SoFi Active Investing Review: Pros, Cons, & What We Like

Written by Drew ChenelerUpdated: 2nd Sep 2021
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There are tons of investment platforms and brokerages to choose from these days, which can make finding the ideal app or brokerage for your needs difficult. Today, we’re going to look at SoFi Active Investing in detail.

SoFi Active Investing is an accessible and easy-to-use trading platform that offers commission-free trades for stocks and exchange-traded funds.

Furthermore, SoFi Active Investing allows you to buy and sell a handful of cryptocurrencies, including big ones like Bitcoin and Ethereum.

SoFi Active Investing is also noteworthy as it allows trading of fractional shares, provides access to retirement accounts, and more.

All of your trades can be completed on SoFi’s user-friendly mobile app. This digital platform also operates as a portal through which you can use SoFi’s other financial products and services if you so choose.

While it runs smoothly and has some financial planning services, it lacks some of the advanced functions or controls available on other stock or ETF trading platforms.

That all being said, SoFi Active Investing overall is a solid stock trading brokerage, particularly if you are looking for a service with low fees and a low barrier to entry.

Let’s dive a little deeper into this trading platformand see what it offers up close.

SoFi Active Investing Pros and Cons

Pros:

  • No stock or ETF commission fees
  • Low account minimum
  • Has a smooth, well-performing mobile app
  • Has free financial counseling services and financial planning tools
  • Fractional share trading is available

Cons:

  • No stock-option or mutual funds trading
  • No margin trading
  • Some extra types of retirement accounts would be welcome

SoFi Active Investing Review

  • Account Minimum: $1
  • Fees: 1.25% fee for crypto purchases, no other fees
  • Tradeable Securities: Stocks, ETFs, cryptocurrencies

SoFi Active Investing Features and Benefits

SoFi Active Investing has a lot of major benefits and important features to keep in mind as you decide whether this service is right for your financial goals.

Commission-Free Trades

Perhaps the biggest draw to SoFi’s Active Investing service is the lack of commission fees with any of its trades.

Granted, this isn’t industry-shaking since most brokerages have also removed trading commissions for their online stock and ETF trades. But it’s good to see SoFi follow this trend rather than push against it.

On the downside, of course, SoFi Active Investing doesn’t offer the same variety in tradable securities compared to other investment platforms. For example, you won’t be able to buy or sell mutual funds, index funds and bonds, and more.

That’s the price you pay for having a (mostly) free trading platform in your pocket at all times.

No Account Minimum

Also nice is the fact that you can open a SoFi Active Investing account with just $1: there are no real account minimums to contend with, making this investing service one of the best for budget-minded folks or those without a lot of wealth at the start of their trading journeys.

In comparison, many other trading platforms require you to put down several hundred or several thousand dollars before you can open an account.

This limits the people who can enter the market and start trading; SoFi Active Investing makes trading accessible to practically everyone!

Cryptocurrency Trading

SoFi Active Investing offers cryptocurrency trading options 24 hours a day and seven days a week for future-minded individuals.

You can trade crypto coins through the SoFi Invest platform, the primary platform you’ll use to buy and sell stocks and other financial assets.

At the time of this writing, SoFi lets you trade Bitcoin and Bitcoin Cash, Ethereum and Ethereum Classic, and Litecoin.

While this spread of cryptocurrencies isn’t the most varied on the market, it’s better than nothing. More importantly, SoFi has announced its intention to add up to 40 more digital currencies over time.

If you want to bet big on Bitcoin and similar digital coins, SoFi Active Investing may be the right trading platform for you!

Retirement Accounts Are Available

If you want to plan for retirement or start saving early, SoFi Active Investing can also help with this. You’ll be able to set up traditional, Roth, or SEP-IRA retirement accounts depending on what you need.

Even better, you can set these accounts to be either active investment accounts (i.e., you regularly review your portfolios and add or remove to your positions with time) or automated. With the latter option, your retirement account will simply follow the stock market according to your preferences by investing in predictable funds.

Free Financial Planning Services

Perhaps most important of all is SoFi’s free financial planning services. These are great for everyone, but especially for new investors who want to learn the ropes of investing before putting their money into the market.

These financial planning services can help you identify which stocks or funds are best for your goals, help you identify how much money you need to invest to reach certain returns benchmarks for retirement or other needs, and more.

Fractional Shares

Last but not least, SoFi Active Investing lets you purchase fractional shares. Fractional shares are excellent for individuals without a lot of money to trade. Instead of buying a whole share, you can purchase a portion of a share of stock even for $1.

Thus, you can trade on the stock market no matter how much money you have and eventually see returns. SoFi Active Investing makes it easier than ever for beginner investors to jump into the stock market.

How Does SoFi Active Invest Compare to Other Brokers?

While SoFi Active Investing certainly has several elements that make it worthwhile, particularly to new investors, let’s compare this brokerage to some other options you might consider trying out.

#1. SoFi Active Invest vs. Robinhood

Though Robinhood recently came under fire during the Gamestop stock debacle, it’s still a solid trading app through and through.

Not only does it offer one of the best mobile trading platforms in the industry, with a slick and streamlined interface, but it also has commission-free trading for stocks, ETFs, and options.

On the downside, Robinhood lacks mutual fund investing, making it better for active or day trading and less appropriate for retirement saving and investing.

>> More: Robinhood Review

#2. SoFi Active Invest vs. Vanguard

Compared to SoFi Active Investing, Vanguard offers a much more traditional brokerage service. For example, Vanguard allows you to trade with mutual funds and options, but both of those trades incur fees of $20 or $1 per contract, respectively.

Vanguard also has higher average fees, including an annual IRA fee and an annual maintenance fee of $20 each.

That said, Vanguard allows you to trade in equities, fixed income instruments, and many more advanced financial assets.

It also provides an investor education hub and more training information, plus advanced tools. It’s clear that Vanguard is a better overall choice for more experienced investors who want to enact complex trading strategies, whereas SoFi Active Investing is a better choice for budget-minded folks or new traders.

>> More:Vanguard Review

#3. TD Ameritrade vs. SoFi Active Invest

TD Ameritrade may also be a good choice compared to SoFi Active Investing. The former provides a fantastic trading platform, as well as both options and mutual fund investing choices.

Even better, TD Ameritrade has pre-made accounts you can choose from if you want to bootstrap your account into profitability with a minimum of effort.

Additionally, TD Ameritrade is one of the few accessible brokerages that offer margin trading. That being said, it doesn’t match SoFi Active Investing’s other major features, like crypto trading or fractional share investing.

Is SoFi Active Investing Free?

Mostly, but not completely. As noted above, SoFi Active Investing doesn’t have any commission fees for stock or ETF trades.

This is partially because it doesn’t offer investment transactions that incur fees, such as options purchases or broker-assisted trades.

That being said, SoFi Active Investing does charge fees for buying or selling cryptocurrencies. These come in the form of a 1.25% markup for any crypto purchases on the SoFi platform.

Still, you can’t do much better than SoFi Active Investing when it comes to raw affordability.

Does SoFi Invest Have Fees?

As noted above, SoFi Active Investing only has fees for crypto trading. This makes it one of the most affordable trading platforms or brokerages available, especially since you don’t have to worry about any recurring annual account fees or similar charges.

SoFi Active Investing vs. SoFi Automated Investing

SoFi Automated Investing is SoFi’s robo-advisor plan. With this plan, account holders choose from up to 10 pre-made portfolios and automated algorithms, then invest their cash in various ETFs and similar instruments to best reach their financial goals.

In this way, the two services are reasonably different. SoFi Active Investing requires you to choose your stocks and financial assets personally.

However, both services use the same broader SoFi investing platform architecture, so the app will look similar either way.

Additionally, both services give you access to financial advice from human advisors. Both services are also very low cost and have no account minimums.

Choose SoFi Automated Investing if you don’t want to pick out your stocks or ETFs personally and would rather invest by choosing from several pre-made portfolios with different asset allocation ratios and risk tolerance levels.

>> More:Best Robo-Advisors

Does SoFi Offer Roth IRAs?

Yes, SoFi Active Investing offers Roth IRA accounts to its users. You can set this up so that you tailor its portfolio positions specifically to your needs or set it up to perform automatically based on your preferences, risk tolerance level, and other metrics.

Can You Trade on Margin with SoFi Active Investing?

No, but this may be a good thing overall. Margin trading is particularly risky if you don’t have a lot of trading experience or don’t know how to weigh the likelihood of a trade performing as you predict. Margin trading can leave you on the hook for much more money than you currently have.

You’ll need to find another investing platform if you want to leverage margin trading for your financial goals.

Does SoFi Active Investing Offer Any Bonuses or Sign-Up Promotions?

Yes, though we don’t know how long this promotion will last! At the time of this writing, SoFi Active Investing offers between $5 and $1000 in free stock credit if you sign up for this trading service through the mobile app rather than through the desktop website.

SoFi Active Investing also has brand-specific promotions or bonuses from time to time. However, these are impossible to predict, so regularly check their website or our site for more information!

Is SoFi Active Investing Safe to Use?

Yes. Not only is SoFi Active Investing regulated by several important financial authorities, but it also offers up to $500,000 in investor protection insurance.

This also includes a $250,000 limit for cash refunds. It has this insurance thanks to its SIPC protection agreement.

In other words, if you lose a lot of money in your account because of illegal activity or because of hacking, you’ll be refunded up to the above amounts.

So long as you don’t share your personal login information with anyone else, SoFi Active Investing is very safe to use.

Bottom Line: SoFi Active Investing Review

As you can see, SoFi Active Investing provides a reasonably varied and accessible trading platform to anyone with at least $1 in their bank accounts.

With a very small amount of money and thanks to SoFi’s fractional trading feature, you’ll be able to start investing in the stock market and progressing toward your financial goals today.

However, keep in mind that SoFi Active Investing is quite limited both in terms of its mobile app controls and tradable securities.

It’s nice that it lets you trade crypto, but many more advanced trading strategies will be inaccessible unless you switch to a different platform.

Overall, SoFi Active Investing is best for new investors or stock market traders who want to start saving up for retirement using the platform’s available retirement accounts or individuals who want to learn the ropes of investing and trading without having to spend a lot of money upfront.

Drew Cheneler
Drew Cheneler

Drew is our Co-Founder and is a recognized Credit, Small Business, and Personal Finance Expert. He has been featured in CNBC, Fox Business News Section, The Huffington Post, Business.com, Moneyunder30, US Chamber of Commerce, and more. He is known for breaking down complex personal finance topics into action-oriented advice, so you can make the most of your hard-earned money. Drew attended the U.S. Coast Guard Academy where he majored in Business Management with a focus on Information Systems.