SoFi Active Investing vs. Robinhood

As of late, there are such a lot of commission-free brokers you should utilize to start out investing. However whereas brokers all promote completely different sign-up bonuses or that they are your only option, it is exhausting to select a winner since you may have so many selections.

SoFi Lively Investing and Robinhood are two main brokers that cater to new buyers who need a simple method to commerce. However regardless of being commission-free, there are some variations in accessible investments and distinctive options that differentiate the 2 corporations.

Our SoFi vs. Robinhood breakdown is overlaying these variations and the professionals and cons that can assist you discover one of the best dealer for you.

About SoFi

SoFi is a web based financial institution and monetary providers firm that was based in 2011. Since its inception, the corporate has grown to over 4 million members and turn into some of the in style investing platforms for millennials and new buyers.

SoFi Lively Investing is its commission-free dealer that allows you to commerce shares, ETFs, and crypto. However the firm additionally has quite a few different options, together with a robo-advisor, mortgage merchandise, and money administration account.

About Robinhood

Robinhood is a number one on-line dealer that started in 2013. Like SoFi Lively Investing, you can too commerce shares and ETFs on Robinhood with out paying commissions. However the platform can be extremely popular for its commission-free choices buying and selling and easy-to-use cell app.

The corporate additionally grew quickly in 2021 as extra newbie buyers flocked to fee-free on-line brokers to start out buying and selling. In December 2021, Robinhood had over 17 million month-to-month energetic customers, making it considerably bigger than SoFi.

SoFi vs. Robinhood – Buying and selling Charges

Each SoFi Lively Make investments and Robinhood supply commission-free buying and selling for shares and exchange-traded funds (ETFs). That is in-line with the wave of brokers which might be going fee free. You continue to pay small charges that FINRA costs brokers, however that is barely noticeable and a daily payment for brokers.

One huge distinction between SoFi and Robinhood is that Robinhood additionally provides commission-free choices buying and selling. Most brokers cost $0.65 per contract, so in case you often commerce choices, Robinhood may assist you to save on charges.

It is also value noting that many SoFi ETFs have excessive expense ratios. For instance, SoFi’s WKLY ETF has a 0.49% annual payment, and the TGIF ETF has a 0.59% payment. This is the reason SoFi Automated Investing, the platform’s robo-advisor service, is not as “fee-free” as meets the attention.

Winner — Each platfoms are commission-free however Robinhood additionally has commission-free choices buying and selling

SoFi vs. Robinhood – Accessible Investments

Each SoFi and Robinhood are a bit restricted when it comes to accessible investments in comparison with different main on-line brokers:

As talked about, the primary distinction is that you may commerce choices with Robinhood not like SoFi. However neither dealer helps mutual funds, bonds, or CDS such as you discover with many different on-line brokers. Nevertheless, each SoFi and Robinhood assist IPO investing. These alternatives aren’t at all times accessible and may have completely different investing necessities. Moreover, IPO investing will be fairly dangerous.

Each brokers additionally allow you to spend money on fractional shares. There is a $0 account opening requirement, and SoFi has a $5 minimal for fractional shares whereas Robinhood’s minimal is $1. Both approach, fractional shares are a superb method to begin investing with little cash, so it is good each platforms have this feature.

Winner — Robinhood takes a slight edge because it provides choices buying and selling.

SoFi vs. Robinhood – Crypto Buying and selling

If you wish to spend money on cryptocurrency, SoFi Lively Make investments and Robinhood have the fundamentals you want. With SoFi, you possibly can commerce in style cryptos beginning with simply $10. On the time of writing, 30 cryptocurrencies can be found, together with:

SoFi works with crypto trade companions like Coinbase to securely course of trades. You pay a 1.25% transaction payment on each commerce, which is the primary draw back. And presently, you possibly can’t switch the crypto you purchase to a different pockets. This implies the one method to transfer your crypto is to promote it for fiat after which withdraw your funds. SoFi states including exterior pockets assist is not a deliberate function presently.

As for Robinhood, it provides fewer altcoins and solely has 11 accessible cryptocurrencies on the time of writing. You can begin buying and selling with simply $1, and also you get the most important cash like BTC and ETH plus in style choices like Solana and Shiba Inu. However not like SoFi, Robinhood is rolling out the power to obtain and ship crypto to different pockets addresses. This can be a huge benefit over SoFi because the extra management you may have over your funds, the higher.

Robinhood advertises it has commission-free crypto buying and selling, however that is considerably deceptive. You continue to pay unfold charges that are fairly excessive and corresponding to SoFi.

Both approach, we do not advocate SoFi or Robinhood for crypto buying and selling. You are a lot better off utilizing a devoted cryptocurrency trade like FTX.US, Coinbase, or Gemini the place you may have extra instruments and decrease charges.

Tie — Each SoFi and Robinhood are lackluster for crypto buying and selling.

SoFi vs. Robinhood – Account Varieties

At the moment, SoFi Lively Make investments clients can open a number of account varieties, together with:

• Conventional, Roth, SEP, and Rollover IRAs
• Particular person taxable account
• Joint accounts

In distinction, Robinhood solely provides particular person taxable accounts and remains to be engaged on its retirement accounts. This can be a vital benefit of SoFi if you wish to make investments via tax-advantaged accounts.

Winner — SoFi helps extra account choices than Robinhood.

SoFi vs. Robinhood – Safety

Each SoFi and Robinhood are protected brokers that take quite a few steps to guard your funds and private data. With SoFi, you possibly can stand up to $1.5 million in FDIC insurance coverage, and your brokerage account will get as much as $500,000 in SIPC insurance coverage. As for Robinhood, you possibly can stand up to $1.25 million in FDIC insurance coverage and the identical $500,000 in SIPC insurance coverage.

For crypto, each corporations use safety measures like storing a majority of belongings in chilly storage to enhance safety. At the moment, SoFi would not state it has any digital asset insurance coverage. In distinction, Robinhood carries crime insurance coverage that protects a few of its digital belongings. However we nonetheless do not assume it’s best to use both dealer for crypto investing.

Winner — Robinhood takes a slight edge because of its crime insurance coverage.

SoFi vs. Robinhood – Buyer Assist

Each SoFi and Robinhood supply cellphone buyer assist. Nevertheless, Robinhood has 24/7 assist whereas SoFi’s assist hours are from 5:00am to five:00pm PT through the week and are closed on weekends.

On the time of writing, SoFi has a 2.5 star score on Trustpilot and Robinhood has a 1.1 star score. Widespread complaints for each platforms embody sluggish and irritating buyer assist experiences. That is clearly an space the place each brokers can enhance. If you would like an choice with a lot better assist (and bodily areas), we advise TD Ameritrade.

Tie — Each corporations may enhance their customer support.

Distinctive SoFi Options

One cause folks like SoFi is that it has so many services and products in its ecosystem. So, as an Lively Investing buyer, you may have entry to loads of different monetary instruments. A few of SoFi’s most unusual options embody:

• Free Human Advisors: All SoFi clients can get free recommendation from SoFi’s crew of licensed monetary planners.
• Different SoFi Merchandise: SoFi supplies members with entry to mortgage refinancing, private loans, mortgages, property planning providers, and different monetary providers.
• SoFi Credit score Card: This no-fee bank card pays you as much as 3% in cash-back rewards.
• SoFi Cash: Open a money administration account with SoFi and earn as much as 1.25% APY and stand up to $300 at no cost for organising qualifying direct deposits.

Distinctive Robinhood Options

As the most effective investing apps for freshmen, folks have a tendency to love Robinhood as a result of it is easy and lets them commerce with out paying too many charges. Plus, it has a number of different distinctive options like:

• Robinhood Gold: For $5 per 30 days, you possibly can improve to Robinhood Gold and get bigger immediate deposits, Morningstar skilled analysis, Degree II Nasdaq information, and entry to margin investing.
• Margin Accounts: As talked about, Robinhood Gold clients can commerce on margin. The primary $1,000 of margin is included within the month-to-month value. You presently pay 3.5% yearly curiosity on margin quantities over $1,000, which is a really aggressive margin charge.
• Free Inventory Rewards: New Robinhood clients can get a free inventory valued between $5 and $200 for opening and funding an account.
• Money Card: Robinhood’s money card allows you to robotically round-up purchases equally to Acorns so that you robotically make investments. You do not pay month-to-month charges and you can too receives a commission early and arrange computerized investments. Plus, you earn weekly bonuses in your round-ups to encourage diligent investing.

SoFi Lively Make investments Professionals & Cons