What is SoFi Invest?

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SoFi Invest

Overall Rating

9

Bottom Line

SoFi Invest is an affordable and easy-to-use investing platform. Not only does it boast multiple useful features and a solid mobile app, but SoFi Invest also has some of the lowest fees and expense ratios in the industry.

Pros

  • Automated investing
  • Access to crypto, stocks, and ETFs
  • Low-cost investments
  • Free human support

Cons

  • No mutual funds
  • High outgoing transfer fee
  • No tax-loss harvesting

Customer Support

9.0

User Experience

9.5

You’re anxious to start investing and looking for a trading platform that’s affordable and easy-to-use.

SoFi Invest is one option that should definitely be on your list. This post covers what SoFi Invest is, what the company has to offer, and the pros and cons of being a customer.

So, What is SoFi Invest?

SoFi Invest, which used to be known as SoFi Wealth, is an automated investing platform. The service is offered by Social Finance (SoFi), which an online personal finance company based out of San Diego. SoFi initially started out as a student loan refinancing company and has gained massive traction since its inception.

You can use the SoFi automated investing app on iOS and Android devices to invest in the stock market, either through a hands-on or robo advisor approach.

Learn More:

SoFi Invest Account Types

Let’s explore the main features that you can access as a SoFi Invest customer.

Active investing

Hands-on investors can make commission-free trades with active investing.

Commission-free trading has become a standard offering among brokerage accounts in recent years, but it’s still a big deal. When you make a trade, the majority of your money goes toward investments and not towards administrative fees.

Investors can also create custom watchlists that connect to real-time market data, so you can follow specific stocks and track the market based on your preferences.

Automated investing

Not all investors these days are looking for active investing. In recent years the demand is skyrocketing for automated investing services, mostly in the form of robo advisor accounts.

SoFi Invest’s automated investing service is a robo advisor service that makes it easy for beginners to trade with limited experience or market knowledge.

If you sign up for automated investing through SoFi Invest, you can benefit from a goal planning service, auto rebalancing, and automated account diversification — all with little to no research or planning on your behalf.

One feature that really makes SoFi’s robo advisor stand out is that it’s 100% free. So you don’t have to worry about paying, for example, a 0.25% assets under management fee that you would have to pay with its main competitors (namely Betterment and Wealthfront).

Stock Bits

Stock Bits is a fractional trading feature that lets investors own parts of a stock without having to buy a full share. With Stock Bits, you can buy pieces of stock for as little as $1. And, if you choose to reinvest your shares, you can work your way up to a full share over time.

Fractional trading is another growing trend among millennials because it enables you to buy into expensive stocks that are too expensive for many investors to purchase outright.

Consider that one share of Amazon stock is trading for over $3,000 at the time of this writing. By investing in fractional shares through Stock Bits, you can benefit from owning part of a high-growth company, without having to spend all of your savings on one stock.

Retirement accounts

If you’re thinking of planning for retirement (and you should be!), SoFi makes it possible with the following types of retirement accounts:

  • SoFi Individual Retirement Account (IRA) is a traditional IRA account, meaning that you deposit pre-tax money, but pay taxes on the earnings when you withdraw it at retirement. The maximum IRA contribution limit for tax year 2021 is $6,000.
  • SoFi-managed Roth IRA is a standard Roth IRA account, where you are depositing money that you’ve already paid taxes on (so you won’t have to pay taxes again on the funds when you need them during retirement). Similar to a Traditional IRA, the maximum contribution limit is $6,000 for tax year 2021.
  • SoFi SEP IRA is for self-employed investors, who can deposit up to 25% of the net profit of their business, up to a maximum of $54,000 annually.

Each retirement account offers either automated or active investing, so you can either sit back and let SoFi handle your asset allocation or hand-pick each fund in your retirement portfolio.

Cryptocurrency trading

Cryptocurrency is exploding in popularity, largely due to Bitcoin’s 2020 bull run that saw the coin rise in value from about $4,000 to $40,000 in just a matter of months.

SoFi Invest offers a secure crypto trading platform, where you can purchase leading digital assets, such as Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC), right from your main SoFi account (or within the app).

As a full disclaimer, cryptocurrency is extremely volatile and risky. Just because SoFi invest offers a high-quality cryptocurrency platform, it doesn’t necessarily mean you should use it.

Before you invest in cryptos, familiarize yourself with how the market works, form a strategy and understand that you could lose money.

Exchange-traded funds (ETFs)

In addition to buying individual stocks, you can also buy SoFi’s proprietary exchange-traded funds (ETFs).

SoFi ETFs are intelligently weighted by growth, instead of just market capitalization. Investors also benefit from auto-rebalancing and intelligent diversification.

Here’s a look at the ETFs that you can currently purchase through SoFi Invest:

  • SoFi Weekly Income ETF (TGIF) is an actively-managed fixed income ETF that aims to distribute earnings to investors every Friday.
  • SoFi Gig Economy ETF (GIGE) is a low-fee ETF that invests in high-growth technology companies.
  • SoFi Select 500 ETF (SFY) is an actively-managed ETF that focuses on the top publicly traded fortune 500 companies in the U.S.
  • SoFi Next 500 ETF (SFYX) focuses on growing mid-cap U.S. companies.
  • SoFi 50 ETF (SFYF) is a low-fee ETF that consists of the top 50 traded stocks on the SoFi Invest platform.

Investing 101

SoFi’s platform is robust enough to support expert traders. However, the company seems to make a point to provide guidance and education for beginning investors. So if you’re new to investing, this is a good place to start.

At SoFi’s Investing 101 hub, you can learn all about various asset classes like stocks, bonds, certificates of deposits (CDs), and more. There’s also helpful information about goal setting and a variety of other educational resources to explore.

What’s more, SoFi Invest provides access to the SoFi community, where you can connect with other investors and exchange tips and strategies.

Sofi Invest Pricing

SoFi Invest is known for its affordable pricing. The app has an account minimum of $0 and there are no account management fees.

The lack of management fees is important, especially if you plan on investing small amounts through Stock Bits. Since there are no fees, you don’t have to worry about gains being offset.

There are portfolio expense ratios but that is to be expected when investing in managed funds. Fortunately, SoFi Invest’s expense ratio of 0.05% is among the lowest you can find.

The biggest fee to watch out for is a $75 full outgoing transfer fee, which gets charged if you decide to close your account. This is also a pretty standard fee among large financial institutions.

One of the best values that SoFi Invest offers too is a human advisor option at no extra cost. So if you’re looking for the added support of a human, you won’t have to worry about paying for it.

Signing Up and Getting Started with SoFi Invest

Signing up for SoFi Invest takes just a few minutes online. All you have to do is enter your basic personal information and link to another bank account where you want to transfer your funds from.

Since the company is online-only, accounts are available to residents of all 50 states in the U.S.

SoFi Invest Promotions

SoFi Invest is now offering a cryptocurrency promotion that pays $25 in Bitcoin after your first crypto trade of $10 or more.

In addition, the company management fees are waived for at least the first year on both the SoFi Select 500 (SFY) and SoFi Next 500 (SFYX) ETFs.

So if you’re considering investing in cryptocurrency or ETFs, SoFi’s promotions are worth checking out.

SoFi Invest Security

SoFi Invest offers robust, enterprise-banking level account security.

As an SEC-regulated brokerage firm, customer funds are protected by the Securities Investor Protection Corporation (SIPC). This means if SoFi goes under, your investment amounts up to $500,000 are insured. Cash amounts are insured up to $250,000.

In short, you can feel as safe about using SoFi Invest as you should with any other leading brokerage firm.

Customer Service and Support

SoFi Invest offers customer service over the phone, email, and live chat.

To speak with a SoFi Invest support agent, give them a call at 1-(855)-525-SOFI (7634).

At the time of writing, phone support is available Monday through Thursday from 8 a.m. to 8 p.m. ET, and until 4 p.m. on Friday.

The ability to speak with a real customer support agent can be tricky with free online investment platforms. So the fact that SoFi offers this level of customer support is a clear benefit.

Pros and Cons of SoFi Invest

Advantages

  • Low-cost investments
  • Free human support
  • Automated investing
  • Access to stocks, ETFs, cryptocurrency
  • Above-average customer support
  • User-friendly platform

Disadvantages

  • No mutual funds
  • High outgoing transfer fee
  • No tax-loss harvesting option

Alternatives to SoFi Invest

Before you sign up for a SoFi investment account, it’s a good idea to explore some of its competitors.

Fidelity

Fidelity is a leading U.S. stockbroker that’s been around since 1946. Fidelity now offers the Spire mobile app, which helps investors plan, save, and invest for specific goals.

Chase

Chase offers You Invest, a powerful mobile platform that comes with the support of a robo-advisor. However, this feature comes with a minimum $500 investment.

Schwab

Schwab is another top broker, offering Intelligent Portfolios for automated investing. This service comes with a minimum investment of $5,000.

Robinhood

Robinhood is a popular, no-fee online trading platform that also offers cryptocurrencies.

Vanguard

Vanguard is one of the longest-established financial institutions, offering investing accounts, retirement accounts, ETFs, index funds, and more.

Frequently Asked Questions

Is SoFi Invest legit?

Yes. SoFi Invest is a safe and legitimate investment service that makes it easy and convenient for users to make trades and manage their portfolios on the go.

The service is known for its commission-free trades, as well as its free advisory services. The company makes money in a number of other ways, including their lending products and interest on uninvested cash held in accounts.

Can I rely on SoFi for investment advice?

Yes. SoFi has emerged as a trusted advisor in the financial industry. Its robo advisor uses a powerful algorithm that makes intelligent investment decisions. As a customer, you can follow along or take over the reins if you prefer.

Is SoFi Invest free?

SoFi Invest offers free management along with low-cost ETFs. As a result, SoFi is one of the most affordable budget investment services for consumers on the market.

SoFi invest also gives free access to financial advisors, meaning investors can receive ongoing guidance and support whenever it’s required. This is not something that many competitors provide.

Should I use a robo advisor?

A robo advisor can be useful because it’s a hands-free way to manage your investments. As a result, you eliminate the hassle of having to pick your own stocks and rebalance your accounts.

If you opt to use a robo advisor, it’s a good idea to check in on what the service is doing on a regular basis so that you don’t get caught off guard with any surprises. Plus, by watching what the robo-advisor does, you can increase your knowledge about the market.

Should I invest in cryptocurrency?

It depends on your financial situation and risk tolerance.

SoFi offers a cryptocurrency service, which is great if you’re looking to buy tokens like Bitcoin or Etherum. However, cryptocurrency trading is risky. Many investors have lost money throwing money blindly at emerging cryptocurrencies thinking they will skyrocket in value, only to watch them stagnate or fall out of fashion.

If you’re thinking about investing in cryptocurrency in the SoFi app, set an investment strategy and proceed with caution. Start slow, and build from there.

The Bottom Line

SoFi Invest is part of a new class of mobile investment advisors that make it easy for consumers to manage their investment portfolios.

When it comes to customer service and overall financial product quality, it’s safe to say that SoFi Invest is above average in comparison with its competitors. And the fact that the service is free makes it even more appealing.

If there’s one thing to keep in mind though, it’s that a robo advisor can make you lazy if you’re not careful. Instead of blindly trusting what an algorithm says, remember to pay attention to where your money is going. Always ask if there are better decisions than what the computer is recommending. Research on your own, and try to see if you can outperform it on your own.

In time, you may decide that active investing is better for you. Or maybe it’s not. SoFi Invest makes it easy to take either course.

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