SoFi Active Investing vs. Robinhood


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Lately, there are such a lot of commission-free brokers you should use to begin investing. However whereas brokers all promote totally different sign-up bonuses or that they are your best choice, it is laborious to select a winner since you’ve so many decisions.

SoFi Energetic Investing and Robinhood are two main brokers that cater to new buyers who need a simple option to commerce. However 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 masking these variations and the professionals and cons that will help you discover the very best dealer for you.

About SoFi

SoFi is an internet financial institution and monetary companies firm that was based in 2011. Since its inception, the corporate has grown to over 4 million members and change into probably the most widespread investing platforms for millennials and new buyers.

SoFi Energetic Investing is its commission-free dealer that permits 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 Energetic Investing, it’s also possible to 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 begin buying and selling. In December 2021, Robinhood had over 17 million month-to-month lively customers, making it considerably bigger than SoFi.

SoFi vs. Robinhood – Buying and selling Charges

Each SoFi Energetic 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 are going fee free. You continue to pay small charges that FINRA expenses brokers, however that is barely noticeable and a daily price for brokers.

One huge distinction between SoFi and Robinhood is that Robinhood additionally affords commission-free choices buying and selling. Most brokers cost $0.65 per contract, so for those who incessantly commerce choices, Robinhood may provide help 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 price, and the TGIF ETF has a 0.59% price. For this 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 – Out there Investments

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

 SoFiRobinhood

Shares & ETFsYesYes

Mutual FundsNoNo

BondsNoNo

CDsNoNo

Cryptocurrency3011

OptionsNoYes

FuturesNoNo

Fractional SharesYesYes

IPOsYesYes

Fiat CurrenciesNoNo

As talked about, the principle distinction is you can commerce choices with Robinhood in contrast to 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 all the time out there and may have totally different investing necessities. Moreover, IPO investing might be fairly dangerous.

Each brokers additionally allow you to put money into 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 option to begin investing with little cash, so it is good each platforms have this feature.

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

SoFi vs. Robinhood – Crypto Buying and selling

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

SoFi works with crypto alternate companions like Coinbase to securely course of trades. You pay a 1.25% transaction price on each commerce, which is the principle draw back. And at present, you possibly can’t switch the crypto you purchase to a different pockets. This implies the one option 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 right now.

As for Robinhood, it affords 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 most important cash like BTC and ETH plus widespread choices like Solana and Shiba Inu. However in contrast to SoFi, Robinhood is rolling out the flexibility to obtain and ship crypto to different pockets addresses. It is a huge benefit over SoFi because the extra management you’ve 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 similar to SoFi.

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

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

SoFi vs. Robinhood – Account Sorts

Presently, SoFi Energetic Make investments clients can open a number of account sorts, together with:

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

In distinction, Robinhood solely affords particular person taxable accounts and continues to be engaged on its retirement accounts. It is a important 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 secure brokers that take quite a few steps to guard your funds and private info. With SoFi, you possibly can rise 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 rise 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 property in chilly storage to enhance safety. Presently, 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 property. However we nonetheless do not assume you need to use both dealer for crypto investing.

Winner — Robinhood takes a slight edge due to its crime insurance coverage.

SoFi vs. Robinhood – Buyer Assist

Each SoFi and Robinhood supply telephone buyer assist. Nevertheless, Robinhood has 24/7 assist whereas SoFi’s assist hours are from 5:00am to five:00pm PT in the course of 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. Frequent complaints for each platforms embody gradual 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 recommend TD Ameritrade.

Tie — Each corporations may enhance their customer support.

Distinctive SoFi Options

One purpose individuals like SoFi is that it has so many services and products in its ecosystem. So, as an Energetic Investing buyer, you’ve 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 workforce of licensed monetary planners.
Different SoFi Merchandise: SoFi offers members with entry to mortgage refinancing, private loans, mortgages, property planning companies, and different monetary companies.
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 rise up to $300 without spending a dime for establishing qualifying direct deposits.

Distinctive Robinhood Options

As among the best 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 30 days, you possibly can improve to Robinhood Gold and get bigger prompt deposits, Morningstar skilled analysis, Stage II Nasdaq knowledge, 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 worth. You at present pay 3.5% yearly curiosity on margin quantities over $1,000, which is a really aggressive margin price.
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 helps you to routinely round-up purchases equally to Acorns so that you routinely make investments. You do not pay month-to-month charges and it’s also possible to receives a commission early and arrange automated investments. Plus, you earn weekly bonuses in your round-ups to encourage diligent investing.

SoFi Energetic Make investments Professionals & Cons

professionals

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

cons

Costly crypto buying and selling charges
Would not assist choices or margin buying and selling like Robinhood
You’ll be able to’t ship crypto from SoFi to a different pockets
Many SoFi ETFs have excessive expense ratios
Poor customer support

Robinhood Professionals & Cons

professionals

Fee-free inventory and ETF buying and selling like SoFi plus free choices buying and selling
Robinhood Gold offers way more market analysis and knowledge
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

Excessive crypto unfold charges
Retirement and joint accounts aren’t out there at present
Fewer cryptocurrencies than SoFi
Poor customer support

Who Ought to Use SoFi?

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

Get Began With SoFi

Who Ought to Use Robinhood?

We predict Robinhood is greatest for anybody who desires to dabble in inventory, ETF, and choices buying and selling. The app is extremely simple to make use of, which is why it is grown in reputation so rapidly. We do not recommend Robinhood’s crypto investing choices right now. However the truth the platform is rolling out enhancements like crypto transfers is a plus. And when retirement accounts can be found, the app will change into that a lot better.

Backside Line

Each SoFi and Robinhood are extremely widespread, notably for youthful buyers who’re simply dipping their toes into inventory and ETF buying and selling. And for those who make use of their distinctive options, you possibly can actually take advantage of out of both firm.

Should you’re in search of mutual funds, bonds, and extra banking options, we want choices like TD Ameritrade and Ally Make investments. However for easy, low-fee buying and selling, you possibly can’t go flawed with both Robinhood or SoFi. Simply remember customer support is not all the time fast or stellar, so hold this in thoughts when signing up.

Advertiser Disclosure – This commercial incorporates info and supplies supplied by Robinhood Monetary LLC and its associates (“Robinhood”) and InvestorJunkie, a 3rd celebration not affiliated with Robinhood. All investments contain danger and the previous efficiency of a safety, or monetary product doesn’t assure future outcomes or returns. Securities provided via Robinhood Monetary LLC and Robinhood Securities LLC, that are members of FINRA and SIPC. InvestorJunkie is just not a member of FINRA or SIPC.”



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