SoFi Active Investing vs. Robinhood

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These days, there are such a lot of commission-free brokers you need to use to begin investing. But whereas brokers all promote totally different sign-up bonuses or that they are the best choice, it is arduous to select a winner since you will have so many decisions.

SoFi Active Investing and Robinhood are two main brokers that cater to new traders who need a simple approach to commerce. But regardless of being commission-free, there are some variations in out there 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 the very best dealer for you.

About SoFi

SoFi is a web-based financial institution and monetary companies firm that was based in 2011. Since its inception, the corporate has grown to over 4 million members and grow to be some of the widespread investing platforms for millennials and new traders.

SoFi Active Investing is its commission-free dealer that permits you to commerce shares, ETFs, and crypto. But the corporate 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 Active Investing, you may as well commerce shares and ETFs on Robinhood with out paying commissions. But the platform can also be very fashionable for its commission-free choices buying and selling and easy-to-use cell app.

The firm additionally grew quickly in 2021 as extra newbie traders flocked to fee-free on-line brokers to begin 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 – Trading Fees

Both SoFi Active Invest and Robinhood provide commission-free buying and selling for shares and exchange-traded funds (ETFs). This is in-line with the wave of brokers which might be going fee free. You nonetheless pay small charges that FINRA prices brokers, however that is barely noticeable and a daily charge 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 for those who steadily commerce choices, Robinhood may assist you to save on charges.

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

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

SoFi vs. Robinhood – Available Investments

Both SoFi and Robinhood are a bit restricted by way of out there investments in comparison with different main on-line brokers:

  SoFi Robinhood
Stocks & ETFs Yes Yes
Mutual Funds No No
Bonds No No
CDs No No
Cryptocurrency 30 11
Options No Yes
Futures No No
Fractional Shares Yes Yes
IPOs Yes Yes
Fiat Currencies No No

As talked about, the principle distinction is that you could commerce choices with Robinhood in contrast to SoFi. But neither dealer helps mutual funds, bonds, or CDS such as you discover with many different on-line brokers. However, each SoFi and Robinhood assist IPO investing. These alternatives aren’t all the time out there and might have totally different investing necessities. Additionally, IPO investing will be fairly dangerous.

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

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

SoFi vs. Robinhood – Crypto Trading

If you need to spend money on cryptocurrency, SoFi Active Invest and Robinhood have the fundamentals you want. With SoFi, you’ll be able to commerce widespread cryptos beginning with simply $10. At 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 charge on each commerce, which is the principle draw back. And at the moment, you’ll be able to’t switch the crypto you purchase to a different pockets. This means the one approach 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 out there cryptocurrencies on the time of writing. You can begin buying and selling with simply $1, and also you get the key cash like BTC and ETH plus widespread choices like Solana and Shiba Inu. But in contrast to SoFi, Robinhood is rolling out the flexibility to obtain and ship crypto to different pockets addresses. This is a large benefit over SoFi because the extra management you will have over your funds, the higher.

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

Either method, we do not suggest SoFi or Robinhood for crypto buying and selling. You’re significantly better off utilizing a devoted cryptocurrency trade like FTX.US, Coinbase, or Gemini the place you will have extra instruments and decrease charges.

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

SoFi vs. Robinhood – Account Types

Currently, SoFi Active Invest prospects can open a number of account sorts, together with:

  • Traditional, Roth, SEP, and Rollover IRAs
  • Individual taxable account
  • Joint accounts

In distinction, Robinhood solely provides particular person taxable accounts and continues to be engaged on its retirement accounts. This is a major benefit of SoFi if you wish to make investments by means of tax-advantaged accounts.

Winner — SoFi helps extra account choices than Robinhood.

SoFi vs. Robinhood – Security

Both SoFi and Robinhood are secure brokers that take quite a few steps to guard your funds and private data. With SoFi, you’ll be able to 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’ll be able to 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. Currently, SoFi does not state it has any digital asset insurance coverage. In distinction, Robinhood carries crime insurance coverage that protects a few of its digital belongings. But we nonetheless do not suppose 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 – Customer Support

Both SoFi and Robinhood provide telephone buyer assist. However, 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.

At the time of writing, SoFi has a 2.5 star score on Trustpilot and Robinhood has a 1.1 star score. Common complaints for each platforms embody gradual and irritating buyer assist experiences. This is clearly an space the place each brokers can enhance. If you need an possibility with significantly better assist (and bodily places), we recommend TD Ameritrade.

Tie — Both corporations may enhance their customer support.

Unique SoFi Features

One cause individuals like SoFi is that it has so many services in its ecosystem. So, as an Active Investing buyer, you will have entry to loads of different monetary instruments. Some of SoFi’s most original options embody:

  • Free Human Advisors: All SoFi prospects can get free recommendation from SoFi’s workforce of licensed monetary planners.
  • Other SoFi Products: SoFi gives members with entry to mortgage refinancing, private loans, mortgages, property planning companies, and different monetary companies.
  • SoFi Credit Card: This no-fee bank card pays you as much as 3% in cash-back rewards.
  • SoFi Money: Open a money administration account with SoFi and earn as much as 1.25% APY and stand up to $300 totally free for organising qualifying direct deposits.

Unique Robinhood Features

As top-of-the-line investing apps for inexperienced persons, individuals 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 thirty days, you’ll be able to improve to Robinhood Gold and get bigger prompt deposits, Morningstar skilled analysis, Level II Nasdaq information, and entry to margin investing.
  • Margin Accounts: As talked about, Robinhood Gold prospects can commerce on margin. The first $1,000 of margin is included within the month-to-month worth. You at the moment pay 3.5% yearly curiosity on margin quantities over $1,000, which is a really aggressive margin price.
  • Free Stock Rewards: New Robinhood prospects can get a free inventory valued between $5 and $200 for opening and funding an account.
  • Cash Card: Robinhood’s money card helps 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 may as well receives a commission early and arrange automated investments. Plus, you earn weekly bonuses in your round-ups to encourage diligent investing.

SoFi Active Invest Pros & Cons

professionals

  • Free entry to human monetary advisors
  • Commission-free inventory and ETF buying and selling
  • More cryptocurrency choice than Robinhood
  • Use different SoFi companies, like its robo-advisor or money administration account
  • Supports retirement accounts and joint accounts in contrast to Robinhood

cons

  • Expensive crypto buying and selling charges
  • Doesn’t assist choices or margin buying and selling like Robinhood
  • You cannot ship crypto from SoFi to a different pockets
  • Many SoFi ETFs have excessive expense ratios
  • Poor customer support

Robinhood Pros & Cons

professionals

  • Commission-free inventory and ETF buying and selling like SoFi plus free choices buying and selling
  • Robinhood Gold gives rather more market analysis and information
  • Get a free inventory for signing up
  • Earn rewards and construct good investing habits with Robinhood’s money card
  • Very easy-to-use app
  • Robinhood is rolling out assist for sending crypto to different wallets

cons

  • High crypto unfold charges
  • Retirement and joint accounts aren’t out there at the moment
  • Fewer cryptocurrencies than SoFi
  • Poor customer support

Who Should Use SoFi?

In our opinion, SoFi’s major promoting level is that you just get free entry to human monetary advisors. It’s additionally a superb on-line dealer for those who plan on utilizing its different companies, like SoFi Money, SoFi Automated Investing, or its money administration account. In truth, its money administration account has larger rates of interest than many high-yield financial savings accounts, so it is a superb possibility for parking idle money. But if you wish to commerce choices, SoFi undoubtedly is not the precise dealer for you.

Get Started With SoFi

Who Should Use Robinhood?

We suppose Robinhood is greatest for anybody who desires to dabble in inventory, ETF, and choices buying and selling. The app is extremely straightforward to make use of, which is why it is grown in recognition so rapidly. We do not counsel Robinhood’s crypto investing choices presently. But the very fact the platform is rolling out enhancements like crypto transfers is a plus. And when retirement accounts can be found, the app will grow to be that significantly better.

Bottom Line

Both SoFi and Robinhood are extremely widespread, significantly for youthful traders who’re simply dipping their toes into inventory and ETF buying and selling. And for those who make use of their distinctive options, you’ll be able to definitely take advantage of out of both firm.

If you are in search of mutual funds, bonds, and extra banking options, we desire choices like TD Ameritrade and Ally Invest. But for easy, low-fee buying and selling, you’ll be able to’t go mistaken with both Robinhood or SoFi. Just bear in mind customer support is not all the time speedy or stellar, so preserve this in thoughts when signing up.

Advertiser Disclosure – This commercial comprises data and supplies supplied by Robinhood Financial LLC and its associates (“Robinhood”) and InvestorJunkie, a 3rd celebration not affiliated with Robinhood. All investments contain threat and the previous efficiency of a safety, or monetary product doesn’t assure future outcomes or returns. Securities supplied by means of Robinhood Financial LLC and Robinhood Securities LLC, that are members of FINRA and SIPC. InvestorJunkie will not be a member of FINRA or SIPC.”

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