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best investment apps for beginnersWith dozens of trading and investing apps currently on the market, it can be tricky to separate the good from the bad. To help you find the right one for you, we put together this list of the best investment apps for beginners in 2018.

Our Editorial Team has researched all of the top investing apps available, and evaluated each one in several different areas in order narrow this list down to the five that we think will help you the most.

Everyone’s financial situation is different. We all have different goals, amounts to invest, tolerance for risk and knowledge about investing.

At DollarSprout we know what we like, but we’ve also asked around to see what other apps people in the personal finance community are using to invest their money online.

Whether you have lots of extra money to invest, or just want to get started with a small amount of money, you should be able to find something useful for you on this list.

Note: Before you start investing, you should already have a monthly household budget and a plan in place to pay off your debt, if you have any.

Best for: Beginners

Fees: $1/mo

Min. Deposit: $5

Stash Invest was chosen as one of the best investment apps of 2018 by DollarSprout

Don’t know the first thing about investing? No worries — we all have to start somewhere.

Stash is a simple investing app that makes it easy to start putting money to work, even if you’re only looking to invest small amounts of money.

What we like most about Stash is how the app explains investing in a way that you can actually understand. You won’t need a college degree in finance to understand what’s happening with your money.

How does Stash work?

• You open your account with as little as $5.

• Stash allows you to invest money online by letting you choose from 30 different investment “themes”; pick from the best options for your goals, interests, and beliefs. For example, one of the themes is “Clean Energy”.

• Each theme includes a group of companies to invest in rather than just one. This helps reduce your risk.

• Each week you can make a small automatic deposit into your Stash account to invest (even just $5 a week is smart).

• Over time, you should see your investments begin to slowly grow.

One of our staff writers, Olaf Strom, is a huge Stash fan. Here’s what he had to say about it:

“I love how I can automate my deposits and investing so I don’t have to think about it at all. I started with something small, like $20, and it’s grown to just north of $1,000.  It’s a little addicting, actually! I have to resist the urge to keep checking it daily to see if my balance has went up.”

Many investment services charge high fees, but he says Stash’s $1 monthly fee is perfect for him. “Keeping fees low is really important — that’s how my investments are able grow as much as possible.”

Pros and Cons of Stash

Pros

  • Low account minimum
  • Ability to buy fractional shares
  • Unique investments based on values & beliefs

Cons

  • Fees can be high (percentage wise) on low balances
  • No management option
  • High ETF expense ratios

2. Best App for DIY Investing: Ally Invest

Best for: Stock trading

Fees: $4.95/trade

Min. Deposit: $0

Ally Invest was chosen as one of the best investment apps of 2018 by DollarSprout

If you want a more hands-on way to invest your money, we really like Ally Invest (formerly known as TradeKing).

How does Ally Invest work?

• You choose each individual investment (stocks, bonds, ETFs, etc). There are no pre-made themes like Stash has. This means you have much more flexibility.

• You enter each individual trade and are responsible for rebalancing your portfolio on your own.

• A huge collection of educational resources

A word of caution: If you are completely new to investing, this may not be the best investment app for you. If, however, you are excited to research investments and learn more about the stock market in general, Ally Invest is a high quality platform.

Where Ally shines the most is the low cost of trades: only $4.95 per stock or ETF trade. This puts them at the top of their class among their competitors (think E-trade, Charles Schwab, TD Ameritrade, etc).

Clients have access to Ally Invest’s browser-based platform which offers quick trading capabilities, real-time streaming quotes and data, a customizable dashboard, and access to all of their tools.

Pros and Cons of Ally Invest

Pros:

  • Largest number of investment options
  • Low trading commissions
  • High quality trading platform
  • Customer service

Cons:

  • No automatic investing or rebalancing
  • Completely self-directed

3. Best App for Automated Investing: Acorns

Best for: Beginners

Fees: $1-3/mo

Min. Deposit: $0

Acorns was chosen as one of the best investment apps of 2018 by DollarSprout

Acorns is an investing app similar to Stash, with a few extra bells and whistles. You can read our full Acorns Review here.

How does Acorns work?

• Open an account in under 5 minutes, with no minimum investment required.

• Answer a few questions about your age, risk tolerance, etc.

• There are several ways to add to your account, including depositing your “spare change” (the app will round up your debit card purchases to the nearest dollar and move the extra few cents into your Acorns account).

• You can also make lump-sum deposits and use Acorns’ “FoundMoney” program, which is essentially a cash back program that works in a way that’s similar to Ebates or Swagbucks.

Pros and Cons of Acorns

Pros

  • Automatically invests spare change (this adds up over time)
  • Free for college students
  • Dividends can be reinvested
  • Built in cash back program that funnels into investments

Cons

  • On small account balances, the fees can be a high percentage
  • For meaningful results, you’ll need to invest more than just your spare change
  • High ETF expense ratios

4. Best App for Long Term Investing: Betterment

Best for: Beginners

Fees: 0.25%

Min. Deposit: $0

Betterment was chosen as one of the best investment apps of 2018 by DollarSprout

Betterment is more than just an investment app — it’s designed to be a one stop shop for all of your investing needs. It’s focused primarily on long term investing, and the platform caters to a “set it and forget it” investing style (which is perfect for beginners). You can read our full Betterment Review here.

How does Betterment work?

• Open an account in under 5 minutes, with no minimum investment required.

• Answer a few questions about your age, risk tolerance, etc. You’ll be asked about your goals and what you are investing for. 

• Based on your answers, Betterment will put together a portfolio that suits your needs. As time goes on, Betterment handles portfolio rebalancing so your asset allocation stays in line with your goals.

• If you have investment accounts outside of Betterment, you can still use the app to track all of your assets in one place.

Pros and Cons of Betterment

Pros

  • Comprehensive, low maintenance investing
  • Access to financial experts (humans) for personalized advice
  • Low management fees
  • Automatic rebalancing
  • Helpful retirement calculators and tracking tools 

Cons

  • No REITs or commodities
  • Not meant for hands-on, analytical investors
  • Cannot asset allocate with external accounts, even though it can track external accounts 

5. Best App for Socially Responsible Investing: Swell

Best for: Impact

Fees: 0.75%

Min. Deposit: $50

Swell was chosen as one of the best investment apps of 2018 by DollarSprout

Swell takes a unique approach to investing. According to their website, they are “an impact investing platform that helps you invest in high-growth companies solving global challenges.” You can read our full Swell Investing Review here.

Despite the higher than average fees, we included Swell in our list of best investment apps because of the philosophy behind their investment strategy.

How does Swell work?

 Set up your account: Select either a traditional brokerage account or a retirement account (IRA).

Pick your portfolios: Choose from six thematic portfolios and create your Swell investment mix:

  • Green Technology
  • Renewable Energy
  • Zero Waste
  • Clean Water
  • Healthy Living
  • Disease Eradication

• Link your bank and fund your account.

Pros and Cons of Swell

Pros

  • Socially and morally responsible investing
  • Straightforward fee structure
  • Direct stock ownership; no extra expense ratios
  • No trading costs

Cons

  • Management fee is higher than competitors, but not unbearable. On a $500 balance, you will pay $3.75 a year in fees.
  • Primary focus is on US small cap stocks, so volatility can be high
  • Quarterly rebalancing might not be most tax efficient strategy 

Time is on your side — if you start now

If you haven’t started investing yet, don’t fret, it’s not entirely your fault.

It’s not like we crawl out of the womb knowing what a 401(k) is or how you should start saving for retirement.

We aren’t born knowing the ins and outs of trading stocks, and basic personal finance still isn’t being taught in schools.

But to make this work, you need to start tucking away some of your money into the stock market as soon as possible. You need to start now while time is still on your side.

With any one of the investment apps listed above, it’s easier than ever to get started with investing. Even if you are a complete beginner!

The more time your investments have to grow, the more money you will end up having in retirement. That means that you need to start doing this now, even if you start small. The rise of mobile has made tracking and growing your money easier than ever.

This list has, in our opinion, the best investment apps that will allow you to realistically and responsibly invest money online.

Comparing DollarSprout’s Best Investment Apps of 2018

With dozens of trading and investing apps currently on the market, it can be tricky to separate the good from the bad. To help you find the right one for you, we put together this list of the best investment apps for beginners in 2018.
Author
Jeff Proctor

Yo! I'm Jeff. A personal finance nerd and entrepreneur at heart, I'm here to bring you all the latest cool ways to make and save extra money. I want you to get EXCITED about your money now so you can live life to the max!

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