SoFi Money Guide – What You Need to Know about this Online Cash Account – Modest Money
SoFi Invest has advanced a lot in recent years with lots of new features to help you manage your finances. When we published our SoFi Invest review, we briefly mentioned the existence of an online cash management account called SoFi Money.
Investing with SoFi is easy, but you can make managing your cash even simpler by taking advantage of SoFi Money. All users have access to it, and it pays a regular interest rate, as long as you make regular cash deposits.
It also perfectly pairs with SoFi Invest. Here’s everything you need to know about how this works.
What is SoFi Money?
SoFi Money is a hybrid between a checking account and a savings account. Since it’s an online-only bank, there are no brick-and-mortar banking locations. Strictly speaking, SoFi is not a registered bank.
Despite this, your money is still FDIC protected because SoFi doesn’t keep your money in its own accounts. Instead, it sweeps up user funds and deposits them into six partner banks. This is why your money is still insured up to $250,000.
Interest rates are on par with most high street banks and are subject to change.
The best part is there are no overdraft fees. If SoFi investors are unable to cover a payment, the platform will simply cancel the payment.
In the same way as SoFi Invest, there are no minimum balances or account management fees. It’s a completely free banking option.
What You Need to Consider
SoFi offers most of the same features in its hybrid checking/savings account as a normal bank. Without any brick-and-mortar locations, you will be unable to access a teller. However, the customer support team is effective at resolving problems.
While they do offer free ATM withdrawals across a whole network, not every ATM will come with no fees. Make sure the ATMs near you are part of the SoFi network so you don’t receive any unexpected charges.
Benefits of SoFi Money
At Modest Money, we always recommend our users maintain a traditional bank account as their primary account. SoFi Money does offer several benefits as a secondary account, including:
- All-in-One – This is an all-in-one checking and savings account.
- No Fees – There are no minimum balance requirements or account fees.
- Online Platform – Its innovative online platform allows you to deposit checks, make payments, and even pay bills online.
- APY Payments – All cash in your account earns some APY, currently 0.01%, which is on par with traditional banks, the highest of which offers 0.04% APY.
- Personal Loans – Accountholders cannot gain access to credit cards, but they can take advantage of personal loans at competitive rates.
Disadvantages of SoFi Money
Remember, this isn’t a checking account, so you won’t be able to write checks. You can, on the other hand, deposit checks into your account over the phone. There are certain drawbacks to holding one of these accounts, including:
- No credit cards
- No money market accounts
- No CDs
If you are looking for a reliable banking option, SoFi Money is a great choice to make. SoFi investors who are searching for additional functionality may want to look towards high-street banks.
Can I Pair SoFi Money with SoFi Invest?
SoFi Invest is part of the same network as SoFi Money. Technically, they are completely separate products, but they play nice with each other.
When you invest with SoFi, you can start with as little as $1. There are also no account management fees, no brokerage fees, and no trading fees so you can begin building your financial future.
Some of the options you have to invest in include:
- Stocks – SoFi includes thousands of the most popular stocks to invest in, such as Apple, Disney, and Amazon.
- ETFs – For more exposure to specific markets, SoFi offers lots of ETF choices.
- Cryptocurrency – Invest in more than 30 cryptocurrencies, including Bitcoin and Ethereum.
- Stock Bits – Don’t have enough money for a full share? Put your money to work and purchase fractional shares.
One of the best ways to use SoFi Money is to set up a regular deposit with SoFi Invest, so you can put your investments on autopilot.
As a roboadvisor, the platform takes the stress and the hassle out of investing, thus empowering even beginners to gain exposure to the markets.
The Bottom Line
For investors who are searching for a simple cash management account to help them pay the bills, accept checks, and invest in the markets, SoFi Money is a solid option. Unlike many of its competitors, it pays a regular APY, so your money is always working for you.
Easily pair it with SoFi Invest to combine your cash management strategy with your long-term investors.
If you want to invest in a product that can compete with the high-street banks, SoFi Money is the hybrid checking/savings account for you. Create an account with SoFi Invest today and start investing for free by clicking on this link.
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