Investing in the stock market is the best step you can take to secure your financial future. It gives you additional income and opportunities to grow your wealth. If you simply stash your money in a bank account, you will end up losing a lot over time due to inflation. As an investor, it’s essential that you get an early start on investing if you want to successfully build wealth and financial stability. Fortunately, even with limited investment knowledge, we’ve rounded up some of the best micro-investing apps that can help you get started and build a future of financial stability.
One of the biggest obstacles that young people face when it comes to investing is getting started. Due to different financial constraints, a lot of young people are unable to accumulate savings and make investments. The best micro-investing apps allow users to save small sums of money and invest in stocks. Micro investing apps make saving simple and painless, helping people who wouldn’t otherwise accumulate enough savings for future investment get started.
Top 10 Best Micro-investing Apps
Micro investing allows you to save and invest small amounts of money that fit into your budget. These platforms round up your purchases to the nearest dollar and deposit the difference into an investment account every time you make a purchase with your debit card. It’s the digital age equivalent of taking spare change from your purchases and putting it into a piggy bank, then breaking the piggy bank and taking the cash to an actual bank.
Over time, these small savings can add up and yield significant returns, sometimes even beating traditional saving methods such as savings accounts. This set-it-and-forget-it approach makes investing a few dollars here and there pretty easy. All you need is to add a micro-investing app to your smartphone to get started. Below, we take a look at the 10 best micro-investing apps in 2020 to help you build a financially secure future.
#1: SoFi Active Investing: Best for Young Investors
One of the latest offerings from SoFi Invest is SoFi Active Investing, a micro-investing app designed for young investors looking for options to save and invest small amounts of money. SoFi Active Investing is part of the firm’s growing line of financial products which includes SoFi Money, an online cash management account and a Robo advisor known as SoFi Automated Investing.
Sofi Active Investing offers a lot of investment options for active traders. These include fractional shares of blue-chip companies such as Netflix and Amazon, the ability to trade digital currencies such as Ethereum and Bitcoin, as well as a wide selection of free exchange-traded funds and trades of stocks. Members also have access to benefits such as meetings with financial advisors and free educational seminars.
Investing with SoFi Active is as easy as setting up your account and providing basic information about yourself. You will be able to enjoy perks such as commission-free trades as well as zero account minimums and fees. This means that you will be able to maintain minimum trading activity, transfer securities, or close an account without any fees at all. All members get free financial counseling from SoFi Active Investing professionals.
#2: Robinhood: Best Low-Cost Option
When it comes to the best micro-investing apps, Robinhood stands out from the crowd due to the low-cost options it offers. There’s no cost to create, maintain the account, or purchase more than 5000 stocks and ETF offerings, except for a minimal charge for all sell orders from regulators. This low-cost option for new investors has zero commission fees and no fees for account management on their flagship accounts.
Another major perk for using Robinhood for micro-investing is that the app allows users to trade full shares of stocks, bonds, and ETFs. It’s easy to open a Robinhood account. All you have to do is download the app and provide your name, date of birth, and social security number. The app is very hands-on in that it allows you to do everything on your own. You get to choose every asset that goes into your portfolio.
The Robinhood app is designed for ease of use. The streamlined interface encourages users to learn by doing the actual thing. You can also access your account from a laptop or desktop computer. Robinhood is also the only micro-investing app that offers crypto trading for interested investors. The option to trade cryptocurrencies makes Robinhood a popular micro-investing app among millennials.
#3: TD Ameritrade: Best App for Investor Training
TD Ameritrade is one of the largest online brokers at the moment. The TD Ameritrade micro-investing app is one of the best in the business, both for beginners and experienced investors. The investment app stands out for offering robust research for traders, which makes it one of the best micro-investing apps for investor education. Here, you will find a suite of educational videos on investment strategies.
The app also offers vast market research as well as data on individual companies and stocks. The education offerings are meant to make new beginners who are just starting out comfortable with a wider variety of asset classes. You can download TD Ameritrade’s thinkorswim platform on your smartphone or tablet and start investing. The app is highly customizable, allowing you to define layouts, color schemes, and trading defaults.
On October 3, 2019, TD Ameritrade cut base commissions for stock, ETF, and options trades to $0. You don’t need to pay any fees or meet any account minimum requirements to save and invest on TD Ameritrade. There are over 12,000 mutual funds and 300 ETFs commission-free to choose from when you invest via TD Ameritrade. Moreover, you can use the app to set up price alerts and monitor your investment.
4: E-Trade: Best for Investment Selection
For a long time, E-Trade has been one of the most popular online trading platforms in the world. E-Trade offers several platforms to appeal to a wide range of interests and investing styles. Their mobile app offers numerous options and features for all kinds of traders. As a beginner investor, you will be able to benefit from a vast library of educational resources and one of the largest investment selections on the market.
Both active traders and beginner investors will find this professional-level trading platform extremely useful when it comes to assembling a balanced, risk-appropriate portfolio. E-Trade integrates watchlists on all platforms, which means that you will be able to access a full range of tradeable assets on your mobile app. Compared to the website, the mobile app offers a smoother workflow.
E-Trade has a wide range of offerings. There are over 12 ETFs that you can trade daily from Monday to Friday. The app offers nearly 4,500 no-fee mutual funds. The app is easy to use and highly customizable. When it comes to trading capabilities, the options are incredibly flexible. The platform does not charge any commission for stock/ETF trades. Additionally, no account minimums are required to trade on this platform.
#5: Wealthsimple: Best for Socially Responsible Investments
With offices in Europe, Canada, and the USA, Wealthsimple is one of the leading Robo advisors in the world. If you are looking for a reliable and easy to use micro-investing app to get you started, Wealthsimple is an option worth exploring. One of their best offerings is the socially responsible investment portfolios. As an investor, you get to choose from three weighted socially responsible investment portfolios on this app.
The portfolios are drawn from six exchange-traded funds focusing on organizations involved in tackling different issues in society. These issues include support for gender diversity in leadership roles, reducing carbon exposure, and clean technology innovations in the developing world. Another standout offering at Wealthsimple is the Shariah-compliant portfolio. This halal investing portfolio blocks investments in companies in restricted industries, including firearms, alcohol, gambling, etc.
This micro-investing app creates your portfolio out of ETFs and selects asset allocation based on your risk tolerance. The fee for investing in one of the custom-built SRI is higher than the competition. However, the pricing is very straightforward. There are plenty of investment options to choose from at Wealthsimple. But first, you have to sign up by creating an account with a username and a password. You can proceed to choose your investment once you have provided basic information.
#6: Betterment: Best for Hands Off Investing
Betterment is an innovative investment platform that gives users access to investment tools hitherto only available to the wealthy. With over $8 billion under management, Betterment is one of the biggest investment platforms out there. This Robo advisor makes it extremely easy to save and invest your money. It will pick the right portfolio and rebalance it automatically. Once you invest, all you have to do is sit and wait for returns.
The Betterment micro-investing app also allows you to talk to real financial advisors through the app’s messaging system if you need advice on where to invest your savings. This makes the app an excellent choice for novice investors who don’t have a lot of investment knowledge as it gives them as much knowledge as they need. There are numerous portfolios to choose from once you start investing with Betterment.
Setting up your account with Betterment is relatively easy. All you need to do is answer a few questions about your income, financial goals, age, and risk tolerance to start investing with Betterment. When it comes to fees, Betterment has a very straightforward pricing of 0.25 percent annual fee. You can start making investments with as little as $10, which is great for those looking for investment opportunities that allow them to start small.
#7: Twine: Best for Couples Investment
Looking for a micro-investing app that allows you and your partner to invest and build wealth together as a couple? Look no further than Twine micro-investing app. Created by insurance giant John Hancock in 2018, Twine has branded itself as a micro-investing app built for couples to save and invest jointly. You can invest with your friend, partner, or spouse using the Twine micro-investing app.
Twine offers three investment portfolios for those who choose to invest as a couple. These are conservative, moderate, and aggressive. The app uses a glide path to manage your portfolios. That means that the app uses a strategic approach to determine the correct mix of fixed income assets and equity to meet your financial goals. Funds can be invested ETFs or saved in cash. The app allows you to set your goals and work towards them.
You can have long-term or short-term goals. For instance, you can be working on your retirement savings, or you can use the app to save for a wedding or vacation fund as a couple. Contributions are separate but you can track your investments and progress as a couple. All you have to do to invest with Twine is sign up and provide the necessary information. An investment account on Twine costs 0.6% annually but the cash account is free.
#8: Wealthfront: Best for Automated Investments
The Wealthfront micro-investing app offers one of the best automated investment platforms in the market. The company has built up its assets under management to 11.5 billion dollars since it was launched in December 2011. The Wealthfront micro-investing app makes it extremely easy for you to start and continue saving and investing. Thanks to this automated investment platform, you don’t need a personal financial advisor to start investing.
Wealthfront provides numerous features for both Android and iOS, including long term planning to help you stay on track for your investment goals. All you need to get started with investing on Wealthfront is to set up an account. Creating an account with Wealthfront is easy, all you need to do is enter the required information and you are good to go.
You have to answer a few questions about your attitude towards risk and when you might need the funds to determine the portfolio you will invest in. The app will show you the portfolio account before you fund the account. In terms of fees, the funds are cheap and the trades are free on Wealthfront. However, you will be required to pay 0.25 percent annually for the management of your account.
#9: Stash: Best for Beginners
Are you looking to try micro-investing but don’t know how to get started? You can start by installing the Stash micro-investing app. Stash is specifically designed for beginners looking to build wealth and secure their futures through micro-investing. With over 4 million investors, Stash is one of the most popular micro-investing apps out there. In fact, over 80 percent of users on Stash are first-time investors.
All you have to do to start investing with Stash is download the app and link it to your debit or credit card. Upon registration, the app offers an investors’ guide which you can read to determine if you are comfortable with the whole process. After reading the guide and ready to make some investments, you can choose the types of portfolios and companies you are interested in investing in from a long list of options.
As a Stash user, you can purchase fractional shares from over 200 individual stocks and 60 curated exchange-traded funds starting at $5 a month. The Stash micro-investing app teaches you how to invest, which makes it one of the best micro-investing apps for beginners. The “How to Invest, The Stash Way” guide and a variety of other learning materials make this app great for learning.
#10: Acorns: Best for Investing with Small Sums
Acorns is one of the most popular micro-investing apps out there. Acorns helps you circumvent the numerous savings and investing challenges you are likely to face by rounding up purchases to the next dollar and investing the difference in one of their diversified portfolios. All you have to do is register and link your credit or debit card to your Acorns account and start investing.
Acorns will round up the amount to the nearest dollar every time you make a purchase with your linked card. The app will then pull the different from your source of funds and invest it on your behalf. The Found Money feature on the Acorns app helps you earn extra money when you shop on select partner companies including Apple, Nike, Hulu, Airbnb, Macy’s and more.
The app also allows users to set up automatic investments from their bank accounts. Fees start from as low as $1 per month for a personal taxable investment account — monthly fees range from $1, $2 or $3 depending on account type. By automating the entire process, Acorns make micro-investing a completely mindless undertaking. It’s very easy to forget that you are investing and getting returns when using Acorns.
You can head over here for a more comprehensive comparison between Acorns and Stash and make a more informed choice between these two beginner-friendly micro-investing apps.
Best Micro-Investing Apps: Wrap Up
With all the jargon in the financial market, investing can seem like a pretty daunting undertaking for anyone. Micro investing apps eliminate traditional barriers to investing, including the large investment minimums, the laborious monitoring of the stock market, and brokerage fees, allowing people of limited means to invest and build wealth. With just small amounts of money, the best micro-investing apps listed above will handle investing for you and enable you to save by just doing the things you usually do with your money. Micro investing, through micro-investing apps, is the real deal if you are looking to start small and ease yourself into the investment arena.