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SoFi Lively Investing vs. Robinhood


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Today, there are such a lot of commission-free brokers you need to use to start out investing. However whereas brokers all promote totally different sign-up bonuses or that they are your only option, it is laborious to select a winner since you could have so many selections.

SoFi Lively Investing and Robinhood are two main brokers that cater to new buyers who need a straightforward solution 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 protecting these variations and the professionals and cons that can assist you discover one of the best dealer for you.

About SoFi

SoFiSoFi is an internet financial institution and monetary providers firm that was based in 2011. Since its inception, the corporate has grown to over 4 million members and develop into probably the most standard 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 may also commerce shares and ETFs on Robinhood with out paying commissions. However the platform can also 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 lively customers, making it considerably bigger than SoFi.

SoFi vs. Robinhood – Buying and selling Charges

Each SoFi Lively Make investments and Robinhood provide 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 fees brokers, however that is barely noticeable and a daily price for brokers.

One huge distinction between SoFi and Robinhood is that Robinhood additionally gives commission-free choices buying and selling. Most brokers cost $0.65 per contract, so should you incessantly commerce choices, Robinhood might assist you save on charges.

It is also price 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. That is why 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 out there investments in comparison with different main on-line brokers:

 
SoFi
Robinhood
Shares & ETFs
Sure
Sure
Mutual Funds
No
No
Bonds
No
No
CDs
No
No
Cryptocurrency
30
11
Choices
No
Sure
Futures
No
No
Fractional Shares
Sure
Sure
IPOs
Sure
Sure
Fiat Currencies
No
No

As talked about, the principle distinction is you could 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 help IPO investing. These alternatives aren’t all the time out there and may have totally different investing necessities. Moreover, IPO investing will 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 manner, fractional shares are a wonderful solution to begin investing with little cash, so it is good each platforms have this selection.

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

SoFi vs. Robinhood – Crypto Buying and selling

If you wish to put money into cryptocurrency, SoFi Lively Make investments and Robinhood have the fundamentals you want. With SoFi, you possibly can commerce standard 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 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 solution to transfer your crypto is to promote it for fiat after which withdraw your funds. SoFi states including exterior pockets help is not a deliberate characteristic presently.

As for Robinhood, it gives 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 standard 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. This can be a huge benefit over SoFi for the reason that extra management you could 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 manner, 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 could 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 gives 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 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 belongings in chilly storage to enhance safety. At the moment, 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. However we nonetheless do not suppose it’s best to use both dealer for crypto investing.

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

SoFi vs. Robinhood – Buyer Help

Each SoFi and Robinhood provide cellphone buyer help. Nevertheless, Robinhood has 24/7 help whereas SoFi’s help 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. Widespread complaints for each platforms embrace gradual and irritating buyer help experiences. That is clearly an space the place each brokers can enhance. If you’d like an choice with a lot better help (and bodily places), we recommend TD Ameritrade.

Tie — Each corporations might 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 Lively Investing buyer, you could have entry to loads of different monetary instruments. A few of SoFi’s most original options embrace:

  • Free Human Advisors: All SoFi clients can get free recommendation from SoFi’s staff of licensed monetary planners.
  • Different SoFi Merchandise: SoFi offers 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 rise up to $300 totally free for establishing qualifying direct deposits.

Distinctive Robinhood Options

As one of many finest investing apps for novices, 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 instantaneous deposits, Morningstar skilled analysis, Degree 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 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 permits you to routinely round-up purchases equally to Acorns so that you routinely make investments. You do not pay month-to-month charges and you may also 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 Execs & Cons

execs

  • Free entry to human monetary advisors
  • Fee-free inventory and ETF buying and selling
  • Extra cryptocurrency choice than Robinhood
  • Use different SoFi providers, 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
  • Does not help 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 Execs & Cons

execs

  • 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 help 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 fundamental promoting level is that you just get free entry to human monetary advisors. It is also a wonderful on-line dealer should you plan on utilizing its different providers, like SoFi Cash, SoFi Automated Investing, or its money administration account. The truth is, its money administration account has larger rates of interest than many high-yield financial savings accounts, so it is a wonderful choice for parking idle money. However if you wish to commerce choices, SoFi positively is not the suitable dealer for you.

Get Began With SoFi

Who Ought to Use Robinhood?

We expect Robinhood is finest 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 presently. 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 develop into that a lot better.

Backside Line

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

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

Advertiser Disclosure – This commercial incorporates data and supplies supplied by Robinhood Monetary LLC and its associates (“Robinhood”) and InvestorJunkie, a 3rd get together 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 just isn’t a member of FINRA or SIPC.”

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