Picking the best investment app can be a tough decision. After all, there are a lot to choose from.
From micro-investing mobile apps that buy fractional shares with your spare change to active trading platforms equipped with advanced trading tools and market commentary, there's an investment app for every skill set and budget.
Each of our top picks offer $0 account minimums, low account fees, retirement accounts and educational resources.
All of these apps are good for beginners, but some offer users more control, customization and investment selection than others.
When choosing an investment app, it's important to consider if you want a passive portfolio or a self-directed portfolio.
The first manages your investments day-to-day for you. The second puts you in the driver's seat: You're responsible for picking and managing your own investments â€" and gauging your personal risk tolerance.
We tend to favor robo-advisors because they're affordable, easy to use and don't require much ongoing maintenance.
Below, you'll find our full list of the best investment apps along with answers to frequently asked questions and insight from financial experts about how to pick the right investment app for you.
Best Investment Apps: Features Summary
| Investing App | Account Fees | Account Minimum Balance | Best For | ||
|---|---|---|---|---|---|
| Betterment Digital | 0.25% annual fee | $0 | Passive investing | SEE DETAILS | |
| Stash | $1 to $9 monthly fee | $0 | New investors | SEE DETAILS | |
| E*TRADE | 0% to 0.30% | $0 | Frequent, active traders | SEE DETAILS | |
| SoFi Automated Investing | No annual or monthly fee | $0 | Advisor access | SEE DETAILS | |
| Fidelity Go | $0 to $3 monthly | $0 | Low-cost management | SEE DETAILS | |
| Webull | No annual or monthly fee | $0 | Intermediate investors | SEE DETAILS |
Betterment Digital
- Automated portfolios
- Tax-loss harvesting
- Bank account with debit card
Customers with a $100,000 minimum balance in their investment accounts can opt into the Betterment Premium plan for an account management fee of 0.40%.
Premium customers get more in-depth financial advice and unlimited access to phone calls with a financial advisor.
Stash
- Hands-on micro-investing
- Fractional shares
- Educational resources
The micro-investing app can create a diversified investment portfolio for you, or you can pick from more than 3,000 stocks, ETFs and bonds if you want a more hands-on approach.
However, Stash's flat monthly fee is unlike many other robo-advisors, which charge a management fee as a percentage of your portfolio balance.
This can make Stash's price a drawback for users with low account balances.
Still, at $1 a month, Stash Beginner is a fairly affordable investment account, considering you also get access to a bank account and a Stash debit card. This entry-level option is also cheaper than Acorns, Stash's biggest competitor.
E*TRADE
- Wide array of investment options
- 4,400 no-load, fee-free mutual funds
- Advanced trading tools
The company also offers a more advanced platform called Power E*TRADE, where experienced and intermediate traders can utilize more than 145 charting tools, options strategies, risk-reward analysis and a live-streaming Bloomberg TV feed.
The Power platform also includes a paper trading feature, which lets you hone your investing skills and test strategies without committing real money.
Power E*TRADE isn't a separate brokerage account â€" just a different platform with its own mobile app. Like the original platform, there's no trading costs or account management fees.
SoFi Automated Investing
- Access to a financial advisor
- No annual management fee
- Automatic rebalancing
SoFi also offers an attractive platform for more experienced traders: SoFi Active Investing.
It provides an almost unbeatable fee structure: No account minimums, no annual advisory fees and free stock and ETF trades. It also offers fractional share investing.
Active Investing users can trade 21 different cryptocurrencies for a flat fee of 1.25% per trade.
However, the platform lacks access to some fundamental investment types, including bonds and mutual funds. It also lacks some advanced trading options, such as options trading.
Fidelity Go
- No fees for small account balances
- No investment expense ratios
- Integration with other Fidelity accounts
These funds have holdings across four asset classes including U.S. stocks, international stocks, domestic bonds, and short-term securities. Keep in mind there are no assets such as commodities, real estate investment trusts and international bonds to choose from. Still, you can get a decent amount of diversification if you're not bothered by the lack of these additional choices. Keep in mind that this robo-advisor doesn't offer tax loss harvesting.
Webull
- Commission-free trading
- Cryptocurrency trading
- Advanced investing tools
While the Webull platform features a thriving user community, its traditional education resources are slim. It also lacks access to some common securities, like bonds and mutual funds.
Webull is most appealing for its advanced features, including margin accounts and options trading. In fact, Webull is one of the few online brokers to offer free options trades with no commissions or contract fees.
Other key features include real-time market quotes, full extended-hours trading and commission-free crypto trading.
Frequently Asked Questions
They keep costs low while offering robust financial planning tools that give you a better understanding of your entire financial situation.
Meanwhile, self-directed accounts are best for more advanced investors who understand the complexity and risk involved.
Even in the unlikely event an investment app goes under, your money is still safe and insured by the Securities Investor Protection Corporation (SIPC) for up to $500,000.
These investment apps also use bank-level security features, including encryption and two-factor authentication, to protect your data and privacy.
You fund your portfolio by linking a bank account and transferring money. You can make one-time lump-sum deposits to your investment account or set up recurring transfers.
Once your account is funded, you can explore your investment options, make stock and ETF trades, or let a robo-advisor manage an investment portfolio for you.
Expert Advice on Choosing the Best Investment App for You
We asked two financial experts at The Penny Hoarder what they had to say about investment apps.
What are the biggest benefits of using an investment app?
Molly Moorhead, Certified Financial Planner:
Apps bring investing and financial planning to the place where you manage so much else of your life nowadays: your phone. If you've put off opening an IRA or becoming more educated before investing real money, all the tools and information you need are in your hands.
Robin Hartill, Certified Financial Planner:
Many investment apps make it easier than ever for beginners to get started. Some apps will let you buy fractional shares â€" which allow you to invest as little as $1 in top stocks â€" rather than saving up hundreds or even thousands of dollars for a full share.
Others will round up your purchases and let you invest the spare change.
Another benefit is that you can get an instant snapshot of how your investments are performing.
What are the drawbacks of using an investing app?
Molly Moorhead, CFP:
If you're inclined to check your 401(k) every day or watch how a stock you bought is doing, investment apps can exacerbate that habit.
The vast majority of us don't need to follow the markets every day, and we definitely don't need to buy or sell investments based on short-term movements.
We're in it for the long haul, so don't let whatever app you choose become a temptation to make hasty investment choices.
Robin Hartill, CFP:
If you're prone to panicking after the stock market has a bad day, an investment app may not be the best choice.
Likewise, if you're an impulse buyer, be careful with investment apps. Long-term investing is what builds wealth.
Also, some apps have substantial fees that may not look like a lot. But if you invested $100 in a lump sum and your app charges a $1 monthly fee, that amounts to a 12% annual investment fee.
How can I learn more about the investment choices an app offers?
Molly Moorhead, CFP:
Most apps will steer you toward stock ETFs. By purchasing shares in these funds, you'll own small pieces of many different companies across an array of sectors.
If you're curious, log into your investment account, find the stock symbol for the companies in the fund and check out their historical performance.
You'll find that they likely all have ups and downs, but because your money is spread across multiple industries, no single company's stock will hurt you much if it drops.
Robin Hartill, CFP:
Look at online reviews to see whether users are satisfied with their investment choices and whether there are any limitations.
Once you find an investment you're interested in, do your homework.
If it's an individual stock, you need to understand how the company makes money and why you think it can be profitable in the future.
Most people don't need a ton of investment options. An S&P 500 index fund is one of the most surefire ways to build wealth over time.
How much money can you make with investing apps?
Molly Moorhead, CFP:
To state the obvious, it depends how much you invest.
Micro-investing apps that let you round up the change on your purchases and invest that money for you won't make you rich.
But if you can set aside a fixed amount of money every month to automatically invest in a diversified portfolio, your money will grow over time and provide you with a nice nest egg.
Robin Hartill, CFP:
Of course, your returns depend on how much you invest and what you invest in.
But keep in mind: Past results don't guarantee future returns. Just because people made huge returns using an app to invest in an obscure crypto or hot stock doesn't mean you should expect the same result.
Rachel Christian is a Certified Educator in Personal Finance and a senior writer for The Penny Hoarder.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
No comments:
Post a Comment