The Best Apps for Investing
Millennials are surprisingly good at saving money. According to Forbes, up to 71% of millennials are actively saving for retirement. These savings skills do not translate into investing for wealth-building or retirement, however. Younger investors are far more conservative than older generations. Some 66% of 18-29 year-olds told Forbes that they find the stock market intimidating.
Ironically, the stock market used to be much more intimidating before millennials came of age. For individual investors to trade in past generations, they had to pay for access to market data or use newspapers and financial records to get information that was potentially out of date. In the pre-internet era, you would have to order stocks over the phone from a broker, who would usually charge high fees to make a trade on your behalf.
The internet has made investing much more accessible, and a new crop of investing apps have made purchasing securities easier than ever. You can now invest for retirement, wealth-building, future financial freedom, or to save for future purchases, such as a home.
With these computer and mobile investing tools, it only takes a few taps to purchase a stock, check your portfolio, and shift your investment money between securities. There are enough options that you can find something that fits your needs, level of investing experience, and financial plans.
Here are seven such apps.
Robinhood is an investing app that offers five products: money market accounts, stocks and funds, options, gold, and cryptocurrency. This app is one of the first to provide cryptocurrency, such as Bitcoin, as an investment vehicle.
Another advantage of Robinhood is that it does not charge a commission on trades. Many apps and online brokerages now offer commission-free trading, but Robinhood was one of the first to do so.
This service has a low bar for entry. There is no minimum deposit to trade, which is ideal for new investors who want to learn the securities-buying process while only risking a few dollars.
Robinhood also caters to new investors with its simple user interface. Experienced investors could find it lacking advanced features, but Robinhood does have research materials and data feeds. You can also purchase the Robinhood Gold plan for $5 per month. It includes additional market data from NASDAQ, research from Morningstar, and the ability to open a margin account.
Acorns has a different approach that involves one of the more creative ways to save money for investing. This app helps users create an investment portfolio using their spare change. You connect credit and debit cards to the app. When you make a purchase with a linked card, Acorns automatically rounds that purchase up to the nearest dollar. Those extra cents get put into your investment account. If you save money yourself, you can invest a lump sum as well.
Acorns aims its services as novice investors. It offers different portfolios and helps each user choose a collection of stocks based on their financial plans, risk tolerance, and other factors. Fees for these accounts range from $1 to $3 per month, with the $3 option offering access to an Acorns debit card.
The fees are all-inclusive. Acorns does not charge commission or transaction fees when you invest.
Though Acorns does offer research and educational materials, it is best for novice investors. Those who want to research, analyze, and purchase individual stocks will want to use an app that offers a higher level of control and customization. However, those who want to invest in funds without performing research or making decisions about individual securities will appreciate the convenient investing options from Acorns.
Stash is for novice investors. Eighty-six percent of Stash customers come to the app with no previous investing experience. The goal of Stash is to make the investment process as convenient and straightforward as possible. Users can select from a variety of exchange-traded funds (ETFs) and stocks. A beginner account costs $1 per month, though there is also a $9-per-month version that includes additional family accounts, a debit card, and monthly market reports.
While there are no account minimums, you do need an initial deposit of $5 to start trading. Stash also offers tools such as a retirement calculator. Premium accounts at the $3 and $9-per-month level come with tax benefits for retirement investors.
Stash has some of the features of other apps. For example, you can connect a debit card and round up on purchases to fund your account. You can also set up automatic investments and move money into your investment account automatically at a specific time each month.
Stash is for novice investors, but it does have some features for those who want a more hands-on approach to investing.
M1 offers something to hands-on investors as well as novices and those who want to invest in funds. You can customize a portfolio with stocks and ETFs of your choosing, or you can choose one of M1’s 80 portfolios. The app also comes with the option of a regular taxable account or an individual retirement account.
Novice investors may appreciate the opportunity to purchase fractional shares and the chance to invest without any commissions or fees. You can also get M1+ for $125 per year. This premium service includes a debit card, an interest-bearing checking account, and more control over your trading.
Because it provides a more hands-on platform, M1 is best for those who already have some experience in investing or those who want to learn with the specific goal of having a hands-on approach to investing and selecting individual stocks.
With over $23 billion under management, Wealthfront is one of the larger investment app options. Not only does it offer competitively low fees, but it also helps you optimize your taxes, and offers free management for accounts under $5,000. You can also get an interest-bearing checking account that offers a 1.78% annual percentage rate. You only need $1 to open an account, and there are no additional investment requirements.
Wealthfront offers automated financial planning tools and software that gets updated by a team of financial experts. The automated process can be convenient, but novices who need guidance from a financial expert may prefer a different investment service.
Wealthfront offers some advanced features, such as tax-loss harvesting, which involves selling securities that decline in value to take a tax loss, which you can use to offset capital gains taxes from successful investments. Wealthfront automates this process.
In general, Wealthfront is for investors who have some knowledge of the market and know what they want from an investment. That said, the high-yield savings account and advanced features can benefit anyone willing to put in the effort to learn.
Betterment has been around since 2008, and it is an overall financial planning app rather than merely an investment app. The main goal is to help you plan your finances and investments with your specific goals in mind.
The entire Betterment platform is customizable. You could, for example, link all of your accounts to the app to get a clear picture of where your finances stand before investing. When it comes to investing, Betterment users have different options. You can opt for one of the company’s portfolios or create a customized investment plan.
Betterment also has some advanced features, such as goals-based investing tools, portfolio rebalancing (so that your portfolio remains properly diversified to lower risk), and tax-loss harvesting.
E-Trade is one of the oldest online brokers. It has a long-standing reputation as one of the best overall online options in the investment industry.
E-Trade has a lot of tools, but it focuses mainly on active investors. When it comes to controlling investments, accessing research materials, finding data, and other tools, E-Trade is the best option on our list. Though it previously charged commissions to traders, it now has $0 commissions. E-Trade also offers relatively quick order settlement for short-term investments.
The site has a wealth of different tools to help you create and rebalance your portfolio. The platform and tools are intuitive, and E-Trade does have educational materials, but it does have more of a learning curve than the other novice-friendly apps on our list.
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