SoFi (Social Finance Inc.) was originally founded in 2011. Their banking arm, SoFi Bank, came a bit later and officially received its national bank charter in 2022.
SoFi Bank Name
The name “SoFi” is an abbreviation for “Social Finance”. SoFi was founded by a group of students at the Stanford Graduate School of Business that recognized a need for a different kind of financial company that focused on community.
The “Social” part of the name SoFi emphasized the founders' desire to create a community aspect within finance. They wanted to foster a sense of support and belonging among their members.
The “Finance” aspect demonstrates the founders' desire to revolutionize how people approach their finances.
When was SoFi founded?
SoFi was founded in 2011, with a focus on affordable student loan refinancing and a more modern, tech-focused approach to banking. To fund the refinancing of student loans, SoFi worked with partner banks that provided the capital.
When did SoFi become a bank
SoFi Bank, N.A. launched by obtaining a bank charter through by acquiring Golden Pacific Bancorp, an existing small community bank based in California. Golden Pacific Bancorp possessed the necessary licenses and infrastructure that would have taken SoFi longer to build independently. This acquisition was finalized in February 2022.
Instead of applying for a brand new charter directly, SoFi took a faster route through acquisition which offered many benefits, including:
- Direct Control. SoFi no longer need to rely on partner banks and can control the underwriting and loan process more directly.
- Potential for Lower Costs. Operating as their own bank can potentially reduce costs involved in partnering with external lenders.
- Increased Flexibility. A banking charter gives SoFi more flexibility in designing and offering new financial products.
Today, SoFi Bank offers multiple services and financial products that include an investment platform, career planning, credit cards, personal loans, certified financial advisors, mortgage loans, a combined checking and high-yield savings SoFi bank account along with a hefty bank bonus for opening an account.
Is SoFi Bank safe?
Yes. You are safe with a SoFi Bank account that is FDIC-insured up the standard $250,000. High-net worth individuals that need more than the standard FDIC-insurance can enroll in the SoFi Insured Deposit Program that offers FDIC insurance up to $2M coverage. There are no fees to boost your insurance.
