SoFi vs. Robinhood

Want to jump straight to the answer? SoFi is better for long-term investors, and Robinhood is better for fee-free cryptocurrency trading.

Robinhood and SoFi are brokerage services that provide a vast range of financial instruments. Both companies offer investors ways to invest without the high management fees of traditional investments. 

Although these apps offer similar products and cater to beginner investors, they differ in critical areas. Robinhood excels as a self-contained investing app, and SoFi provides a combination of investing, loans, insurance and coaching to its clients.

SoFi’s platform allows users to trade stocks, exchange-traded funds (ETFs), and cryptocurrencies. Commission-free trading is available on all assets except crypto. Overall, SoFi acts as an online bank, providing financial products for borrowing, saving, spending, and investing. 

Robinhood offers stocks, IPOs and digital assets to trade on its platform for free. Its mobile app is easy to use and simple for beginners to learn. While options trading isn't available for crypto (due to SEC regulations) investors can trade options of traditional securities.

***As of November 2023, SoFi decided to end its crypto services by the end of that calendar year. However, this review offers a wealth of unique information about both platforms that could still be useful to you.

Robinhood has gained a large following among young, tech-savvy investors. Robinhood excels in investing, offering clients a plethora of order types, including stop-limit, limit, and market orders. 

The company offers trading options for cryptocurrency, stocks and recently added cash management and recurring investment services to its platform. It also allows users to purchase fractional shares rather than stocks, allowing small investors access to some of the largest corporations in the world.

What is a Cryptocurrency Brokerage?

Cryptocurrency brokerages act as intermediaries that let investors buy and sell cryptocurrency. Both SoFi and Robinhood offer other assets on their platforms, making them great options for users who seek to invest in traditional markets as well as digital assets. Brokerages differ from exchanges in that the price of the asset is determined by the brokerage, whereas exchanges connect buyers and sellers of an asset.

Using a brokerage that offers cryptocurrency are a great way to get started investing in digital assets. While Robinhood and SoFi both offer little to no fees, they charge a spread on the assets provided on the platform. This means you may end up paying slightly more for your cryptocurrency than on an exchange, but many exchanges charge high fees. Due to this, you may actually be better off using a cryptocurrency brokerage to invest or trade cryptocurrency.

Important Cryptocurrency Brokerage Features

There is no single cryptocurrency brokerage that fits every individual user’s needs. It is vital to assess your interests and identify a platform with features that align with your goals regarding crypto. Here are some of the essential features to look for:

Security

Unlike traditional investments, a central authority does not back cryptocurrencies, and your crypto holdings are not insured the same way as bank deposits. Many cryptocurrency platforms hold your U.S. dollars in FDIC-insured bank accounts. However, it's important to note that cryptocurrency holdings are not covered under FDIC insurance.

Certain platforms have insurance policies to protect users’ digital assets within the exchange from hacking or fraud. If the reserves were an exchange hack, accounts with up to the insured amount in crypto would be protected. As an alternative, some companies rely only on their security practices to protect clients.

Supported coins

There are thousands of cryptocurrencies available, but not every cryptocurrency brokerage offers every coin. A popular coin such as Bitcoin or Ethereum is likely to be available on any given exchange you consider. However, more research will be necessary for newer altcoins, coins with small market capitalizations, or meme coins.

Trading features

For crypto traders, a significant factor in choosing an exchange is the type of trading options available through the platform. Some clients require access to more advanced features such as secure trading bots, charting tools, and real-time order books. At the same time, others may need to borrow money to trade cryptocurrency or futures contracts.

Features on SoFi

SoFi has no minimum investment requirement and no account or trading fees. SoFi accounts offer several advantages, including:

• Support:  SoFi provides Certified Financial Planners (CFPs) at no additional charge.
• Options :  SoFi offers multiple investment strategies, including active investing.
• Robo-advisor :  A sophisticated computer algorithm that picks and manages investments.
• Cryptocurrency trading : SoFi offers trading 28 altcoins and charges up to 1.25% of trade value.
• IRA accounts : The platform offers several to choose from.
• IPO stocks: SoFi users have access to a stock's Initial Public Offering (IPO).

SoFi Money provides online money management services such as checking and savings accounts that charge no fees. The company offers free ATM use within its network, and accounts earn 2% APY, but rates are subject to change.

Features on Robinhood

The Robinhood platform allows commission-free trading of stocks, ETFs, cryptocurrencies, and options with an intuitive and easy-to-use interface. Robinhood requires no minimum investment to use its services. Among the benefits of Robinhood accounts are:

• Intuitive app:  Robinhood’s app is intuitive and seamless to use.
• High-yield savings : A cash management account from Robinhood currently earns 0.30% annual percentage yield and automatically sends uninvested funds to savings.
• Free stock:  New members receive one free share of stock from Robinhood.
• Cryptocurrency trading : The cryptocurrency trades on Robinhood are free of charge.

A full-screen charting option is available on Robinhood’s website, including two different types of graphs: line graphs and candlestick charts. Technical indicators are also available, which help give traders an edge when making decisions.

SoFi Fees vs. Robinhood Fees

You can choose either SoFi Invest or Robinhood if you are looking for an investment tool that does not require account management fees. Both options offer free or extremely low-fee services, but SoFi has a slight edge because it offers access to financial professionals for free.

SoFi Invest does not require a minimum investment amount (only $1), so you can invest regardless of your financial situation. Additionally, SoFi does not charge any commissions for stock purchases or sales. 

You may incur fees if you invest in mutual funds, either actively or through SoFi’s automated investing platform. Despite this, SoFi offers a wide selection of mutual funds, including many with low expense ratios. Also, as previously mentioned, SoFi will charge an additional 1.25% for crypto transactions.

​​In order to begin investing with Robinhood, you will need to deposit some funds. However, there is no minimum investment amount. Robinhood offers fractional shares starting at $1, which places it on an equal footing with SoFi Invest. 

For the basic account level, Robinhood does not charge any fees for account management. However, clients may upgrade to the Gold membership for a monthly fee of $5. Users can access professional research, margin trading, and level II market data with a Gold membership.

Security Features on SoFi vs. Robinhood

SoFi takes security seriously and has implemented industry-standard safeguards designed to ensure the safety of customer information. It offers SSL encryption, fraud protection, and, once your money reaches their bank partners, it’s FDIC insured up to $1.5 million. 

Aside from being insured, SoFi Money offers security features such as chip card technology, 2-factor authentication and suspicious activity monitoring. If fraud is detected, you can freeze your account immediately through the mobile app.

Robinhood’s security team uses many high-level security measures to protect your account, ensuring your experience is safe and secure. It offers FDIC-insured U.S. dollar balances, cold storage, and coverage against crypto platform breaches. 

The platform uses the industry-standard BCrypt hashing algorithm to encrypt its clients’ account passwords. You can secure access to your mobile application with TouchID, FaceID or a PIN code. Robinhood also supports 2-factor authentication using external authenticator apps and by SMS.

Altcoins Supported on SoFi vs. Robinhood

Many investors may be a bit more adventurous and wish to explore projects beyond the major large-cap cryptocurrencies. Investors who choose smaller cap projects with a lot of growth potential can often reap greater rewards than those who invest in large caps. 

Robinhood and SoFi both offer most of the same large caps, such as Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Dogecoin (DOGE), Ethereum Classic (ETC) and Litecoin (LTC). SoFi is particularly strong in this area, offering a selection of 28 different altcoins.

Altcoins on SoFi

There are 28 Cryptocurrencies available for trading through SoFi, including:

• Aave (AAVE)
• Bancor (BNT) 
• Basic Attention Token (BAT) 
• Chainlink (LINK)
• Cardano (ADA)
• Compound (COMP)
• Cosmos (ATOM)
• Decentraland (MANA)
• Enjin Coin (ENJ)
• Filecoin (FIL)
• Maker (MKR)
• Polkadot (DOT)
• Polygon (MATIC)
• Solana (SOL)
• Stellar (XLM)
• SushiSwap(SUSHI)
• Synthetix (SNX)
• Tezos (XTZ)
• The Graph (GRT)
• Uniswap (UNI) 
• Yearn.finance (YFI)

Altcoins on Robinhood

Only Bitcoin SV (BSV), 1 of 7 cryptocurrencies traded on Robinhood, is not supported by SoFi.

SoFi vs. Robinhood

Beginner traders looking for no-fee trading platforms will enjoy SoFi and Robinhood. SoFi Invest’s automated investment platform will benefit new investors who desire a hands-off solution for long-term investing. In comparison, more experienced investors who wish to engage in short-term trades may find Robinhood’s simple interface fast, uncluttered, and hassle-free.

SoFi is the perfect investment solution for long-term investors, IRA holders or individuals who wish to use automated investing. If you are only interested in making your investments and require advanced charting and control over your orders, Robinhood is a better choice.

No matter which option you choose, it is critical to identify your personal goals and comfort level before committing to any online brokerage service.