So, you’d like to take investment for a test drive, eh?
See if you like it or not before paying your buck with a financial advisor?
You’ve probably heard you can start investing as little as $5 for free, and indeed you can. It’s called Micro-investing.
The big questions are:
- What is the best investment app for beginners?
- How do I start investing with little money?
- Are investment apps worth it?
- Which app is best for investing?
And the answer is… it depends on your investment goals.
In this post, we’ll go over all the different investment apps giving you an overview of each, but first, let’s stop to ponder a more fundamental question:
How do I start investing with little money?
Investing with little money is called micro-investing.
It allows you to invest small amounts of money – as little as pocket change. It’s about making investments small enough to fit everyone’s budget.
Read this article if you want to discover more than 150 ways to reduce your spending, increase your savings, and build a fortune.
How Micro-investment Apps Work
Micro-investing apps allow you to automatically invest small amounts of money in stocks – even if you know nothing about stock markets. They funnel your extra cash into portfolios of stocks that they make for you.
The money you invest buys Exchange Traded Funds (EFTs). Micro-investing apps help you spread your risk by buying shares in various companies.
You don’t even have to read The Wall Street Journal or watch CNBC or follow stock market news. You can continue binge-watching your favorite movies while micro-investing apps do the work for you.
Why People Like Micro-investing
You don’t need a lot of money to start micro-investing. You can launch your investment fund with as little as $5 if you want.
While micro-investing won’t make you rich, the idea is to introduce you to the concept of investing with as little money as possible. Micro-investing apps will help you make that first step towards your financial freedom.
What are micro-investing apps?
Micro-investing apps make saving easier by allowing you to save money in small amounts.
Connect your debit card to your best micro-investing app, which rounds up your purchases to the dollar and makes automatic transfers for you.
Some micro-investing apps charge a fee on trades while others offer free trades until you reach a certain amount, such as $5000.
Who Should Use Micro-investing Apps?
Low cost or low/minimum account minimums are their biggest selling features.
You don’t need a lot of money or investing knowledge to start. You will find micro-investing apps useful if you’re
- A young investor without access to capital
- Inexperienced and do not want to pay commissions.
- Want to automate savings into an investment account.
- Want to develop good investment habits such as dollar-costing while resisting the urge to overtrade.
Things to Look for in a Micro-investing App
Does micro-investing sound like something that fits your lifestyle and budget?
You’ll need to select a micro-investing app that will match your long-term goals since every micro-investing app works differently.
Some apps build their portfolios, while others invest in mutual funds, and established EFTs.
However, the best micro-investing apps have a few standard features.
- Affordability– Can you afford the minimum fees? A free app is better when you are just starting.
- Low minimum balance – You’ll want an app that allows you to start investing with a minimum balance as possible.
- Portfolio variety – The app should help you reach your investment goals by providing you with a wide array of options.
Now let’s look at the best investment app for beginners in 2020
Best Micro-investing Apps for Beginners in 2020
Now you want to get your finances organized and invested. These apps will help you manage your finances and the small investments you make.
They are great investment apps for beginners because they make it easy for you to invest and stock-picking game fun.
1. Arcons for hand-off investors
Acorn is an investing app that lets you automatically invest your spare change by rounding up your purchases with your linked debit or credit card.
For example, if you purchase something for $20.49, Acorns will take the extra $0.51 and save it and invest for you once your account reaches $50.
You don’t have to choose precisely where to invest but, you’ll answer a few questions to create a financial profile and state your financial goals.
Acorns app uses your profile to build an investment portfolio for you, which ranges from aggressive to conservative.
Acorns charge a small fee but waive it if you have zero balance in your account. They charge $1 per month for balances below $5000 and $0.25 per year (divided into monthly fees) for balances above $5000.
2. Robinhood allows you to trade for free
Robinhood app enables you to trade options, stocks, EFT, and cryptocurrency for free. It’s also free to open an account, and fund transfers to your bank account are also free.
It’s also the best app for beginners because of its easy language and simple interface. It also allows you to stay on top of your investments with real-time market data.
However, Robinhood doesn’t offer investment research and guidance on your portfolio.
But, their “Collections” Section helps you discover new stocks in various categories like oil and gas, entertainment, and social networks. You will also see the average stock price and current prices, analyst ratings, and the general stock market news.
If you love social media and playing internet games with friends, then Wealthbase is the app for you.
The app marries social media and stock picking. You’ll see a feed of stocks your friends are picking with daily updates on who is winning.
You will enjoy picking stocks and playing games in a social environment with colleagues and friends.
4. Betterment gives you free access to financial advisors
Betterment investment App gives you access to professionally managed portfolios using a selection of EFTs calibrated against your risk tolerance.
When you sign up, the app gives you two options; Betterment Digital and Betterment Premium. Betterment Digital is suitable for beginners because it’s simple, with no required account minimum, and a small fee of 0.25% of your assets.
The app also allows you to set investment goals, such as retirement or safety net.
Betterment Digital also gives you access to their financial advisors through the messaging system to help you decide where to invest.
5. Stockpile best if you want to introduce kids to investments
If you’re a beginner investor, you probably don’t have $300 to buy in an expensive tech stock. Stockpile allows you to buy a fraction of that stock instead.
That’s not all…
Stockpile has the interest of every parent at heart. Those parents who want to introduce investment to their kids.
Instead of giving them a gift card that they’ll blow away in shopping, why not give a $20 gift of your favorite stock?
They can also share their wish list of stocks with their friends.
Stockpile does not charge a monthly fee but costs $0.99 for every trade.
6. Invstr turns investing into a fantasy game
Invstr gives beginning investors an easier and fun way to get into stock, especially if you like games.
It combines learning with real-life investing and a sense of community. It comes with fantasy games where you assist in managing a virtual portfolio of $200M. It also gives you access to investors’ opinions on stocks and other investments.
A fantasy game gives you a portfolio of $1M of virtual money to manage with the help of its social network and news feed for ideas. Every month, top performers win real cash.
You also have the option of turning some of the fantasy picks into real-life stakes. You can buy fractional shares from $0.99 per share or whole share from $2.99 per trade in the app.
The app is best for beginners because you learn from the investing community and learn why they pick individual stocks, all while having fun with fantasy games.
7. Public.com connects you with other investors
Public.com is an investment app that allows you to connect with other investors the same way you would with friends on social media.
It works best for beginning investors who want to learn the ropes while earning some extra money.
Interacting with experienced investors gives you an edge to start as a new investor.
The Public app bundles similar companies into themes. Themes include; women-led businesses, tech companies, or environmentally conscious businesses.
Themes help you invest in businesses that align with your personal beliefs.
8. Stash teaches you how to invest
Stash teaches beginners how to invest with as little as $5.
Once you download the app, connect it with your bank account. Stash will require you to answer some questions to determine your level of risk; moderate, conservative, or aggressive.
It also allows you to invest your money in companies with a cause you value or products/services that interest you.
Once you set your Stash portfolio, you can choose Auto-stash and determine how much to invest on a weekly or monthly basis. It could be as little as $5, even $100. Stash allows you to check your portfolio and make changes as often as you wish.
You pay $1 per month for a balance below $5000 and 0.25% for balances above $5000.
9. Vault for self- employed or freelancers
If you’re self-employed or a freelancer, you know how difficult it can be to save for retirement.
Vault allows you to open a Roth IRA, IRA or SEP-IRA account for your investments. And, SEP-IRA is particularly useful for freelancers and self-employed people.
But whatever IRA type you choose, Vault allows you to invest based on a specific percentage of your income.
Once your money hits your account, your Vault app sends you a notification to approve a percentage to your IRA account at Vault.
Vault also allows you to set automatic transfers, so you don’t have to approve all the time manually.
10. Clink helps you save with every purchase.
Clink is an investment app that helps you save every time you make a purchase. It takes money from your bank account and invests it for you in a diversified EFT portfolio.
You can schedule a certain percentage of your purchases to be added to your Clink account after every transaction.
For example, if you spend a lot on movies, you can have 10% of the bill transferred to your Clink account every time you pay for a movie.
You can also schedule regular transfers from your checking account to your Clink account.
It invests based on how aggressive you want your investments to grow.
Clink doesn’t have a minimum investment amount, but you have a daily limit of $10,000.
Clink charges $1 monthly fees for portfolios of up to $5000 and 0.25% annual fee for portfolios above $5000.
11. TD Ameritrade Mobile simplifies your investments
TD Ameritrade has no minimum required amount to start investing.
It gives you access to more than 20 educational videos to help you gain additional investing knowledge.
TD Ameritrade dropped its commission fees in 2019, allowing you to trade in online stocks and EFTs for free. You can also trade options without paying commissions but just pay $0.65 in contract fees per contract.
You can also set price alerts to receive notifications when your investment hits a specified price point.
They also have an online platform if you want to access additional features.
12. WiseBanyan gives you free access to financial advisors
WiseBanyan is an investment app that allows you to start investing with as little as $1 without monthly fees or trading fees.
After you sign up, create a “Milestone” by entering your financial goals. Your financial goals could be saving for retirement or holiday.
Then, the WiseBanyan app automates everything from your suggested deposits to rebalancing your accounts to help you achieve your goals.
Investing with WiseBanyan is free until you decide to upgrade to their premium services.
13. Twine best for couples or friends
Twine is an investment app that allows you to invest with your spouse or a friend. It teaches you the value of setting goals and teamwork.
The idea behind Twine to help you set your financial goals and start working towards them with your partner or friend.
It’s also an excellent way to save for a holiday, downpayment, or buying a significant item.
Twine recommends how much you need to save based on your financial goals and when you want to reach them.
Twine does not invest in micro-shares, instead focuses on low-cost EFTs.
You’ll need at least $100 in your account to start investing, but before that, Twine holds your money in a savings account with a slightly higher than average APY.
You pay $0.25 for every $500 invested or 0.6% annually. There is no cost to saving money in cash.
Is Micro-investing and Investment App worth it?
Many people think micro-investing is a waste of time. They believe small amounts can only have low returns.
True, you probably won’t become a millionaire investing your spare change.
But here’s the thing.
Investment apps help you set aside a few hundred dollars every year – money you would otherwise spend on unnecessary stuff. You could end up with $500 in your emergency fund by the end of the year.
It could also be your first step into bigger investments.
Micro-investing is also essential for the educational aspect of trading. It could turn you into a smarter investor in the long-run.
Micro investing encourages people to build good financial habits and learning to invest in one of those good habits worth acquiring.
Investment apps make investing approachable for people who shy away from investing because they think they don’t have much money, or they are in too much debt.
However, set realistic expectations about how you want to use these apps to build wealth. They’re merely stepping stones toward more serious investing.
Which app is best for investing?
That’s the million-dollar question, isn’t it?
You know why testing your investment knowledge with an investment app with no or minimal account balance when you’re just starting is a good idea.
You know what each investment app is all about. And now you know how much you need to get started.
So which one is it going to be?
Do you still want my honest opinion? My answer is simple…
The best investment app is whichever one will get you to stop dreaming about investing and wakes you up to start pursuing your dreams.
Review your particular needs and financial situation, and take each one for a test drive.
See which one fits your goals like a glove.
And be sure to let us know in the comments section which one you like best.
Hi, I’m Andia.
An expert personal finance & investment writer and blogger. I help people like you turn your spare time into $1000 per month or more outside of your day job.
I’ll help you identify proven side hustle ideas you can take action right away and make six figures working from home or whenever your schedule allows.