Difference Between SoFi Invest Products: SoFi Active Investing vs SoFi Automated Investing?

Nowadays, everything runs on technology, and mobile devices are indispensable. People frequently use their smartphones for everything from managing their healthcare and scheduling their children’s extracurricular activities to investing in the stock market and managing their retirement funds. Services like SoFi Invest make it possible for anyone with a smartphone and an internet connection to open a microinvesting account and start investing in everything from stocks to cryptocurrencies. Traditional stock and bond markets, exchange-traded funds, individual retirement accounts, and cryptocurrencies are all available through SoFi Invest. If you’re a new or young investor just getting started, this service, which is available exclusively online, could be ideal, especially the SoFi Automated Investing accounts. However, what if you are a novice investor who is confused by the stock trading process? While SoFi Invest does provide financial assistance, it is not in the form of real-time execution for trading accounts, and a more conservative approach might be needed. It’s important to understand the distinctions between automated and actively managed investment accounts. Keep reading if you’re curious.

How to Open a SoFi Invest Account

To begin, open a SoFi Invest account digitally or via the mobile app. An online application and supporting documents showing the applicant’s employment, identity, and financial stability are all that’s needed to get started. Then, money can be deposited into the account via Western Union or a linked bank account. The new account holder can then choose to move forward with either of the two investment plans listed below.

SoFi Automated Investing

Formerly known as SoFi Wealth, this is the automated version of SoFi Invest accounts. By allowing SoFi’s system algorithms to automatically invest for them, users can rest assured that their money will automatically go into their preferred stocks and their dividends will be reinvested into stocks that meet their specific criteria. The investor receives guidance and management of their portfolio from this algorithm, too. The SoFi Automated Investing account holder enjoys a number of benefits from the automated investment platform, but the most obvious is the saving of time that comes from not having to handle the account management themselves. This method also eliminates the possibility of human error, such as selling stock that was intended to be kept, etc. It’s a less stressful alternative to active trading, as with SoFi Active Investing.

SoFi Active Investing

Some users are happy to let SoFi’s algorithms handle their finances, but others would rather take charge of their own finances. SoFi Active Investing is a self-managed platform that enables users to engage in active trading at their convenience. In this setup, the user places buy and sell orders for assets on their own and can choose how much to diversify their holdings. The self-managed account holder has the option of selecting one of SoFi’s premade suggested portfolios or creating his own. The account holder is not automatically reinvesting dividends in stocks that meet certain criteria as with SoFi Wealth, rather, he has the option to either reinvest or withdraw the dividend payments.

Summary

SoFi Invest offers several different options for the new investor, both SoFi Wealth and SoFi Active Investing. Depending on the account’s settings, the account holder can withdraw money from their SoFi Invest account through their SoFi checking or savings account, and there is no minimum balance required to open a trading account after the initial $1 deposit. The young investor can start saving for retirement, budgeting for major purchases, and amassing wealth with the help of a SoFi Invest account, whichever they choose.

FAQ

1. How do I get started with an investment account?

SoFi Invest accounts are subject to the same identity and residency verification processes as any other type of financial account, and account holders are required to submit a government-issued photo ID or passport as well as a recent bill showing the account holder’s address. Users also need to be able to provide proof of identity (such as a Social Security number) and financial standing (such as bank statements).

2. Are there different requirements for setting up a SoFi Active Investing vs SoFi Automated Investing account?

No, the requirements for both SoFi Active Investing accounts and SoFi Automated Investing accounts are the same.

3. Is SoFi Invest a legitimate investing brokerage?

In the United States, SoFi is a fully chartered and licensed financial institution. The Federal Deposit Insurance Corporation (FDIC) guarantees all deposit accounts.