The ability to easily buy fractional shares by the swipe or touch of a button on a mobile device has made it simple to invest online. Last year, 149.3 billion apps were downloaded, according to Hamburg, Germany-based Statista, and that number is projected to climb to 197 billion by the end of this year before skyrocketing to 352.9 billion by 2020. According to Tech Crunch, people use an average of nine apps daily and 30 apps monthly.
For investors, apps have made high-priced shares of Amazon.com ( AMZN) or Facebook ( FB) more accessible through micro investing. The apps usually charge an account fee that covers most trading and administrative costs. Like anything else, though, the devil is in the details, and investors should read the fine print before using an app because a la carte charges may include commissions or other fees for advisors or broker-dealers.
[See: 7 of the Best Stocks to Buy for 2018.]
Except for Swell Investing, all of the apps listed below work on both Android and iPhones and are free to download from Google Play or iTunes. Although also free, Swell Investing is technically not an app but a mobile investing platform that can be viewed on your phone.
SigFig
This robo investing platform acts like a middleman between investors with third-party investment brokerage accounts and SigFig advisors. SigFig offers a registered investment advisory service while your account is held at a brokerage, such as Charles Schwab, Fidelity or TD Ameritrade. There are two services: a free portfolio tracker and a managed account. While both services come with live phone and chat support, only the managed account includes automatic rebalancing, reinvesting, tax-loss harvesting and access to a financial advisor. Although the annual fee generally covers trading costs, tax-loss harvesting may trigger a separate trade fee from the brokerage. Unlike some investing apps that give a longer history of your brokerage accounts, SigFig only provides a three-year overview.
Website: sigfig.com
Account Fee: 0.25 percent annually for managed accounts with $10,000 or more
Account minimum: $2,000 for managed accounts
Stash
Broker-dealer Stash Invest offers more than 30 themed investments that investors narrow down by risk tolerance and preference. Stash gives quirky names to investments. For example, the Schwab U.S. Dividend Equity ETF ( SCHD) is called Delicious Dividends. Almost all are exchange-traded funds, except Roll with Buffett, which is stock in Warren Buffett’s Berkshire Hathaway, class B shares ( BRK.B). Alicia McElhaney, a Brooklyn-based writer who blogs at SheSpends.org, micro invests $5 every two weeks through this app, which links to a bank account, and monitors the investments for which has the greatest returns. “I like that I can invest based on my values,” she says. Jennifer Jackson, a coach at Atlanta-based ADLT 101, which helps students and recent graduates transition into the workplace, says the app has helped her invest automatically while keeping transactions at a low cost.
Website: stashinvest.com
Account Fee: $1 per month for balances below $5,000; 0.25 percent per year for $5,000 or more
Account minimum: $5
[See: 7 Investment Fees You Might Not Realize You’re Paying.]
Acorns
This app, which is linked to your credit and debit cards and also works with PayPal, simplifies saving by rounding up any purchases you make to the nearest dollar and then investing the spare change. Investors select among five pre-set portfolios that are robo advisor-managed and include diversified index funds chosen by Nobel Prize-winning economist Harry Markowitz. Because your money is automatically invested in ETFs, “saving and investing become a habit,” says Carolyn Leonard, a former trader and the founder and CEO of DyMynd, a female-focused financial empowerment firm in Chicago. Money can also be invested using automatic deductions from a bank account. Along with investing tips in easy-to-digest snippets, the app offers real incentive by showing “you where you will be in 30 years if you continue [your investing] behavior,” Leonard says. Although the app works only with taxable accounts now, traditional and Roth individual retirement accounts will be added beginning in early 2018, says Acorns chief commercial officer Manning Field. The downside: There’s no tax-loss harvesting feature for offsetting capital gains.
Website: acorns.com
Account Fee: $1 per month for balances below $5,000; 0.25 percent per year for $5,000 or more.
Account minimum: $5
Robinhood
Broker-dealer Robinhood’s app offers free trading for self-directed individual cash or margin brokerage accounts that trade U.S.-listed securities via mobile devices. Be sure to check the itemized costs, such as the $50 per-trade fee for foreign-listed securities or $10 for a broker-assisted trade. Ogechi Igbokwe, founder of the website OneSavyDollar.com, likes the app because most Nasdaq stocks can be traded free. By adding a stock to her watch list, she also gets notifications about dates for earnings reports or if the share price has moved up or down. The biggest downside, Igbokwe says, is that newly released initial public offerings require a two-to-three-hour wait period before purchasing, which is a problem if the stock is hot. “This means people with other types of investing platforms get to have first dibs,” she says. Also, no over-the-counter stocks are available for trading.
Website: robinhood.com
Account Fee: None but watch itemized costs
Account minimum: None
[See: 8 Ways to Invest in Office Supply Stocks.]
Swell Investing
Backed by Pacific Life Insurance Co., this mobile investing platform for socially responsible investing has portfolios based on six United Nations’ sustainable development goals: renewable energy, green tech, clean water, zero waste, healthy living and disease eradication. Assets for each portfolio are rebalanced and reviewed every quarter to ensure that they support the respective UN goal. Broker-dealer and custodian Folio manages the portfolios, and the flat fee covers both brokerage and advisory services. One of Swell’s biggest pluses is that it works with taxable accounts or an individual retirement account, with options for a traditional, Roth or SEP IRA. Because Swell only permits investing in stocks not ETFs, there are no expense ratios. The downside is that most investments are small-cap stocks, which can make for volatile portfolios.
Website: www.swellinvesting.com
Account Fee: 0.75 percent per year for all accounts
Account minimum: $50
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