SoFi Active IRA Review 2024: Features, Fees, and More

Best If You Want

A SoFi Active Invest IRA is best for retirement savers who want an easy-to-use, low-cost platform that offers optional extras (like fractional shares and margin trading) that can help them go the extra mile once they get their feet wet.

The SoFi Invest platform offers a beginner-friendly interface for those just getting started on their journey, but it packs enough punch for more experienced investors to find what they’re looking for.

SoFi offers traditional IRAs, Roth IRAs, SEP IRAs and regular investment accounts, which offer not only stock trading but also access to ETFs, mutual funds, alternative funds, fractional shares, options and margin trading.

Crypto is also available, but not directly on the SoFi platform; the firm has partnered with partners like BitGo and Blockchain.com.

With its low costs, wide range of investment options, and free live advisory service, it’s a worthy match for plenty of investors. However, the SoFi platform doesn’t offer tax-loss harvesting, and uninvested cash sees no interest growth. Still, these are relatively minor drawbacks if you want to use SoFi as a one-stop shop for your financial needs.

Fees

While certain fees apply, you may find yourself with an essentially free investment portfolio if you avoid certain types of trades or actions.

For starters, SoFi charges no account management fee and maintains a $0 minimum balance requirement. There are also no trading commissions on individual stocks and ETFs, though management fees and/or expense ratios may apply for both ETFs and mutual funds.

SoFi also charges a few fees under specific circumstances, including:

• $20 IRA closing fee
• $5 for paper statements
• $30 returned ACH or insufficient funds fee
• $25 per Invest account inactivity fee (no log-in for six months)

What You Can Invest In

SoFi lets you allocate your funds into stocks, low-cost ETFs, alternative investment funds and mutual funds.

Fractional shares are also available. These can be appealing to new investors who don’t have much upfront capital because they let you buy a piece of big-name businesses like Meta or Google even if you don’t have enough to buy an entire share.

SoFi also offers options trading, as well as early access to IPOs to investors on its platform.

If the idea of DIY-ing your retirement plan sounds a little overwhelming to you, SoFi automated investing is also available for IRAs. For the purposes of this article, though, we’re focusing on SoFi active investing.

Limitations

SoFi has a few limitations: The SoFi platform doesn’t offer tax-loss harvesting, which can help you lower your overall tax burden and increase your returns on taxable accounts. Furthermore, uninvested funds don’t earn interest on the SoFi invest platform. However, the company offers a savings account feature with higher-than-average yields.

Account Minimums

The highlight of any SoFi Invest review you’re likely to read: SoFi has $0 account minimums and $0 in account fees. It also has a plethora of commission-free active trading options.

Commission-free investment options are no longer the rarity they once were. However, the fact that SoFi Invest also offers no account minimums or monthly fees this policy puts it among the top choices for beginning investors. It’s also a great option if you want to lower the overall cost of your investment portfolio, including retirement accounts.

Customer Support

SoFi earns an impressive 4.6 stars for its customer service on Trustpilot. Live support for SoFi Invest is available from 5 a.m. to 5 p.m. Pacific time Monday through Friday at 855-525-SOFI (7634).

Additionally, SoFi offers all members a no-cost financial consultation. Members can get advice from human advisors at no additional expense. This can be an invaluable asset whether you’re opening a new account or you’re a veteran investor looking to reevaluate your investment strategy. For example, an advisor can help you reassess your risk tolerance, diversification or goal planning.

Free access to an advisor is a stand-out feature that’s hard to find in financial services. Hiring a financial advisor on your own, even for just one session, can come at a significant cost.

Account Types

SoFi offers four main types of retirement accounts, along with its regular self-directed individual investment accounts.

Traditional IRA

Traditional IRAs may allow you to take a tax deduction on your retirement contributions in the year you make them, depending on your income and access to a workplace retirement account. You also get tax-deferred growth on your investment.

Traditional IRA withdrawals are taxed as ordinary income in retirement. They’re subject to required minimum distributions (RMDs) at 73. RMD age will increase to 75 in 2033.

Roth IRA

A Roth IRA works in the opposite way as a traditional IRA: You contribute after-tax funds to the account, which means no deduction in the short term. But you get tax-free retirement income in the long term.

Roth IRAs are also a great way to pass down generational wealth since they’re not subject to RMDs during the original account holder’s lifetime. However, the account is eventually subject to RMDs once it’s transferred to an heir.

SEP IRA

SEP IRAs offer tax advantages and the opportunity to maximize retirement contributions to small business owners and self-employed individuals. In 2024, you can save up to $69,000 in a SEP IRA, or 25% of your overall compensation.

By comparison, you can only save $7,000 in a traditional or Roth IRA, or $8,000 if you’re 50 or older.

Rollover IRA

Rollover IRAs are built to catch the funds rolled over from an old retirement account, like a 401(k) or even another IRA. They must match the tax structure of the original account. But you can roll over as much money as you want in a given year, regardless of the annual contribution limit.

Other Features

SoFi has become a one-stop shop for managing finances, with a wide range of products that includes investment accounts, student loans, mortgages, personal loans and cash management accounts. SoFi even offers a credit card, as well as insurance products.

The SoFi cash management savings account offers a yield above 4% APY. That’s substantially higher than the national average. Members can access all of their accounts and products through the company’s easy-to-use mobile app or web interface.

Considering a SoFi IRA?

For those looking for low costs, SoFi’s IRA offers a wealth of opportunity. If you’re looking to fund your new SoFi IRA with a 401(k) rollover, Capitalize can help. We’ve made it our mission to make this process easier for everyone. We can handle the entire process for you. Most of the process can be done online and our rollover experts will guide you through any of the manual parts. Get started with your 401(k) to IRA rollover in just a few minutes.