SoFi matches Robinhood's 1% IRA match

SoFi is copying Robinhood's play for retirement assets by offering owners of individual retirement accounts a 1% contribution match to win their business.

The financial services company announced that perk Thursday, noting that the match applies to all new IRA contributions to SoFi Invest from outside accounts and those made through automated clearing house transfers.

At 1% of contributions, it’s not nearly as big of an incentive as the matching contributions made by employers to 401(k) accounts, which are often 1% to 6% of a worker’s gross pay. Nonetheless, a 1% match may still draw people to SoFi, at least if the company sees similar results to Robinhood, which last year made a splash with its announcement of a 1% match.

“Less than a year in, we're excited about the response from our customers: We just hit over $1 billion in retirement assets under custody and have over 325,000 funded retirement accounts, up 75,000 from last quarter,” a Robinhood spokesperson said in a statement.

Assuming an account holder contributes the maximum annual limit of $6,500, not including catch-up contributions, the 1% match amounts to $65. Robinhood also offers an additional 3% matching contributions for customers with Robinhood Gold accounts, which charge $5 per month and 8% interest on margin investing over $1,000.

SoFi, which calls itself a “one-stop shop for digital financial services,” got its start in 2011 as a student debt repayment service, then called Social Finance. Four years later, it was the first fintech in the country to get $1 billion in a single funding round, and it received an additional $500 million in 2019, as reported in InvestmentNews. The firm went public through a special purpose acquisition company in 2021, and it has since grown to represent 6.2 million customers across its account types, according to its recent announcement.

The company now has a wide range of financial services, including various types of loans, banking, investing, credit cards, employee benefits and insurance. It also gives account holders access to CFPs who can provide basic financial road maps.

According to the company’s latest Form ADV, SoFi Wealth manages about $670 million across more than 136,000 accounts.