SoFi Invest® vs. Betterment [2024]: SoFi®'s Minimal Fees Give It the Upper Hand

The choice between SoFi Invest® and Betterment isn't always clear-cut, as both offer unique benefits. Personally, I lean towards SoFi Invest® because it offers both automated and active investing with a low $1 minimum requirement and no trading or advisory fees¹ <p><b>INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED •&nbsp;</b><b>MAY LOSE VALUE</b></p> <p>Brokerage and Active investing products offered through SoFi Securities LLC, member FINRA(<a href="https://www.finra.org/">www.finra.org</a>)/SIPC(<a href="https://www.sipc.org/">www.sipc.org</a>).</p> ² <p>Advisory services are offered by SoFi Wealth LLC, an SEC-registered investment adviser. Information about SoFi Wealth’s advisory operations, services, and fees is set forth in SoFi Wealth’s current Form ADV Part 2 (Brochure), a copy of which is available upon request and at <a href="https://www.adviserinfo.sec.gov">www.adviserinfo.sec.gov</a>. </p> ³ <p>FinanceBuzz is not an investment advisor. This content is for informational purposes only, you should not construe any such information as legal, tax, investment, financial, or other advice.</p> . This makes it incredibly accessible for everyone, even if you’re new to investing and want to start with small amounts at first.

However, I can see the appeal of Betterment for those already familiar with investing. While it does charge $4 a month or 0.25% annually based on your account, these fees are lower than what you'd typically pay a traditional advisor. Betterment's pre-selected exchange-traded fund (ETF) portfolios and automatic rebalancing mean it’s also a solid automated investing option for those who don't want to actively manage their investments.

Key takeaways

• Is there a low-cost option? Yes, SoFi Invest®’s $1 minimum investment, $0 trading and advisory fees, and complimentary access to financial planners make it a holistic yet cost-effective choice.
• Can I make ethical investments? Yes, Betterment offers pre-selected ETF and socially responsible investing portfolios for diversified and ethical investing, making it the better option for this form of investing.
• Do I earn interest? Yes, both SoFi® and Betterment offer high-yield deposit accounts. SoFi Checking and Savings⁴ <p>New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Direct Deposits received during the Direct Deposit Bonus Period) <b>OR</b> $300 (with at least $5,000 total Direct Deposits received during the Direct Deposit Bonus Period). Cash bonus will be based on the total amount of Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 1/31/2026. Full terms at <a href="http://sofi.com/banking">sofi.com/banking</a>. SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC.</p> <p>SoFi members with Direct Deposit can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the 4.00% APY for savings (including Vaults). Members without Direct Deposit will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of Dec. 3, 2024. There is no minimum balance requirement. Additional information can be found at <a href="http://www.sofi.com/legal/banking-rate-sheet">http://www.sofi.com/legal/banking-rate-sheet</a></p> offers up to 4.00%⁵ <p>SoFi members with Direct Deposit or $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. Members without either Direct Deposit or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Only SoFi members with direct deposit are eligible for other SoFi Plus benefits. Interest rates are variable and subject to change at any time. These rates are current as of Dec. 3, 2024. There is no minimum balance requirement. Additional information can be found at <a href="http://www.sofi.com/legal/banking-rate-sheet">http://www.sofi.com/legal/banking-rate-sheet</a></p> APY with direct deposits, while Betterment Cash Reserve⁶ <p>Betterment Cash Reserve ("Cash Reserve") is offered by Betterment LLC. Clients of Betterment LLC participate in Cash Reserve through their brokerage account held at Betterment Securities. Neither Betterment LLC nor any of its affiliates is a bank. Through Cash Reserve, clients' funds are deposited into one or more banks ("Program Banks") where the funds earn a variable interest rate and are eligible for FDIC insurance. Cash Reserve provides Betterment clients with the opportunity to earn interest on cash intended to purchase securities through Betterment LLC and Betterment Securities. Cash Reserve should not be viewed as a long-term investment option.</p> <p>If you participate in Cash Reserve, you authorize Betterment, on a discretionary basis, to direct Betterment Securities as to the allocation of your funds among one or more Program Banks. Deposits at each Program Bank are insured by the FDIC up to $250,000 for each insurable capacity (e.g. individual or joint). In aggregate, funds deposited into Cash Reserve are eligible for up to $2,000,000 (or $4,000,000 for joint accounts) of FDIC insurance once the funds reach one or more Program Banks (up to $250,000 for each insurable capacity—e.g., individual or joint—at up to eight Program Banks). Even if there are more than eight Program Banks, clients will not necessarily have deposits allocated in a manner that will provide FDIC insurance above $2,000,000 (or $4,000,000 for joint accounts). The FDIC calculates the insurance limits based on all accounts held in the same insurable capacity at a bank, not just cash in Cash Reserve. Although certain types of accounts, such as trust accounts may be eligible for additional FDIC insurance based on the number of beneficiaries, funds will be allocated to each Program Bank in such a way that provides up to $250,000 of FDIC insurance for individual accounts, $500,000 of FDIC insurance for joint accounts, and $250,000 of FDIC insurance for trust and other corporate account types, in each case per Program Bank. In the event you maintain an individual or joint Cash Reserve account and are a beneficiary of a Cash Reserve trust account, Betterment does not provide FDIC insurance based on your status as a beneficiary. If clients elect to exclude one or more Program Banks from receiving deposits the amount of FDIC insurance available through Cash Reserve may be lower. Clients are responsible for monitoring their total assets at each Program Bank, including existing deposits held at Program Banks outside of Cash Reserve, to ensure FDIC insurance limits are not exceeded, which could result in some funds being uninsured. For more information on FDIC insurance please visit www.FDIC.gov. Deposits held in Program Banks are not protected by SIPC. For more information see the full <a href="https://www.betterment.com/legal/cash-reserve">terms and conditions</a> and <a href="https://betterment-prod-cdn.s3.amazonaws.com/agreements/Betterment_LLC_ADV_2023_09_28.docx.pdf">Betterment LLC's Form ADV Part 2</a>.</p> offers up to 4.25% (as of Dec. 2, 2024)⁷ <p class="">Current promotional rate; annual percentage yield (variable) is 5.00% APY as of April 2, 2024, plus a .50% boost available as a special offer with qualifying deposit. Terms apply; if the base APY increases or decreases, you’ll get the .50% boost on the updated rate. Cash Reserve is only available to clients of Betterment LLC, which is not a bank; cash transfers to program banks conducted through clients’ brokerage accounts at Betterment Securities. </p> APY⁸ <p class="">The annual percentage yield ("APY") on the deposit balances in Betterment Cash Reserve ("Cash Reserve") is 2.25% and represents the weighted average of the APY on deposit balances at the banks participating in Cash Reserve (the "Program Banks") and is current as of September 26, 2022. This APY is variable and subject to change daily. Deposit balances are not allocated equally among the participating Program Banks. A minimum deposit of $10 is required, but there is no minimum balance required to be maintained. The APY available to a customer may be lower if that customer designates a bank or banks as ineligible to receive deposits. APY applies only to Cash Reserve and does not apply to checking accounts held through Betterment Checking. Cash Reserve and Betterment Checking are separate offerings and are not linked accounts.<br></p> ⁹ <p class="">The product and annual percentage yield (APY) data displayed on this website is gathered from various sources and may not reflect all of the offers available in your area. Although we strive to provide the most accurate data possible, we cannot guarantee its accuracy. Always verify account details and availability with the financial institution before opening an account.<br></p> . 
• Can I reduce my tax burden? Betterment offers a tax loss harvesting feature that might help you minimize your tax liability, while SoFi® doesn’t.

SoFi Invest® vs. Betterment

	SoFi Invest®	Betterment
Investment type	Active investing Automated investing	Automated investing
Minimum investment	$1 minimum investment for automated investing $5 minimum for active investing $5 minimum for fractional shares10 <p>There are limitations with fractional shares to consider before investing. During market hours fractional share orders are transmitted immediately in the order received. There may be system delays from receipt of your order until execution and market conditions may adversely impact execution prices. Outside of market hours orders are received on a not held basis and will be aggregated for each security then executed in the morning trade window of the next business day at market open. Share will be delivered at an average price received for executing the securities through a single batched order. Fractional shares may not be transferred to another firm. Fractional shares will be sold when a transfer or closure request is initiated. Please consider that selling securities is a taxable event.</p>	$0 minimum balance $10 minimum opening deposit
Investing fees	$0 trading fees $0 advisor fees	$4 per month on balances under $20,000 0.25% annual advisory fee with a monthly deposit of $250+ or on balances between $20,000
Available assets	Individual stocks ETFs Mutual funds IPOs Options11 <p>Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire investment Before trading options please review the <a href="https://www.theocc.com/getmedia/a151a9ae-d784-4a15-bdeb-23a029f50b70/riskstoc.pdf.">Characteristics and Risks of Standardized Options</a>.</p> Alternative funds	ETFs Cryptocurrency
Account types	Individual taxable accounts Joint taxable accounts Traditional IRA Roth IRA SEP IRA	Individual taxable accounts Joint taxable accounts Trusts Traditional IRA Roth IRA SEP IRA
Main features	Automated or active investing in one place Automatic portfolio rebalancing Complimentary access to a financial planner	Automated investing with socially responsible options Automatic rebalancing Lower fees than a traditional advisor
Best for...	Investors who prioritize minimal fees while accessing active and automated investing	Investors who prioritize tax-loss harvesting and don’t mind paying a relatively small fee
	Visit SoFi Invest® | Learn more in our SoFi Invest® review	Learn more in our Betterment review

My verdict

SoFi Invest® is the clear winner for people looking to start investing with minimal upfront costs, thanks to its $1 minimum for automated accounts and $5 for active trading — not to mention its $0 trading fees and $0 advisory fees. While using SoFi Invest®, I valued the ability to quickly toggle between hands-off robo-investing and self-directed trading.

However, SoFi Invest® doesn’t offer tax-loss harvesting, and that’s where Betterment has an edge. This tax strategy can yield a meaningful difference in the performance of larger account balances. On top of that, I like that Betterment offers socially responsible investments and crypto portfolios. However, the advisory fee it charges is hard to justify at a time when several of the best robo-advisors don’t charge such a fee.

How does SoFi Invest® work?

SoFi Invest® offers two investing methods—one is active, where I’m able to choose my investments manually, and the other is an automated one, where I only need to deposit money, and SoFi® chooses the investments for me.

Automated investing

I started with the automated option and let SoFi®’s robo-advisor handle portfolio selection using a wide selection of ETFs. The robo-advisor also handled rebalancing my portfolio based on my tolerance for risk.

The ability to begin investing with just $1 made it easy to start, while the $0 advisory fee meant that I didn’t have to worry about what investing with SoFi® was costing me.

To grow my retirement savings, I also opened an automated Roth IRA account with SoFi®. As with the taxable automated account, SoFi®'s robo-advisor built and maintained my retirement portfolio and provided performance information in a clear and simple layout that made it easy to see daily and historical movements.

Active investing

Once I gained more confidence, I opened an active investing account to pick my own stocks, ETFs, mutual funds, and other asset classes. SoFi®'s trading platform made placing my orders quite easy, although it lacked advanced analysis tools that advanced investors may need. It’s worth mentioning that I didn’t have to pay any commissions or trading fees for these purchases,

SoFi Invest® supports fractional shares starting from a $5 minimum, which was essential for me — I could buy slices of stocks like Amazon (NASDAQ: AMZN) that would normally be out of my budget.¹⁰ <p>There are limitations with fractional shares to consider before investing. During market hours fractional share orders are transmitted immediately in the order received. There may be system delays from receipt of your order until execution and market conditions may adversely impact execution prices. Outside of market hours orders are received on a not held basis and will be aggregated for each security then executed in the morning trade window of the next business day at market open. Share will be delivered at an average price received for executing the securities through a single batched order. Fractional shares may not be transferred to another firm. Fractional shares will be sold when a transfer or closure request is initiated. Please consider that selling securities is a taxable event.</p>

While my SoFi Invest® account provides access to financial planners, I couldn't get specific trade recommendations, which was a bit limiting as an active trader. But overall, SoFi®'s low-cost, user-friendly platform was ideal for starting my investing journey.

SoFi Checking and Savings

In addition to investing accounts, SoFi® also offers a banking account that comes as bundled checking and savings accounts. This truly simplified moving money in and out of my investment accounts and allowed me to set up small recurring deposits for each day of the week.

The SoFi Checking and Savings account offers up to 4.00% annual percentage yield (APY) with direct deposits, which is a great rate. Although Betterment offers an even higher APY rate, I chose to stay with SoFi® for my banking needs to have my cash and investments under one roof and simplify monitoring my financial picture.

SoFi is a Member, FDIC. ¹³ <p><b>SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $2M through participation in the program. See full terms at <a href="http://sofi.com/banking/fdic/terms">SoFi.com/banking/fdic/terms</a> See list of participating banks at <a href="http://sofi.com/banking/fdic/receivingbanks">SoFi.com/banking/fdic/receivingbanks</a></b></p>  

Visit SoFi Invest® or learn more in our SoFi Invest® review.

How does Betterment work?

Betterment is a great robo-advisor choice, especially for investors with bigger balances who are willing to pay a bit more in fees to access features like tax-loss harvesting and crypto investing.

Automated investing

When I started using the platform, the account opening process was seamless — I simply answered some questions about my financial goals, risk tolerance, and investment timeline.

Based on my responses, Betterment recommended one of its pre-built ETF portfolios that include stocks and bonds. As a set-it-and-forget-it investor, I appreciated this hands-off approach to automating my portfolio management.

What caught my eye were Betterment's socially responsible investing options. For example, its climate-focused portfolio exclusively holds companies with low carbon emissions, which enables me to invest while supporting a cause at the same time.

The ability to invest in cryptocurrencies through Betterment’s crypto portfolios was another unique offering that many robo-advisors I reviewed didn’t have.

Betterment’s portfolios come with built-in tax loss harvesting, which aims to optimize tax liability each year by offsetting capital gains with losses. While my portfolio balance and account activity weren’t significant enough to yield meaningful results, I could see how important this would be for investors with large portfolios.

That said, Betterment's fee structure gave me some pause. The $4 monthly fee on balances under $20,000 or 0.25% annual fee on balances of $20,000 or more can really add up over time, eating into returns. So, while Betterment shines for socially conscious investors wanting ethical investments and tax optimization strategies, the fees are a drawback compared to SoFi®'s minimal fee structure.

Betterment Cash Reserve

A standout feature that made Betterment appealing was the Cash Reserve account. This high-yield cash management solution allowed me to keep my money liquid and easily accessible while still earning a highly competitive APY.

I used the Cash Reserve as a place to park a portion of my savings and earn an APY of up to 4.25% (as of Dec. 2, 2024). What I really appreciated was the simple integration between my Cash Reserve and investment accounts. With just a few clicks, I could transfer money in or out to increase my investments or withdraw profits. This made managing my overall portfolio a breeze without having to link multiple external bank accounts.

Learn more in our Betterment review.

What both investment platforms excel at

Both SoFi® and Betterment share three advantages that make them great investment platforms for hands-off investors:

• Low minimum balances: The low account minimums were crucial for allowing me to start investing with just a small amount of money. SoFi®'s $1 minimum for automated accounts and $5 for active trading meant I could get started without a large upfront investment. And Betterment's $10 opening deposit was still quite accessible. Not having to maintain high monthly balances took the pressure off as I was building up my portfolio.
• Automated investing and rebalancing: While I dabble in active investing, I mostly prefer hands-off investing. I like using recurring deposits to average my asset dollar cost and just let a robo-advisor do the rest. Both SoFi® and Betterment offer portfolio automation along with periodic rebalancing to keep my investments properly distributed across different assets as prices fluctuate.
• High-yield deposit accounts: Both SoFi® and Betterment offer banking solutions that come with highly competitive APY rates. SoFi Checking and Savings helps you earn up to 4.00% APY with direct deposits, while Betterment Cash Reserve helps you earn up to 4.25% (as of Dec. 2, 2024) APY.

Four important differences between SoFi Invest® and Betterment

While both SoFi® and Betterment can help grow your money, each one has its own unique strengths. Before choosing one, these were the major differences that stuck out to me:

1. Monthly fees

SoFi Invest® doesn’t charge trading fees or advisory fees. The only costs were certain underlying expenses for the specific investments in my portfolio, which are pretty standard across the industry.

On the other hand, Betterment's fee structure gave me some pause. The platform charges a $4 monthly fee if your balance is under $20,000. Once your balance gets to $20,000 or more, the fee switches to an annual 0.25% advisory fee. Paying $4 a month comes to $48 a year while paying 0.25% annually on a balance of $20,000 equates to $50 a year.

Winner: SoFi Invest® wins this category since it doesn’t charge trading or advisory fees, so it has no on-going monthly or yearly cost to consider.

2. Access to financial advisors

While both SoFi® Automated and Betterment are robo-advisors, SoFi® makes it relatively easy to talk to a financial planner and ask questions free of charge and without balance restrictions.

Betterment offers access to Certified Financial Planners (CFPs) but requires you to have at least $100,000 in assets and be on its Betterment Premium plan. This plan has an annual advisory fee of 0.65%, considerably higher than its standard plan’s fee of 0.25%.

Winner: SoFi®, since it doesn’t require a minimum balance or charge extra to talk to a financial planner and discuss your portfolio.

3. Alternative investing options

Both SoFi® and Betterment allow you to venture beyond just traditional stocks and bonds.

SoFi® lets eligible customers invest in companies that are about to go public before they become generally accessible for traders on the stock market through its IPO access. It also offers access to options trading, which can be lucrative for advanced investors. On top of that, it offers alternative funds that help you invest in real estate, commodities, and more.¹⁴ <p>Investing in alternative investments and/or strategies may not be suitable for all investors and involves unique risks, including the risk of loss. An investor should consider their individual circumstances and any investment information, such as a prospectus, prior to investing. Interval Funds are illiquid instruments, the ability to trade on your timeline may be restricted. Brokerage and Active investing products offered through SoFi Securities LLC, Member FINRA(<a href="www.finra.org" style="background-color: rgb(255, 255, 255);">www.finra.org</a>) /SIPC (<a href="www.sipc.org" style="background-color: rgb(255, 255, 255);">www.sipc.org</a>).</p>

On the other hand, Betterment offers access to crypto and socially responsible portfolios. While it doesn’t have the same degree of alternative investing options as SoFi®, it stands out with these two portfolio types since SoFi® doesn’t offer them.

Winner: SoFi® since it offers a wider variety of alternative investing options.

4. Tax loss harvesting

Selling off losing assets can help you offset some of your gains, which may help optimize your taxes. This is known as tax loss harvesting, a feature that SoFi® doesn’t offer.

On the other hand, Betterment offers tax-loss harvesting through an automated algorithm that checks your account regularly for potential tax-loss harvesting opportunities. There’s no extra fee for this service.

Winner: Betterment, since it includes tax loss harvesting at no added cost, which may help you offset some of your taxes on profits you make.

Which investment platform should you choose?

When you should choose SoFi Invest®

Consider using SoFi Invest® if you:

• Don’t want to worry about fees
• Want to start small and grow your investments over time
• Want to experiment with alternative investments like IPOs and options trading
• Would like to have access to a financial planner no matter how much is in your account

When you should choose Betterment

Consider Betterment if you:

• Have more significant sums to invest and don’t want to pay a traditional advisor
• Want to invest in cryptocurrency or socially responsible portfolios
• Want to take advantage of tax loss harvesting
• Know your way around investing and likely won’t need to consult with a Betterment investment advisor

FAQ

SoFi Invest® vs. Betterment: bottom line

At the end of the day, both SoFi Invest® and Betterment provide valuable platforms for investing your money — it simply comes down to your investment goals and personal preferences.

For people looking to start investing without worrying about fees, SoFi®'s automated investing accounts and lack of trading or advisory fees make it an extremely accessible and cost-effective choice. The ability to eventually transition into self-directed trading on an active investing account as your skills progress is also appealing.

However, if you plan on having a large portfolio, Betterment's tax optimization via its tax-loss harvesting feature could outweigh the extra fees involved.

No matter which route you go, having an automated option that removes the hassle of building and rebalancing a diversified portfolio can go a long way in consistently reaching your financial milestones.