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Bottom line: Robinhood and SoFi Invest are two of the best investment apps — and the only online brokerages to offer an IRA match on eligible retirement contributions. Both platforms are great for individual investing and retirement savings, but SoFi offers a better IRA match unless you are a Robinhood Gold member.
Robinhood vs. SoFi Invest: The Biggest Differences
Robinhood and SoFi Invest are two of the best investment apps for beginners. Both offer low fees, commission-free trades, educational resources, and much more.
In general, SoFi Invest - Product Name Only is best for passive investors and has unlimited access to certified financial advisors. Robinhood is better for active investors and commission-free crypto trades.
SoFi Invest is suitable for all kinds of investors since it offers self-directed and automated accounts. It doesn't cost extra to use the brokerage's robo-advisor to trade commission-free stocks and ETFs. Plus, SoFi doesn't charge a management fee. All SoFi accounts get unlimited, free access to certified financial planners (CFPs).
Robinhood Investing - Product Name Only only offers self-directed investing accounts. It has commission-free trading on a larger selection of assets such as stocks, options, ETFs, and 18 cryptocurrencies. So, if you're looking for low-cost crypto trading, Robinhood is the better option.
SoFi and Robinhood both offer tax-advantage IRAs with 1% IRA match bonuses. Robinhood was originally the only online brokerage to offer its users an IRA match, but SoFi recently launched its own competing offer with its new 2% IRA match through tax day on April 15, 2024.
That said, Robinhood is still offering a slightly better deal since it allows IRA transfers and 401(k) rollovers to qualify for the bonus, and there is no limit on the match. Robinhood Gold members can earn up to a 3% match on IRA deposits.
SoFi's IRAs are better for passive investors wanting automatic IRA trading and features. Unlike Robinhood, SoFi also offers a SEP IRA option — but it's not eligible for the IRA match bonus.
Is Robinhood Right for You?
Pros
- 1% match on all Robinhood IRA contributions and transfers (Robinhood Gold earns up to a 3% match)
- Commission-free trading for stocks, ETFs, options, and cryptocurrencies
- Cash management accounts and margin trading accounts available
Cons
- No automated accounts, custodial accounts, trusts, or joint accounts
- Doesn't offer mutual funds
Who is Robinhood Best For?
Robinhood is best for beginner, active investors looking to invest in a large selection of investment options for generally low fees. Robinhood Gold members get the most out of the platform since it has more advanced charting tools and provides users with access to market research and larger bonuses.
Ways to Invest With Robinhood
Robinhood is a self-directed trading platform for commission-free stocks, options, ETFs, and cryptocurrencies. Investors can also trade IPOs and fractional shares. The brokerage offers 18 cryptocurrencies, including bitcoin, dogecoin, and ether.
A standard Robinhood brokerage account doesn't have a minimum to start investing, and fees are generally low. On the other hand, Robinhood Gold doesn't have a minimum requirement but a $2,000 minimum to access margin trading, which is required by regulation. With a Gold membership, you'll get access to a lower margin rate than a standard Robinhood account and other advanced investing features.
You can open individual brokerage accounts or retirement accounts with Robinhood. Robinhood offers traditional IRAs and Roth IRAs. Keep in mind that retirement portfolios only trade stocks, ETFs, and options. Robinhood has discussed adding options trading to eligible users.
Robinhood IRA Match
Robinhood offers a traditional IRA and Roth IRA for investors to save for retirement while receiving tax advantages. Robinhood offers an unlimited 1% match on all IRA contributions. You'll also get a 1% match on IRA transfers and 401(k) rollovers.
For example, for every $1,000 you deposit or transfer into a Robinhood IRA, you'll receive a $10 match. Unlike a 401(k) match contribution, match contributions from Robinhood don't count toward your annual IRA contribution limits.
Robinhood Gold users can earn up to a 3% IRA match on contributions with no cap. But Gold members must maintain Gold status for at least one consecutive year to keep the extra 2%. Robinhood's website also discloses that users need to keep IRA contributions in their Robinhood IRA account for at least five years to prevent an Early IRA Match Removal Fee.
Check out Insider's guide to the best rollover IRAs »
Can You Trust Robinhood?
Robinhood currently has a D from the Better Business Bureau. The BBB says the reasons for this rating include the government actions against the business, thousands of complaints against Robinhood, and the length of time the business takes to respond to these complaints.
In 2021, Robinhood was scrutinized for preventing trading on GameStop (GME) stocks and AMC Entertainment stocks after those companies' share prices skyrocketed. Major lawsuits and user retaliation followed after Robinhood reopened trading on many temporarily restricted stocks. The federal court in Miami dismissed the case against Robinhood in November 2021.
Also in 2021, the Financial Industry Regulatory Authority (FINRA) claimed that Robinhood had misleading and inaccurate information on important issues, approved ineligible customers for options trading, and failed to surprise its technology adequately. Robinhood didn't confirm or deny these allegations but did agree to pay a $57 million fine to FINRA and another $12.6 million in restitution.
Is SoFi Invest Right for You?
Pros
- 2% IRA match on eligible deposits into a traditional IRA or Roth IRA
- Low $1 minimum to start investing for self-direct and automated accounts
- Commission-free trading of stocks and ETFs
Cons
- Only invests in US assets
- No IRA match for IRA transfers or 401(k) rollovers
- Doesn't offer mutual funds
Who is SoFi Invest Best For?
SoFi Invest is a good option for all kinds of investors. You can open an automatic investing account through the platform's robo-advisor or a self-directed account to manage your own investment portfolio. All SoFi accounts have no account minimum and require $1 to start investing. Compared to Robinhood, passive investors will have more success with SoFi's automated trading platform.
Ways to Invest With SoFi
SoFi offers a large selection of assets, including stocks, bonds, fractional shares, ETFs, options, and IPOs.
SoFi's robo-advisor mainly invests in diverse allocations of low-cost Core ETFs or Thematic ETFs, depending on your risk tolerance and goals. You can pick from a list of investment goals such as retirement, saving for a home, getting married, setting up a college fund, or planning to travel. You can also invest in ETFs from other brokerages like Vanguard and BlackRock.
SoFi will no longer offer crypto trading starting December 19, 2023. Current SoFi crypto account holders will be moved to Blockchain.com or have their assets liquidated.
SoFi IRA Match
SoFi Invest's active and automated IRAs are now eligible to earn a 2% IRA match. Like Robinhood, every dollar you contribute to your SoFi retirement account earns an extra 2% bonus. For example, a $2,000 deposit would earn you an additional $40. Match contributions won't count toward your annual contribution limit.
SoFi offers more retirement account options for investors, such as a traditional IRA, Roth IRA, and SEP IRA. But only traditional and Roth IRAs are eligible for the 2% match. SoFi also offers IRA rollovers for old 401(k) plans. However, IRA transfers and rollover contributions aren't eligible for a 2% match.
Whether or not SoFi's 2% IRA match bonus will stick around as a permanent feature is unclear. As of right now, the IRA match is set to end on tax day, April 15, 2024.
Can You Trust SoFi?
SoFi currently has an A+ rating from the Better Business Bureau. This high score indicates that SoFi has positive interactions with customers. But it would help if you still considered talking with friends or family who have used SoFi for insight.
In March 2023, SoFi sued the Department of Education for continuing the student loan repayment pause, claiming that it was damaging to businesses and unlawful. The lawsuit was dropped 60 days later in June.
There are no major lawsuits filed against SoFi.
Robinhood vs. SoFi — Frequently Asked Questions (FAQs)
What is the difference between SoFi and Robinhood?
When comparing SoFi vs. Robinhood, the best platform for you depends on your individual preferences. Robinhood and SoFi are low-fee brokerages offering multiple investment options and 1% IRA matches. But SoFi is better for hands-off investors since Robinhood doesn't have automated investing.
Does Robinhood use SoFi?
Robinhood does offer commission-free trading of SoFi stock (SOFI). Robinhood offers stocks, options, ETFs, crypto, fractional shares, and IPOs.
How is Robinhood pricing vs. SoFi Invest pricing?
Robinhood and SoFi both have low account minimums and fees. A regular Robinhood brokerage account has no minimum requirement to start investing. But you'll need to meet a $2,000 minimum to access margin trading with a Gold membership. SoFi, on the other hand, has a low $1 minimum to start investing and 0% fees for active and automated trading.
Can I transfer Robinhood stocks to SoFi?
Yes, you can transfer stocks from Robinhood to SoFi. SoFi allows users to transfer stocks and other assets from another brokerage, like Robinhood, as long as it's Automated Customer Account Transfer Service (ACAT) eligible.
Why You Should Trust Us: How We Reviewed Robinhood and SoFi Invest
We compared Robinhood Investing - Product Name Only and SoFi Invest - Product Name Only investment apps using Personal Finance Insider's rating methodology for investing platforms to compare and examine IRA match bonuses, account types, pricing, investment options, and overall customer experience when reviewing investing platforms. Platforms are given a rating between 0 and 5.
Investment apps are brokerage platforms generally offering retirement savings accounts, trading tools, and other educational resources. Some investing platforms are better for more advanced or active investors, while others may better suit beginners and passive investors. Robinhood and SoFi were evaluated with a focus on how they performed in each category.