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SoFi is a renowned platform known for its attractive rates on banking accounts, allowing users to accrue more interest without the burden of monthly fees or other annoying charges. However, the allure of free banking accounts with enticing rewards may raise questions about their legitimacy or long-term viability. Let’s delve into various aspects to assess the credibility of SoFi as a banking institution, and read more to learn if Sofi is a trustworthy bank.
Is SoFi a Trustworthy Bank? SoFi is an FDIC-Insured Bank
Many ask, “Is SoFi a real bank?” The platform became a nationally chartered bank with the Federal Deposit Insurance Corporation (FDIC) in January 2022.
So, SoFi has a similar accreditation as national banks like Chase Bank, Bank of America, U.S. Bank, and regional banks in your area. However, there are several unique differences as SoFi doesn’t have physical branches.
As a real bank, SoFi can offer more banking products and loans with potentially better rates.
Additionally, SoFi provides up to $250,000 in FDIC coverage on qualifying account balances. They also work with approximately 12 partner banks to provide as much as $2 million in coverage on deposits which helps clients with a high net worth have peace of mind and keep their money at a single institution which can make monitoring your finances easier.
Still, bank failures happen. For reference, the FDIC counts over 560 bank failures from 2001 to 2023, Most occurred in the years surrounding the 2008 Great Recession.
Even with up to $2 million in FDIC coverage benefits, it’s still a good idea to spread out your cash reserves between multiple institutions to manage risk. This practice means you’re more likely to have immediate access to some of your cash reserves with operational banks while you wait to be reimbursed from a failed bank.
Sofi Excellent Customer Reviews
Don’t just take our word for it that SoFi is a trustworthy bank. SoFi has an excellent Trustpilot rating (4.6 out of 5 with over 6,100 ratings). This rating is competitive with other online-only banks with similar banking account benefits. Additionally, it’s substantially higher than the Trustpilot score for the big banks.
Most of the praise for Trustpilot is for its courteous and responsive customer service. A lot of comments also focus on the institution’s loan products, which is common for banks (it’s how they make money) but also because competitive loan rates are how SoFi gained a firm foundation in the personal finance sector.
However, the platform has a low Better Business Bureau (BBB) rating of 1.28 out of 5, with 174 customer reviews. Other banks have similar ratings, and most complaints focus on loans and account access problems.
No banking institution is perfect, but SoFi has many happy banking and loan customers.
No Service Fees
There are no fees to open or maintain a SoFi Checking & Savings account. Having no fees means your account balance won’t go down unless you schedule a withdrawal or pay a bill. You also get to enjoy 100% of the benefits immediately at account opening.
Being an online-only bank, not charging fees is almost a requirement, as many households choose online banks purely to avoid fees and earn more interest on savings.
Banks with monthly service fees aren’t automatic scams, but they should prompt you to examine if the membership benefits are worth the cost closely. Additionally, bank fees can motivate you to look for low-fee or free checking accounts to enjoy similar features with less hassle.
Related: SoFi Bank Review
Competitive Interest Rates
SoFi is a trustworthy bank for another reason: interest rates. Many people like SoFi Checking & Savings as you can earn a competitive interest on your entire account balance. The base yield is great for interest-bearing checking accounts.
Customers receiving qualifying direct deposits can also earn one of the nation’s best bank account rates.
Going beyond how much interest you can earn, SoFi has competitive rates and fees on its various loans. For example, the lender doesn’t charge origination fees, and there are opportunities for interest rate discounts by enrolling in autopay and by having a SoFi Checking & Savings account.
Repeat borrowers may also be eligible for better rates, and you can prequalify at no extra cost.
Versatile Banking Features
Not having any local branches will keep away certain potential customers who need in-person service. However, SoFi is able to offer several benefits to its banking members that can be worth using an online-only bank:
- No service fees
- No overdraft fees (up to $50 in coverage with qualifying direct deposits)
- Over 55,000 fee-free ATMs
- Receive paychecks up to two days early
- Earn interest on your entire account balance
- Up to $2 million in FDIC insurance
For additional peace of mind, SoFi uses data encryptions and two-factor authentication (2FA) to protect your account from unauthorized logins and transactions.
Along with these banking benefits, all SoFi members can access complimentary career coaching, credit insights, and other financial tools.
Final Thoughts of If Sofi A Trustworthy Bank
SoFi is a trustworthy bank with ample FDIC insurance benefits, transparent rates and fees, and many valuable perks. It is an excellent option for online banking with many happy, long-term customers. However, no bank is risk-free, and you may decide not to keep all of your cash reserves at a single institution to manage risk.
