SoFi Active Investing review 2023
The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for .
SoFi Active Investing: Best for
- Fractional shares
- Commission-free stock and ETF trades
- New investors
SoFi Active Investing is a low-cost broker that focuses on handling the basics well and should appeal to investors who are just starting out. You can start investing with just $5 and will have access to more than 4,000 stocks and ETFs that are available using fractional shares. Plus, you won’t pay commissions on stock or ETF trades, so more of your return stays with you. SoFi also offers cryptocurrency trading in about 30 different coins, but you will pay a 1.25 percent markup as part of those trades. SoFi’s mobile app makes it easy to track your finances at any time.
SoFi’s biggest shortcoming is that it doesn’t offer options or mutual fund trading. Options are popular with more experienced traders, while mutual funds have long been a staple of retirement accounts. If you’re looking for brokers that offer options trading, you might consider Firstrade or Webull. Mutual fund investors should check out Interactive Brokers or E-Trade.
Ally Invest: In the details
Pros: Where SoFi Active Investing stands out
SoFi offers fractional shares on both new purchases and reinvested dividends, allowing customers to get started with as little as $5. Fractional shares are particularly popular with new investors who may not be able to afford entire shares in multiple companies. Fractional shares can allow you to build a diversified portfolio even if you don’t have a lot to invest.
SoFi allows fractional shares trading in more than 4,000 stocks and ETFs including popular companies such as Apple (AAPL), Amazon (AMZN) and Tesla (TSLA). The offering gives SoFi a leg up on other brokers that don’t offer fractional shares at all or only offer them on reinvested dividends.
SoFi also sets itself apart by being one of the few brokers to offer cryptocurrency trading. While other brokers offer futures trading or ETFs associated with crypto, SoFi lets you trade digital coins directly. You’ll be able to trade about 30 different coins, including popular coins such as Bitcoin, Ethereum and Dogecoin.
You can start trading crypto with just $10, but note that SoFi charges a 1.25 percent markup, which is higher than other brokers that offer crypto trading such as Interactive Brokers and Webull. Crypto enthusiasts who are only looking to trade the most popular coins may feel more comfortable with a more established broker like SoFi rather than a dedicated crypto exchange.
Commission-free stocks and ETFs
You won’t have to worry about commissions eating into your investment returns thanks to SoFi offering commission-free trading of stocks and ETFs. This has become the industry standard after leading brokers such as Charles Schwab and Fidelity cut commissions to zero in 2019.
Historically, these pesky trading fees could have a big impact on the ultimate returns you earn over your investing life. Over long time periods, even small differences in the return you earn can have a major impact on the value of your investments due to the effects of compounding.
SoFi’s mobile app is easy to use and allows you to track your finances all in one place. Whether you use SoFi for its checking and savings accounts or are looking to trade stocks, you can access everything you need in the app.
It’s simple to place a trade or just check in on your portfolio’s value when you’re on the go. Not all brokers offer access to all accounts through mobile apps, so SoFi stands out here.
Cons: Where SoFi Active Investing could improve
No options or mutual fund trading
One major drawback of SoFi’s brokerage platform is that you won’t be able to trade options or mutual funds. The lack of options trading could be a big deterrent to active traders who use options in the hopes of boosting their returns. Firstrade, Robinhood and Webull all offer commission-free option trades for those customers looking to be active traders.
While the lack of mutual fund trading is surprising and rare in the brokerage industry, SoFi does offer ETF trading. ETFs have a lot in common with mutual funds and even have some advantages such as greater liquidity and lower minimum investments. If mutual fund trading is important to you, you might consider Interactive Brokers or E-Trade.
While SoFi emphasizes its low costs, it does still charge account fees for a variety of different actions. You’ll pay $25 for an outgoing wire transfer, $75 to transfer your account to another firm and a $20 IRA closing fee. There are also fees for paper statements and participating in an IPO.
These fees aren’t likely to be regular occurrences, but they still eat into the returns investors earn and can be sizable for those who manage small portfolios. Fees are almost always a negative for investors.
Limited research offering
SoFi doesn’t offer much in the way of investment research for customers. You’ll get some basic stock pages with key information, but it doesn’t come close to matching what is available through other brokers such as Fidelity or Merrill Edge. Serious investors expect access to research from a variety of sources, so it would benefit SoFi to boost its offering here.
To be sure, SoFi does offer a solid educational site that can be helpful to new investors who are looking to understand basic terms and concepts. You can even get ideas for how to set your own financial goals and which investment strategies might be the best fit for you.
Firstrade4.0 Bankrate Score
Firstrade is a solid brokerage offering that may particularly appeal to options traders because of its commission-free options trades. You’ll also get access to quality research and its mobile app, but mutual fund investors may be disappointed by the small number of no-transaction fee funds available.
TD Ameritrade4.5 Bankrate Score
TD Ameritrade still offers strong platforms and a range of research for its clients, making it a very solid pick for more advanced traders, even as it is about to merge with Charles Schwab. A wide range of tradable securities and plenty of commission-free mutual funds make this broker interesting for both new and advanced traders, as do the competitive commissions.
WellsTrade2.5 Bankrate Score
WellsTrade handles most of the basics well and could be a good fit for existing Wells Fargo customers looking to consolidate accounts in one place. However, active traders should likely look elsewhere for their brokerage needs due to high options costs and a barebones trading platform.
J.P. Morgan Self-Directed Investing3.0 Bankrate Score
J.P Morgan’s Self-Directed Investing platform is a good fit for existing Chase customers who are looking for a low-cost way to trade stocks, ETFs and mutual funds while getting access to the bank’s easy-to-use mobile app. However, only a few account types are offered and If you’re looking to trade forex, futures or crypto, you’ll need to look elsewhere.
Interactive Brokers5.0 Bankrate Score
Interactive Brokers keeps adding new features and improving its offerings year after year, and now has new mobile apps to pair with long-time strengths such as its wide number of tradable securities and access to global markets. Low margin rates, high interest rates on cash balances, and a leading number of no-transaction-fee mutual funds serve to make this broker a top pick.
E*Trade4.5 Bankrate Score
E-Trade is likely to be a suitable broker choice for many investors who will appreciate its low trading costs, high-quality research and education, and 24/7 access to customer service. However, if you’re starting small and looking to trade fractional shares, you’ll need to find a different option.
Ally Invest4.0 Bankrate Score
Ally Invest offers a solid brokerage with many of the features that investors have come to love, especially no-commission trades on stocks and ETFs, but it ups the game with low-cost options trades, too. All-hours customer support and an all-encompassing mobile app will make sure you get business done on your terms, though mutual fund investors may be a bit disappointed.
Merrill Edge4.5 Bankrate Score
Merrill Edge brings strong research and education to the investing space, offering a solid trading platform for stocks, bonds, options and funds. You’ll likely find some extra things to love here if you’re already a customer of parent Bank of America, with 24/7 phone support and in-branch service potentially making that relationship even more meaningful to clients.
Fidelity5.0 Bankrate Score
Fidelity Investments is back again with another blowout performance in Bankrate’s reviews. This broker seems to do it all right, from low costs to plenty of research to mutual funds to prompt and courteous customer service. And with so much under the Fidelity roof – banking, credit cards and more – you could capably run your financial life here.
Charles Schwab5.0 Bankrate Score
Charles Schwab is a great all-around broker, whether you’re just getting started investing or are more advanced, and it can bring the heat on almost anything you’re likely to need. Add on strong customer support, a wide investment selection, no-commission mutual funds, and tons of research, and you have the makings of a five-star broker.
Webull4.0 Bankrate Score
Webull offers a lot that investors will like such as commission-free trading, fractional shares and a slick mobile app that allows you to trade on the go or keep tabs on your favorite stocks. But only a few account types are offered and you won’t find the level of research that is available through other brokers.
Robinhood3.5 Bankrate Score
Robinhood has taken its game up a notch or two, pairing its traditional no-cost trading with new IRA accounts (and a special bonus match for clients) as well as improvements in customer service, including 24/7 chat. The mobile app remains an attractive place for options traders but is a no-go for those looking for mutual funds or a wide range of account types.
Vanguard3.0 Bankrate Score
Vanguard’s brokerage offering can handle the basics well and may be a good fit for long-term fund investors. But more active traders will be disappointed by the basic trading platform and high commissions for options trading.
TradeStation3.5 Bankrate Score
TradeStation’s brokerage offering is likely to suit active traders better than it does new investors or those just looking to save for retirement. Customers will get an advanced trading platform with low commissions, but you won’t find fractional shares and the mutual fund offering is limited.
moomoo3.0 Bankrate Score
Moomoo joins a crowded field of discount brokerages with an appeal to individual traders, offering some atypical features, including access to U.S., Hong Kong and Chinese markets. Competitive pricing on stocks, ETFs and options will prove welcome with traders, though others may find the lack of account types, limited available securities and high transfer fees off-putting.
Zacks Trade3.5 Bankrate Score
Zacks Trade is a broker that should appeal to active traders with its advanced trading platform and ample research offering. New investors may be turned off by the high account minimum and fees for mutual fund trades.
Lightspeed3.0 Bankrate Score
Lightspeed is all about active traders who can deliver volume to the broker, and so everything is optimized around making the experience the best for them. That means discounted prices for high-volume trades and multiple high-power trading platforms, but it also means no concern for eliminating the nickel-and-dime costs that other brokers routinely slash.
tastytrade3.5 Bankrate Score
Tastytrade offers some of the lowest commissions around, whether you’re trading stocks, options or even cryptocurrency – and it actually caps your commissions on the latter two. Traders should find a lot to like here, among the commissions, trading platform and the variety of trading securities on offer, though long-term investors may bemoan the lack of mutual funds.