Betterment vs. SoFi Invest

Industry low feesAutomatic rebalancingTax-loss harvesting
Free Access to Financial Planners529 PlansAutomatically Invest Extra Cash

Betterment and SoFi Invest are both leaders in the world of robo-advisors. Betterment was founded in 2008 with SoFi launching its platform three years later. In 2019, SoFi created a robo-advisor of its own. Retail traders now make up 20% of all equity trades which tells us that the number of individual investors has skyrocketed.

And yet, investors often lack the time and the knowledge needed to invest their money correctly. Robo-advisors empower you to put your portfolio on autopilot while you get on with life.

Although Betterment and SoFi offer similar products, there are differences. Here’s what you need to know about the similarities and differences between these two market-leading robo-advisors.

Betterment Overview

When you invest with Betterment you are investing with one of the oldest robo-advisors in the industry. After all, it’s been around since 2008. Thousands of investors have used it for many years to invest their money in stocks and bonds.

Our Betterment review details how useful this platform is for investors who are new to the market. To get started, simply fill in the beginners’ questionnaire. Enter your income, risk tolerance, and your financial goals, and the platform will get back to you with its recommended selection of stocks and bonds.

You can either listen to Betterment’s recommendations or manually select your stock/bond allocations. It depends on how confident you are as an investor.

Betterment Details

Account Minimum

Management Fees


Account Types

Brokerage, Saving, Checking, Trust, Roth IRA, Traditional IRA, and SEP IRA

Investment Type

Exchange-Traded Funds (ETFs)

The main perk Betterment offers is that there is no need to maintain a minimum balance. When you do decide to invest, Betterment will keep your portfolio sufficiently diversified through automatic rebalancing.

Betterment offers an impressive number of account types, including IRAs, trust accounts, and checking accounts. This is something many similar robo-advisors fail to offer.

The platform helps you to align your portfolio with your goals. If you’re nearing retirement, your portfolio allocation will be different from someone who has just left college and started their career.

To support you in securing the optimal portfolio, you can choose from selected specialized portfolios to achieve your goals, such as:

BlackRock Target IncomeClimate ImpactGoldman Sachs Smart BetaSocial Impact

Betterment Fees

Since Betterment opened its doors, it has become known as an excellent starting point for investors looking for an alternative to traditional brokerages. It’s why Betterment fees are among the lowest around.

The main fee you need to pay is a management fee, which stands at 0.25% if you’re a Betterment Digital member. For Betterment Premium, the fee is 0.40%.

Certain ETFs do come with expense ratios which range from 0.07% to 0.15%. Again, these are among the lowest in the business.

If you want to gain access to Betterment Premium, you need at least $100,000 invested on the platform. As part of this higher membership tier, you gain access to free advice from CFP professionals. But even if you don’t qualify, you can still book a 45-minute call for $199.

Betterment Pros

Industry low feesAutomatic re-balancingTax-loss harvesting

Betterment Cons

Limited investment optionsLittle in the way of customizationIncompatible with external platforms

SoFi Invest Overview

Launched just three years after Betterment, the platform didn’t unveil its robo-advisor until 2019. SoFi Invest has quickly taken the investing world by storm.

With one of the most advanced robo-advisors on the market, thousands of investors have entered the market for the first time with the help of this platform.

Cost-conscious investors appreciate the lack of any financial hurdles to jump over and the fact they can trade stocks and ETFs without paying commission. Although there are few advanced trading features, this is a great place for beginners to get started, as we talked about in our SoFi invest review.

Keep in mind that if you are choosing an automated investing account, you will only be able to invest in ETFs. But with SoFi Active Investing, you can invest in several types of assets, including fractional shares (known as Stock Bits at SoFi).

Compared to Betterment, investing with SoFi gives you more control over your investments. On the other hand, features like tax-loss harvesting are conspicuously missing from SoFi, which can be a problem for bigger investors.

SoFi Invest Details

Account Minimum

Management Fees

Account Types

Traditional IRA, Roth IRA, SEP ITA, and individual and joint taxable accounts

Investment Type

Stocks, ETFs, IPOs, and cryptocurrency

There’s no doubt in the debate over Betterment vs. SoFi that the latter offers a far bigger range of investments. For example, recently the platform added almost 30 cryptocurrencies for users to trade including Bitcoin and Ethereum.

One of the big advantages SoFi has is the fact the lack of management fees. The only fee is a flat $75 fee for migrating your account away from the platform.

If we compare the types of accounts available, Betterment is the clear winner. The addition of checking and savings accounts to Betterment makes it the standout winner in this category.

Plus, Betterment has tax-loss harvesting, something SoFi lacks. The lack of this advanced feature means you could be losing thousands of dollars in tax unnecessarily every year. For smaller investors, this may not be a big deal, but it starts to bite with investors who have larger portfolios.

What we love about investing with SoFi is that there are truly no fees. From management fees to trading commissions, there are no fees baked in. It’s one of the few platforms that can claim to be truly transparent in the way it operates. Instead, it makes money via other unrelated products.

SoFi Invest Fees

As already mentioned in our full review on SoFi, there are no fees involved with operating an investment account here. You have no monthly fees, no minimum investments, no commissions, and no fees for account inactivity.

Other than the $75 fee for migrating or closing your account, the only fee you need to worry about is trading in certain ETFs. The expense ratios average at just 0.05%.

When taking into account the 0.25% management fee Betterment offers, it comes down to how much you can benefit from tax-loss harvesting. Do your calculations to decide which platform offers the most value.

SoFi Pros

No management feesFree access to qualified financial advisorsCommission-free trading

SoFi Cons

No tax-loss harvestingOnly available to U.S. investors$75 fee for leaving the platform

Betterment vs. SoFi Invest: Comparison



SoFi Invest

Min. Investment

Management Fees

0.25% (Digital); 0.40% (Premium)

Avg. ETF Expense Ratio


Account Types

Brokerage, Saving, Checking,
Trust, Roth IRA, Traditional IRA, and SEP IRA

Traditional IRA, Roth IRA, SEP ITA, and individual and joint taxable accounts

Tax-Loss Harvesting


Financial Advisor Fee

$199 (Free with Premium)

Best For

Specialized Portfolios

Hands-On and Hands-Off Investors

Betterment vs. SoFi Invest: Which One is Right for You?

Both platforms offer similar products, but SoFi goes one step further because you have the option to trade actively. With a greater number of asset classes, including crypto, SoFi allows newer investors to grow into market trading. Betterment’s sole focus on automated investing may be a turnoff for some.

The fees are comparable, but Betterment charges more. While this may seem like it makes investing with SoFi a clear winner, the lack of tax-loss harvesting means it could cost you less in the long term to invest with Betterment.

Betterment also had an obvious advantage in terms of the number of supported accounts. The lack of any checking or savings account at SoFi is a drawback for a minority of investors.

If we look at the support options on offer, both offer access to qualified financial advisors. The difference is that SoFi offers free access to everyone, regardless of how much they invest. Free access on Betterment is restricted to Premium users or those who are willing to spend $199.

The right option for you is a matter of whether you want to trade passively or actively. If it’s the former, choose Betterment due to the tax-loss harvesting options. If you want to trade actively, do it commission-free with several asset types on SoFi.

On balance, we would have to go with SoFi Invest as our beginner investment vehicle of choice, but that doesn’t mean Betterment isn’t right for some investors.

If you want to create an account with SoFi, start today with Modest Money and begin investing for free with our special link.

Create an account now and invest for free with SoFi Invest.

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