If you want to close an account on SoFi, you need to take a few steps before you can complete the closure. SoFi requires your Invest account to have no remaining cash or investments, and you may also need to cancel recurring investments and wait for pending transactions to settle.
Here is how to close an account on SoFi correctly and avoid potential tax or transaction issues.
How to Close an Account on SoFi
To close an account on SoFi, start by opening the SoFi app and going to your Invest dashboard.
- Open the SoFi app and tap “Invest” at the bottom of the main screen.
- Scroll down past the chart, buying power, and promotional cards.
- Find the “Accounts” section.
- Tap your self-directed brokerage account.
- On the account screen, tap the gear icon in the top-right corner.
- You will be taken to the “Manage Account” screen.
- Scroll all the way to the bottom.
- Tap “Close Account.”
- Review the confirmation screen and tap the red “Close” button when you are ready.
However, you cannot simply close the account if you still have investments or cash in it. You need to bring the account balance to zero first.
What to Do With Your Investments Before Closing
Before you close an account on SoFi, decide what you want to do with any investments and cash in the account. There are three main options.
Transfer Your Investments to Another Broker
If you are moving to another brokerage, you may be able to transfer your investments without selling them. An ACATS transfer allows eligible securities to move from one brokerage to another without requiring you to sell them first.
You normally start an ACATS transfer with the new brokerage, such as Fidelity, Vanguard, or another participating broker. The new broker handles the transfer request with SoFi.
Because the investments are transferred rather than sold, the transfer itself generally does not create a capital gains tax event. Your existing holdings and their original purchase information can also transfer with them.
An ACATS transfer can take several business days to complete, so wait until the transfer is finished before trying to close your SoFi account.
Sell Your Investments and Withdraw the Cash
If you are not moving your investments to another brokerage, you can sell them and withdraw the resulting cash to your bank account.
Keep in mind that selling investments in a taxable brokerage account can create a capital gains tax liability. If you sell an investment for more than you paid for it, the profit may be taxable.
The tax treatment can depend on how long you held the investment. Investments held for one year or less generally receive short-term capital gains treatment, while investments held for more than one year may qualify for long-term capital gains treatment.
If you have significant gains, consider speaking with a tax professional before selling. In some situations, waiting until an investment qualifies for long-term treatment could make a meaningful difference.
Transfer Money to Another SoFi Account
If you are simply moving money or investments to another eligible SoFi account, an internal transfer may be another option.
For example, you might decide to move funds from a taxable investment account to another type of SoFi account. The tax and eligibility rules depend on the specific accounts and transaction, so make sure the transfer is appropriate for your situation before proceeding.
Cancel Recurring Investments
Another important step before you close an account on SoFi is canceling any recurring investment orders.
If you have recurring purchases scheduled, they could attempt to run while you are trying to empty or close the account.
To cancel a recurring investment, go to the relevant ETF or investment and look for your scheduled activity. From there, select the recurring investment and choose the option to cancel it.
Check your account for every recurring investment and cancel all active schedules before proceeding with the closure.
Wait for Pending Transactions to Settle
Before you close an account on SoFi, make sure there are no transactions still in progress.
Check for things such as:
- Pending trades
- Dividends that have not yet been credited
- Transfers that are still clearing
- Other pending account activity
SoFi may prevent you from closing the account while transactions are still being processed. Waiting until everything has settled can help prevent problems during the closure process.
Close the SoFi Account
Once your account has no investments or cash, your recurring investments have been canceled, and all pending activity has settled, you can return to the account settings.
Go to your self-directed brokerage account, tap the gear icon, select “Close Account,” and confirm the closure.
At this point, you should be able to complete the process through the app.
What Happens After Closing
Closing your SoFi Invest account does not necessarily mean all account information disappears immediately. The account may remain in a wind-down state while SoFi handles any remaining activity, such as late dividends or interest payments.
You may also still be able to log in and access important account documents after the account has been closed.
This is particularly important for tax documents.
Tax Forms and Credit Score
After you close your SoFi account, keep an eye out for the tax documents you will need for the year in which you had taxable investment activity.
For example, you may need a Form 1099 to report investment income or gains on your tax return. Make sure you retain the necessary documents for your records.
Closing a brokerage account does not normally affect your credit score. Investment accounts are not the same as credit accounts and generally are not reported to the credit bureaus in the way credit cards and loans are.
Can You Open a SoFi Invest Account Again?
If you close your SoFi Invest account and later decide you want to invest through SoFi again, you can generally apply to open a new Invest account.
You should treat the new account as a new account rather than assuming the old one will simply be reopened.
Final Thoughts
Knowing how to close an account on SoFi is only part of the process. The most important thing is to prepare the account before you select the final “Close Account” button.
Transfer or sell your investments, withdraw any remaining cash, cancel recurring investments, and wait for pending transactions to settle. Once the account is at zero and there is no activity left to process, you can return to the account settings and complete the closure.
Taking these steps can help you close an account on SoFi without unnecessary delays or unexpected tax issues.
