Over 6 million members trust SoFi in 2023. That’s an increase of 46% compared to the previous year.
The allure of attractive rates on banking accounts offered to every member, not just the ultra wealthy, along with no monthly fees are just some of the captivating features.
Naturally, free bank accounts that accrue market leading interest on your money may raise a few eyebrows as to the legitimacy of the online banking institution.
In this review, we’ll evaluate the safety and security of SoFi to determine whether SoFi is a trustworthy bank.
Is SoFi Trustworthy?
There are multiple factors that make SoFi a safe place to keep your money, including being FDIC insured, having federal regulatory supervision, and excellent SoFi reviews.
Still, even trusted banks such as SoFi, are not immune to macroeconomic conditions that could cause an unfortunate collapse.
In early 2023, we saw the collapse of Silicon Valley Bank, previously the 16th-largest commercial bank in the U.S.
This makes it even more important to understand all the ways SoFi keeps your money protected and gains your trust as a long-term viable banking institution.
SoFi is FDIC Insured
Deposits are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per customer and double that amount per joint account.
This means that in the event SoFi can no longer meet its obligation to customers, the FDIC will step in and help use the bank’s assets to pay depositors. It’s an industry staple that protects you against unforeseeable bank failures.
SoFi also goes a step further by enabling you to insure excess deposits.
For high-balance depositors, FDIC insurance of up to $2 million is available by enrolling in the free SoFi Insured Deposit Program.
The program works with 12 partner banks to offer you additional coverage shall you need it. This way, you can feel better knowing your SoFi Checking and Savings account is safe and insured.
SoFi is a Nationally Chartered Bank
People often ask, ‘Is SoFi a real bank?,’ to which the answer is ‘Yes.’
SoFi became a nationally chartered bank in February 2022, at which point it launched its SoFi personal Checking and Savings account.
Prior to that, the fintech company had partnered with Bancorp Bank to provide online cash management services under the name SoFi Money.
Now that SoFi is a chartered bank under federal regulatory supervision, members can benefit from a greater sense of security.
This is because bank examiners monitor how well chartered banks are managing bank operations and major risks to further keep you and your money safe.
This banking supervision can prompt SoFi to put tougher restrictions in place when it comes to qualifying people for mortgage loans or credit cards, in order to better protect its assets.
SoFi Drives High-Quality Long-Term Deposits
Long-term deposits are important because it helps to keep a bank solvent and able to pay their liabilities.
SoFi does not have high cash-burning clients, such as venture-backed tech and healthcare companies, that are known to withdraw large sums of money.
This puts SoFi in a safer position to conduct its financial services and banking operations in a more manageable risk-tolerant manner.
This following statement that SoFi put out to members shortly after the Silicon Valley Bank collapse further summarizes why it is safe to bank with SoFi.
‘It’s important for you to know that your money is safe with SoFi. We have a high quality growing deposit base. We have ample cushion to the regulatory required equity to asset ratios. We have maintained a strong spread between what we charge on loans and our cost to fund loans despite a higher interest rate environment.’
– SoFi Bank
Excellent SoFi Customer Reviews
Thousands of people, not just me, also think SoFi is trustworthy. Take for reference the over 6,700 Trustpilot reviews that rate SoFi bank 4.6 out of 5 stars.
The excellent ratings mainly revolve around better yielding interest rates, easy loan application process and great customer service.
On the other end of the stick, some of the SoFi complaints revolve around tech issues with the SoFi app and website, SoFi referral bonus payouts, and loan application hiccups.
No bank is ever perfect. Although on average, we can see that most SoFi banking members think favorably of their SoFi experience.
The SoFi bank reviews on the Better Business Bureau (BBB) are a stark contrast to that of the SoFi Trustpilot reviews.
There, SoFi bank is rated 1.27 out of 5 stars with an average of 366 customer reviews. The good news is that this rating is not much different from its other banking counterparts.
Additionally, if you spend time reading the SoFi BBB reviews, you’ll notice they’re written by the same reviewers who have multiple entries. So I wouldn’t give these reviews too much weight at the end of the day.
Impressive SoFi Banking Benefits
SoFi is not your typical run of the mill traditional bank.
They have no physical bank locations, which helps keep operating costs low. Everything is conducted online via the SoFi banking app and website.
As a result, SoFi is able to offer you higher than normal rates on your banking accounts as well as competitive interest rates on personal loans.
Other Notable SoFi Banking Features Include:
- No monthly account fees
- Unlimited free ATM withdrawals at over 55,000 AllPoint In-Network ATMs
- Use of your SoFi debit card worldwide
- Relay Insights to help you keep track of your money and spending across both your SoFi and external financial accounts
- No overdraft fees (up to $50 in coverage with qualifying direct deposits)
- Cash back rewards on qualified debit card purchases
- Early Paycheck program that gets you paid up to 2 days early by setting up direct deposit
- Ability to add up to five primary and five secondary beneficiaries to your checking and savings account.
- FDIC insured up to $2 Million
SoFi also safeguards your account from fraudulent activity by using two-factor authentication (2FA) as a security measure. This works to keep your sensitive data safe and secure.
Additionally, SoFi uses Plaid to encrypt your sensitive information when connecting external financial accounts.
Read my full SoFi Bank review.
Is SoFi a Trustworthy Bank? Final Thoughts
So what’s the verdict, ‘Is SoFi Trustworthy?’
SoFi is legitimate and your money is as secure as it would be in any regular bank such as Chase, Bank of America, or Wells Fargo. Members can have peace of mind knowing SoFi is a nationally chartered bank that is FDIC insured, and carries an ‘excellent’ Trustpilot rating of 4.6 out of 5 stars.
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