What apps should you try if you’re new to investing?
A few months ago, I stumbled upon a YouTube video about the ins and outs of investing, for beginners. In the video, the speaker was excited to report that he’d become an investor.
He’d invested just $25 dollars so far!
Wait, what?!
It hadn’t occurred to me until then how little I knew about investing. I didn’t realize you could start with so little.
How did you start?
Where did you need to go?
Did you have to physically “go” anywhere?
Did you need to have a financial planner first?
Everything I know about investing can fit easily onto a 3 X 5 index card. Which is to say, I don’t know very much.
I know that when you invest you should be mindful of all the associated fees. If you invest through a brokerage firm or through an app online, at the absolute least, you should make sure you can answer these questions:
- Is there a transaction fee each time you buy or sell a stock?
- Is there a transaction fee each time you buy or sell a mutual fund?
- Is there a minimum balance you need in your account before you can invest?
- Is there a monthly or annual fee for opening the account? If so, what?
- If you’re investing through a brokerage firm, what are the broker’s fee, or commissions, for this service?
- Are there any additional investment management fees or investment advisory fees?
Here’s a rundown of the investment apps I’m using right now, followed by a few others that have been recommended for new and inexperienced investors.
Let’s start with Stash, Robinhood, and Betterment first because I use these now.
1. Stash
The Pros:
It costs $0 to create an account, and $5 to start investing.
It’s easy to set up, and it’s free for the first month.
Stash waives its fee on retirement accounts for anyone under 25.
It now offers custodial accounts so that parents (or other adults) can set up investment accounts for their children.
It provides additional information and resources for new investors who want to learn more.
Stash lets you automate your investments, so you can contribute a certain dollar amount each week or month. You can also buy fractional parts of a share of stock (which is ideal for broke investors like me).
The Cons:
After the first month, it charges $1 per month for account balances under $5,000.
If you have an account balance over $5,000, there is a 0.25% annual fee.
[See Stash Review 2018 to learn more.]
2. Robinhood
The Pros:
You can buy and sell stock for free.
There is no fee to use the app and no minimum to start investing.
There is no monthly or annual management fee.
The Cons:
It’s a mobile-only investing app. You can’t invest from the website.
You can only buy entire shares of stock—you can’t purchase portions of one single share.
[See Robinhood Review 2018 to learn more.]
3. Betterment
The Pros:
It’s one of the most popular “robo-advisors.” $0 account minimum to start investing.
You’re able to create retirement accounts.
Betterment uses an introductory questionnaire to determine your risk level as an investor, and it will invest in stocks and bonds for you.
The Cons:
Over-communication: I tried to complete paperwork to roll over my Roth IRA, and I received 51 emails from Betterment Support. Yes, 51. What in the?
The basic management fee is 0.25% on your total portfolio value.
[See Betterment Review 2018 to learn more.]
These apps are also recommended for new investors who may not have much capital to start.
4. Acorns
The Pros:
Costs $0 to open an account. $5 is required to start investing.
You may not even miss the money or “loose change” that it invests from your account.
It’s considered a micro-investing app (which may also be seen as a con).
It’s free for up to four years for college students who have a valid .edu address.
You can create a retirement account there too.
The Cons:
It costs $1 per month for taxable investment accounts.
It costs $2 per month for individual retirement accounts.
[See Acorns Review 2018 to learn more.]
5. Fidelity Go
The Pros:
Name recognition (if that matters to you).
You can open an investment account with $0. You need a balance of $10 to begin investing.
Retirement accounts provide added features, such as letting you know if you’re on track with your retirement savings goal.
The Cons:
Fidelity charges $4.95 for each trade.
There is a 0.35% management fee for retirement accounts, which includes all investment expenses.
[See Fidelity Go Review 2018 to learn more.]
6. Wealthfront
The Pros:
Wealthfront invests your money for you into a diverse portfolio of ETFS (exchange-traded funds).
It offers financial advice.
You can create a 529 college savings plan on behalf of your child.
The Cons:
You’ll need at least $500 to open an account.
It charges 0.25% for account management.
[See Wealthfront Review 2018 to learn more.]
7. Stockpile
The Pros:
No minimum investment is needed to start.
You can buy fractional shares of your favorite stocks and ETFs.
Many parents use Stockpile to teach their children and teenagers how to invest.
You can give Stockpile gift cards to friends and family members.
You can create custodial accounts (investment or savings accounts) on behalf of a family member.
The Cons:
Each trade costs 99 cents.
In the past, I’ve experienced technical issues with the website.
The gift card process has received mixed and unfavorable reviews.
[See Stockpile Review 2018- Should You Give the Gift of Stocks?]
8. WiseBanyan
The Pros:
There are no trading fees for buying or selling stocks.
There are no account management fees.
You can start investing with just $1 dollar.
You can earn $20 for every successful customer referral.
The Cons:
The app maintains only basic features. There are no retirement calculators or human advisors.
You cannot create custodial accounts for your children.
You can’t open a joint taxable account with your spouse.
[See WiseBanyan Review 2018 to learn more.]
You definitely don’t need more than one investment account.
I started with Robinhood, and that’s my favorite for now.
I wanted to try Stash because you can buy portions of a share instead of having to afford the whole share at once.
I tried Betterment because I wanted to see how the retirement plans compared to those that I’ve had with former employers.
Once I learn more, I’ll let two of these go.
Technically speaking, these aren’t all FREE. However, they do provide options for new investors like me who want to invest but don’t have a lot to start with.
We need to have a conversation about money.
