Investment options for beginners have never been easier. It was only a matter of time before you could handle all of your investments right from your phone. Today, a huge number of apps and financial services companies offer a trading platform where investors, beginner or advanced, can buy, sell, and partake in passive investing. You can create custom portfolios, automatically invest your dividends, and track the performance of your investments easier than ever before. You can even get stock market updates and news on your favorite stocks!
In the past, an everyday investor would have to find a personal broker for your investment portfolio. Anytime you wanted to make a trade, you would need to pick up the phone and call them and put in your trade. Everytime you did this, you would have to pay a heavy trading fee to your broker.
Imagine wanting to invest $100 of your income and you buy a share of a company for $100. Your broker then makes you pay him $10 for the trade and now your share has to increase 10% in value before you can even break even! Even more, your broker might have required you to make a minimum investment of $500 to $1,000.
One of the best parts of the online stockbroker is that some of these apps even have no commission fees and no minimum account balance and you can trade as many stocks as you want without having to pay any additional fees!
Likewise, you can invest in much more than just shares of companies. You can invest in exchange traded funds, or ETFs, as well as cryptocurrencies like Bitcoin and Ethereum.
If you are looking to get into investing or just putting your money some spare change into the stock market, there are tons of online brokers to choose from. Let’s take a look at some of the best investing apps for beginners so you can get your foot in the door and start making some money!
Robinhood was a major disruptor in the broker industry. Robinhood started in 2015 and began attracting young investors around the age of 25. Today, Robinhood has around 13 million users and the investment platform is now valued at around 8 billion dollars!
Along with being an online trading stock platform for your phone and computer, Robinhood is also starting to offer more services on the side. For example, they are planning to release a cash management feature that allows you to put your money into a small savings account as well as get a debit card if you wish. This service plans to offer a 0.3% annual percentage yield, or APY, that is a competitive rate compared to other companies.
Likewise, Robinhood offers a service called Robinhood Gold for more experienced investors or beginners who are looking to elevate their investing skills to help them reach their financial goals. For $5 a month, you can access high-level information and analysis from the renowned Morningstar for over 1,700 different stocks, as well as make larger deposits if you want to invest more money at a time.
- Completely Free: One of the aspects that made Robinhood take off is that it is essentially entirely free stock trading app. It is free to open your account and there are no commission-fees for trades. In other words, you won’t get charged every time you want to buy or sell a stock. Likewise, trading ETFs and cryptocurrencies is absolutely free. There is no minimum account balance as well. While you can upgrade to the Robinhood Gold for $5 / month, you are still provided all the tools a beginner investor would need. It’s as free as free gets.
- Beginner-Friendly: Let’s face it, investing can be confusing. Thankfully, Robinhood has a good looking and simple, yet informative, platform that is perfect for beginners. The performance of your stocks is visualized perfectly. Clicking on a specific stock also provides valuable information on your stock. You also automatically get news updates on that app for news that pertains to your stocks or the stocks you are following. Even more, if you want to invest in a company whose stock is too expensive to buy a share, (Like Amazon’s stock that is over $3,000) you can buy fractional shares. Fractional shares can be a great way to invest in all the stocks you love.
- Trade Cryptocurrencies: Crypto is a relatively recent investment opportunity that has taken markets by storm. If you are looking to invest in crypto, Robinhood allows you to make free trades on crypto while many of its competitors do not have that capability yet.
- No Mutual Funds / Bonds: While mutual funds and bonds may not be beginner-level investments, you still may want to invest in them for a diversified portfolio. Unfortunately, buying bonds can be complicated and a mutual fund often has hefty fees associated with them, and as a result, they are not offered on Robinhood’s platform.
- No Retirement Accounts: With many other banks and companies like Fidelity and Charles Schwab, you can open retirement investment accounts that can help invest for retirement while limiting the taxes you need to pay. Robinhood does not offer such accounts and only offers an investing account that faces the normal (and sometimes steep) capital gains taxes.
The Acorns website writes, “From acorns, mighty oaks do grow.” Acorns is a micro investing app that is based around taking your spare change from purchases and investing them into the stock market. Other apps may force you to automatically save your money, but Acorns takes it one step further and takes that extra money and puts it into the stock market so you can start stock trading and investing for your future.
Like Robinhood, Acorns also offers a checking account and debit card that can help streamline your process of automatically investing. Acorns has a tiered structure, with each type of Acorns account costing different. The 3 accounts each cost $1, $3, and $5 a month.
- Mindless Investing: While the benefits of investing your money are quite clear, Investing is hard and can be too out of reach or too boring for the typical person to want to follow closely. This is where Acorns comes in. Acorns is extremely hands off and takes the thinking out of stock trading and transferring money.
- Additional Account Types: Acorns succeeds where Robinhood falls short. While it comes at a cost, Acorns offers more account types if you are looking to do more than just put money in the stock market. For example, for $5 a month you can open IRA accounts (individual retirement account) like Roth IRAss, SEP IRAs, and traditional IRAs.
- Pricing: While it does not cost anything to start your basic Acorns account, it costs $5 to start investing. $5 is not the end of the world though, but the costs do not end there. Each account you want to open costs money each month. For $1, you essentially get an arguably worse experience than Robinhood. For $3, you are able to have access to the retirement accounts as well as the card and checking account. For $5, you can open investment accounts for the whole family. While these are relatively cheap prices, if you have a small account balance because you are just investing your spare change, it can be expensive. If you have $100 in your account and you are charged $12 for the entire year to have your account, that's a 12% fee! Yikes!
- Costly ETFs: As a beginner investor, you might just be stock trading and might not be venturing into investing into ETF trades yet. However, they can be an easy way to invest in industries anywhere from cloud computing, to e-sports and pet pharmaceuticals. Trading an ETF on Acorns can cost .03%-.18% per transaction and costs $50 per ETF to move your Acorn ETFs to another brokerage account.
Webull is an all-inclusive trading, research, and retirement planning platform. While it can work for beginners, Webull seems to be marketed more towards the intermediate investor. Webull’s app and interface looks very sleek and professional and has some of the best tools and features of the investment apps. Likewise, Webull now has a good web platform that can now support all of your investing activities on your computer.
- Commision Free: Like Robinhood, WeBull makes no money off of commissions like a traditional broker would, so you the user do not have to pay anything when you make a trade. This is one of the most attractive features of Webull for beginners. Especially if you are investing with little money, it does not seem fair to have to be charged money everytime you make a trade when it costs the company a few cents, if that, to make your trade go through. Webull seems to agree with this mindset and they offer commission free trading for stocks, ETFs, and some options trading as well.
- Grow your Investing Skills: If you think you are getting the hang of investing or you just want to take a more hands-on approach to your investing, Webull is a great place to do that. First, it is a great way to be informed. Webull gives you updated information and charts about the stock market as well as specific stocks, industries, and currencies. There are a bunch of different chart and analytical tools that can help you be informed as an investor and help you make smart decisions for your investments.
- Not Great for Beginners: If you are an absolute newbie when it comes to investing, Webull probably is not the best place to start. It just simply isn’t built to be used by the most basic investors like Robinhood or Acorns is. All of the awesome information, charts, and tools used to analyze stocks that Webull provides are not easy to understand if you do not have a background in investing. It can be quite overwhelming!
While many banks, brokerage firms, and other financial institutions have had online platforms for some time now, more of these companies have been pressured to offer accessible trading platforms with their customers to prevent them from moving towards these many free, mobile trading services. The company we feel has one of the best all-around financial services as well as a good trading platform for beginners is Fidelity.
Fidelity is an investment firm that has been in the industry for a very long time. They are a respected and trusted company that provides all the financial planning services a customer could want. In terms of investing, they have adapted to create a solid trading platform for its own clients to easily begin stock trading.
- Free: Fidelity and Robinhood are about as close as you can get to free. It costs nothing to open an investment account with Fidelity and there is no minimum balance for your account. Trading stocks is completely free and there is no cost associated with buying an ETF like there is for Acorns.
- Trade Bonds and Mutual Funds: For hands off investors that might be worried about making poor decisions when choosing stocks, bonds and mutual funds can be very good investments. Though they have low returns, bonds are one of the safest investments. Mutual funds have high a management fee but are managed by some of the brightest investors and can make you great returns. Fidelity offers both of these investments for hands-off investors to buy into instead of stock trading.
- ThinkorSwim: If you are trying to become a more experienced investor, Fidelity offers its own research software called “ThinkorSwim.” Good name right? ThinkorSwim is a very highly rated investment analysis tool that provides its users with the latest news, charts, and information to make good investment decisions. Even if you aren’t looking to analyze stocks, it can be a great way to keep up with the stock market. If you have an account with Fidelity, ThinkorSwim is completely free to download and use.
Interface Falls Short: Fidelity is mainly a web platform, but they still have an app for stock trading and other Fidelity services. In an age where sleek, modern-looking apps like Robinhood, Acorns, and Webull attract young investors to their platform, Fidelity falls short in this category. While it is still fairly good and gets the job done, the interface can seem old and clunky and not as simple and easy to navigate as these other apps