The Best Investing Apps for Teens
In today’s digital age, many teens are interested in learning about investing and managing their money. Investing can be a great way for teens to learn financial responsibility, set goals, and get a head start on saving for the future.
With the rise of easy-to-use investing apps designed specifically for younger users, investing is more accessible than ever for tech-savvy teens. In this blog post, we will look at some of the top investing apps for teenagers and discuss their key features and also how to choose te best investing app. But first, let’s talk about why should teens invest.
Why Should Teens Invest?
Investing at a young age can be extremely beneficial for teens for several reasons:
1. It teaches financial responsibility and money management skills – By investing early, teens learn core concepts like balancing risk vs reward, compound interest, and diversification in a hands-on way. This builds critical foundations for managing finances in adulthood.
2. It helps build long-term wealth – Investing provides an opportunity for compounded returns over many decades. The earlier teens start investing, the more time their money has to grow. Investing incomes like dividends can be reinvested to accelerate growth.
3. It supports future goals – Teens can invest with specific goals in mind, such as college tuition or buying a first car. Investing provides teens with an active way to prepare financially for adulthood.
4. It takes advantage of time – Teens investing small amounts consistently have the advantage of time and compound growth on their side. Investing apps make it easy to start small.
By learning to invest at a young age, teens can establish productive financial habits that pay dividends far into the future.
How to Choose an Investing App for Teens
When choosing an investing app for a teen, key factors for parents to consider include:
1. Educational resources – Look for apps like Fidelity and Stockpile that offer guides, videos, and definitions that clearly explain investing concepts. Resources to learn by doing are ideal.
2. Parental controls – Select an app like Greenlight that enables parents to oversee activity and place limits to keep teen investing safe and responsible.
3. Cost – Pick an app like Robinhood that allows trading commission-free so fees don’t eat into teen portfolios.
4. Ease of use – Choose an app with an intuitive interface and simple account opening process designed for first-time investors.
5. Diversity of investments – Opt for an app that provides choices like stocks, mutual funds, and ETFs to allow proper diversification.
6. Security – Only use reputable apps that are FINRA-approved like Stash and have strong security measures like encryption.
The right app allows teens to start investing in a controlled, supervised, and affordable way.
8 Best Investing Apps for Teens
Robinhood is one of the most popular investing platforms for beginners. The app allows users to invest in stocks, exchange-traded funds (ETFs), and options commission-free. The easy-to-use interface and zero account minimum make Robinhood ideal for teens just starting out.
Users can build a portfolio, track markets in real time, and make trades easily via the mobile app. Robinhood also offers educational resources like investing guides and stock news to help teens learn as they go.
Stash is another great investing app for teens. It features customized investment portfolios called “Stashes” that users can tailor to their goals. Stashes simplify investing for beginners by grouping stocks and funds around different themes like tech, environment, and blue chips.
Stash also offers banking services like savings accounts and debit cards. The educational content helps users learn investing strategies and concepts. Stash requires a $1 minimum to get started, making it very accessible.
Acorns is perfect for teens who want to passively invest spare change. The app automatically invests your spare round-ups from everyday purchases into diversified ETF portfolios. For example, a $3.50 coffee would lead to a $0.50 investment. Acorns makes diversification easy by selecting ETFs based on your risk profile.
The “Found Money” program also rewards you for shopping with partner brands. With no account minimums, Acorns allows teens to start small.
5. Fidelity Youth Account
Fidelity offers a great starter investing account for teens aged 13-17. The Youth Account is a custodial account managed by parents and offers access to a variety of investments like stocks, ETFs, and mutual funds. Fidelity provides educational resources to help teens learn investing strategies.
The account has no minimum deposit or trading fees. With parent oversight, teens can use the easy-to-use web and mobile interfaces to manage their portfolios. Fidelity Youth Account gives teens a taste of real-world investing in a safe environment.
Greenlight empowers teens 13+ to manage spending and investing with parent approval. Teens get a debit card and app to manage weekly allowances and budgets. Parents can approve spending and set controls. Teens can invest in parent-approved stocks and ETFs or choose recommended bundles.
Greenlight teaches financial literacy via hands-on experience. The platform features educational content and resources as well. With Greenlight, parents facilitate teens’ financial independence.
Earlybird helps families save for a child’s future expenses in a tax-advantaged 529 account. Parents manage the account and can invite teens to track contributions and investment performance via the app.
Teens can also share college and savings goals. EarlyBird makes saving interactive and educational for the whole family through a simple, user-friendly app. Features like gift-sharing also allow peers to contribute to a child’s 529 account for special occasions.
Stockpile makes it easy for teens to buy fractional shares of stocks with as little as $1. The app features a selection of stocks from various industries to help teens build a diversified portfolio. Stockpile’s informational stock profiles also make research and learning about companies simple.
The educational resources help teens make wise investing decisions. With Stockpile, teens can affordably invest in brands they know and love.
Tips for Teens Who Are Investing
Here are some top tips for teens who are just starting out with investing:
1. Set reasonable goals – Don’t expect to become rich overnight. Have clear, achievable objectives like earning enough dividends to buy a coveted item.
2. Invest consistently – Develop the habit of contributing any money gifts, allowances or earned income regularly to keep growing your principal.
3. Reinvest earnings – Reinvest investment income like dividends instead of spending it. This compounding effect can accelerate portfolio growth.
4. Remain diversified – Stick to investment apps that automatically diversify holdings. Don’t load up on individual stocks.
5. Be patient – The market fluctuates but continues to rise over decades. Don’t panic sell in downturns. Ride out short-term volatility.
6. Seek knowledge – Read investing resources and stay up to date on financial news to make informed decisions. Experience will give you wisdom.
7. Discuss plans – Have open conversations with parents about your investing approach to gain valuable guidance.
8. Stay responsible – Don’t overextend yourself financially. Investing should be just one prudent part of an overall budget.
By starting early and sticking to common sense practices, teen investors can set the stage for investment success later in life.
From DIY trading platforms like Robinhood to passive round-up tools like Acorns, there are now many great investing apps tailored specifically for teens. Investing early can help teens build wealth and healthy money management skills. However, it’s important for parents to provide guidance on using these apps responsibly.
With proper education and parental oversight, these apps can be a gateway for teens to begin investing in their future. Learn here more investing and passive income tips.