The Top 10 Investment Apps of 2020 for Beginners and Everyday Investors
They say the best time to get into the stock market is yesterday; today is the second-best time. Many people are interested in investing but aren’t sure how to get started. They think they need to work with an advisor or give their money to someone else. Thanks to technology, this is no longer the case. Today, there are dozens of investment apps that can help beginners and everyday investors get their toes wet in the stock market.
What are investment apps? They’re brokerages in your pocket. Through an investment app, you can set up an investment account, deposit money and buy and sell stocks. Most of them are so easy to use that any adult can log on and get started.
Last year, we picked five of our favorite up-and-coming investment apps. This year, the playing field is a lot bigger! Below are the top 10 investment apps of 2020 for beginners and everyday investors. If you’re looking to get started investing, you’ll have an easy time with any of these.
Best Investment Apps List
Index funds are one of the easiest ways for new investors to get comfortable with the stock market. Vanguard is the world’s largest provider of mutual funds and the second-largest provider of exchange-traded funds (ETFs). Vanguard’s app gives new investors access to these funds with minimal fees.
While the app interface is a bit clunky and not as sleek as some users might want, it’s hard to beat the benefits of a Vanguard account. Users of this app enjoy commission-free trading and low management fees on ETFs. There aren’t any service fees and you don’t have to worry about maintaining a minimum balance.
You might remember the talking baby commercials for E-Trade in the late 1990s. The message is as clear today as it was then: E-Trade is simple enough for anyone to use. Today, E-Trade has one of the best apps on the market for new investors to get familiar with trading. Not only does E-Trade give investors exposure to many investment options, there aren’t any commissions – no matter what you trade.
One of the more important features for new investors is access to real-time insights from portfolio managers and institutional investors via feeds from CNBC, MarketWatch and Morningstar. You’ll need to keep a balance of at least $500, but for the exposure and features E-Trade provides, it’s well worth it.
Wealthfront is a carryover from our 2019 list, and for good reason: It’s the best investment app for “set it and forget it” investing. With all the automation tools Wealthfront provides, it’s easy to invest without spending hours at a time on the app. New users take a risk-tolerance quiz, which helps the app configure an investment portfolio that’s weighted according to your appetite for risk. Robo-advisor managed portfolios typically contain diversified investments across different asset classes.
You’ll need to keep a $500 balance in your Wealthfront account, and the app charges a reasonable 0.25% management fee. You can refer friends to have fees waived (until your account exceeds $5,000). One downfall is that fractional shares aren’t offered, but that’s not a major concern of newbie investors.
While other apps leverage the power of robo-investors, Round takes an active approach to managing portfolios. The app actually partners with real hedge fund investors to help investors manage their budding portfolios. While there are plenty of traditional investment options, Round broadens the scope of what assets can be traded on an investment app. The app opens the door to many alternative assets and strategies – including asset-backed securities, real estate and more.
The app charges a 0.5% management fee that may be a little steep for new investors, but there are no account minimums or service fees. Round actually waives its management fee if your portfolio yields negative returns, which presents a low-risk opportunity for beginners.
Not only does Ally Invest make picking stocks and building a portfolio easy, but new users also gain access to some great bonuses and rewards. If you can muster a $10,000 deposit to open your account, you’ll get $50 and 90 days of commission-free trading. The higher your deposit climbs, the higher the rewards go – up to $3,500! All this, plus access to tons of investing education materials and a broad assortment of assets make Ally Invest a great option.
Ally Invest recently adopted a zero-commissions stance to follow the industry. That said, you’ll still pay a small fee if you want to try your hand at trading options and there are various fees to be aware of when trading foreign stocks or OTC stocks. With a sleek interface and tremendous customer service, Ally is beginner-friendly and accessible enough to use as you become a seasoned investor.
On a cost-by-cost basis, Charles Schwab is the best investment app for stock traders – whether aspiring or seasoned. The long-time broker offers zero-commission trades like most of its competitors, alongside zero account minimums or service fees. Even ETF trades are free. You pay nothing to have a Schwab account. Combined with an intuitive mobile interface and access to industry insights, this app has everything you need to invest with confidence.
Where Charles Schwab really shines is its customer service. It’s easy to call a live person from the app if you need help or have questions. Want to invest with little-to-no effort? Check out Schwab’s Intelligent Portfolio robo-investor option.
SoFi is a new player in the market of investment apps, but one that’s growing in popularity among college kids and new graduates. In addition to stock trading on a sleek app, SoFi throws in free career counseling – a benefit of its broader business as a student loan servicer. It’s great for beginners looking at stocks and ETFs – both of which come with commission-free trades. In fact, SoFi has a zero-fee structure. It costs you nothing to open an account and there are no minimums.
The drawback with SoFi is that you won’t have access to a full scope of investment assets (no bonds or mutual funds). That said, you do have access to cryptocurrency investments, which many other apps on this list don’t offer.
Looking for a place to put all of your money? Stash is an app that embodies its name. For a low $3 monthly rate, you can manage a checking account, brokerage account and retirement account all in the same place. If you feel like dropping $9 per month, that expands to include two custodial accounts, access to investing materials and a debit card. The goal is to consolidate all of your money in one easy-to-manage app.
Stash is really for beginners. Not only is your access to stocks and ETFs limited to 150 blue chip companies and 60 stable ETFs, the ETFs are actually renamed to make them easier to understand. Stash aims to teach investing and even offers a coaching feature. This holdover from our 2019 list is a big favorite of newbies who want to learn investing in plain, simple English.
To the question “How much money do I need to invest?” Acorns answers, “Pocket change.” Acorns works by rounding any purchases you make to the nearest dollar, then depositing the difference in an ETF. Pick your ETF and watch your holdings grow over time. Everything is free until your holdings reach $5,000 – after that, it’s only $1 per month to keep growing your wealth. For an additional $1, you’ll gain access to Acorns Later, a tax-advantaged retirement account.
A new feature of Acorns in 2020 is “found money,” which rewards purchases for big-name brands with bonus deposits (usually a 5% bonus). It’s another great “set it and forget it” investing app that adds up your spare change and rewards you for buying.
Robinhood is the gold standard among investment apps for beginners. There are no fees, no restrictions and no hassles in setting up a Robinhood account. In fact, the only thing you pay for is the security you’re purchasing. Buy stocks, ETFs, cryptocurrency and just about anything else you want to invest in (no bonds or mutual funds, though) – even penny stocks on the OTC markets. The app is intuitive, beginner-friendly and easy to use.
This app is for those who want to become investors through action. There aren’t any robo-advisors or automated account options. You’re responsible for buying and selling your own securities and Robinhood gives you all the tools you need to do so with confidence. This app is so popular with beginners and seasoned investors alike that rumors of an IPO have been swirling since 2019.
Get Answers to Your Questions About Investment Apps
Have questions about using an investment app? You’re not alone. Thousands of people download investment apps each day for the first time and start their investing journey. Here are a few quick answers to some common questions most new investors have.
What are investment apps?
Investment apps are apps on your phone that give you exposure to the stock market. These apps act as brokerages, allowing you to buy and sell stocks from your account. Just open an account, transfer money in and you’re good to go. Every investment account is different, but they all have the same goal: to get you invested in the stock market.
What assets can be traded on an investment app?
Most investment apps allow you to trade the basics: stocks, ETFs and index funds. More and more apps also allow cryptocurrency trading. Some allow mutual funds and bonds; however, these are in the minority. Only a few investing apps allow you to buy and sell equity in real estate, precious metals and tangible assets. It all depends on the app.
If I use an investment app, is my money insured?
This is one of the most important questions any new investor should ask. Because a brokerage account is a place for you to store your personal wealth, it’s federally insured. While your bank account is insured by the Federal Deposit Insurance Corporation (FDIC), your brokerage account is insured by the Securities Investor Protection Corporation (SIPC). SIPC insurance protects you in the event your brokerage fails – not against investment losses.
Before you sign up for anything, ask the brokerage, “If I use your investment app, is my money insured?” If they have SIPC insurance, consider yourself good to go.
How do I use an investment app?
Another common question for newbie investors is, “How do I use an investment app?” The truth is, most apps today are intuitive. They have step-by-step processes to guide you through setting up an account, depositing money and making trades. Every app is different, and it’s a good idea to poke around the one you choose for a little while to get a feel for the interface before you make any trades.
How much money do I need to invest?
Most apps will let you invest with as little as $5 if they allow fractional share purchases. Some, like Acorns, even let you invest with pocket change. Realistically, it’s smart to have between $100 and $1,000 to open your investment account. Some apps, like Ally Invest, have minimums to ensure you’re serious about investing.
How do I choose an investment app?
If you’re still asking, “How do I choose an investment app?” consider the list above. We’ve put together this list of 10 unique apps – each with its own pros and cons – to help you make a smart, confident decision about how to get started with investing. The right app for you is sure to be on this list.
To learn more about how to out these apps to work, we suggest signing up for our Trade of the Day e-letter. It’s packed with insight from investing experts. Whether you’re new or already an experienced trader, you’ll find plenty of useful tips and tricks.