SoFi Stock Vs Robinhood: Which Is Best?

SoFi Stock Vs Robinhood: In today’s fast-paced digital world, a financial company that can offer their services to users on the go is an immediate advantage. SoFi, short for Social Finance Inc. (SOFI), is one such name: It offers personal finance services through its website and mobile app, putting student loan refinancing, mortgages, and investments all in the hands of people on the move.

Robinhood is another: Focused exclusively on retail investing and trading, this app is hugely popular among everyday stock and cryptocurrency afficionados who live their lives far from Wall Street.

At the end of the day, though, which of these two platforms is best for those aforementioned retail investors and traders? SoFi Stock or Robinhood?

SoFi Is A One-Stop Shop For All Things Finance

Just based on the brief description above, it’s clear to see that SoFi has a lot more to offer its users than just investing and trading. Truthfully, stocks are just one small part of its large suite of services.

SoFi users also have access to credit card consolidation, personal loans, banking, home loans, and credit score monitoring in addition to the student loan refinancing, mortgages, and investing mentioned above.

In other words, SoFi is obviously aiming for its app to be a one-stop destination for any and all finances.

SoFi Vs Robinhood: How They Compete

Setting aside all the bonus features found on the SoFi app, it’s worth examining exactly how SoFi and Robinhood compete — not just in terms of number of downloads, but in terms of how the two investing and trading services stack up against one another.

For starters, looking at the number of users alone, Robinhood takes the lead with 13 million (a clear jump over SoFi’s number of users, a much smaller but still substantial 7.5 million).

In a way, this speaks to both apps’ services, as well: Does the app with more users reflect a more appealing user experience? Not necessarily. SoFi simply hasn’t had the headstart Robinhood has enjoyed in laser-focusing on investors and traders. It began in fact by targeting “HENRYs” – “high earners not rich yet” and pitching them on student loans.

SoFi SPAC A Success

SPACs, or special purpose acquisition companies, tend to be incredibly risky for all involved.

Despite being the preferred way to take a company from a privately traded to a publicly traded one, SPACs have a tendency to see very little return on investment (if any at all — as with any investment, investors very well could end up losing money).

Luckily for SoFi, who recently merged with an SPAC called Social Capital Hedosophia V, going public hasn’t been bad at all — as a matter of fact, it’s seen a surprising amount of success since the merge.

While SoFi is still the app with fewer users, becoming a valuable and coveted stock puts it at a financial advantage over Robinhood.

When Will Robinhood IPO?

Naturally, looking at the success of SoFi on the stock market raises the question: When is Robinhood’s turn to go public?

According to insiders, Robinhood has set July for their projected initial public offering, likely sometime after the 4th of July holiday when potential retail investors and traders have returned home from any trips they may have planned and the work week resumes once more.

Of course, Robinhood has already pushed this date before, so don’t be surprised if it happens again.

How Robinhood Threatens SoFi

Given the fact that Robinhood has more users and generally dominates much more of the online conversation than SoFi, Robinhood’s imminent IPO poses a huge threat to SoFi — it’s generally the more popular trading app, which bodes extremely well for a future performance on the New York Stock Exchange.

Robinhood’s app is already favored by users over SoFi’s, and now SoFi’s greatest advantage — their stock — is at risk of being bested once again by Robinhood.

Only time will tell if Robinhood can perform better than SoFi has, but needless to say, SoFi is definitely threatened by Robinhood in this instance, especially when it comes to free stock and cryptocurrency trading. Robinhood does not compete on student loan or mortgage lending however.

How SoFi Beats Robinhood

That’s not to say that SoFi doesn’t beat Robinhood in some ways. One example of this lies in the functions of the two apps: Robinhood exists solely for investing and trading stocks and cryptocurrency, while SoFi has a lot more to offer than just that.

In other words, Robinhood has all its eggs in one basket, while SoFi has done a better job of diversifying its many features.

No matter what happens on the stock market, SoFi could hypothetically survive without investing and trading while Robinhood definitely could not.

Pros and Cons of SoFi Vs Robinhood

One of the biggest positives about both SoFi and Robinhood is the freedom from commission. Neither app takes a commission when users invest and trade stocks, no matter how much the user stands to pocket.

On top of this, both apps also offer extremely friendly interfaces for retail investors and traders just beginning to invest.

However, Robinhood’s lack of other features might put SoFi at a potential advantage, while SoFi’s commission on crypto might send potential users to Robinhood instead.

Not to mention, Robinhood also gives users the chance to invest in options commission-free, while SoFi doesn’t offer options at all, much less commission-free.

SoFi Stock Vs Robinhood: The Bottom Line

Despite all their differences, SoFi and Robinhood are both popular for a reason, and this makes determining a winner between the two quite difficult. Both apps are excellent tools for new investors and traders, and neither one will charge users a commission for their activity on the stock market.

However, when all is said and done, it seems appropriate to crown SoFi as the best. This decision all boils down to SoFi’s all-in-one approach to finances over Robinhood’s simple focus on trading and investing alone.

SoFi’s additional features take the app from being a place to make money to a place that users can actually do something with their money.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.