SoFi Invest vs Robinhood 2023
For beginner investors, the world of online investing can seem scary. Fortunately, there are plenty of beginner-friendly online trading platforms that offer commission-free trading, fractional shares, and a handy mobile app to make trading on the go a simple task.
While the services themselves may be designed to appeal to beginners, being easy to use doesn’t necessarily mean they can’t be used by more advanced investors. In fact, even beginner-friendly platforms often support multiple asset types (like mutual funds and crypto) in addition to offering advanced features like options trading.
Today, we’ll be taking a closer look at two such services. Which one will come out on top? Find out in this head-to-head SoFi Invest vs Robinhood comparison!
|SoFi Invest is Better for:||Robinhood is Better for:|
|Newer investors||Experienced investors|
|Robo trading||Choosing Your Own Securities|
|Long-term investors||Active investors|
Although each trading platform shares a lot of similarities with the other (such as the lack of trading fees and the ability to do margin trading), there are a few noticeable differences between them. For example, white one offers automated investing and financial advisors, the other offers 1% matches on retirement accounts and competitive rates on margin trading.
It’s important to consider the differences—as well as the similarities—when deciding on which platform to use.
|Free Features||Commission-free trading, access to human advisors, automated investing, fractional shares||Commission-free trading, instant deposits (up to $1,000), margin investing (at 11%), options investing, IPOs, retirement accounts, banking solutions|
|Paid Features||Outgoing transfers||4% interest rate on uninvested funds, increased Instant deposits, Morningstar research, Level II Nasdaq market data, margin investing (at 7%)|
|Annual Subscription Fees||N/A||$5 per month for Robinhood Gold|
|Securities Analyzed||Stocks, ETFs, Crypto||Stocks, ETFs, options, crypto, IPOs|
|Investing Approach||Active & passive||Active|
|Best Use||Meeting Multiple Financial Needs||Trading Individual Securities|
|Modest Money Overall Rating|
Factor 1: Free Features
First things first: let’s take a look at the free features! Both of these services offer many similar features, such as commission-free stock trading, fractional shares, and provide support for IPO investing, ETF trading, and crypto transactions.
They’re even both free of management fees, so what are the differences? Well, there are quite a few.
SoFi Offers More Features for Free
- SoFi offers investing, banking, loans, and more
- Robinhood offers trading, IRAs, and banking solutions
- SoFi also has free human financial advisors
This platform offers a lot for free to various types of investors. For hands-off investors, there’s SoFi Automated Investing. For active investors, there’s SoFi Active Investing. Both cover a wide variety of asset types (such as stocks and exchange-traded funds) and don’t require minimum balances.
However, investing isn’t the only thing that SoFi is capable of. The company also issues personal loans, can help with student loan refinancing, offers banking solutions via Sofi Money (which supports joint accounts), and even offers Invest customers free access to their financial advisors.
This high level of customer service—combined with the plethora of written information offered—means that SoFi can be used for educational purposes alongside taking care of your financial life.
Robinhood Financial LLC, on the other hand, primarily offers brokerage services. It supports a variety of asset types and advanced trading types (like margin and futures trading), making it perfect for intermediate investors and experienced investors. The platform even offers commission-free crypto trading!
Unlike SoFi, Robinhood doesn’t offer robo advisory services, so customers will have to come up with their own investment strategy. This also means that keeping track of one’s risk tolerance is critical to your success on Robinhood. While making a great profit on Robinhood is possible, so is losing all of your money!
Although Robinhood Cash Management has been discontinued, Robinhood does now offer a spending account that members can use for their daily banking needs. Additionally, the platform also offers a 1% IRA match.
Factor 2: Paid Features
While both services are generally free to use, there are a few premium benefits offered (and a few fees to look out for!).
Robinhood Provides a Few Benefits for Paying Members
- Robinhood Gold is useful for margin loans
- SoFi doesn’t offer any premium benefits
- Robinhood Gold is affordable
Unlike Robinhood, SoFi Invest doesn’t offer a premium plan. This lack of paid features goes along with the rest of its service, which is entirely free. However, that doesn’t mean you’ll be entirely safe from fees.
Although Sofi Invest itself doesn’t charge fees on its brokerage accounts (nor doesn’t it require a minimum investment to open an account), certain trade types or assets may incur fees. For example, ETFs obtained through the robo advisor charge management fees, although the percentages are very low.
There is only one fee that you’ll find while using SoFi Invest’s service, and you likely won’t encounter it until you decide to leave. Although transferring money in is free, transferring it out is not. SoFi Invest will charge you a fee of $75 if you transfer money to another broker.
Robinhood Financial LLC does offer a premium trading account on its investment platform. Known as Robinhood Gold, this membership offers a wide range of benefits.
Active accounts will enjoy larger instant deposits (which are available even when the direct deposits or transfers haven’t yet cleared). They’ll also be able to take advantage of a higher interest rate on uninvested balances, access margin investing at 7%, view Level II market data, and view Morningstar research.
If your investment portfolio activities consist largely of margin trades then Robinhood Gold is an appealing option. The plan also benefits those with a highly diversified portfolio, as you’ll be able to view expert research on all of your assets from one platform.
Factor 3: Subscription Costs
Both of these services provide an excellent experience without needing to pay a dime. Still, if you’re considering paying for the extra perks, the ongoing prices are worth considering.
SoFi Doesn’t Charge a Subscription
- Robinhood Gold is competitively priced
- SoFi Doesn’t Charge a Subscription
- Robinhood Gold is billed to your brokerage account
This platform doesn’t offer a premium plan or package, although you may run into a few fees (as noted above).
Learn More About SoFi Invest
Priced at a mere $5 per month (or $60 per year), Robinhood Gold offers a plethora of benefits at an extremely affordable asking price. Unless you’re absolutely sure you’ll never use any of the features offered, we’d recommend paying for Robinhood Gold.
Learn More About Robinhood
SoFi Invest vs Robinhood: Our Summary
Both platforms are excellent options, so the one you should go with really depends on your individual needs as an individual. For crypto traders, margin traders, and those with more experience, we’d recommend Robinhood. That said, the platform can also be enjoyed by less-experienced traders as well!
Click here to make a free account on Robinhood!
If your needs focus less on actively investing (and more on personal finance and passive investing), we recommend SoFi Invest. Offering solutions to all of your financial dilemmas in one place, SoFi Invest is a platform that you can trust to optimize your income.
Click here to make a free account on SoFi Invest!