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Sofi vs. Acorns
Two investing platforms for beginners, but one is free and the other comes with monthly fees.
SoFi and Acorns offer automated investment strategies and are designed for those who want to build a nest egg. You don’t need advanced knowledge to start investing, and you can start off with a smaller account. And that’s where the similarities end between these two companies.
Which one is better?
- Choose SoFi if you want control over your investments and don’t want to pay a management fee.
- Choose Acorns if you’re a set-it-and-forget-it type of investor and don’t mind the cost.
Active investors who want to choose their investments and pay no management or equity trading fees might be better off with SoFi. You get to trade stocks, ETFs and even a few cryptocurrencies. Plus, you can even buy IPO stocks at IPO prices — a perk that not many trading platforms offer. If you want SoFi to manage your investment account, you can get that too without a management fee.
Acorns, on the other hand, is a simple investing platform with only five automated portfolios to choose from. There are no stocks, options or crypto. Depending on your investment goals, there are three subscription models: one for starting an investment account, a second for starting a retirement account and a third where you can add investment accounts for your kids.
One of Acorns’ main strengths is the round-up feature. You can link your credit card or use the Acorns debit card, and every time you buy something, Acorns will automatically deposit your spare change into your investment account. For example, if you buy groceries for $49.23, Acorns will charge you $50 total and add the $0.77 difference into your investment account. Consider this a piggy bank that grows over time.
How do SoFi and Acorns compare?
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How to grow your SoFi and Acorns investments with credit cards
Because both SoFi and Acorns provide other financial services, you can grow your investments every time you make a purchase. Here’s how it works: SoFi offers the SoFi Credit Card, which lets you earn 2 points per dollar spent on everything you buy. When you redeem your points into an eligible SoFi investment account, each point is worth 1 cent. This turns your 2x points into 2% back. If you spend $20,000 each year with this credit card, you’d earn $400 back into your investment account.
Acorns, on the other hand, offers a checking account and a debit card. Using the debit card, you would invest all your rounded-up change back into your investment account. Plus, you can earn up to 10% back at eligible merchants, which also goes into your investment account. But unlike the SoFi card where you know you can earn up to 2% back on all purchases, the Acorns debit card offers no guarantees because it depends on whether a particular merchant participates in the program.
Both SoFi and Acorns are great for beginner investors who want to take a passive approach toward investing. With the help of automated investment systems, both platforms can take care of your funds. But if you want to take an active role and buy stocks, ETFs or a few cryptocurrencies, SoFi is the better choice.
If you’re not sure whether these two are a good fit for your needs, compare other automated trading systems. Those who want to actively participate in the market and choose their own stocks or crypto may want to compare brokers.
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