Investing has come a long way from physical stock certificates. The internet allowed for the rapid exchange of information, to the point where some stock exchanges, like Toronto’s, are entirely online.
Smartphones brought another investing revolution. A wealth of apps were developed and released to make investing more accessible to everyone. However, there are so many apps out there designed to help investors that it can be hard to cut through the noise.
The following guide will give you more detail as to what investing apps are available, and which are the best investing apps for your financial situation.
6 of the Best Investing Apps
Not every investment app seeks to do the same thing. Some offer a traditional online investing platform, with expert advice and management available. Others use an algorithm to automatically invest your money based off of your goals and risk assessment.
Remember, you will still have to pay taxes on everything you make through investing apps. They are still governed like regular investing platforms. However, remember that there are ways that you can reduce your tax bill, like a 1031 exchange.
For American investors, it’s hard to beat Robin Hood. It’s a zero-commission app, which means that you won’t lose any of your money through fees. They make their money through their premium service, which offers after-hours trading and access to margin accounts.
This is great if you want to play around with a small amount of money, which is when fees would have a bigger impact. However, it is a barebones app: you won’t have advice or other features to choose for. Still, if you’re able to do all your research yourself, Robin Hood is a good option.
Acorn is designed to automate the investing process. Instead of putting in deposits yourself, you attach a card to the app. Whenever you make a purchase with that card, it will round up to the nearest dollar and put the extra money into an investment account.
Fees are low, at just $1 for accounts under $5,000 and 0.25 percent for accounts over $5,000. Most importantly for investors who are just getting started, Acorn offers college students four years of fee-free investing for signing up with their college email address.
Vault is an app that targets self-employed individuals. Since freelancing means you don’t get benefits or access to a retirement account, you need to make plans yourself. Vault either sends you a reminder or automatically withdraws a certain amount when you are paid for a freelancing job.
You can only open retirement accounts (IRA, Roth IRA, or SEP-IRA) with Vault, which limits its use for most investors. Still, Vault fulfills an important function for a targeted audience. The fee structure is the same as Acorn, $1 for accounts under $5,000 and 0.25 percent for accounts above $5,000.
Though somewhat similar to Acorn, Clink allows for more customization in your automated investing. Instead of rounding up to the nearest dollar, you can set a specific percentage of a type of spending that you want to invest through Clink.
For example, you can set your Clink account to take 5 percent of what you spend on gas each week. You can make that percentage higher or lower, depending on how much you want to invest.
On one hand, this allows you to set a quicker deposit schedule, while on the other it can help you curb your spending by increasing how much money you’re actually using. The fees are the same as Vault and Acorn.
Based in Canada but available in America as well, Wealthsimple offers a lot of the features that its competitors use. Wealthsimple lets you build a risk profile, and then automatically invests your money into ETFs and stocks that fit that profile.
Wealthsimple also allows you to roundup purchases from a card, choose socially responsible investing (including Halal investing), and offers special perks and lower fees to those with a combined account balance over $100,000. The fees for Wealthsimple are a little higher than the other apps on this list, clocking in at 0.5 percent for accounts with under $100,000 and 0.4 percent above $100,000.
Wealthfront is similar to many of the above apps in that it seeks to invest your money automatically, but it does so in a different way. Instead of asking you questions to build a risk profile, it examines your spending history. By looking at what you spend, what you make, and what your goals are, it develops a tailored investing strategy.
Wealthfront’s key feature, beyond analyzing your spending habits, is its 529 plan. 529 plans are college saving investment accounts that give you tax benefits on their earnings.
Wealthfront is free to use for the first $10,000 you deposit, which is an interesting inversion of the usual fee structure. You’re charged a 0.25 percent fee each year on your balance. However, unlike most of the other apps, there is a minimum investment of $500 that you have to put in.
Each App Fills a Different Niche
Now that you have a general overview of some of the best investing apps available to download, you can begin to explore your options. All of these apps work well at what they are designed to do. Their utility to you, however, largely depends on why you want to invest.
For more information about improving your personal finance and getting your money to work for you, check out the Finance section of our blog. It’s full of tips and tricks that you can use to improve your finances, from investing advice to choosing the best credit card rewards program.