Investors are dumping their financial advisors and stockbrokers for an app. That’s because investment apps offer lower fees and the convenience of making trades on the go.
Investment apps also reduce the barrier to entry for new investors who can easily get started without much experience, time or money.
What are investment apps?
Investment apps are bringing stock market trading and financial planning to the digital age. Simply put, they offer a platform for investing your money independently, without the need for a stockbroker or financial advisor.
The best investment apps overview
The best investment apps
Betterment offers personalized investment options. It also automates the investment process from start to finish.
How it works
Betterment wants to make investing effortless and affordable for everyone. Based on your finances, needs, goals, and lifestyle, they give you a personalized portfolio of low-cost index funds.
They help you decide how much to invest and sync with your bank so that you have the option of regular automatic contributions. This robo-advisor makes financial decisions using a complex algorithm, but what’s great about Betterment is that you also have the option of speaking to a financial expert.
$0 minimum and 0.25 percent annual fee for the standard account; $100,000 minimum and 0.40 percent annual fee for the premium account.
- No prior experience required
- Simple and effortless investing
- Financial advisor
- Low fees
- Rigid formula is not great for DIY-ers
- Limited to managing Betterment accounts only
Stash is an easy investing app that’s accessible for everyone. You can start investing with as little as $5.
How it works
Inspired by the weight loss industry, their philosophy is about making small, easy steps. Stash allows you to invest in fractions of shares, which means you can start with as small an investment as you want.
They offer you a choice of 30 different ETFs based on your desired risk, financial situation and lifestyle. What’s great about Stash is how easy they make the whole process. They explain everything along the way and they even offer financial advisory services.
$1/month for balances under $5,000; only 0.25 percent for balance of $5,000+.
- Low barrier to entry
- Easy to use
- Includes personal financial advisor
- $1/month can add up if you’re a small investor
- Limited to their chosen portfolios
Acorns allows you to choose from portfolios made by Nobel-Prize winning economist, and automatically invest your spare change.
How it works
Acorns links with your credit and debit card and automatically “rounds up” the spare change to the next dollar on every purchase.
For example, if you bought a latte for $3.60, they’d automatically deposit 40 cents to your investment account, which can potentially add up to quite a lot every month. Based on your desired risk, Acorns gives you the choice of five different portfolio options, which were created by Nobel Prize-winning economist Harry Markowitz.
This is a little different from robo-investors like Betterment that offer custom portfolios instead of the choice of a few pre-configured ones.
$1 monthly fee for accounts with balance under $5,000; 0.25 percent of the balance annually on accounts over $5,000.
- Easy way to invest without even noticing
- No minimum balance
- Your monthly spare change may not be enough for a solid routine investment
- $1/month fee may not be worth it if you’re not investing enough
M1 Finance offers automated investing in pre-selected portfolios, or you can choose from any stock or ETF.
How it works
M1 is meant for people who like the idea of automating their investments, but still want some say on where their money is going. M1 Finance allows investors to choose from any stock or ETF.
Unlike robo-investors, you’re not restricted to their pre-selected ETFs, but they do offer preset templates for beginners. You can also set up recurring automatic deposits on a weekly or monthly basis, or any custom time frame you desire.
Free of charge; $100 minimum to open an account and $500 minimum to open a retirement account.
- Offers an alternative to rigid robo-advisor formula
- Simple, user-friendly
- Limited to 1 trade a day
- Can be confusing for beginners
- No human financial advisor
Personal Capital is like a personal financial manager that offers advice, wealth management, and free financial tools
How it works
Personal Capital not only works as an asset manager service, but also provides helpful free financial tools. Personal Capital links to your financial accounts to summarize your finances and help you plan and budget your finances. You get a ton of features including a handy retirement planner or bill notification.
Personal Capital invests your money in a preselected portfolio of individual securities and ETFs, specifically to minimize added expenses and taxes. Every account also gets a dedicated advisor.
0.89 percent fee for $1 million deposited or less; you need at least $100,000 to start using the service.
- Consolidates all your financial information
- Free finance tools
- Easy to use and set up
- High minimum
- Can’t customize your investment
- More expensive than most robo-advisors
Robinhood is a simple stock trading platform with no transaction fee.
How it works
Robinhood offers a platform for buying and selling stocks and ETFs in real time. The best part is that you invest in anything with zero transaction fees. You can also schedule recurring deposits if you want.
Robinhood offers a super simple user interface that’s easy to use. You can see a simple overview of your investment performance with helpful charts and stats.
Free; no minimum.
- Absolutely free
- Easy to use
- Easy to sign up
- Perfect for investment DIY-ers
- You must do your own research
- Easier to make rushed uncalculated decisions
- No personalized investment recommendations
Stockpile is an investment brokerage app that allows you to buy fractional shares and offers stock gift cards.
How it works
If you want to buy a specific stock of ETF, but don’t want to pay for an entire share, Stockpile allows you to buy share fractions. What’s especially unique about Stockpile is that you can buy stocks and ETFs in the form of gift cards.
Trade can take up to a few days to get completed, it’s not ideal as a live trading platform. However, it’s a great option for casual investors or novices. It’s also a good way to learn about investing. Stockpile offers a bunch of learning resources and even lets kids create their own accounts with adult supervision.
No minimum; $0.99 per trade; $2,000 maximum for gift card.
Gift cards cost $2.99 for the first stock and $0.99 for each additional stock, plus a three percent credit or debit card fee. The plastic cards cost $4.95-7.95 depending on the value of your gift.
- Not limited to expensive stock buy-in cost
- Unique gift card option
- Low fee per trade and no annual fees
- User-friendly interface
- Allows minors to participate
- Great way to learn about trading
- Longer processing time
- Not all stocks are available
- Gift recipients are stuck using this platform
- High gift card fee
- No live customer support
- Limited research tools
Wealthfront is a robo-advisor that automates everything with the goal of keeping costs low. You can also get financial advice through the app.
How it works
Wealthfront looks to make you money with minimal effort from you. They create a custom portfolio for you based on your finances, goals, lifestyle, and risk level. They try to keep costs as low as possible by strategically choosing low-cost ETFs that minimize tax obligation.
Their whole interface is super simple. No complicated jargon, and the app has great resources. It can even answer your very specific questions about your goals and aspirations, like whether you can afford to take a year off to travel.
$500 minimum investment; free for the first $10,000; 0.25 percent of your invested assets afterwards.
- Low, straight-forward fees
- Easy to use
- Simple for new investors
- Custom portfolios
- No face time with financial advisor
- High minimum investment
- Stuck with rigid robo-advisor formula
Wealthsimple is actually based in Canada, but it’s available in the US. Wealthsimple is a robo-advisor that offers speical investment portfolios you may not find elsewhere. These include SRI (socially responsible investing) portfolios and a Halal portfolio, consistent with Islamic Halal principles.
How it works
Wealthsimple offers three different SRI portfolio types for you to choose from. They include:
- Conservative: More heavily invested in Local Initiatives and Affordable Housing, since those are bond funds. It essentially creates an allocation in which 65 percent of the portfolio is invested in bonds, and 35 percent in stocks.
- Balanced: Has an even split of 50 percent stocks and 50 percent bonds. With the three different portfolio allocations, not only can you invest in SRI, but you can do so based on your own personal investment risk tolerance.
- Growth: Has a higher concentration in the stock sectors, and particularly Low Carbon, which represents more than 46 percent of the portfolio. Local Initiatives and Affordable Housing represent just 20 percent of the portfolio combined. That results in a portfolio mix of 80 percent stocks, and 20 percent bonds.
There’s no minimum investment required. Wealthsimple charges 0.50 percent per year of account balances up to $100,000; 0.40 percent per year for balances greater than $100,000. There is no additional cost for SRI investing.
- Offers SRI investing
- Offers Halal investing
- No minimum investment requires
- Higher fees than other investing platforms
- Relatively new
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How do investment apps work?
Investing apps allow you to start investing in a matter of minutes. There are many investing apps out there to satisfy the needs of all types of investors. Some apps help new investors effortlessly set up an investment portfolio from scratch. Others offer a simple bare-bones platform for quick low-fee trading.
The pros and cons of using an investment app
Simplicity for all
Investment apps empower anyone of any means or skill level to start investing easily. Your app can help you set up an investing account and offer financial advice based on your lifestyle and income.
They can also automate the whole process so that you can continue building your investment without much effort.
By replacing human advisors with an algorithm, apps have much lower overhead and can afford to keep their fees significantly lower. Some apps even offer free trading.
Gain access to your financial information, make adjustments, or buy and sell anywhere you can connect to the Internet. You don’t have to wait for the work day to start. The app works around the clock for you.
Enables bad decisions
The convenience of using these apps allows people to invest impulsively, instead of making a calculated investment decision. The benefit of investing the traditional way is that you have the advice of an expert to help second guess your decisions.
Lacks human element
Although some apps give you the option of speaking to an advisor, many use algorithms to help guide you. What you’re missing is conversations that can reveal much more nuanced information. Advisors not only know about the market, but can offer advice that’s tailored specifically to you.
Many investors are finding that the massive advantages of investment apps make the risks worth taking.
Investment apps FAQs
Don’t I need a financial advisor?
Financial advisors can be incredible helpful resources. They also give you peace of mind that your financial decisions are backed by an expert. However, many apps can provide the same type of advice with an algorithm.
Are investment apps secure?
We don’t suggest anything that we haven’t personally vetted, all of these apps come with robust built-in security features.
How much money do I need to invest?
This really depends on how much you feel comfortable investing. There are many investment apps geared to a variety of investors. Apps like Stash have no minimum investment. You could invest as little as $5.
Why should I invest?
Whether or not you are saving up for something, investing allows you to squeeze the most out of your money. Investing doesn’t require much knowledge or a huge time commitment. Plus, a bunch of these apps make it easy for anyone can start investing.
What can I trade on these apps?
There are many trading options, depending on what app you choose. Robo-advisors like Betterment only trade ETFs, while live trading apps like Robinhood allow you to buy and sell stocks in seconds.
|App||Price||Minimum Investment Requirement|
|Betterment||Standard Account: $0 minimum and 0.25 percent annual fee
Premium Account: $100,000 minimum and 0.40 percent annual fee
|Stash||$1/month for balances under $5,000; 0.25 percent for balance of $5,000+.||$5|
|Acorns||$1 monthly fee for accounts with balance under $5,000; 0.25 percent of the balance annually on accounts over $5,000||None – your purchases are rounded up to the nearest dollar|
|M1 Finance||Free||$100 minimum to open an account and $500 minimum to open a retirement account|
|Personal Capital||0.89 percent fee for $1 million deposited or less||$100,000|
|Stockpile||$0.99 per trade||None|
|Wealthfront||Free for the first $10,000; 0.25 percent of your invested assets afterwards||$500|
|Wealthsimple||0.50 percent per year of account balances up to $100,000; 0.40 percent per year for balances greater than $100,000. There is no additional cost for SRI investing.||None|
Investing really doesn’t need to be complicated. Investing apps empower us to take control of our finances. Whether you have $5 in your bank account or you’re a seasoned investing pro, everyone can benefit from having simple investment resources at our fingertips.