Investment apps have blown up recently, with tons of new options coming to market. These apps can make it easier for you to manage your finances while introducing you to the stock market and alternative investment opportunities, like real estate. In this article, I’ll show you the best investment apps available today.
Best for Investors Looking for an Easy-To-Use Robo Advisor: Betterment
Betterment, the first robo advisor that was made available to the investing public in 2008, uses an algorithm that develops customized investment portfolios for you, based primarily on your risk tolerance and investment horizon.
Betterment has the goal of saving you money on taxes and they focus on this more than any other service. In fact, they’ll automatically do tax-loss harvesting on your taxable investment accounts. But unlike some other robo advisors, Betterment includes an asset allocation strategy. This helps you if you have retirement and taxable investment accounts. This algorithm ensures that your portfolios are set up in the most tax-efficient way possible between all accounts. So if you’re looking for a high return after taxes, Betterment is a great option.
Betterment charges 0.25% in management fees, which is right in line with other major robo advisors. One nice feature is that Betterment doesn't require you to have a minimum balance. This means you can start investing with $10 if you'd like.
With Betterment, you're able to choose between a premium or a digital portfolio. A premium portfolio allows you to speak with certified financial planners on the phone and receive guidance on your investment accounts outside of Betterment, 24/7. The only downside is that you'll need $100,000 or more to get a premium portfolio. In addition, it has a higher management fee of 0.40%.
Pro: You can get started with just $10.
Con: It's not the best option for investors who prefer to pick their own stock.
Best for Investors Who Just Want to Set It and Forget It: M1
I’ve basically developed an app-crush on M1 (is that a thing?). In all seriousness, M1 Finance has a lot going for it. You can invest in fractional shares (few places do this anymore), set up auto-deposits, and buy stocks without commission.
So, if you want an easy way to build a broadly-diversified portfolio that includes both ETFs and stocks, and do it for free, M1 might be the way to go. Their app is slick and intuitive, and it’s super easy to build a diverse portfolio just the way you want it. Plus, when you make deposits, the app will automatically allocate resources where you want them, so you can maintain the portfolio mix you want.
For example, if your portfolio has 10 different stocks and you’ve allocated 10% of your money to each of them, you just deposit money into your M1 account and the app will divide that deposit appropriately so you get your 10% into each stock. Plus, it’s all done for free. Not too shabby, eh?
What’s also nice is you can pick one of M1’s pre-allocated portfolios, too. This way, you don’t have to mess with trying to pick your own individual securities. M1 can do it for you.
Pro: No fees when you meet the low minimum qualifications.
Con: No professional advice available.
Best for a Big Picture View of Your Overall Financial Well-Being: Personal Capital
Personal Capital is a little different. They have a high minimum balance requirement to invest, but we’ve found the tools within their platform to be pretty amazing. You’ll need at least $100,000 to invest with Personal Capital--but that gets you a hybrid investment model of both robo advisors and human advisors. Also, if you deposit over $200,000, you’ll get access to a personal, dedicated financial advisor. The management fee is a bit high (0.89%), but you can pay as low as 0.40% if you have sufficient deposits (though I wouldn’t count on it if you’re a new investor).
So why the heck am I recommending Personal Capital if they’re so darn expensive? Because you get financial planning tools that you can’t get anywhere else and are simply stunning. This includes a spending tracker, progress on your retirement, the performance of your overall portfolio, a net worth tracker, and so much more. Plus, the graphs are beautiful. On top of that, Personal Capital has a new tool that allows you to predict what your withdrawals would/should be once you hit retirement. This allows you to keep yourself on track with your investments today. Finally, Personal Capital recently introduced Personal Capital Cash, a high-yield savings account to keep your un-invested money at a higher interest rate than you’re probably getting with your traditional savings.
Pro: Excellent financial planning tools and beautiful dashboard.
Con: High minimum balance to invest.
Best for Beginner Investors Looking for a Robo Advisor: Wealthfront
I personally use Wealthfront (switched over from Betterment) and I find it to be an incredibly useful way to build wealth without having to think about it. The app is super-clean and easy to use. It also has algorithms built-in to help you get the most out of your investment portfolio. I’m able to adjust my portfolio based on my current level of risk tolerance (and many other factors, like my current income).
One of the first things you do when you sign up for Wealthfront is to link the accounts that you use most for spending. The app will then analyze your spending patterns to learn more about how you handle your money. If it sounds scary, it really isn’t. In fact, it’s a more advanced way of creating a personalized investment strategy for you, based on how you spend and create goals. Wealthfront then invests your money in about 11 different ETFs and rebalances it whenever necessary to maintain the correct portfolio allocation for you. In addition, one of the main reasons I switched to Wealthfront is the 529 College Savings Plan it offers–which is unique to this robo advisor. Some of the other nice features I’ve taken advantage of with Wealthfront are the advanced and direct indexing, as well as tax-loss harvesting.
The first $10,000 you invest with Wealthfront is completely free. That's a great deal for a robo advisor. Once you cross $10,000, you'll pay 0.25%, just like Betterment. One difference between Betterment and Wealthfront, however, is the $500 minimum balance requirement. Though if you don't have $500 to invest, I'm not sure you should be investing at all (meaning, a savings account is probably better to start).
Pro: Offers a 529 savings plan
Con: More advanced portfolios are available to investors with at least a $100k minimum.
Best for Turning a Non-Saver/Investor Into a Saver/Investor: Acorns
Acorns has been around for quite a long time. But it’s still on our list because of how simple and intuitive it is. What I love about Acorns is the raw set-it-and-forget-it factor. Once you get an account set up, you really don’t have to do much. Acorns does it all. You simply link your credit or debit card to your Acorns account and the app will round up any new purchases you make to the nearest dollar and invest it. So, for instance, if you buy a coffee for $3.50, Acorns will round that purchase up to $4.00 and put the $0.50 difference into an exchange-traded fund (ETF) for you. You can start for as little as $3 per month, and you can get a bunch more features as you upgrade your account level.
For instance, Acorns Later, which is included with their Personal and Family accounts, gives you access to either a Traditional IRA, Roth IRA, or SEP IRA. This is a nice feature to give you the ability to put money toward retirement. You can also roll over another IRA or 401(k) to Acorns Later--which makes it even more enticing, especially if you’ve recently left your job and want to move your money somewhere. As I mentioned, it’s pretty hands-off from there. Acorns simply selects a portfolio for you based on things like lifestyle, goals, and age. That means it will be more aggressive when you’re younger and become more conservative as you get closer to retirement.
If you're looking for an app that does everything for you once you set it up, this is the one for you. All you have to do is open an account and link your debit or credit card and Acorns does the rest.
Pro: $3 monthly fee
Con: The annual fee can be high for small portfolios.
Best for Saving Money on Investment Fees: Robinhood
If you've ever read Robin Hood (or seen the cartoon movie on Disney if you're a millennial like me), you probably know that his whole deal was taking from the rich and giving to the poor. That's kind of how Robinhood's philosophy goes (the app, that is). They want to encourage people to start investing without charging them.
Robinhood lets you buy stock for free. And no, that doesn’t mean “free*” as you see on so many advertisements that ultimately hit you with some hidden surcharge. Free is free. Robinhood lets you buy stock without paying a dime in commission. I actually just signed up for Robinhood and it was super simple. You just download the app, link your existing checking account and fund your Robinhood account, and you’ll start trading right away. You can also upgrade to Robinhood Gold, which allows you to trade on margin and have access to extended trading hours. For most investors, though, you won’t really need this.
I like to think of Robinhood as a barebones online stockbroker. You only invest in the app and there certainly are no physical locations. It’s just a cheap way to buy stock. They can do this for the same reason other online brokers can, only Robinhood does it at a much lower cost since they don’t have offices, a huge staff, or other overhead to pay. You’re probably wondering how the heck does Robinhood make money. Robinhood gets its primary sources of revenue from interest on cash balances (if you don’t invest it) and customers who upgrade and pay for Robinhood Gold.
Pro: It's a cheap way to buy stock and there's no minimum balance.
Con: It's not as advanced as other investment tools.
Best for Diversifying a Portfolio With Real Estate Investing: Fundrise
While the other apps on this list focused primarily on the stock market, Fundrise is our favorite option for real estate investing, especially via the app.
Fundrise gives you the ability to invest in large-scale real estate projects through crowdfunding. According to their site, average returns range from 8.7% to 12.4%. This is a great way to get into real estate without investing a ton of money (or having to manage a physical property). Whereas many other real estate investment platforms online only allow access to accredited investors (which usually means you have a high net-worth or SIGNIFICANT deposits), Fundrise is available to everyone, regardless of your net worth or cash balances.
They offer REITs (real estate investment trusts) and, in addition, a few options for more balanced investing. It’s also simple to receive expert advice on your investing strategy through Fundrise.
So if you’re looking for an app that will help you diversify outside of the stock market, Fundrise might be your best option. One thing to remember, though, is that real estate isn’t as liquid as stock. Meaning, that if you change your mind and want to sell, it might be a lot harder to sell your shares in a real estate investment than it would be to unload some GE stock. In fact, Fundrise will charge a fee to exit before five years in most cases, so you need to have a long-term focus when you’re investing with this app.
Pro: Available to everyone, not just for accredited investors.
Con: Investments are not as liquid as stock so this is for long-term investors.
Best for Simple Investing: Ally Invest
Ally Invest is a new investment service (and app) offered through Ally Bank, which has already been making waves in the financial industry. Ally Invest is suitable for investors with a lot of experience as well as newbies. In fact, they have a ton of educational material to gobble up and their fees are pretty cheap. And by cheap, I mean free. Their Self-Directed trading option has no commission fee on U.S. listed stocks and ETFs, while their Robo Portfolio option has no advisory fees. Robo Portfolio is similar to a robo advisor and includes a broad mix of ETFs. Both account types come with a wide array of investment choices, making them ideal for anyone wanting to invest.
To go a little further (and the reason we put it on the list), Ally Invest has options you can’t find in many other places. For example, the Self-Directed Trading option is geared toward the DIY investor, and also features no commissions on options trades with just $0.50 per contract. This is an excellent value for people who want to go at it on their own. And for the Robo Portfolios option, you can get started with as little as $100 and choose from one of four portfolios; Socially Responsible, Tax-Optimized, Core, and Income. Whether you’re an Ally Bank customer or not, I strongly suggest looking into Ally Invest. They have competitive pricing and plenty of options for any level investor.
Pro: Excellent educational resources available.
Con: Lacks advanced reporting and other features found on other trading platforms.
With new options coming out all the time, you may feel pressure to find the latest app that is available in the App Store. My recommendation is to hold off until an app gains more momentum, support, and works out any bugs. These apps have all been vetted so you can feel confident moving forward to find the one that fits best for you.