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Nowadays, there are such a lot of commission-free brokers you should use to begin investing. However whereas brokers all promote completely different sign-up bonuses or that they are your best choice, it is laborious to choose a winner since you may have so many selections.
SoFi Energetic Investing and Robinhood are two main brokers that cater to new buyers who need a simple technique to commerce. However regardless of being commission-free, there are some variations in obtainable investments and distinctive options that differentiate the 2 firms.
Our SoFi vs. Robinhood breakdown is protecting these variations and the professionals and cons that can assist you discover the perfect dealer for you.
About SoFi
SoFi is a web based 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 in style investing platforms for millennials and new buyers.
SoFi Energetic 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 Energetic Investing, it’s also possible to commerce shares and ETFs on Robinhood with out paying commissions. However the platform can be very talked-about 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 energetic 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 prices brokers, however that is barely noticeable and an everyday payment 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 if you happen to steadily commerce choices, Robinhood may make it easier 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 payment, and the TGIF ETF has a 0.59% payment. Because of this 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 sellingSoFi vs. Robinhood – Out there Investments
Each SoFi and Robinhood are a bit restricted by way of obtainable investments in comparison with different main on-line brokers:
| Shares & ETFs | ||
| Mutual Funds | ||
| Bonds | ||
| CDs | ||
| Cryptocurrency | ||
| Choices | ||
| Futures | ||
| Fractional Shares | ||
| IPOs | ||
| Fiat Currencies |
As talked about, the primary distinction is which you could commerce choices with Robinhood not like 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 at all times obtainable and may have completely different investing necessities. Moreover, IPO investing may 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 technique to begin investing with little cash, so it is good each platforms have this feature.
Winner — Robinhood takes a slight edge because it provides 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’ll be able to commerce in style 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 payment on each commerce, which is the primary draw back. And presently, you’ll be able to’t switch the crypto you purchase to a different pockets. This implies the one technique 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 provides fewer altcoins and solely has 11 obtainable 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 in style choices like Solana and Shiba Inu. However not like SoFi, Robinhood is rolling out the power to obtain and ship crypto to different pockets addresses. This can be a huge benefit over SoFi for the reason that extra management you may 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 similar to SoFi.
Both approach, we do not advocate 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 may 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 Energetic 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 provides particular person taxable accounts and continues to be engaged on its retirement accounts. This can be a vital 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 – Safety
Each SoFi and Robinhood are protected 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 firms use safety measures like storing a majority of belongings in chilly storage to enhance safety. At the moment, SoFi would 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 you need to use both dealer for crypto investing.
Winner — Robinhood takes a slight edge because of its crime insurance coverage.SoFi vs. Robinhood – Buyer Help
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 through 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 assist experiences. That is clearly an space the place each brokers can enhance. If you need an choice with a lot better assist (and bodily areas), we recommend TD Ameritrade.
Tie — Each firms may enhance their customer support.Distinctive SoFi Options
One purpose individuals like SoFi is that it has so many services in its ecosystem. So, as an Energetic Investing buyer, you may 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 crew 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 stand up to $300 without spending a dime for organising qualifying direct deposits.
Distinctive Robinhood Options
As top-of-the-line investing apps for newcomers, 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’ll be able to improve to Robinhood Gold and get bigger immediate 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 presently pay 3.5% yearly curiosity on margin quantities over $1,000, which is a really aggressive margin fee.
- 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 allows you to mechanically round-up purchases equally to Acorns so that you mechanically 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
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 not like 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
execs
- Fee-free inventory and ETF buying and selling like SoFi plus free choices buying and selling
- Robinhood Gold offers rather 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 obtainable presently
- Fewer cryptocurrencies than SoFi
- Poor customer support
Who Ought to Use SoFi?
In our opinion, SoFi’s predominant promoting level is that you simply get free entry to human monetary advisors. It is also a superb on-line dealer if you happen to plan on utilizing its different providers, like SoFi Cash, SoFi Automated Investing, or its money administration account. In truth, its money administration account has greater 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 fitting 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 counsel Robinhood’s crypto investing choices right now. However the reality 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 in style, significantly for youthful buyers who’re simply dipping their toes into inventory and ETF buying and selling. And if you happen to make use of their distinctive options, you’ll be able to definitely take advantage of out of both firm.
In case you’re searching for mutual funds, bonds, and extra banking options, we favor choices like TD Ameritrade and Ally Make investments. However for easy, low-fee buying and selling, you’ll be able to’t go fallacious with both Robinhood or SoFi. Simply bear in mind customer support is not at all times fast or stellar, so hold this in thoughts when signing up.
Advertiser Disclosure – This commercial comprises 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 supplied by means of Robinhood Monetary LLC and Robinhood Securities LLC, that are members of FINRA and SIPC. InvestorJunkie shouldn’t be a member of FINRA or SIPC.”
