Investing Apps for Beginners

If you want to start investing as a beginner, the process can seem scary. When you consider all the apps and platforms out there that could help, it can get even more confusing. After all, who has the money to “lose their shirt” in soybeans? Definitely not you!

If you are learning to invest, yet want to keep your costs and learning curve low, technology can help you. Whether you are a millennial, college student, or newly-employed individual, you’ll find that there are plenty of apps to help you along the way.

With many of them, you can start with as little as $5. Fortunately, with the rise of smartphones and robo-advisory services, pretty much anyone can invest these says.

If you’re convinced that you need to start investing (aside from investing in your employer-sponsored plan,) then this post will help. Check out some of the best the best investing apps for beginners.

Related resource: Stocks & Profit (Free Course)

Acorns

Little drops of water make the mighty ocean. That’s the principal behind Acorns.

This micro-investing app is great for the novice investor who can never seem to save enough to actually invest. Acorns positions itself as a platform that will allow you to make the most of spare change.

Getting started with Acorns is really simple. To sign up for Acorns, you’ll need to answer basic questions and provide demographic information like your age, financial situation, and risk tolerance. Then, you’ll link your bank account along with your debit or credit card. That’s it. The process can take less than five minutes.

When you make a purchase using debit or credit card linked to your Acorns account, Acorns rounds the amount up to the nearest dollar. The amount by which your purchase is rounded up moves into your Acorns account where it’s then invested in stocks and bonds.

For example,  let’s say that you eat at McDonald’s and your bill comes out to  $13.25. If you use the debit card that is linked to your Acorns account, your purchase will be rounded to $14 and $0.75 will move to your Acorns account

Acorns also has a cashback program, known as “Found Money” which offers you the chance to buy certain products that offer cashback that can be invested in your Acorns account.

OPEN A FREE ACORNS ACCOUNT HERE

Pros & Cons of Acorns

Pros

• Offers a free sign-up bonus of $5 for new accounts with zero minimum deposit
• College students can use the app for free for up to 4 years
• Vast choice of investment options across five risk tolerance categories
• Facilitates dividend re-investment

Cons

• The monthly fee ($1, $2, and $3 for pricing tiers) can be  high for those with a small balance in their account
• High expense ratios (like on ETFs) can diminish investment gains For significant growth with your investments, you will need to supplement your round-ups with additional deposits.

OPEN A FREE ACORNS ACCOUNT HERE

Betterment

Betterment is getting to be an increasingly popular investing app.  a Betterment is known for being a sophisticated robo-advisor offering high-quality, long-term investment options. The ability to build an individualized, goal-oriented portfolio is where Betterment shines, making it a popular choice among the beginners.

Betterment charges a flat annual fee of  0.25% and doesn’t charge any trading fees or sales fees. The app features unlimited phone access to Certified Financial Planners with the Premium plan which charges  0.4%. of assets under management (AUM.)

Any questions you ask through the app are answered by Certified Financial Planners who can help guide other money decisions as well. This might make Betterment much more worthwhile for people who are short on time yet willing to pay extra for quick, concise advice. Pros and Cons of Betterment

Pros

• Offers 12 very comprehensive asset classes that are in line with different goals and degrees of risk tolerance
• Automatic portfolio rebalancing
• Investment opportunities in both domestic and international stocks
• Tax-loss harvesting (TLH) to offset gains from other investments; can also include a spouse for TLH  

Cons

• Doesn’t offer investment opportunities in real estate and commodities
• Not ideal if you are a  hands-on investors
• Although you can sync Betterment  to external accounts (other investments,) the app cannot allocate or manage assets from them

OPEN A BETTERMENT ACCOUNT HERE

Ally Invest

If you like to have a more hands-on approach towards investing, Ally Invest could work — even for beginners. Formerly known as TradeKing, Ally Invest doesn’t offer any services when it comes to putting together themes or portfolios.  The user gets to choose individual investments — whether stocks, bonds or ETFs.

Ally Invest allows you to execute individual trades on demand without all the bells, whistles and sometimes overwhelming interface you find on other trading platforms.  The fee structure is very simple. Instead of a monthly subscription fee or percentage of assets, Ally Invest charges $4.95 per trade for stocks and ETF.

OPEN A FREE ALLY INVEST ACCOUNT HERE

Pros & Cons of Ally Invest

Pros

• No minimum deposit amount to open a free account
• Free extended-hours trading
• Discounts available on high-volume trades
• Access to the Ally’s web-based platform

Cons

• No international trading options
• No advisory services like portfolio rebalancing or fund selections
• Ally invest customers can’t meet with a broker in person because there are no branch locations
• Limited educational resources

Related resource: Stocks & Profit (Free Course)

OPEN A FREE ALLY INVEST ACCOUNT HERE

Stash

Stash helps beginners access and choose a wide range of investment options like individual stocks and ETFs. The app features investment ‘themes’ that are designed according to your financial goals, interests, and risk tolerance. Each theme is a bundle of different stocks that lets you invest in multiple companies at a time.

Pros & Cons of Stash

Pros

• Low minimum deposit amount of $5
• Allows the users to buy fractional shares
• No fees on retirement account for users under 25 years of age
• Offers custodial accounts so that parents can set up an investment account for their kids

Cons

• Doesn’t have portfolio management options
• High ETF expense ratio
• High subscription fees for those using Stash with low account balances

Robinhood

If you feel like monthly subscription fees and commissions are eating into your investment gains, Robinhood might be for you.  Robinhood is ideal for low-volume traders (or investors with simple needs) because you can make trades for free.

Also, Robinhood offers 100% commission-free trading of stocks, ETFs, and options.

Pros and Cons of Robinhood

Pros

• Robin Hood referral program get you and your referral free stock
• Zero subscription fee and zero trading fee
• Can  trade in cryptocurrency
• No account minimum
• Allows extended-hours trading with Gold premium service

Cons

• Mutual funds and bonds are not offered
• Individual and custodial accounts and not IRAs
• No educational resources and more sophisticated trading tools

OPEN AN ACCOUNT AND GET FREE STOCK FOR SIGNING UP

Honorable Mentions

Stockpile

The CEO of Stockpile Inc. Avi Lele came up with the unique idea of easily investing in fractional shares to get youngsters interested in investing. He was looking for Christmas gifts to give his nieces and nephews that would have longer lasting value than toys.

He introduced the concept of gift cards to purchase fractional share of stocks through the Stockpile investing app. Besides allowing app users to buy and sell stocks, Stockpile sells gift cards at local retailers that can be used to buy stocks and ETFs.

Pros and Cons of Stockpile

Pros

• Ideal for young investors who want to get their feet wet with investing
• Zero minimum investment
• No annual fees.
• Low trading fee of $0.99 per trade
• Allows buying and selling of fractional shares

Cons

• Stockpile offers only individual and custodial accounts and not IRAs
• Doesn’t offer investment in bonds, mutual funds, options
• Not available to non-US residents
• Trades executed after 3 pm are settled the next day

Worthy

Worthy is an app that rounds up your purchases and lets you use your spare change to invest in asset-backed bonds. These bonds go to support small U.S. based businesses who will use loan proceeds to invest in assets that will help grow their business.

With Worthy, you can invest at 5% returns and help small businesses at the same time. It’s also good to know that you don’t have to wait for your spare change to be rounded up as you can purchase bonds whenever you like. The typical cash out period is 3 years, but you can access your money at any time prior if you need to.

Pros and Cons of Worthy

Pros

• 5% return on investment beats most savings accounts and can compete with traditional investing returns
• Rounds up purchases to help you “find” money to invest
• Easy to open an manage your Worthy account from your phone
• Add funds to purchase bonds at any time

Cons

• Not FDIC insured
• Worthy is a start-up; no track record of performance or proven concept
• Investing in smaller increments can mean slower investment growth

Though each person has different financial circumstances, varied money goals, interests, and a different degree of risk tolerance, there are more than a few ways to start your investing journey.  Investing apps offer the chance for all kinds of novice investors to finally fulfill their dream of buying and selling securities.

Want to learn more about investing? Check out my free eBook, Start Investing Now: