Best Investing Apps for Beginners:
Investing can seem daunting for beginners. Thankfully, there are now a variety of easy-to-use investing apps that make it simple for novice investors to buy stocks, bonds, ETFs, and other securities right from their phones.
Investing apps offer low fees, automated investing options, and educational resources to help new investors feel confident as they begin their investing journey. In this blog post, we will talk about best investing and how to choose the best investing app. Let’s first, start wiht basics.
What is an Investing App?
An investing app is a mobile application that allows you to buy, sell and manage investments directly from your smartphone or tablet. Investing apps connect to your bank account so you can easily transfer funds in and out of your investment account.
Many investing apps offer commission-free trades, fractional share investing, automated investing, and other features tailored toward beginning investors.
Why Use an Investing App?
Investing apps provide a convenient, low-cost, educational, and simplified way for beginners to start investing compared to traditional brokerages. Here are some of the major benefits investing apps offer to new investors:
1. Convenience– One of the biggest advantages of using an investing app is the convenience they provide. Investing apps allow you to buy, sell, and manage your investments entirely on your smartphone or tablet, anytime and anywhere. This gives you real-time access to monitor and take action on your portfolio versus having to use a desktop computer.
2. Low barrier to entry – Many investing apps drastically reduce or completely eliminate the account minimums required by traditional brokerages, which are often $500 or more to get started. Apps like Acorns, Stash, and Robinhood allow you to open an account and make your first investments with as little as $5 or no minimum. This makes investing accessible even if you don’t have thousands saved up.
3. Low fees – Almost all investing apps offer $0 commission trades on stocks, ETFs, and options contracts. This enables you to trade securities frequently without high trading fees eating into your returns. Apps also eliminate or reduce management fees associated with investment funds. Lower fees allow more of your money to work for you.
4. Educational resources – Investing apps understand most of their users are just learning how to invest properly. That’s why many apps offer educational materials directly in the app to improve your investing knowledge. These may include articles, videos, tips, strategy guides, and more. The tools can give beginners the confidence to start investing wisely.
5. Automated tools – Manually maintaining a properly balanced and diversified portfolio can be challenging for beginners. Investing apps offer automated tools that do the work for you once configured, such as automatically depositing investment funds on a set schedule, portfolio rebalancing, and reinvesting dividends. This simplifies the investing process.
The convenience, low costs, educational content, and automated tools offered by investing apps provide an ideal solution for beginners looking to get started in the markets. The apps make investing easy, accessible, and understandable for first-time investors.
Best Investing Apps for Beginners
Here are some of the top investing apps for beginners:
Acorns offers a unique “round up” feature that invests your spare change from everyday purchases into a diversified portfolio. Just link your credit or debit card and Acorns will round up each transaction and automatically invest the change. This makes it easy to passively invest your pennies into ETFs. Acorns costs $1, $3, or $5 per month depending on the plan.
Robinhood is popular for its commission-free trading. You can trade stocks, ETFs, options and cryptocurrencies with no trading fees. The easy-to-use app is great for beginning investors looking to frequently trade stocks and ETFs. Robinhood also allows for fractional share investing so you can own a piece of expensive stocks like Amazon.
3. SoFi Invest
SoFi Invest offers zero-expense ratio index funds called SoFi ETFs. The app makes it easy to build a diversified portfolio using these low-cost funds. SoFi Invest provides financial planning guidance and portfolio management assistance for beginners. The app has zero trading fees and a minimum investment of just $1.
In addition to zero-commission stock and ETF trades, Webull provides powerful investment research and analysis tools. Beginners can utilize Webull’s charts, analyst ratings, and educational resources to inform their trading. The app also offers paper (virtual) trading so you can practice investing risk-free.
Stash allows you to build a portfolio by selecting from over 150 thematic ETFs spanning sectors like tech, healthcare, clean energy, and more. This makes it easy for beginners to invest according to their values. Stash charges between $1-$9 per month. Portfolio guidance and educational resources help guide new investors.
6. M1 Finance
M1 Finance empowers beginners to build their own customized portfolios using stocks and ETFs. You can choose your investments and M1 will automatically maintain your desired asset allocation with no trading fees. The app offers retirement accounts, fractional shares, and automated deposits/rebalancing.
7. Charles Schwab
Charles Schwab offers a robust trading platform for beginners with $0 commissions on stocks, ETFs, and options trades. The educational resources on their app help new investors learn investing strategies. You can open an account with no account minimum. Automated investing guidance is provided through Schwab Intelligent Portfolios.
Fidelity is trusted by beginners for the quality of its educational materials. The easy-to-use Fidelity app allows you to invest in stocks, ETFs, mutual funds, and more commission-free. Fidelity’s no minimum balance requirement and fractional share investing make it easy to start investing.
Betterment is one of the most popular robo-advisor apps, using computer algorithms to automatically invest your money based on your goals, time horizon, and risk tolerance. This makes hands-off investing simple for beginners. Betterment charges between 0.25% – 0.40% of assets under management as an annual fee. The app offers high-yield savings accounts to park cash as well.
10. TD Ameritrade
TD Ameritrade offers $0 trades on stocks, ETFs, options, mutual funds, and bonds. With no minimum balance and extensive educational resources, TD Ameritrade provides a great experience for first-time investors. New investors can get started on the basic TD Ameritrade app.
E*TRADE is another strong choice for beginners with $0 stock and ETF trades along with easy-to-use research and charts. A unique perk is their network of physical branches across the U.S. that investors can visit in-person for guidance. E*TRADE charges no minimum balance but does charge a $6.95 fee per stock or options trade.
Ellevest is a robo-advisor app focused on women and gender-based investing goals. The app offers goal-based portfolio recommendations, retirement planning, and guidance tailored specifically to women’s financial needs. Ellevest charges between 0.25% to 0.5% of assets under management as an annual fee depending on account balance.
The wide variety of quality investing apps makes it easier than ever for beginners to find one that matches their specific needs and interests to start investing in the stock market.
How to Choose the Best Investing App for You
Here are some tips for choosing the best investing app for your needs as a beginning investor:
1. Consider your investment goals
Think about what you want to invest for – retirement, education, home purchase, or other goals. Make sure the app allows you to invest in suitable securities for your timeframe.
2. Determine your risk tolerance
If you are more risk-averse, look for an app with automated portfolio guidance or robo-advising. Apps with fractional shares can allow you to spread out risk as well.
3. Think about your investment style
Will you take an active or passive investment approach? Passive investors may like automated investing options, while active traders need robust trading tools.
4. Consider the fees
Many apps offer commission-free trades, but look out for other account fees. Compare overall cost structures between apps.
5. Read reviews
Read user reviews and comparisons between investing apps to see the pros and cons of each and how they stack up. Focus on apps highly rated for beginners.
Investing apps provide an easy and affordable way for beginners to start investing in stocks, bonds, ETFs, and other securities. With many great investing apps to choose from, new investors can quickly open an account and begin building a portfolio using the app best suited for their needs. Features like fractional share investing, zero fees, and automated tools make investing apps ideal for getting started in the markets. Learn here more about online business and passive income ideas.
Q: What is the best investing app for a complete beginner?
A: Apps like Acorns, Stash, and Robinhood are great for complete beginners thanks to their low barrier to entry, educational resources, and easy-to-use interfaces. Acorns and Stash provide automated portfolio guidance while Robinhood offers commission-free trading.
Q: How much money do I need to get started with an investing app?
A: Many investing apps allow you to open an account and start investing with no minimum deposit. Others only require $5 or $10 to get started. This makes investing accessible even with little savings.
Q: Are investing apps safe to use?
A: Investing apps offered by established brokerages like Fidelity, Charles Schwab, and TD Ameritrade are regulated for security by the SEC and SIPC. Startup apps like Robinhood and Webull also use strong encryption and security measures to protect your personal data and money.
Q: What fees should I look out for with investing apps?
A: While trades may be commission-free, look out for account maintenance fees, transfer fees, inactive account fees, and management expense ratios on funds offered. Fee structures vary greatly between investing apps.
Q: How often should I check an investing app?
A: It’s smart to check your investing app at least once per month to see your positions and make any needed changes. Don’t get distracted checking daily as short-term price movements shouldn’t impact long-term strategy.