brokerage, however, it works well for the niche that it caters to – beginner investors.
In order to help you understand if SoFi is the right brokerage for you, we’ve put together a list of pros and cons below:
Pros
- Trade Stocks and Crypto Using the Same Platform: Most people like to keep their investments simple. Generally speaking, most people prefer to have as few accounts as possible. With SoFi, you don’t have to worry about creating a separate crypto trading account.
- Low-Cost Automated Investing: At just 0.25% in management fees, SoFi’s robo-advisor is a relatively inexpensive option.
- Automatically Dollar Cost Average: Dollar cost averaging is a great way to invest, but it can be a pain to do so at certain brokerages. SoFi allows you to not only make recurring deposits into your account, but it also allows you to automatically buy stock with that money.
Cons
- Limited Investable Securities: SoFi doesn’t have a great lineup of investable securities. They only allow customers to invest in stocks, ETFs, and a limited variety of crypto.
- Lack of Investment Research Tools: With just recent news and basic stock-related metrics, SoFi has an incredibly limited number of research tools.
- Mediocre User Interface: SoFi’s user interface is surprisingly clunky, given the fact that they offer so little in terms of both investments and information.
Is SoFi Right for You?
SoFi is a great brokerage for the right person. At the end of the day, SoFi has a decent product that has a niche that it serves well.
Who SoFi Is Best For
If you haven’t started investing yet, and are looking for a simple way to get started with a company you might already have a relationship with, SoFi is a great choice.
They support all of the securities that a beginner investor needs to be successful.
Not to mention, SoFi also allows users to make recurring investments in specific securities.
This is great for those looking for a truly hands-off approach to investing.
Who SoFi Is Not For
SoFi is definitely not for the intermediate or expert investor.
With SoFi, you will not be able to execute more complex investment strategies, such as short selling, or hedging.
To put it simply, SoFi doesn’t have the investment infrastructure needed to support a more advanced investor.
How to Sign Up For SoFi (Step-by-Step)
If you like what you’re reading about SoFi, and would like to sign up for an account, we’ll walk you through exactly how to set up an account below:
Step 1: Select The Account You’d Like to Open
Make the decision between a Self-Directed IRA, Traditional Self-Directed Brokerage Account, or Automated Investing Account.
The first two options will allow you to pick your investments, whereas the Automated Investing Account is a robo-advisor.
Step 2: Enter Your Personal Information
This is a typical step involved with opening a brokerage account at any broker.
You will be required to provide your name, address, Social Security Number/ITIN, as well as your income, employment detail, and other misc personal information.
Step 3: Make Any Necessary Disclosures
This is another boilerplate step involved in opening a brokerage account.
You are legally required to disclose any conflicts of interest you may have, for the purposes of monitoring and mitigating insider trading.
Most of us out there will answer “No” to all of the above questions.
Step 4: Agree to the Terms of Service and Disclosures
The last step is yet another commonly seen step in applying for any type of online account.
All you have to do is read the terms of service/disclosures and check the box agreeing to them before you hit submit.
How to Buy Stock on SoFi (Step-by-Step)
Once you’ve got an account set up, it’s time to make your first stock purchase.
We’ve walked you through how to buy your first stock on SoFi below:
Step 1: Select a Stock You’d Like To Buy
Search up the stock or ETF that you’d like to buy using the search bar.
Step 2: Decide How Much You’re Buying
Decide whether you’ll be buying fractional share (dollars) or entire shares, and then input how much you would like to buy.
Step 3: Review Your Purchase
Make sure that you’re purchasing the right stock and amount that you intended to purchase
Step 4: Place Your Order
Once you’ve ensured that everything is correct, click the button to place your order.
Final Thoughts
Overall, SoFi is a halfway decent brokerage for those looking to get started investing.
While they don’t have the tools and techniques that more advanced investors require, that’s also not the type of investor they cater to.
They make it easy for people who are already in their ecosystem to get started.
And at the end of the day, if someone who wouldn’t have otherwise invested their money, starts investing because they’re with SoFi, that’s a win in our book.
Frequently Asked Questions
- How do I get my money out of SoFi Invest?
- Is SoFi invest FDIC insured?
- Who owns SoFi Invest?
Author:
Logan is a practicing CPA and founder of Choice Tax Relief and Money Done Right. After spending nearly a decade in the corporate world helping big businesses save money, he launched his blog with the goal of helping everyday Americans earn, save, and invest more money. Learn more about Logan.
