We’re in the digital age and if you want to invest your money in the stock market, you can do so not only from your desktop or laptop, but you can also do it while mobile. Smartphones are now as powerful as computers, and there are a number of investing apps that you can use right from the comfort of your phone.
In this article, we’ll provide a guide to the best investment apps in 2020. Some are low-cost, easy-to-use apps that are designed for beginner investors. Others are powerful investment apps meant to give day traders the tools they need to dominate the stock market.
All should make investing easier, and give you effective ways to manage your money wherever you (and your phone) may be.
Why Use Investing Apps?
Investing apps are intended to make personal finance management easier. This can come in a variety of ways. Some apps simplify the process, allowing you to invest passively (and start generating passive income) in the background, without any real thought or time commitment. Others give you the tools to make real-time trades no matter where you are.
Investing allows you to grow your personal capital — while not a solution to all of life’s problems, it certainly plays a part in the path toward individual betterment and peace of mind. Contrary to what some might think, investing doesn’t have to be hard — and you don’t need a boatload of money to get in on the action. These investing apps simplify the process and have an extremely low barrier of entry.
Different Types of Investing Apps
When looking at the different types of investing apps available in 2020, there are three main categories to consider — “spare change” apps, investment portfolio management apps, and real-time trading apps.
Of course, these are loose categorizations meant to give you a basic overview. Some “spare change” apps let you manage your investment portfolio, and some management apps offer real-time trading.
Choosing how you want to invest your money — and what investment options you want from an app — will guide you into what kind of app you’ll use.
“Spare Change” Apps
“Spare Change” apps access your bank account and either pull leftover change from transactions (if you buy something for $8.50, it will take out 50 cents and “round up” the purchase) or draw small amounts from your checking account automatically. That money will then be invested for you.
These apps are great for new investors. They’re easy to set up and can run mostly in the background, allowing you to slowly build a portfolio without too much work up front. Most of these apps won’t let you choose individual stocks to buy and sell, but if the goal is to start putting money away, it’s an easy way to do so. Once you link your checking account to the app, you’ll be off and running.
Investment Portfolio Management Apps
Management apps let you build or review investment portfolios and grow your wealth. You’ll have the tools to rearrange your asset allocation, build and design retirement funds, or simply play the market. Many of these sites offer the assistance of a financial advisor, one that’s either automated or a real person.
Real-Time Trading Apps
Real-time trading apps are a subset of investment portfolio management apps, but they give you a lot more power to do real-time stock trading from a mobile app. These trading apps give you the resources and tools to make snap decisions on stocks to buy and sell, plus conduct quick, customizable research. For serious day traders, these apps are a must.
8 Best Investment Apps of 2020
Below are eight of the best investment apps for 2020. These apps not only represent the three different types listed above, but offer a wide range of options and setups.
Some offer free stocks, others offer a set amount of free trades for new users, and some offer unlimited free trading. Depending on the time you’re willing to invest, your risk tolerance, your preferred fee structure, and other factors, you should be able to find an app that appeals to you.
The Stash tagline is “investing, made accessible.” It’s a management app aimed at beginners. You can start investing with just five bucks and the app allows you to build a custom investment portfolio, plan a retirement fund, and even offers banking services with a debit card. If you’re a beginner, Stash has a personalized coach tool to get you started. They charge a $1 to $2 monthly management fee, though you get a free month for signing up.
Robinhood is a bit like Stash, but gives you a little more power for frequent trades. They also have leaned into giving you more investment options, offering cryptocurrency trades. (Cryptocurrencies are digital currencies regulated and secured by encryption processes.) Trading stocks on Robinhood is free for basic users, and there’s no account minimum. There used to be a premium tier called Robinhood Gold, but now all users can access premium features for a $5 monthly fee and 5% annual interest.
Acorns is one of the most popular “spare change” apps that takes small amounts of money from your bank account and then invests it for you. Investments are commission-free, but there is a $1 monthly management charge. You can build a simple investment portfolio, or use Acorns Later to build a retirement fund from the app.
Offering “passive investing on autopilot,” Wealthfront uses your money to build a portfolio of low-cost index funds meant to encourage steady growth and minimize risk. Their big calling card is their “Robo-Advisor,” which manages your money and reduces taxes via Tax-Loss Harvesting — making sure you don’t have to pay any taxes on losses you incur in the normal act of trading. They charge a 0.25% annual advisory fee, with no trade fees.
Stockpile is an app that lets you build practice trading on the stock market by giving you a very low barrier of entry. It’s a nice choice for college students or young people eager to learn more about the market. You need just $5 to start, and you can buy fractional shares of over 1,000 stocks and exchange-traded funds (ETFs). They charge 99 cents per trade, with no monthly fee.
6. M1 Finance
M1 Finance will automatically invest your money in a portfolio that you help build and design. They also allow you to open up a line of credit through their app, and will soon offer digital banking as well.
7. TD Ameritrade Mobile Trader App
For serious traders, the TD Ameritrade Mobile Trader App lets you access the power of their investing platform right on a smartphone. You can build customizable charts, get alerts, and receive live text support from trading specialists. For serious day traders, it’s a powerful tool.
If you have a retirement account like a Roth IRA or 401(k), or personal accounts with Vanguard, their mobile app lets you check in and manage all of them from one place. You can review retirement investment accounts, change up your investing plan, and more.
Frequently Asked Questions
Now that you’ve gotten a better idea of the different kinds of investing apps available to you, let’s get to some frequently asked questions about using them.
1. How much money do I need to have to start investing with an app?
It entirely depends on the type of app you want to use. Apps like Robinhood don’t require a minimum balance, while Stash and TK require you to start with a $5 account balance. If you want to take advantage of an app like the TD Ameritrade Mobile Trader App, you’d probably need a minimum investment in the hundreds to justify the fees and make it worth your while.
2. What fees should I expect?
Each app offers different fee structures. Some offer a management fee to maintain your account. Others, like Robinhood, will only charge a fee to give you access to specialized tools. An app like Stockpile will forgo a monthly or annual fee to manage the account, but charge trading fees of 99 cents.
3. Is there a good online primer for the difference between stocks, bonds, mutual funds, etc.?
You bet there is. If you want to learn about the difference between stocks, bonds, ETFs, mutual funds, cryptocurrencies, Investopedia has a fantastic guide to understand the basics of investing. We also have a guide to investing for beginners that’s a fantastic resource as well.
Grow Your Wealth With Investing Apps
Investing apps exist to make growing your money easier. The best investment apps are user-friendly, allow new investors to easily get started, and cost a fraction of what traditional stockbrokers charge. Knowing which ones are the most reliable and efficient will give you the power to grow your money in a smart and fun way right from your phone.