The best investment apps for beginners in 2021
If you’re new to the world of investing, it can be a bit overwhelming. Not only do you need to figure out what you want to invest in, but you’re probably also wondering what the best investment apps for beginners are in 2020 are. We’re going to compare a selection of the most popular apps out right now to help you decide where to get started.
Ever felt like investing required some kind of secret manual from a library you don’t have access to?
Investing used to be pretty inaccessible to the average person. For most of the 20th century, the world of financial products was reserved for those who understood complex financial products and knew how to read the charts. Or the ones who had the capital to hire someone to do it for them.
Now, apps have helped break barriers by minimizing the work and research you need to know to get started in investment. And many apps operate with almost zero fees. We’re going to tell you which investment apps you should be looking at today.
How do investment apps work?
Before the dawn of investment apps, you had to use complicated brokerage services (which required some prior personal knowledge) or consult a wealth manager, which usually was quite pricey.
Fintech investment apps have made everything simpler for beginners. Back when financial products were the domain of a small group of elites, no one had to worry about making stock charts easier to read or breaking down technical jargon to newcomers.
Apps care about being useful to everyone. They are often streamlined to only include essential information and even feature educational resources. You can’t fit a classic stock chart on your phone screen too easily.
But just because investment apps are easy to get started on doesn’t mean you shouldn’t be careful. Many big apps like Robinhood have faced criticism for failing to adequately explain how some of their tools work when investors learned how margin works the hard way.
Successful investing always requires some planning!
Now onto some apps.
Types of investment apps
Not all apps are made equal — they all have slightly different focuses.
Here are a few of the main types:
- P2P apps let you take out loans, invest, and access secondary market orders in a peer-to-peer marketplace.
- Robo-advisors take the role of a wealth manager or financial advisor by giving automated investments using algorithms.
- Micro-investing apps help you manage smaller amounts of money by advising you on budgeting, savings goals, and investing.
- Stock/crypto trading apps make it easier to trade stocks or crypto on a highly liquid market with minimal fees.
Many traditional brokers — like Fidelity and Charles Schwab — have their mobile apps. There are also sites like MyConstant that operate both online and through an app.
Which investment app is best?
Just like picking a typical investing platform, choosing the right investment app for you is ultimately a personal choice.
Still, no matter what kind of investor you are (or hope to be) you should find that one of the options below suits you.
Type: In-app P2P investments
Fees: $1 fee for stablecoin withdrawals (expect for DAI), 2.5% matching fee for borrowers
On MyConstant you invest in crypto-backed loans. You give loans to borrowers who put down cryptocurrency as collateral and pay you back returns up to 7%.
Meanwhile, the Flex account lets you earn 4% while having access to unlimited withdrawals whenever you want them.
- All features can be accessed on the app (including secondary markets)
- Minimal fees
- Very decent returns on investment
- Full Plaid integration on the app for bank transfers
- No FDIC insurance
Type: In-app P2P investments
Fees: Annual fee of 1%
LendingClub is another prominent P2P investment site. It started as an online-only platform but has since launched an app for its investors.
On LendingClub you invest in P2P loans that aren’t backed by collateral. Instead, borrowers are given different interest rates based on how likely they are to default.
- Can link accounts like IRAs
- Established platform with many years of service
- App has a simple and intuitive interface
- Requires a minimum income level to invest
- Long investment terms
- No secondary market access
Type: Stock trading app
CashApp began as a popular app for sending cash to friends and family, but it’s since diversified into stock trading too.
It’s a lovely, easy-to-use platform that’s been widely downloaded and promoted by the likes of Cardi B and Lil Nas X. On the app, you can instant purchases of various stocks (including fractional shares) via a brokerage account. You can even buy crypto.
However, you’ll need to research which stocks you want to buy since the educational tools are limited.
- No commission
- Easy to use platform
- Can send the money quickly and efficiently to friends
- Can only buy stocks
- Investment options are limited compared to other platforms
- Can’t link to IRAs or other accounts
Type: Stock trading app
Robinhood has taken the US by storm during the first half of 2020 due to it’s a simple approach to stock trading. It’s a great investment app with no fees aimed at beginners.
Unlike simpler stock trading apps, Robinhood offers options trading, leverage, and spreads. And some educational features to teach you about them. It doesn’t quite have a full range of products — you can’t purchase bonds or mutual funds and some stocks — but it still offers a wider variety than other apps.
- No fees
- Many investments options including stocks, crypto, and ETFs
- A simple, intuitive design
- Plaid integration for easy transfers
- Doesn’t offer retirement or tax-advantaged accounts
- Can’t buy bonds or mutual funds
- Many claim they give customers access to complicated tools without adequately explaining them.
Type: Crypto trading app
eToro is a multi-market trading app. It offers it’s signature social trading feature which allows you to “copy” the trades of more experienced investors if you’re unsure where to start. It offers cryptocurrency trading and in some countries, forex and equity trading options.
However, you’ll have to pay some trading fees, and cryptocurrencies can be difficult to understand for beginners.
- Access to various cryptocurrencies
- Offers social trading
- Can access a wide range of different investment options
- Trading fees
- Only offers crypto in many countries
Type: Micro-investing app
Fees: $1 to $5 a month
Acorns is both a micro-investing and robo-advisor app. By connecting it with your debit cards, it invests the loose change from your purchases (by rounding up to the nearest dollar). For instance, if you buy a coffee for $3.80, it will invest the spare $0.20.
This is a great option for anyone who finds it hard to save money for investing. However, you must pay a monthly fee of between $1 and $5 for your account.
- Makes saving easier and effortless
- Robo-advisors are usually safe and beginner-friendly
- It has a slick interface
- Account fees
- Not well-suited to large-sum investors
- Difficult to link your bank account and cards
Fees: 0.25% annual fee
Wealthfront provides you with tailored advice and automated robo-advisory for managing your money according to your risk preferences and saving goals.
They claim to give investors access to a wide range of options including:
U.S. stocks, foreign stocks, emerging markets, dividend stocks, real estate, and natural resources, as well as emerging markets bonds, Treasury inflation-protected securities, and U.S. government, corporate and municipal bonds.
However, you need to invest at least $500 to open your account, and there’s an annual management fee.
- Intuitive interface
- Offers a high yield savings account
- Helps you work toward long-term goals
- Works very well with taxes
- Account minimum required
- There are sometimes problems with linking accounts
- Management fee of 0.25%
- They are required to keep a certain percentage of your money uninvested
Choosing the best investment app for you
Although these apps all make investing easier, you must be financially savvy about managing your money. Take care of your savings first, do your research, and don’t invest money that you don’t have.
While returns can be great on many investment apps, they often charge fees or have stringent requirements about accessing your money. Not on MyConstant.
On MyConstant you can invest with no fees and easy access to your money.
For example: when you create an account on Flex, you earn 4% APY and can withdraw your money at any time without pesky account management fees. As for security, we look after your money by making all borrowers put down 200% of the loan value as collateral.
What could be more beginner-friendly than that?
If you’re a prospective investor, sign up now to find out for yourself. And check us out on the Google Play Store and Apple Store.
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