Many are looking for ways to earn interest while keeping their cash accessible. Traditionally individuals would have looked to Money Market accounts or Certificate of Deposits for this style of saving/investing. However, cash management platforms are a new and trending option.
Banks and other financial institutions are now recognizing the desire that customers have to bank with companies that will actually give them something for their money. SoFi is trying to stand out as the leader of the group. SoFi has made a name for itself in the lending industry by offering quick and painless refinancing options for students and households alike. But it has also recently entered the world of investing and cash management.
While these other features are great and absolutely have benefits to offer each consumer, this review will be dedicated to SoFi’s cash management arm, SoFi Money.
Before we get too deep in the weeds on everything that SoFi Money does for its users, let’s first take a look at where SoFi separates itself from the pack of financial institutions.
SoFi began in 2011 as a better way to take on student debt. But since then, the company has expanded into mortgages, personal loans, investing, and cash management. In the 9 years since they’ve launched, SoFi has managed to bank over 1 million members. That is an incredible feat in a very crowded space.
SoFi Money Review
SoFi Money is a great tool that many users can take advantage of to get a grasp on their financial future or just take the headaches out of banking. With 5Xs the national average, SoFi Money gives users much more to be excited about than a traditional banking solution.
SoFi Money also offers cool features like Roundups and Vaults that help users save without even thinking about it. If you're in the market for a new banking solution, SoFi Money may be a great option.
No account fees
Extensive Tools & Features
User friendly platform
Higher interest rate alternatives available
Relatively short track record
With interest rates as low as they currently are, it can be difficult to find a good place to park your cash. While many recognize the need for a place to hold their short-term savings, they also realize they will need to be able to access this cash while still earning interest. That is why SoFi Money has become increasingly important in today’s world.
SoFi Money is a hybrid between a savings account and a checking account. That means that it pays interest like a savings account but has instant access like standard checking accounts. SoFi Money has the power and advantage of both account types and can help you feel like you’re keeping your cash in an efficient place.
This platform is feature-rich with its high-interest rate, cashback offers, debit card, ATM access, and sign-up promotions.
One of the most important factors when determining where to place your money is the interest rate. While the national average in 0.05% for savings accounts according to Nerd Wallet, SoFi Money pays 5x’s that amount. This is really great news for users who feel the banking industry is only there to take and gives nothing in return.
This interest rate is not applied automatically, however. SoFi Money pays this high-interest account when users set up direct deposit totaling at least $500 each month. This is a barrier that all will need to overcome before they decide if SoFi Money is right for them. While 5Xs the national average is quite good for a spending account, it does come at the expense of convenience knowing you are only able to get this benefit upon setting up direct deposit.
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SoFi, like many other financial institutions, has been kind enough to have a platform with no account fees. Users will not be charged those silly expenses like overdraft fees, minimum fees, money account fees, or ATM fees. SoFi has done away with these common fees in order to decrease potential friction with its customers.
Cash Back is the new buzz word that everyone is using in the world of cash management and spending. Simply put, some financial institutions (credit card companies, banks, investing firms, etc.) will give you money back in your account or toward your balance if you purchase a certain item or shop at a certain store. SoFi money for instance, is offering 10% back when you order food delivery on your SoFi Money debit card.
Users can access their cash at over 55,000 ATMs across the U.S. and can withdraw for no fee. This is a completely new concept if you poll the large banks. New age financial institutions like SoFi have completely waived fees to access funds when withdrawing from a partner ATM.
In addition, users will be issued a SoFi Money debit card which allows them to transact anywhere that Mastercard is accepted. Through their app, users can also track their expenses and view them over time to see where they are spending the most money. This is fairly standard across all banking institutions now but it is a great perk that should still be more utilized than it currently is.
Everyone loves talking about what they get for signing up for different platforms or services. With SoFi Money, you can always count on a promotion to lure you in. Currently, when members sign up for an account and set up direct deposit, they can be eligible to get up to $150 as a thank you from SoFi.
The $150 Bonus is comprised of the three offers detailed below:
Ultimately, it’s actually pretty difficult to obtain the full $150 of promotional dollars. So if your only purpose for signing up for SoFi Money is to receive the $150 promotional prize, be sure you’re ready to work to earn that cash.
SoFi Money allows users to set up a maximum of what they call ‘Vaults’. These are individual savings envelopes, so to speak, within your cash management account. You can assign these vaults to different goals. For instance, you can designate one as the new house fund or the kid’s college fund. This is a simple and easy way for you to save for specific goals and see how those goals are progressing over time.
Roundups give users even more power to control their destiny without exercising much brainpower at all. If enabled, Roundups simply takes each transaction made on the SoFi Money debit card and rounds it up to the nearest dollar. That excess money is then directed to the Vault of your choice.
For instance, if with your SoFi debit card you purchase your favorite breakfast sandwich from McDonalds for $2.50, your SoFi account will round this transaction up to $3.00. The $0.50 that you didn’t actually spend is automatically then withdrawn from your spending account and transferred to the savings vault that your previously designate.
This way, you can be automatically saving for big goals or life events without stressing over how you’re going to get there.
Ultimately, this platform has many benefits that can help users manage their cash in a more efficient and seamless manner. Tools like Roundups, partnerships result in zero ATM fees, and an interest rate that is 5Xs the national average make SoFi Money a great potential platform for new users.
However, there are a few drawbacks that might make users uneasy. For one, SoFi doesn’t have the solid reputation that other financial institutions have gained from surviving some of the largest financial breakdowns in history.
For example, large banking institution Wells Fargo was established in 1852. This bank has survived several earth-shattering financial crises and lived to tell about it. With SoFi’s relatively new entrance in 2011, users can and should be leery to make sure they are confident about trusting SoFi.
Another is SoFi’s lack of a high interest savings account. While the current interest rate is great and is 5Xs the average, there are other banks doing twice this amount. For instance, many well-known banks such as Marcus by Goldman Sachs are offering 10Xs the national average. While many of these banks do not have a spending component like SoFi, it should still be recognized that the interest rate could be higher.
All in all, this is a great option if you are looking for a more simplified means to manage your money. SoFi is known for its great user experience, no account minimums, and lack of account fees. If this is what you’re looking for then SoFi may be a good fit for you.