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SoFi Invest margin rates

Your expert
Adam N.
Fact checked by
Updated
Jul 2024
Personally tested
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Independent

Are margin rates low at SoFi Invest?

Margin trading - borrowing money from your broker to buy more assets than you could otherwise afford - is popular, but it's not available at all brokers, and margin interest rates can vary widely.

SoFi Invest offers margin trading, but its margin rates are high, so you should look elsewhere. Start with our picks for the best margin trading platforms, or read on for info on margin trading.

I don't recommend SoFi Invest for margin trading
Adam
Adam Nasli
Trading • Safety • Market Analysis

I've thoroughly tested SoFi Invest's services using real money. When it came to margin trading, high margin rates killed the deal for me:

  • SoFi Invest's margin rates are high, which can erode your trading profits.
  • Stock and ETF trading fees at SoFi Invest are low.
  • Margin trading involves borrowing money from your broker to increase your exposure.
  • Into margin trading? Skip SoFi Invest and check the best margin trading platforms.

Before we begin, let's see if SoFi Invest is available in your country:

Yes, you can open an account at SoFi Invest if you live in the United States!
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United States

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Overall score
4.4/5
Minimum deposit
$0
Stock fee
Low
Options fee
Low
Inactivity fee
yes
Account opening
1-3 days
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SoFi Invest margin rates are high

So what are margin rates? Margin rates, sometimes called debit rates, refer to the interest rates charged by brokers when you borrow money to buy and sell stocks, ETFs (exchange-traded funds) or options on margin.

Each brokerage sets its own margin rates, but generally margin rates are closely tied to the benchmark interest rate of the currency in which you borrow. If your broker lends you USD, the margin rate will most often be the US interest rate plus a markup that the broker adds.

Brokers often have a tiered system for margin rates, depending on the amount you borrow: the more money the broker lends you, the lower the margin rate is. Some brokers also charge different margin rates for different types of trading accounts. Typically, a standard account will have higher rates than a premium account. The rates BrokerChooser quotes refer to standard accounts.

Most brokers calculate the margin rate on a daily basis, but the amount you owe them is charged to your account once a month. Brokers are required to disclose their margin rates; some do so citing an annual percentage rate while others will display it in swap points. Whichever it is, just keep in mind that margin rates can change rapidly without advance warning from your broker.

Broker
USD margin rate
USD margin rate class
SoFi Invest
11.5%
High
Alpaca Trading
8.5%
Low
Robinhood
6.8%
Low
Margin rates at SoFi Invest

Margin rates on short selling

Margin rates can also apply when you engage in short selling. Short selling means that you borrow shares from your broker and sell them with the expectation that the share price will decline. You will then repurchase the shares at a lower price, return them to the broker and pocket the price difference as your profit.

The margin rate for short selling is the interest rate charged by the broker on the borrowed funds used to facilitate the short sale. It is similar to the margin rates for simple stock, ETF or options trading.

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Stock trading fees are low

Margin rates are the single most important item that influences your margin trading profits, but trading fees and other regular or one-off charges can also impact your overall trading costs.

SoFi Invest has low stock and ETF trading fees overall. See details of this and other fees charged by SoFi Invest and some close competitors in the table below. (Trading fees cited here refer to a $2,000 trade.)

Broker
US stock fee
UK stock fee
SoFi Invest
$0.0
-
Alpaca Trading
$0.0
-
Robinhood
$0.0
-
Stock trading fees and other charges at SoFi Invest

Margin trading in the US

Trading on margin means borrowing money from your broker to buy stocks, ETFs or options. But why would you do that? Basically, it increases your 'buying power', allowing you to open larger trading positions than you could otherwise afford with just the cash in your brokerage account. Just mind the risks, as any losses will also be magnified in the same way that gains are amplified.

At brokers regulated in the US, you need to open a margin account to be allowed to trade on margin. The mandatory minimum deposit for margin accounts is $2,000. Margin trading is governed by the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA) and Regulation T, also known as Reg T, a rule by the US Federal Reserve Board.

Under Regulation T, the initial margin for most stocks is 50%. This means that you must put up at least 50% of the purchase price in cash, while the remaining 50% can be borrowed from the broker. Brokers can only require initial margins that are higher than this.

Reg T also stipulates that short selling requires a deposit equal to 150% of the value of the position at the time the short sale is executed. This 150% includes the full value of the short sale (100%), plus an additional margin requirement of 50%.

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Further reading

Everything you find on BrokerChooser is based on reliable data and unbiased information. We combine our 10+ years finance experience with readers feedback. Read more about our methodology.

author
Adam Nasli
Author of this article
I bring extensive financial expertise as one of BrokerChooser's earliest team members. Personally, I tested nearly all 100+ brokers on our site, opening real-money accounts, executing trades, assessing customer services, and providing firsthand assessment. My professional background includes roles in the banking sector and a degree from Central European University, where I teach finance. My passions lies in in-depth research of the financial industry, building trading algorithms, and managing long-term investments.
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