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Normally there is no simple way to cancel interest on student loans. There are programs under which different kinds of federal student loans could be forgiven or discharged, but they are not easy to qualify for.

Then there’s non-COVID-related forbearance, during which interest does accrue.

During the 2020-21 coronavirus-related “administrative forbearance,” interest rates were set to 0% on federal student loans held by the Department of Education through at least September 2021—and the interest did not accrue. So that’s a reprieve from interest but not a cancellation.

A case of major loan and interest cancellation did arrive in March 2021, when the Biden administration canceled $1 billion in federal student loans for borrowers who attended a school that had engaged in deceptive or illegal practices or closed suddenly.

How Does Student Loan Interest Work?

When borrowers take out a student loan, they should remember that they’ll end up paying more than the amount they initially took out, when all is said and done. That’s because loans come with interest or the amount a lender charges a person to borrow money, which will vary based on the type of loan.

Borrowers accrue interest on their student loans every day. Yep, every day. On top of that, the interest compounds, which means interest owed on a loan rolls into the loan’s total. Simply put, a borrower will pay interest on the interest.

The student loan interest rate does not change on income-driven repayment plans, but the plans can increase the total amount of interest you pay because repayment terms are expanded.

With a typical deferment or forbearance—postponement of student loan payments when you can’t afford them—interest usually accrues during the period (though the government picks up the interest tab during some deferments).

Reports have emerged of borrowers being asked to pay fees to suspend their payments s. That’s a scam. Anyone who encounters that kind of request can report it to the Federal Trade Commission’s Complaint Assistant .

Recommended: How To Calculate Student Loan Interest

Administrative Forbearance: Which Loans?

The government’s suspension of payments and interest did not apply to private loans.

It did apply to the following defaulted and nondefaulted federal student loans owned by the Department of Education:

•   Direct Loans, including subsidized, unsubsidized, Direct PLUS Loans, and Direct Consolidation Loans
•   Federal Family Education Loan (FFEL) Program loans
•   Federal Perkins Loans

If a borrower had a FFEL or Perkins loan not held by the Department of Education, they were beholden to the policy adopted by their lender or school. If their lender or school chose not to adopt the payment and interest waiver, then they were to keep making payments with interest.

Borrowers could choose to consolidate their loans with a federal Direct Consolidation Loan. But doing so after the 0% interest period could result in a higher interest rate than before.

This is true any time: Borrowers unsure of their federal loans’ status may want to contact their servicer for information. Policies are in flux, so loan servicers will know the latest.

How Forbearance and Deferment Normally Work

If you face short-term financial hardship, you may qualify for forbearance or deferment on federal student loans, providing a temporary suspension of payments.

During a normal forbearance, if you qualify, you can temporarily postpone or reduce your federal student loan payments, but interest will accrue on your loans.

During a normal deferment period, the government, not the borrower, pays the interest on some student loans, such as Direct Subsidized Loans, but interest will accrue on others, like Direct Unsubsidized Loans and Direct PLUS Loans.

During forbearance, you probably won’t be making any progress toward forgiveness or paying back your loan, the Federal Student Aid office notes, and gives this example:

If you have a loan balance of $30,000 and an interest rate of 6% and are in forbearance for a year right after you enter repayment, $1,800 in interest will accrue on your loans. If you do not pay that interest, it will capitalize (be added to your principal balance).

Because interest accrues on your principal balance, capitalization will cause more interest to accrue over time than if you had paid the interest. It will also increase your monthly payment under most repayment plans.

Forgiveness, Cancellation, and Discharge

There are several types of forgiveness, cancellation, and discharge for different kinds of federal student loans. Here are a few.

Public Service Loan Forgiveness

If you are employed by a government or nonprofit organization, you may be able to have your Direct Loans balance forgiven after 120 qualifying monthly payments.

Teacher Loan Forgiveness

If you teach full-time for five consecutive academic years at a low-income elementary school, secondary school, or educational service agency, you may be eligible for forgiveness of up to $17,500 on your Direct or FFEL Program loans.

Total and Permanent Disability Discharge

If you’re totally and permanently disabled, you may qualify for a discharge of your federal student loans and/or Teacher Education Assistance for College and Higher Education Grant service obligation.

Discharge in Bankruptcy

Available for Direct Loans, FFEL Program loans, and Perkins Loans, but bankruptcy rarely results in discharge of all debt..

Recommended: Is Paying Off Student Loans Early Always Smart?

What’s Known …

Any payment made during the administrative forbearance was to be applied to the principal of the loan, unless a borrower had accrued unpaid interest, which would have to be paid off first, according to the Consumer Financial Protection Bureau.

Nonpayments by borrowers working full time for qualifying employers were to count toward the 120 payments required by the PSLF program and as payments required to receive forgiveness under an income-driven repayment plan.

Collections on defaulted federally held loans were halted, as were garnishments.

… and Could Be Around the Bend

A lot can happen in a short amount of time. As of now, there’s lots of talk of forgiveness of federal student loans.

But if that does not happen, or happen in the amount some hope for, federal student loan borrowers must eventually resume payments at their loans’ original interest rate.

Those who anticipate a struggle to make payments may consider a number of repayment options, including income-driven repayment plans and federal student loan consolidation.

And those with private student loans might want to consider refinancing, especially if they have good credit and a stable income, during a time of low rates.

The Takeaway

Cancellation of student loan interest is rare. In a normal forbearance, interest accrues on student loans. And other than student loan cancellation from on high, en masse, it’s pretty darned hard to have loans forgiven.

While rates are low, it could be time to look at the rate of your private student loans and consider refinancing them. Student Loan Refinancing with SoFi can mean a lower interest rate and a different loan term.

Borrowers can consolidate both private and federal student loans into one new loan with one monthly payment.

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†Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS, PLEASE BE AWARE THAT THE WHITE HOUSE HAS ANNOUNCED UP TO $20,000 OF STUDENT LOAN FORGIVENESS FOR PELL GRANT RECIPIENTS AND $10,000 FOR QUALIFYING BORROWERS WHOSE STUDENT LOANS ARE FEDERALLY HELD. ADDITIONALLY, THE FEDERAL STUDENT LOAN PAYMENT PAUSE AND INTEREST HOLIDAY HAS BEEN EXTENDED TO DEC. 31, 2022. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE THE AMOUNT OR PORTION OF YOUR FEDERAL STUDENT DEBT THAT YOU REFINANCE WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE FOR MORE INFORMATION.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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You’ve probably been in one of these conversations, before. Someone who’s older, maybe a teacher or a family member, encourages you to start investing as soon as possible. It’s well-meaning advice.

On an academic level, you know that the younger you get started, the more you can allow the magic of compounding investment returns to work in your favor. You’re also committed to prioritizing your own financial health, and you feel inspired to work towards your own personal financial freedom.

Every new investor has to start somewhere, and there’s no better time than this year.

So, you’ve got the right idea, but you don’t have a playbook. No one taught you how to invest. You’ve heard of Roth IRAs and mutual funds, but how do you know that you’re doing the right thing?

Further, there are a lot of people with divergent opinions on the best way to invest. It’s hard to know where to go and who to listen to.

Much of learning to invest means learning to navigate the options and the conflicting advice and then distilling that down into a portfolio that makes the most sense for you and your goals.

Here are some suggestions for how to start investing in five easy steps.

1. Understanding the Options

While the universe of investment options sometimes feels limitless, it’s not. With knowledge of the core building blocks of investing, you’ll be better able to navigate the available options with ease.

Investors have a variety of options available to them, including: stocks, bonds, cash or money market funds, real estate, private equity, investment partnerships, and natural resources, like gold. These are assets, essentially, things that have economic value and can store wealth. Beginner investors may focus largely on stocks and maybe bonds.

Stocks

A stock represents a share of ownership in a company. Shareholders can make money in two ways: through the value of shares appreciating, and through dividend payouts. Although this is an oversimplification, the success of a stock will generally be correlated to the success of the underlying business. This is highly unpredictable, which leads to the volatile nature of stock prices overall.

Bonds

Bonds, on the other hand, are investments in the debt of a company or government. In this case, the bondholder is the lender, collecting a rate of interest on that debt. The terms of the contract are agreed upon at the outset. Therefore, they are typically less volatile as stocks, although they can lose value.

An investment portfolio generally includes a variety of assets, including both stocks and bonds, for diversification. The purpose of diversification is to minimize risk, especially over the long-term.

Exchange-Traded Funds (ETFs)

What about mutual funds and exchange-traded funds (ETFs)? Funds are pools of investments. It may be helpful to think of a fund as a basket that holds a bunch of investments, such as stocks, bonds, or real estate holdings. For example, an S&P 500 index mutual fund or ETF holds the 500 leading stocks in the US. Therefore, an investment in this fund is really an investment in the US stock market.

Funds are a popular and easy option for investors looking to get broad exposure to whichever market it is that you’d like to invest within. Depending on the fund, this could also be an affordable way to invest. It is a common misconception that you need to invest in individual stocks to be a good stock market investor.

2. Creating a Goals-Based Investment Plan

The decision on which asset class to be invested in, and in what proportions, is an important one. It is called asset allocation. Although it is tempting to dive right into trying to pick out the “best” stocks, it may be appropriate to first take a step back and ask whether stocks are appropriate given your goals.

The next logical question is this: How does one determine asset allocation? Start by determining what the goal or intended use of the money is. To determine your personal investment mix, conduct an examination of your financial goals, risk tolerance, and investment time horizon.

At its core, the asset allocation decision is one regarding your comfort level with the tradeoff between risk versus reward. In investing, risk and reward are intrinsically connected. In order to have the potential for more reward, you have to take more risk. Be leery of investment options that tout “all reward and no risk.” Unfortunately, such an investment may be too good to be true because risk is an inherent part of investing.

A couple of questions worth asking yourself are: What is my goal with this money? When do I need the money? Last, what kind of risk am I willing to take with this money? Then, take these answers and match them up with one or a handful of the available investment options.

It’s may be easier to wrap your noodle around when we consider two different examples of two investors:

Our first investor is saving up for a down payment on a home. They plan to use that money within one year. For them, the risk of losing any money in a potentially volatile investment outweighs the possibility of earning investment returns. Instead of investing, they decide to keep this money in cash, in a savings account.

Next, our second investor. They’re new to investing, with plans to begin investing in a retirement account. They want to focus on growth over the long-term. Because they have a long time horizon for their investments, they have the time to ride through any short-term volatility, so they are more comfortable with the risks of the stock market. They may build out a portfolio that is primarily invested in the stock market, and for diversification purposes, they may decide to include some exposure to bonds as well.

As you can probably tell, there’s no one “right” asset allocation for any one individual, nor is there a universal formula for determining asset allocation. Investors who are learning how to start investing may want to take some time thinking about what allocation makes the most sense for them.

3. Opening an Account

Here’s another common misconception about investing. A Roth IRA and a 401(k) are not investments. These are accounts, just as a brokerage account, that hold investments. Retirement accounts, such as a Roth IRA or 401k, simply have special tax treatment.

Which account you decide on depends on a few factors. First, what are you investing for?

If you are investing for the long-term, then a retirement account may be most appropriate. Retirement accounts can either be opened individually or through your employer. If your employer offers a plan, this could be a good place to start. (And yes, picking funds or a strategy within a 401(k) or 403(b) counts as investing.)

If you are self-employed or do not have a plan through work, you may want to open an individual retirement account. Some options include a traditional or Roth IRA, Solo or Individual 401(k), and SEP IRA.

Because these accounts come with some tax benefits, they also have their own special rules, like when you can withdraw money and limits on how much money can be contributed each year. To determine which type of account that makes the most sense for your personal situation, you may want to speak with a tax professional.

If you would prefer to invest with more flexibility, you may want to open a brokerage or other general-purpose investment account. Though those accounts do not have the tax benefits of a retirement account, they also don’t have restrictions on when the money can be accessed and no penalties for withdrawals before retirement age.

No matter which account type you choose, remember: this is just an account. After opening the account, it will be funded with cash, likely by hooking up an existing checking or savings account. Once the account is funded with cash, that money can be used to buy investments.

If you are opening your own investing account (as opposed to using your workplace retirement plan), you will have to choose a brokerage account or online investing platform. When choosing your account, it helps to pay attention to the fees charged by the platform. Investing costs can dig into your potential returns. SoFi knows that new investors don’t want to pay a bunch in fees just to get in the game. There are no commissions on the SoFi Invest® platform.

4. Deciding How Much to Invest

This may sound oversimplified, but start with whatever you’re comfortable with, knowing that this money will be subjected to some amount of risk. Generally, this should be money that you won’t need in the near-term. That said, one of the greatest features of investing in the modern era is that you can get started with any amount.

There are a few ways to look at this. The first is to consider where you’re at in your own financial journey. It is often recommended that people first work on saving up an emergency fund and paying off credit cards and high-interest debt. And if COVID-19 has taught us anything, it’s that having a firm financial foundation is incredibly important. If you have yet to build up a sufficient safety net or maintain expensive debt on your personal balance sheet, this could be a good place to focus.

It’s easy to get hung up on the “invest versus pay off debt” decision. Here’s a simple place to start: compare interest rates. On debt, it’s the interest rate that you’re paying. On investing, it’s on the interest that you could potentially earn. So for example, if you’re deciding between aggressively paying off a private student loan with a 12% rate of interest or investing at what you expect could be a 7% rate of return, perhaps this makes your decision for you.

That said, it’s not as if you have to be completely debt-free in order to start building wealth. Instead, take some personal inventory. If you feel like you’re missing out on achieving investment and compound returns, then perhaps you’ll want to make investing a priority. If you feel like you’re being weighed down by debt, then maybe you’ll want to give expedited debt pay-off your energy.

If you have arrived at a place of debt repayment that feels manageable, you may want to consider investing as a piece of your overall budget. (Ever hear someone say, “pay yourself first?” This is what they are referring to.) One popular budget, called the 50/30/20 budget, recommends allocating 20% of income towards saving and investing. If you’d like to reach a place of financial freedom sooner than this, then you may want to consider saving more, as a percentage of your overall income.

5. Selecting Investments

Now the fun part of learning how to invest; choosing the actual investments in a portfolio.

Hopefully, you’ve given some thought to which asset class you’d like to invest in. For example, stocks. Then, there are lots of different options to invest within the stock market: You could pick out individual stocks, or stock-based funds, whether mutual funds or ETFs.

With funds, it is possible to invest in categories of the stock market that are very broad, such as the entire global or US stock market, or that are narrower, such as technology stocks. Building simple portfolios of just two or three broad, diversified funds has been a popular method for investors. This is called “passive” or “set it and forget it” investing.

It is also possible to build a diversified portfolio with narrower funds or even individual stocks, but this may require substantial research and curation.

When purchasing funds, investigate whether they are actively managed or indexed. An index fund, as it sounds, mimics some index that measures the performance of the market. For example, a “total US stock market index fund” may be built against the Russell 3000 index, which measures the performance of all stocks in the US. The point is to return whatever the returns of the broader US stock market. Because there is no active manager, the management fee embedded within index funds tends to be lower than the fees on actively managed funds.

Investors opting to buy individual stocks, may want to consider businesses that they believe will produce some sort of future stream of income, either by an increase in the share value or through the dividend payment. Consider reviewing the following: a stock’s price-to-earnings ratio, industry competition, strength of balance sheet, the company research and development, and product pipeline. These factors can help investors determine the value of an investment.

New investors may want to consider buying stocks or ETFs on a platform that offers zero-cost trading, like active investing with SoFi Invest. Fees can eat away at the potential performance of an investment and act as a barrier to entry. Luckily, there are lots of low-cost options for new investors just getting started.

The last option is to use an automated investing service that buys funds for you. This may be an especially compelling option for new investors who want some help building out their first portfolio in a thoughtful, diversified, and goals-driven way. SoFi Invest also offers an automated investing platform.

Be proud of yourself for starting the journey. Invest in a strategy that makes sense for you, starting with any dollar amount.

SoFi Invest is an easy, fast, and no-fee way to get your money working harder for you.

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Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.

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Digital currency is currency that is only used in digital form without any physical form to back it up, such as coins or bills. It’s also referred to as electronic currency, digital money, electronic money, and e-money, among other names. The cryptocurrency Bitcoin is the most well-known and widely used digital currency.

Digital money has existed as long as the internet has, but it has taken many years for it to be widely used and trusted. Part of the reason that digital currency has gained traction in recent years is because of the blockchain technology first used by Bitcoin, which allows for more security and transparency.

Prior to the creation of cryptocurrencies, PayPal brought the idea of quick and easy person-to-person transactions to the masses. The money used by banks and central governments is also digital money, since it often gets transferred electronically rather than physically. However, banks are required by law to hold a certain amount of money in physical cash.

While the terms “money” and “currency” are often used interchangeably, they are not the same thing. Money is a more intangible concept of value and numbers, whereas currency is what is physically (or digitally) exchanged. For example, a check or savings account is money, and coins or paper bills are currency.

How Does Digital Currency Work?

Digital currency can be used in the same way as physical currency to pay for goods and services.

Although money has been transacted digitally for many years via online bank accounts, wire transfers, and credit cards, digital currency is a newer market tool that is changing the way the world transacts. With digital currency, every action—from its creation and storage to sending and receiving it—is done electronically through phones, credit cards, and online exchanges.

Digital currency has been growing in popularity in recent years, in part thanks to its increased transparency and quick transactions. Additionally, without the need for intermediaries, transactions are generally faster and lower cost than going through a bank. As more and more companies and countries are adopting it, this increasingly widespread use has contributed to the spread of globalization, since it’s easier to send money and trade internationally than ever before.

Pros and Cons of Digital Currency

These are some of the pros and cons to using digital currency.

Pros:

•  Increased transparency
•  Quick transactions
•  Convenience

Cons:

•  Still some risk of fraud, data theft, scams, and criminal use
•  May be volatile
•  Lack of regulations can cause issues

Types of Digital Currency

There is more than one type of digital currency. While cryptocurrency may be the first thing that comes to mind, there are also central bank digital currencies. Below we’ll outline how each works, and how they differ from each other.

Cryptocurrencies as Digital Currency

Cryptocurrencies are a type of digital currency that is secured by cryptography, which adds an extra layer of security and anonymity to transactions—and tackles the problem of “double spend” (the possibility of spending the same unit of digital currency twice). Cryptocurrencies aren’t controlled or created by a central authority, are held in digital wallets, and are sent from peer to peer on decentralized exchanges, using a blockchain ledger that keeps track of all transactions. Examples of popular cryptocurrency types include Bitcoin, Ethereum, Litecoin, and Ripple.

Recommended: Understanding The Different Types of Cryptocurrency

One reason cryptocurrencies were created was as a response to the way current fiat currencies operate. Rather than being created and issued by a company or government, cryptocurrencies are mined using decentralized computational methods and algorithms. Certain cryptocurrencies, such as Bitcoin, have a predetermined amount of ‘coins’ that will ever be available in the market.

Cryptocurrencies aren’t tethered to a physical asset or otherwise backed by anything, so their value is based solely on supply and demand. This has historically made them fairly volatile as their use and demand changes, but they may not remain volatile as they become more widely used.

It’s worth noting that cryptocurrency is subject to different types of crypto regulations than central-bank-backed digital currency.

Central Bank Digital Currencies

Some digital currency is issued by a central bank and has the same regulations as physical currencies. These are called Central Bank Digital Currencies, or CBDC. These are not widely used yet, but more and more governments are working towards issuing digital forms of their fiat currencies.

Central banks have been motivated to update their technology and practices to outpace the growth of cryptocurrencies in the market. Countries and regions such as China and Europe are racing to lead the way into this new era of digital currencies, partly to avoid the rise of unregulated cryptocurrencies. China is already in the process of testing the digital yuan and other countries will be doing similar tests soon.

CBDCs may use the same blockchain technology as cryptocurrencies or they may rely on different, centralized technologies. One benefit of CBDCs is that they may be more stable than cryptocurrencies, because they are backed by central banks. Additionally, if a digital currency is issued by a central authority, they may choose to create more of it over time.

The Bank for International Settlements (BIS) has a list of 14 characteristics that define CBDCs in order to ensure their financial stability and their interoperability with existing fiat currencies. Some of these characteristics include:

•  They can be used between different types of banking systems
•  They will be legal and supported by central banks
•  Their value and conversion rates will be the same as physical money
•  The cost of creation and distribution will be low
•  They will be resilient and safe, protecting against technology issues and cyberattacks

Investing in Digital Currency

Investing in digital currency like crypto is considered quite risky — in part because prices can fluctuate so wildly. For example, Bitcoin was valued at more than $14,000 per coin in 2017 before dropping to less than $3,500 per coin by the beginning of 2019.

On the flip side, some investors find it appealing to invest in digital assets and crypto because it is also one way to diversify a portfolio that might be largely made up of stocks and bonds. Cryptocurrency is one of many alternative investments that investors sometimes look to in diversifying. In fact, 2021 saw the launch of the first North American crypto exchange traded fund (ETF), in Canada.

The steps to investing in digital currency are relatively simple:

1. Make an account with a digital currency exchange. This is a platform that allows you to buy, sell, and exchange crypto, and gives you the unique addresses you need to make transactions. To open the account, you’ll create a username and password, and also verify personal data like your residential address or social security number.

2. Get a digital wallet. This is a way to securely store your crypto, and is key if you want to trade crypto and also use it to pay for goods and services. There are many free wallets available on the market, some of which are designed for specific platforms, like Windows desktop, iOS, or Android mobile. Note: Some bitcoin brokerages, like Coinbase , operate as both an exchange and a wallet.

3. Link your wallet to an external bank account. This is the account you’ll use to buy digital currency, or to withdraw it in the form of your home currency. You’ll typically need to provide your routing and account numbers, though some wallets can connect to your bank account (or PayPal account, or another source of funds) directly with your digital login credentials.

4. Transfer funds into your new account and start investing. Now you can use your digital currency for purchases or trades. (One thing to note: your wallet may take a portion of your purchase as a transaction fee.)

Digital Currency and Taxes

Anyone who’s interested in investing in digital currency should familiarize themselves with how to pay taxes on crypto. The IRS considers digital currency to be property, rather than monetary income. So in the same way that an individual who purchased or sold a property (like a vacation home) would keep track of the transaction, an individual who bought crypto like a stock or other asset will need to keep track of their crypto transactions—and report the value of their holdings (translated to U.S. dollars) on their tax filings.

There is one exception to the IRS’s cryptocurrency-as-property rule : If you receive crypto as a gift, you mine it, or you are paid in crypto for goods or services you’ve sold, that is in fact treated as income by the IRS, and taxed accordingly.

Typically, crypto exchanges keep track of an investor’s transaction history (in the same way a brokerage might with stocks). But it never hurts to keep your own records, as well.

The Takeaway

Digital currencies are becoming more popular and prevalent in the market, both due to the rise of cryptocurrencies and the shift towards government issued central bank currencies. These currencies reflect the way people are enacting transactions — virtually, rather than in person — and are also considered at the forefront of security and privacy technology.

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Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.

Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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If you invest in Exchange Traded Funds (ETFs) through SoFi Invest (either by buying them yourself or via investing in SoFi Invest’s automated investments, formerly SoFi Wealth), these funds will have their own management fees. These fees are not paid directly by you, but rather by the fund itself. these fees do reduce the fund’s returns. Check out each fund’s prospectus for details. SoFi Invest does not receive sales commissions, 12b-1 fees, or other fees from ETFs for investing such funds on behalf of advisory clients, though if SoFi Invest creates its own funds, it could earn management fees there.
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