As a beginner investor, you may be unsure where to go to start investing and how to get the best return on your money. You may hear conflicting information about the stock market in the news, and these days even seasoned investors can be undecided on whether to invest now or wait until talk of recession has subsided.
Some investing tools are available that can help beginner investors get some investing experience without too much fear of the unknown. Here are seven recommendations of investment apps for beginners:
— Robinhood
— Betterment
— Acorns
— SoFi Invest
— Invstr
— Stash
— Webull
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Robinhood
Robinhood Markets Inc. (HOOD) fueled a buzz on Wall Street in 2021 after some of the users of its trading app, Robinhood, kicked off the “meme” stock trading phenomenon that led to massive short squeezes and the company’s controversial temporary trading restrictions.
But that’s not the only reason Robinhood is one of the most popular investing apps for beginners. It has accessible features that allow investors to explore options for their portfolios, such as stocks, exchange-traded funds, or ETFs, options and cryptocurrency. It even offers investors a first stock for free upon sign-up.
On Dec. 6, the company rolled out retirement accounts for its mobile app and announced that it will match 1% of funds that users contribute to its traditional or Roth IRAs. The matching benefit is a feature of some employer-based 401(k) programs.
Another feature of this investment app that makes it stand out from some other apps is the availability of a margin account. As a new investor, you can leverage your current assets to purchase stocks and ETFs to start building wealth within your investment portfolio and increasing your buying power.
The cost to start an investment account is $1 for the purchase of fractional shares of stocks and cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH). There are no additional fees or commissions.
For an additional $5 per month, a beginner investor can subscribe to Robinhood Gold, which allows you to earn 3.75% interest on cash, increased buying power for margin investing (access at 6.5% annual interest rather than 10.5% without Gold) and advanced research from Morningstar.
Overall, this investment app will appeal to beginner investors who want to contribute small amounts to start and use margin accounts to purchase more investments over time. The investments available are similar to the offerings for beginner investors on apps such as Acorns and Webull (see below), but they may seem limited compared with apps such as SoFi Invest.
An extra feature of Robinhood is a cash card that allows you to invest a portion of what you spend via weekly rewards.
Betterment
If you want an easy way to invest that will cut the “guesswork” on where you should invest your money, Betterment might be the app for you. It offers custom-built portfolios with low-cost ETFs or cryptocurrencies. In addition, Betterment has a variety of retirement account options including traditional IRA, Roth IRA, SEP IRA, and Roth conversions, making it one of the most versatile in this arena.
A unique feature of Betterment is its expert-built curated portfolios for beginner investors, simplifying the process of making allocations to funds. Betterment uses ETFs in both stock and bond portfolios because of their low management fees and tax efficiency.
If you need additional assistance, you can upgrade to get a certified financial planner’s advice for a 0.15% fee; however, you must have $100,000 in stocks, bonds or cryptocurrency in your account to request this service.
According to Charles Qi of Stock Pick, Betterment portfolios can be tailored to your investment goals and risk tolerance. Also, the app offers alternative investment options, such as vehicles focused on environmental, social, and governance, or ESG, factors. Portfolio rebalancing and dividend reinvestment are also available.
The cost to start investing with Betterment is a 0.25% annual fee based on your account balance when using their curated portfolios, with a minimum of $250 in recurring monthly deposits. For accounts with less than $20,000 and a lower recurring monthly deposit, you’ll be charged $4 per month. Investing in cryptocurrency carries a 1% annual fee plus trading expenses.
Betterment would work well for a new investor who wants various account options to start investing for retirement. In addition, the curated portfolios simplify the process of picking investments for those accounts.
Acorns
A unique way that a beginner investor can work investing into their regular spending habits is by using the Acorns app. Acorns allows investors to invest their spare change while they shop by rounding up to the nearest dollar.
“Acorns aims to make investing as simple as possible. The best method to invest is to start contributing right away rather than waiting,” says Bruce Mohr of Credit Sage. “If you don’t consider yourself an investor, you may start regular contributions fast thanks to the absence of an account minimum balance.”
Acorns also provides access to retirement accounts and portfolios that focus on ESG.
The app’s standout feature is its age-based portfolios, which adjust based on the user’s age and timeline to retirement. This differs from some other investments apps, such as SoFi Invest, that focus on automatic portfolio rebalancing.
Acorns offers pricing via a Personal or Family plan. The Personal plan is $3 per month and includes investing, banking and access to partner brands. The Family plan is $5 per month and includes everything within the Personal plan plus investing for kids. (You can find a similar feature for investing for kids within the Stash investment app, below, which you can start for $5.)
Acorns is a good fit for a beginner investor who doesn’t require many options and wants a simple start. The limited investment platforms could be a turnoff for some investors, according to Mark Stewart of Step By Step Business. Stocks, bonds and ETFs are available, but there are no advanced research tools for selecting investments.
SoFi Invest
SoFi Invest allows beginner investors to invest four different ways: retirement accounts, crypto, automated investing and active investing. Melissa Terry, a chartered financial analyst at VEM-Tooling Co. Ltd., says she believes SoFi Invest is ideal for no-fee investments and can be a one-stop shop.
Another feature of this investing app is that a user can purchase fractional shares, which allow even investors with small accounts to build wealth on higher-priced stocks, according to Rich Watson of TradeHub. Purchasing fractional shares is available on several other investment apps on this list as well, including Acorns.
There are no commissions or account minimums, and a unique feature of the app is its IPO Investing option. This option allows investors access to initial public offerings of companies on the stock market. All active SoFi Invest members can participate with no account minimums.
If you want to get started as a beginner investor using Sofi Invest, you can invest as little as $5 to purchase fractional shares without commission fees. You’ll pay a 1.25% markup (rounded up to the nearest penny) on crypto transactions.
Sofi Invest is suited to beginner investors who want no commissions and would like to invest in IPOs. A drawback to the app is its rather basic research tools and charting.
Invstr
An investment app that provides financial literacy education for adults and the entire family is Invstr. “It has a feature called ‘Fantasy Finance’ that offers virtual trading to provide an easy way to learn how to invest and adds a gamification aspect,” says Watson. “This is where you can challenge your friends and a Fantasy League to compete against others and earn a spot on its leaderboard. ”
Invstr offers access to U.S. stocks, ETFs and even fractional shares with no commission fees. Also, it has different plans that allow beginners to start investing for $5. Or pay $3.99 per month for Invstr Pro to get in-depth performance statistics, tracking and personalized investment picks with the Portfolio Builder feature.
Invstr aims to make investing fun and easy to learn. Its Invstr Jr. feature gives kids and teens money management and investing tools appropriate for their age. For $75 per year, up to four kids within your household can learn about cryptocurrency, banking and financial goal setting through the app.
If you are looking for an investment app that allows small investments with access to advanced reporting features, Invstr is a solid choice. A potential downside is that it is only available as a mobile app and doesn’t provide a desktop option. In addition, technical support is limited to email and resources within the app.
Stash
Stash is an investment app for beginners that gives you access to stocks, ETFs, cryptocurrency and also investment accounts for kids, similar to Invstr. The app emphasizes money management skills such as saving and budgeting, and it has a similar feature to Acorns that lets you round up your spare change and invest it. Stash allows users to auto-invest or actively select the investments for their portfolio.
Depending on the account type, Stash charges $3 or $9 per month, Watson says. The pricing model is like Acorns, except you get some additional features including investing advice. There is no minimum amount to get started, comparable to Sofi Invest and Betterment.
An extra feature of this investment app is the Stock-Back card, which lets investors earn stock in the companies they support by shopping at retailers such as Amazon.com Inc. (AMZN).
Stash would work well for beginner investors who want to learn about investing and how to better manage their personal finances. Some limitations of Stash are that it doesn’t provide in-depth charts or research indicators that a beginner might want to explore later during their investing journey.
Webull
If you want to become an active trader as a beginner investor, Webull is worth looking into. This investment app offers commission-free trading of stocks, options and ETFs. “The app is designed for active traders and allows them to research investment opportunities and analyze charts,” says Anthony Martin, founder of Choice Mutual Insurance Agency. “Webull works well for beginners because it’s very user-friendly, and you can get started on the app with minimal setup and start trading immediately.”
A unique feature that most investment apps do not offer beginner investors is Paper Trading, which lets beginner investors practice trading stocks within a simulator before making actual trades. Within the simulator, you can review your trades and test out strategies without risk. Beginners can start with the Paper Trading option for free and then switch over to live trading when they’re ready.
Webull has a fee schedule that varies based on the type of investment and feature you want to use. For example, you will be charged index option fees that range from 5 cents to 66 cents based on the type of investment. Also, there are additional fees to consider, such as for over-the-counter, or OTC, trades.
Webull provides new investors with the ability to practice trading before making any investment purchases by using a stock market simulator. A downside to Webull is that investors must pay an extra fee for advanced trading analysis functions, but many of its peers also charge for advanced features.
Takeaway
Many investment app options are out there for beginners, but choose those that will help you grow your portfolio without overwhelming you with options. Look for an app that is user-friendly, allows you to build wealth and can teach you something about investing at the same time.
More from U.S. News
How to Invest in Stocks for Beginners
How to Pick Stocks: 7 Things All Beginner Investors Should Know
Guide to Investing in Mutual Funds for Beginners
7 Investment Apps for Beginners originally appeared on usnews.com
Update 12/06/22: This story was published at an earlier date and has been updated with new information.
