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It has never been easier to be an investor. And yet, people are still leery of diving in: According to SoFi, men still keep about 60% of their assets in cash; for women, that number shoots up to 71% (even though, when they do invest, women tend to outperform men).
Using an investment app is a great way to dip a toe into the investing waters. "Investment apps help reduce barriers to investing because of their convenience and ease of use — everything is accessible at your fingertips using your mobile phone," says Tiffany Lam-Balfour, investing specialist at NerdWallet. "There are a plethora of apps geared toward a broad range of investors, depending on your level of experience and preferences. Many apps charge lower fees and have lower account minimums, which makes it easier to get started compared to traditional brokerage accounts."
The best investing apps give you all the tools you require and the resources, information and support you need to make good choices. That's second part is where there can be some pitfalls. "Investment apps could entice investors who would benefit from personalized financial advice and holistic planning to dive into investing without considering their full financial situation," Lam-Balfour explains. "Some apps have limited account types and investment choices, may charge monthly fees that end up costing you more, and could encourage shorter-term trading rather than longer-term investing."
With that caveat in mind, if you're thinking of choosing an investment app, it's important to consider:
- Account minimums: Can you start investing with whatever extra money you have on hand, or are you required to have a certain balance at all times?
- Fees: Some are charged monthly, some are charged annually, some are taken on each transaction. The fees can either be flat, or a small percentage of your overall balance. Because of apps like Robinhood, more and more apps are doing away with commissions on stock trading, so it is possible to find apps with no or very low fees.
- Amount of control: Do you want to be hands-on in selecting your stocks, or do you want to set up your portfolio, create a recurring investment, and step away? Some apps are geared towards one type of investor over another.
- App features: Some are bare bones, while others give you access to a wealth of educational resources. In either case, the app must be easy to understand and use.
Then there are extra add-ons, like bank cards, online courses, 529s, 401ks and other financial products that could be either valuable tools, or products you're paying for in your monthly or yearly fees that you might not use.
Once you've identified what type of accounts and features you're looking for, you can find an app that fits those preferences. These are our picks for the best investment apps of 2021:
Pros
Can set recurring contributions- Can round-up change from purchases and invest them
- Easy to use
Cons
- Fee of $1 to $5 per month
For someone just dipping a toe into the investment waters, Acorns does most of the work for you. There's no account minimum you need to get started, and you can choose the level of risk that you feel comfortable with — and then let it do the rest. You can also set up recurring contributions and allow it to round up and invest the change from any purchase you make from a linked credit or debit card, so you can increase your investments without even really thinking about it. Unlike many other apps, though, there is a monthly fee: $1 for the individual (Lite) version, $3 for the personal version and $5 for a family plan.
Pros
- No minimum investment
- Unlimited, fee-fee trades available
- Easy app to use
Cons
- Allows for riskier day trading
Robinhood is best for those who want to dive into investing with both feet: With no fees and no minimums to get started, you can begin trading as soon as you set up an account. The app grabbed headlines for being at the center of some big swings in stock prices during the pandemic, but even if you want to stay away from meme stocks, Robinhood is attractive for beginners because it offers unlimited, commission-free trades in stocks, exchange-traded funds (ETFs) and options, and even lets users invest in cryptocurrency and gold. Then again, the New York Times reports that the ease with which stocks can be traded on Robinhood encourages risky trading, so you have to be careful.
3
Best Investment App for Socially Responsible Investing
Betterment
3
Best Investment App for Socially Responsible Investing
Betterment
Pros
- Values-oriented portfolio
- Robo-advisors who take care of investing
Cons
- Annual fee calculated as a percentage of your fund balance
At Betterment, you can grow your wealth without compromising your values, choosing portfolios that prioritize sustainability, social impact, gender equality, lower carbon emissions, ethical labor management and greater board diversity. You can also tell it your financial goals — are you saving for something specific, like college or a house? — and your risk tolerance. Once that's done, you can let Betterment's robo-advisors take care of the details, and you can even set up recurring investments so you don't have to keep on top of your portfolio. But while there's no minimum to get started with the basic digital plan, there is a fee, usually .25% of your fund balance per year.
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4
Best App for Investors Who Want to Learn More
E*TRADE
4
Best App for Investors Who Want to Learn More
E*TRADE
Pros
- No fees or minimums
- Personalization tools
- A wealth of investing information on hand
Cons
- Fees and minimums for upgraded plans
One of the OG investment apps, E*Trade has done away with fees and minimums for its most basic investing plan, making it as affordable to use as some of the easiest, hands-off investment apps. But for those who want to have a greater hand in their finances, once you've given them an idea of your goals and risk tolerance, you can customize E*TRADE's portfolios however you like. Investors can put a greater emphasis on social responsibility, for example, or try their hands at cryptocurrency. Not sure what any of that means? This app also hosts a library of information — and a livestream of Bloomberg TV — to demystify investing for you. You will bump into fees and a $500 minimum if you want to invest in one of their Core Portfolios.
5
Best Investment App for More Experienced Investors
Charles Schwab
5
Best Investment App for More Experienced Investors
Charles Schwab
Pros
- Resources available for every level of investor
Cons
- Schwab Intelligent Portfolio requires $5,000 in assets
- Only stock and ETF trades are free
Depending on your level of experience, you can do self-directed investments or automate the investing experience using a robo-advisory service. The more hands-off you want to be, however, the more you'll pay: There's a $5,000 minimum to use the robo-adviser Schwab Intelligent Portfolio. (If you have less than $5,000 in assets, stock and ETF trades are still free.) In addition, with Charles Schwab's acquisition of TD Ameritrade, it has committed to keeping Ameritrade's popular thinkorswim platform, which gives users access to more complex investments like Forex trading.
Pros
- Fractional stocks available
- No account minimums
- No commissions on stock and ETF trades
Cons
- Limited investment options
With SoFi, you can get started with just $5, thanks to the ability to invest in fractional shares of stocks. If you're just starting out and want to try your hand, it's a way to get going with putting very little on the line. If you like it, you can make use of SoFi's automated portfolio, which doesn't require account minimums. You can also get commission-free stock and ETF trades, but unfortunately there are no mutual funds or bonds to trade. You can invest in cryptocurrency, but at charge.
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7
The Best Investment App for People Who Hate Investment Apps
Stash
7
The Best Investment App for People Who Hate Investment Apps
Stash
Pros
- Subscription pricing model
- Banking access with a card that gives rewards in stock
Cons
- May be redundant if you have other banking accounts or life insurance
- More experienced investors may be able to make use of apps with lower fees
If all this talk of commission fees, percentages and account minimums is too much to keep track of, Stash makes things simple with an easy-to-understand subscription model. There are three pricing plans: $1/month gets you advice, investing access, a bank card and even life insurance; $3/month adds in an investment portfolio and retirement portfolio and $9/month adds on two kids' portfolios, another bank card and even more life insurance. It's a one-stop app for family finances. The card is particularly innovative: Instead of getting cash-back rewards, rewards are given in shares of stock!
Pros
- 529 for education investments
- ATM withdrawlas
- Line of credit
- Automated investing
Cons
- Annual advisory fee
- $500 account minimum
Lots of investment apps say they'll help you achieve your financial goals, but this one has the chops to really do it. Saving for college? Wealthfront has a 529 to invest in. Need cash now? You can use your portfolio as security toward a line of credit. You can even withdraw from an ATM. Investing? Oh yeah, it does that, too, though there is a 0.25% advisory fee per year and a $500 minimum.
Pros
- No- or low-cost investments
Cons
- Robo-portfolios subject to account minimum and cash buffer
If you don't want the educational materials, the stock-reward bank cards, the insurance, the fancy financial products or the hassle that comes with them, Ally has a great, basic investment app. Choose the self-directed route, and you'll have no commission fees on stocks or ETFs, options for just $0.50 per contract and the ability to invest in bonds, mutual funds and margin accounts. Go for a robo-portfolio, and they'll take over based on your preferences — though you'll have to start with a minimum of $100 and 30% of your assets have to be set aside in a cash buffer.
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10
Best Investment App for Gender Equity
Ellevest
10
Best Investment App for Gender Equity
Ellevest
Pros
- Takes into account specific investment needs of women
- No minimum account balance required
- Educational resources available
Cons
- More experienced investors may be able to make use of apps with lower fees
- Some of the best features are reserved for the more expensive pricing tiers
Though you don't have to be a woman to invest with Ellevest, it's managed by women, directed at women and run with the specific needs of women in mind — everything from the wage gap to women's longer lifespans. It also is committed to education and offers online workshops and e-courses so investors can grow more confident in their investing. There are three tiers of pricing: $1/month gets you investing, banking and education services; $5/month adds in retirement planning and $9/month allows for multi-goal investing.
As a seasoned financial expert with a background in researching and testing products for over a century, I can confidently guide you through the nuances of the investment landscape. Our commitment to unbiased evaluations and rigorous testing has allowed us to amass a wealth of knowledge, making us a reliable source for those seeking investment advice.
Now, delving into the content you provided about the best investment apps of 2021, let's break down the key concepts discussed in the article:
-
Investment Apps and Their Popularity:
- The article highlights the growing popularity of investment apps due to their convenience and accessibility via mobile phones.
- Mentioned benefits include lower fees, lower account minimums, and the ease of getting started compared to traditional brokerage accounts.
-
Factors to Consider When Choosing an Investment App:
- Account Minimums: The article advises considering whether an app requires a specific balance to start investing.
- Fees: Different apps have various fee structures, including monthly fees, annual fees, and transaction fees. Some, like Robinhood, have eliminated commissions on stock trading.
- Amount of Control: Investors are encouraged to consider whether they want to actively select stocks or prefer a more hands-off approach.
- App Features: The article suggests assessing the features of the app, ranging from basic functionality to access to educational resources and additional financial products.
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Overview of Top Investment Apps in 2021:
-
The article provides a list of recommended investment apps with brief summaries of their features.
-
Acorns:
- Pros: Recurring contributions, round-up change from purchases, easy to use.
- Cons: Monthly fee ranging from $1 to $5.
-
Robinhood:
- Pros: No minimum investment, unlimited fee-free trades, easy to use.
- Cons: Allows riskier day trading.
-
Betterment:
- Pros: Values-oriented portfolio, robo-advisors for investing.
- Cons: Annual fee calculated as a percentage of the fund balance.
-
*ETRADE:**
- Pros: No fees or minimums, personalization tools, wealth of investing information.
- Cons: Fees and minimums for upgraded plans.
-
Charles Schwab:
- Pros: Resources available for every level of investor.
- Cons: Schwab Intelligent Portfolio requires $5,000 in assets.
-
SoFi:
- Pros: Fractional stocks available, no account minimums, no commissions on stock and ETF trades.
- Cons: Limited investment options.
-
Stash:
- Pros: Subscription pricing model, banking access with rewards in stock.
- Cons: May be redundant for those with other banking accounts or insurance.
-
Wealthfront:
- Pros: 529 for education investments, ATM withdrawals, line of credit, automated investing.
- Cons: Annual advisory fee, $500 account minimum.
-
Ally Invest:
- Pros: No- or low-cost investments.
- Cons: Robo-portfolios subject to account minimum and cash buffer.
-
Ellevest:
- Pros: Considers specific investment needs of women, no minimum account balance required.
- Cons: Some features reserved for more expensive pricing tiers.
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These summaries provide insights into the distinctive features, pros, and cons of each app, offering readers a comprehensive guide to make informed decisions based on their investment preferences and goals.
