Acorns vs SoFi 2023
Investors who are just starting out generally aren’t interested in paying for a dedicated financial advisor. Instead, they often hope to find a service that supports various investment strategies (like tax-loss harvesting), offers options within their risk tolerance level, and charges a low (or no) management fee.
We’ll be comparing two such services in this Acorns vs SoFi article. While both offer investing services, banking solutions (complete with a debit card), and robo-advisory services, the similarities end there.
Read on to learn which one of these services will best help you reach your financial goals the fastest.
What is Acorns?
Acorns is an investment platform designed primarily for passive investing, focusing on exchange-traded funds (ETFs). Users can invest spare change through the “Round-Up” feature, which rounds up transactions to the nearest dollar and invests the difference. Acorns offers robo-advisory services, banking solutions, and retirement accounts. Users are charged a monthly fee for access to these features.
What is SoFi?
SoFi is a financial platform that offers both active and passive investing services, allowing users to invest in stocks and ETFs. With no minimum balance, SoFi provides banking solutions, commission-free trading, access to human advisors, and automated investing. Unlike Acorns, SoFi offers many of its features for free and only charges for outgoing transfers to other brokerages.
|Acorns is Better for:||SoFi is Better for:|
|Automatic rebalancing||Individual stocks|
|Hands-off investors||Active traders|
|Exchange-traded funds||Mutual funds|
There are various factors you’ll want to consider when comparing investment platforms, such as the minimum account balance, subscription fees, and investment product options. Whereas some services only cater to hands-off investors, others can accommodate active investors as well.
You’ll also want to learn how the fees are calculated. Is it a flat fee, or one based on the total value of your assets under management? Consider these and similar factors when deciding between platforms, as they will directly affect your overall investing experience.
|Free Features||None||Commission-free trading, access to human advisors, automated investing, fractional shares|
|Paid Features||Automated investing, robo-advisory services, banking solutions, retirement accounts, Round-Ups, metal debit card||Outgoing transfers|
|Annual Subscription Fees||$3/month (Personal) $5/month (Family)||N/A|
|Securities Analyzed||Stock and bond ETFs||Stocks, ETFs|
|Investing Approach||Passive||Active & passive|
|Best Use||Passive Automated Portfolio Investing||Trading Individual Securities|
|Modest Money Overall Rating|
Factor 1: Free Features
We’ll begin by taking a look at the free features offered by each service. From functional bank accounts and financial planning services to human advisors and robo advisors alike, online services have evolved their offerings a lot within the past decade.
SoFi offers its services for free
- SoFi offers banking and investing for free
- Acorns doesn’t have any free offerings
- SoFi gives users access to a human advisor
You’ll need to pay monthly subscription fees for unlimited access to every financial product Acorns has to offer. However, once you have a membership, a small variety of features are offered at no additional cost. This includes financial services like Acorn Spend and IRAs.
You may not be able to access Acorns Spend without a membership, but you can find some information in Acorns Learn. Both hands-on and hands-off investors can benefit from this knowledge. Although basic, it covers a few different topics that every investor should become familiar with.
Unlike Acorns, SoFi offers all of its taxable accounts for free. Members can also take advantage of various trading tools and have access to a financial advisor.
As an investment product, SoFi is an excellent way to build a diversified portfolio across multiple asset classes in the stock market. While it does offer robo-advisory services, SoFi also allows investors to engage in active trading with individual stocks.
Like many other online brokerages, SoFi doesn’t have a minimum balance, making it possible for anyone to start working towards their investment goal (regardless of how much extra cash they have on hand!). In addition to its investment services, users can also enjoy banking solutions via SoFi Money.
Factor 2: Paid Features
Next, we’ll look at the paid, premium, and subscription services offered by each investment product. Oftentimes, subscribers who are willing to take on the additional cost of an extra charge or two will be rewarded with more efficient ways to reach their financial goals.
Does this generalization remain true with these investing platforms? Let’s see.
Acorns offers more paid features
- Acorns offers subscription-based benefits
- SoFi doesn’t have any premium products
- Acorns uses robo advisors for ETF investing
As an investment product, Acorns doesn’t have a very wide range of assets. In fact, the platform only supports ETFs! Users are provided with a portfolio based on the risk levels they’re willing to take. Any money deposited will be automatically directed into this portfolio.
Since the platform takes an entirely hands-off approach, it doesn’t offer any human advisors for advice. Acorns relies on AI for responsible investing practices. However, its simple UI makes the process easy, and even shows estimated returns over a selected time horizon.
Users can choose between Acorns “Individual” and Acorns “Family,” the latter of which unlocks UTMA/UGMA investment accounts for kids.
Acorns Spend supports direct deposit, provides users with a metal debit card, and—after rounding your transaction up to the nearest dollar—instantly invests the difference (i.e., “Round-Up”).
Whether you’re relying on an automated financial advisor to perform automatic rebalancing on your investment portfolio or talking to human advisors about potential investment strategies, SoFi Invest doesn’t charge you any subscription fees.
While SoFi Automated Investing won’t charge you any fees itself, the ETFs that it automatically invests in may charge you a fee. That is the only cost associated with SoFi Automated Investing. Aside from that, there’s an outgoing transfer fee that you may incur if you transfer funds to a different broker.
Factor 3: Subscription Costs
Now that we’ve reviewed the features of each service, let’s take a look at the subscription costs each service will require each month.
SoFi has lower costs overall
- SoFi doesn’t charge a monthly fee
- Acorns charges monthly for each plan
- SoFi only charges a single fee
Acorns—at face value—is extremely affordable. However, if you don’t have a lot invested, the management fees could account for a large portion of your portfolio’s total value.
Currently, Acorns charges $3 per month for the “Personal” account, and $5 per month for the “Family” account.
Learn More About Acorns
SoFi doesn’t charge investors any fees to use their platform. While ETFs may charge their own management fees, these fees aren’t charged by SoFi itself. In fact, there’s only one fee that investors may end up paying: the outgoing transfer fee!
This fee isn’t charged when you withdraw money; it’s charged when you transfer your money to another brokerage. You can expect to pay $75 for an outgoing transfer.
Learn More About SoFi
Acorns vs SoFi: Both Are Great Services
Whether you choose Acorns or SoFi, you’re likely to have an enjoyable—and hopefully profitable—investing experience. That said, while both services are beginner-friendly, we do think that SoFi’s wide array of features gives it the edge over acorns.
If you want a completely hands-off investing experience and don’t mind being limited to ETFs, you can sign up for Acorns by clicking here (and enjoy a $5 signup bonus!).
If you’d prefer to have the option of trading individual stocks and want access to a human advisor, you can give SoFi a try by clicking here!