Building an investment portfolio that can help safeguard your financial future and retirement is imperative. However, a lack of knowledge, fear of the stock market, high commissions, and lack of initial capital often cause many people to avoid taking action.
The emergence of beginner-friendly investment apps has somewhat levelled the playing field, demystifying the stock market and allowing novices with minimal funds to start building toward a better financial future.
Here’s a look at four of the best investment apps for beginners, each with unique selling points, that can get you in the game right from your phone.
Created with the beginner in mind, Robinhood allows users to trade ETFs, stocks, cryptocurrencies, and options commission-free, meaning you don’t pay any fees for each trade.
Robinhood is extremely popular with Millennials just starting out: 80% of its users fall into that age category. With an easy-to-use interface, the app is ideal for novices who might be overwhelmed with investment data and strategies.
There is no minimum deposit to get started, although the $5/month subscription, Robinhood Gold, requires a minimum account holding of $2,000. The Gold service allows users to trade pre and post markets and also grants access to Morningstar research reports and margin trading, which includes the option of interest borrowing from Robinhood.
Once investors become accustomed to trading, they may find Robinhood somewhat limited due to its lack of fundamental metrics and charting, but for the green trader, it’s a great place to start.
For beginner investors who are looking for a hands-off approach to investing, M1 Finance is undoubtedly one of the market leaders.
M1 Finance allows users to completely automate their investing, and it’s completely free—no fees, no charges. With a range of ETFs and stocks to invest in, all you have to do is create a “pie,” deposit funds, and let M1 Finance automatically rebalance your portfolio. From there, you simply have to keep making contributions; M1 functions as the autopilot for your portfolio.
Pies are essentially portfolios on the M1 platform, and users can create an unlimited amount of pies, meaning you can have different pies for different financial goals, whether it’s for an income stream or retirement.
For beginners who have no idea what to put in their pies, M1 Finance offers “expert pies.” Created by securities professionals, these prebuilt pies have already been designed for various investment goals and are free to use.
Another cool feature of the M1 app is the ability to invest in fractional shares, allowing investors with less money to invest in as little as 1/10,000th of a share. The app also has built-in tax efficiency tools and dynamic rebalancing functions so you don’t need to be actively buying and selling shares yourself.
Members need just $100 to get started on M1 Finance, while retirement accounts require a $500 deposit.
Putting a whole new meaning on “keep the change,” Acorns does exactly that: the app takes your spare change and places it into an investment account, allowing you to begin building a portfolio from pennies.
When users register with Acorns’ Invest the Change service, they link their debit or credit card, or PayPal Wallet, to the app and select automatic roundups. For example, if you choose to round up to the nearest dollar and spend $45.50 on groceries, Acorns will take the $0.50 and place it into your portfolio.
Acorns then invests your money in one or more of five portfolio templates ranging from “Conservative” to “Aggressive.” When signing up, you answer a few questions about your financial goals, and the app determines how and where to invest on your behalf.
With over 7,000 stocks and bonds to choose in building your portfolio, each of Acorns’ portfolio templates have been created by experts and overseen by Nobel Prize-winning economist Dr. Harry Markowitz.
There are no commissions or fees, and the standard Acorns Lite account costs just $1 a month. The next stage up is Acorns Personal, which for $3 a month includes all the features of Acorns Lite plus retirement planning, a checking account, debit card, bonus investments, and money advice.
As one of the only micro-investing accounts that allows people to automatically invest their spare change, Acorns is a good option for those who want to get started with investing quickly and painlessly.
Fundrise is an investment app that offers users the opportunity to invest in real estate through crowdfunding.
Users need not have hundreds of thousands of dollars to invest in property development. Instead, for a minimum deposit of $500—an extremely low bar for this type of investing—people can invest in a percentage portion of real estate alongside other investors.
No prior knowledge of the real estate industry is required, as Fundrise does all the research and heavy lifting. Using its team of experts, Fundrise invests users’ money into one or multiple real estate investment trusts (REITs), which in turn invest in income-generating properties.
Fundrise has four investment plans depending on your financial goals, all of which come with varying degrees of risk and expected returns. There is a fee of 1% and potentially some fees associated with loan origination, but there are no hidden charges or front-load fees.
Many expert investors believe that real estate investments can be a good choice for a diversified portfolio, and Fundrise is a low-cost, easier way for people to get involved in the game, even when they have relatively little to invest.