If you’re just starting your journey into the world of investing, these are some of the best investment apps out there. (And one popular investment app to beware of.)
You’ve no doubt heard over and over that you have to invest. It’s the only way to make decent money anymore. It’s the only way you’ll ever retire, buy a home, or pay for a college education. That advice is “as old as the hills,” as the saying goes. What’s new, however, is the ease with which you can actually invest. And some of the best investment apps make it easier than ever.
In the not-too-distant past, anytime you wanted to invest, you had to go through a broker. Most brokers required a minimum investment, and they also charged a commission any time you wanted to buy or sell stocks. Then in 1991, E*Trade appeared on the scene. While they still charged commissions, the platform also made it possible for individual traders to buy and sell stocks. Gradually, other companies like T.D. Ameritrade and Charles Schwab offered online stock trading for individuals. Today there are so many online trading platforms that it makes your head spin. It definitely makes it challenging to sort through and find some of the best investment apps around.
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The idea of investing can be pretty intimidating. No one wants to lose money, and it can, unfortunately, be easy to do just that. If there is a downside to these apps making it so simple to invest, it’s that some of them also make it easy to make unfortunate choices. (In fairness, some work hard to avoid that situation.)
To get a little investing experience before you jump in with real money, check out an app like Wealthbase, which offers simulated trading on a gamified platform. You can play fantasy trading games, trade stocks, ETFs, and cryptocurrency, all without risking your hard-earned cash. Then when you’re ready, take a look at these investing apps.
9 of the best investment apps for new investors
We have to add a disclaimer before we get into these: Not all of them belong in a list of the best investment apps for beginners. There are some great apps here, including some that can give you room to grow as an investor. But you’ll also see some that we’ve included just because they are so well known, and we felt it was fair to share what we know about them with you. It’s also worth noting that inclusion on this list is not an endorsement. What’s best for one investor may not be a good choice for another. Still, you should be able to get enough from this list that you can make an informed decision. So without further ado, and in alphabetical order...
1. Acorns: Acorns has been around since 2014. Their most significant selling point is how easy they make it for you to invest. It is literally effortless once your account is set up. They use a “round-up” approach to fund your account. If you buy a $2.50 cup of coffee, they round up to $3 and funnel 50 cents into your account. You can control the limits and even set your account to round up further if you so choose.
Since they only offer managed accounts, you don’t even need to worry about what you’re investing in. Confirm how aggressive or conservative of a portfolio you want, and you’re done. The potential downside, depending on your investing goals, is that you can’t choose your own investments, and they charge between $1 and $5 per month, depending on your plan. There’s also a $5 balance required to start investing.
2. Ally: When it comes to powerful tools for individual investors, Ally is one of the best investment apps out there. You can choose self-directed trading, with no account minimum and commission-free trading for many stocks, ETFs, and options, or invest $100 to start a managed portfolio. Ally has a robust platform that includes real-time data, customizable charting, research from firms such as Morningstar and CFRA, and forex trading (foreign currency trading).
Despite these winning features, Ally does lose points on a few fronts. They don’t offer cryptocurrency trading, fractional shares, or futures trading. I wouldn’t rule them out on that alone. You could still make a pretty penny without those investments. Plus, there’s a lot of room to learn and grow as an investor with what Ally does offer.
3. Betterment: Betterment is what’s called a robo-advisor. In short, that means you set your strategic goals, including how aggressive or conservative an approach you want to take, and Betterment develops a portfolio for you that they automatically rebalance to keep you on track to meet your goals. Although Betterment selects your portfolio of ETFs, you do have some customization available in that you can opt for portfolios that highlight socially responsible investing (SRI) or income generation, for example. They offer several IRAs and individual investing accounts.
So what’s the downside? Betterment does not allow you to select individual stocks or ETFs. That is all automated. For some investors, that might be ideal, but not if you’re a hands-on investor. They don’t charge rebalancing or investing commissions, but there is a 0.25% annual management fee. But if you’re working toward a specific goal and don’t have the time or interest in managing your investments, Betterment could be a good option.
4. Public: Public is possibly one of the more interesting among the best investment apps available. Like many investing apps, they have a large number of commission-free investing options. There are no account minimums, and you can start investing for as little as $5. They also take a number of steps to keep investors safe. For example, they don’t allow day trading, and they label risky stocks as such. When you explore a stock or ETF, you get a full page of information that details what the company (or ETF) does, price targets, stats, and the latest news.
Where Public gets especially interesting, however, is in the way you buy and sell stocks. Rather than investing in shares of a stock, you invest in dollar amounts. For instance, you can invest $25 in a company and get $25 worth of stock, whether that’s a fractional share of a stock like Apple (AAPL) or several stocks of a less expensive company. This could be positive or negative, depending on your outlook.
They also have a community of investors, where you can follow anyone else using the app. While this might be a great way to learn about new stocks, there’s no way to verify how accurate someone’s opinion is. And no, they don’t currently offer cryptocurrency investing, although they do have several cryptocurrency-heavy ETFs available.
5. Robinhood: Another big name on the scene is Robinhood. We’re adding the app here because it is so well-known, but there are some things you need to be aware of. To begin with, the state of Massachusetts filed a complaint against Robinhood in December of 2020, seeking to revoke their license to operate in the state, claiming the company is exploiting customers. Robinhood, of course, does not agree. But we probably don’t need to remind you of their part in the GameStop (GME) chaos that happened in the early part of 2021, when they halted trading on the platform. They recently did it again when cryptocurrency DogeCoin started climbing. That said, many of their trades are commission-free. You can trade cryptocurrency, which isn’t always available on investment apps, and you can open an account without a required minimum balance. Still, we’d venture very carefully into this one. Because imagine you have just made tens of thousands of dollars on GameStop or Dogecoin, and then they won’t let you cash out. Meanwhile, other platforms are freely allowing people to continue to sell, and then you miss out on a big payday. Not great.
6. SoFi: A few features help SoFi rank as one of the best investment apps for beginners. They offer active and automated investing, both with no fees. One of their selling points is that you can invest for as little as $1, thanks to fractional shares (cryptocurrencies require a $10 minimum investment). SoFi is also much more than just an investment app. The company offers everything from student loan refinancing to renters insurance to small business financing.
The biggest selling point, in our opinion, however, is that they offer complimentary financial planning services. The main drawback from our viewpoint is that they don’t support stop-loss orders. Aside from that, however, this is a platform well worth exploring.
7. Stash: Stash is an interesting platform with some real pros and cons. Like SoFi, they’re more than just an investment app. For a monthly subscription fee, between $1 and $9 per month depending on the plan, you can use Stash for online banking, including a stock rewards card. Like Acorn, they offer the opportunity to round up your change and send it to your investing account. You can also take the easy-does-it approach and opt for Smart Portfolios, which will automatically rebalance your portfolio.
The downside? There are some cons that may or may not significantly impact investors, such as higher ETF fees or the $3 per month fee if you want a retirement account. The big drawback for us, however, is that their “market transactions execute during four trading windows each weekday.” So if you’re a hands-on investor and you want to dump a stock that’s tanking, it might be a while before your sale goes through. They are worth checking into, though.
8. Wealthfront: Wealthfront is another automated investing service. There are no trading or account fees, but they do charge a 0.25% annual advisory fee, and there is a $500 minimum account balance. Wealthfront also offers multiple types of accounts, from individual investment accounts to trusts to several different IRA accounts and 529 College Savings accounts.
If you want an entirely automated experience, Wealthfront could be one of the best investment apps for you. The biggest problem we see here is that there is no way to customize your portfolio aside from setting your risk tolerance. This is truly a set-it-and-forget-it approach to investing, which, as you can guess, is not our preferred strategy.
9. Webull: Like many of these apps, Webull has a large number of commission-free trading options, they offer cryptocurrency trading, and there is no deposit minimum. You can set up your account as an IRA or an individual brokerage account (individual stock trading). One consideration for new investors is that Webull doesn’t offer much in terms of investor education. Of course, if you like the platform, you can always learn more from a resource like us.
We could go on for days, but hopefully, this gives you some good options (or warnings, as the case may be). And always read the fine print. In most cases, the commission-free trades are limited to stocks and ETFs. And almost every investment platform charges a fee for transferring accounts, which averages between $50 and $75.
That’s our list. Now go invest! And be sure to sign up for our emails so you can keep up with some of the latest research and information in the world of investing. Then, when you’re ready, sign up for one (or all) of our award-winning advisories.
Do you have a favorite investing app? We’d love to hear about it!