Investing may appear to be a challenging process to the novice, particularly when you have a limited budget to work with. But with the emergence of investing apps, it is now simpler than ever to put your toes into the waters of stock market investments. The platforms enable you to begin with a small amount of money, sometimes as little as five dollars, and thus they are affordable to even the low-income earners.
In this article, I will share 9 of the best cheap investing apps that are suitable to first-time investors. I will give you a detailed description of each app, its features, costs, and user experience, so you can make a wise choice of which one best fits your needs.
So, let us get to it!
1. Ally Invest
Ally Invest is a popular online brokerage firm that is characterized by competitive prices and an easy-to-use interface. It is especially attractive to novices because it has a low minimum investment and strong educational tools.
Features:
Extensive Investment Choices:Ally Invest has a wide variety of investment products, including stocks, ETFs, options, mutual funds, and bonds.
No Minimum Deposit: You can start trading with a minimum of 5 dollars.
Educational Resources:The platform offers in-depth guides, videos, and webinars to educate new investors.The mobile application is user-friendly and simple to navigate, and it is convenient to control your portfolio wherever you are.
Customer Support: Ally Invest offers a responsive customer support team that can be contacted through phone, email, and chat.
Fees:
Stock Trading Fees:
charges a fee of $4.95 per trade, although it is currently offering the first year of free trades.
Options Trading Fees: The cost of options trades is 6.95 per contract.
Mutual funds and ETFs: No transaction fees to buy or sell mutual funds and ETFs of more than 140 providers.
Pros:
- Low prices, particularly when free trades are offered.
- Comprehensive beginner education.
- No minimum account size, which means that anyone can start investing, no matter how much they have to invest.
Cons:
The free trades are only on the first year after which the standard fees will be charged.
2. Acorns
Acorns is a micro-investing application that aims to make the process of investing available to all people, even those who have small sums of money. It rounds off your purchases to the nearest dollar and invests the remainder in a diversified portfolio.
Features:
Micro-Investing: Acorns rounds up your daily purchases and invests the spare change in a diversified portfolio.
Diversified Portfolios: Your portfolio is diversified across different asset classes depending on your risk tolerance and financial objectives.
Retirement Accounts: You can open an IRA or Roth IRA with Acorns.
Mobile App:The application is not complex, and it is easy to navigate with clear images.
Educational Tools:Acorns has articles, videos, and podcasts to teach users about personal finance and investing.
Fees:
Monthly Subscription Fee:1 dollar a month on accounts less than 5,000 dollars. Accounts with more than 5,000 dollars will be charged 0.25 percent of assets per year.
IRA Accounts: An extra 2 dollars a month or 0.25 percent a year on IRA accounts.
Pros:
- Convenient means to begin investing with minimum effort.
- Automatic diversification lowers risk.
- Educational information assists the user to learn about financial concepts.
Cons:
- The fees may accumulate over time and may increase as your account balance increases.
- Little control over personal investments.
3. eToro
eToro is a social trading platform that enables its users to copy the trades of more experienced investors, which makes it a good choice of those who want to learn by copying others and reduce the risk.
Features:
Copy Trading: Users are able to copy the trades of other profitable traders.
Social Features: A social feature where you can meet other investors and exchange ideas.
Besides the common stocks and ETFs, eToro also provides cryptocurrency trading.
Virtual Portfolio: You can train trading with a demo account before you invest real money.
Educational Content: eToro offers tutorials and webinars to enhance the trading abilities of the users.
Fees:
- Deposit Fees:There are no charges to deposit money.
- Trading Fees:The spreads and commissions differ according to the asset type.
- Copy Trading Fees: 15 percent performance fee on profits made on copied trades.
Pros:
- Community and collaboration are encouraged by social learning environment.
- Wide selection of tradeable assets, including cryptocurrencies.
- Practice mode enables the user to experiment with strategies without losing actual money.
Cons:
- Copy trading may be expensive when you are not cautious.
- The social aspect might be too much to handle by some users.
4.Robinhood,The commission-free stock trading app
Robinhood is a very popular and user-friendly investing app that is especially suitable to those who want to start with small investments.
Robinhood was launched in 2013 and became popular due to its commission-free trading and easy-to-use interface. This is what makes it a perfect platform to those who wish to test the waters of stock trading without having to worry about the high fees.
Key Features:
No Commission Charges: Robinhood is one of the few platforms that do not charge commission on trades. This implies that you can trade stocks, options, ETFs, and cryptocurrencies without incurring additional costs.
This is especially useful to investors who intend to trade frequently or are new and do not have a lot of money to invest.
Easy to use interface: The interface of the Robinhood app is user-friendly and makes it simple to navigate through the various investment options.
The dashboard shows you what is happening in real-time to your portfolio, recent trades, and market news. The ease of use of the interface makes new investors comprehend and handle their investments better.
Diversity of Investment Options: Robinhood began as a stock trading platform, but has since diversified to provide a wide range of investment options such as options, cryptocurrencies, and even some more complex financial instruments like futures contracts. This variety enables users to view various kinds of investments and diversify their portfolios.
Educational Resources: Robinhood provides educational resources, including articles, videos, and webinars, to guide new investors on the fundamentals of investing.
The resources include how to read a stock chart, the various types of investments and a good foundation to those who are new to the market.
Stocks and Fractional Shares: Robinhood also allows the purchase of fractional shares. This implies that in case you do not have sufficient funds to purchase an entire share of a company (such as Apple, which may cost hundreds of dollars per share), you can still invest in a fraction of a share.
This makes investing more democratic, as it provides individuals with smaller budgets with an opportunity to invest in the stock market.
Pros:
- No commission on trades.
- Easy to use interface.
- Broad choice of investment opportunities.
- Learning materials to novices.
Cons:
- Weak customer service.
- There are certain security and privacy concerns.
- Possibility of high-frequency trading algorithms which are not necessarily beneficial to the user.
5. Personal Capital: A Holistic Financial Planning App
Personal Capital is one of the most popular investing apps because it is a comprehensive personal finance management tool.
Whereas Robinhood is a trading-centric platform, Personal Capital takes a more comprehensive approach to your financial life, offering you a complete picture of your finances, including budgeting, retirement planning, and more.
Key Features:
Free Financial Dashboard: Personal Capital has a free financial dashboard where you can connect all your accounts, including your bank accounts, investment accounts, and even your mortgage. This dashboard provides a clear view of your net worth, spending patterns and investment performance.
Portfolio Management: Personal Capital offers powerful portfolio management tools to those interested in investing. It automatically rebalances your portfolio according to your risk tolerance and investment goals so that your portfolio is optimally allocated.
One of the most impressive aspects of Personal Capital is its retirement planning tools. The app makes it easy to estimate how much you need to save in order to retire, how much you need to save each month in order to achieve your goals, and even suggests how to maximize your Social Security benefits.
Financial Advice: Personal Capital also provides personal advice on financial matters, but this service is charged. The first consultation is however free and you can get professional advice without paying anything.
Budgeting and Expense Tracking:The app also has an expense tracking and budgeting feature that can help you monitor your spending and find areas where you can reduce your expenses.
Pros:
- Free portfolio management and financial dashboard.
- Extensive retirement planning capabilities.
- Professional financial advice.
- Expense tracking and budgeting.
Cons:
- Premium services are paid on a monthly basis.
- Restricted trading functions in comparison with special trading platforms.
6. A Multifaceted Trading Platform: A Multi-Faceted Trading Platform
Another strong investing app is the one provided by the company called Hull. It provides a combination of trading and educational features.
It is made to suit both novice and advanced traders and offers a variety of tools to assist them in increasing their wealth. Having a user-friendly interface and a competitive pricing, Hull is a good choice to start small.
Key Features:
No Commission Charges:Webull does not impose commission charges on stock purchases. This is why it is a great option when it comes to investing without paying extra fees. Also, Webull provides commission-free options trading, which is an important advantage over many of its competitors.
Advanced Charting Tools: Webull offers advanced charting tools and technical analysis capabilities that are usually available in more costly platforms. These tools enable users to study market trends, develop their own indicators, and use different types of charts to display the data.
One of the most outstanding features of Webull is its paper trading account. This option allows one to train trading without losing actual money. This is priceless when it comes to novices who are keen to get acquainted with the trading process before risking actual money.
Real-Time News and Research: Webull has incorporated real-time news and research reports within the application. This means that users can access current information about companies and market trends to make informed investment decisions.
Besides the standard trading instruments, Webull has a high-yield savings account. This aspect enables users to gain interest on their cash as they await to invest in the market, and it serves a two-fold financial tool.
Pros:
- No commission on stock and options.
- Sophisticated charting and technical analysis.
- Practice account in paper trading.
- Real-time integration of news and research.
- High-yield savings account.
Cons:
- No customer support other than email.
- There are complaints about the interface of the mobile application.
7. SoFi Invest
SoFi Invest is an all-in-one platform that provides active and passive investing. The app is easy to use, which makes it accessible even to the novice investors. The low minimum investment requirement is one of the most impressive features of SoFi Invest that enables users to invest as little as $5 per trade.
Key Features:
Minimal Minimum Investments: SoFi Invest has a minimum investment of only $5 per trade, which is a very low minimum investment. This is what makes it a perfect option to a novice investor who would like to test various investment strategies without risking a lot of money.
Robo-Advisor Services: SoFi Invest also provides robo-advisor services to investors who want a passive investment strategy. It is an algorithm-driven feature that generates and maintains diversified investment portfolios depending on your risk tolerance and financial objectives.
SoFi Invest also focuses on education of its users. The platform offers a wide range of resources, such as webinars, articles, and interactive tools, to educate investors on market trends, investment strategies, and financial planning methods.
Various Investment Opportunities: SoFi Invest offers a wide range of investment opportunities, including not only stocks and ETFs but also cryptocurrencies, including Bitcoin and Ethereum. This wide selection of investment choices enables the user to invest in various asset classes and create a diversified portfolio.
Advantages and disadvantages:
The low minimum investment requirements ofSoFi Invest make it a good option to consider by beginners.
Moreover, the robo-advisor service provides an easy method of investment management that does not demand a lot of knowledge and time investment.
disadvantages:
Although SoFi Invest is broadly regarded as user-friendly, it may be overwhelming to absolute beginners as the platform offers a wide range of features and options. Additionally, there are complaints about the responsiveness of customer support, which may be a disadvantage to people who need prompt attention.
8. Stash
Stash is another well-known investing app that targets those who want to begin with a small amount. Stash also has a low minimum investment of only $5 and it enables users to invest in fractional shares, which means that they can own a part of a company that would otherwise be unaffordable due to the high share prices.
Key Features:
Fractional Shares:Stash is also very attractive as it allows the purchase of fractional shares of stocks and ETFs. This implies that you are able to purchase a fraction of a company stock and not the whole shares which can be very costly to many novices.
Stash has a different way of investing as it provides users with a range of themes to invest in, including “Environmentally Friendly,” “Women Run,” and “Technology.” The themes assist users to match investments with personal values and interests.
Automated Savings Plans: Stash also promotes frequent savings through automatic investment plans. Users can also schedule weekly or monthly investments to make sure that their investments grow steadily.
Like SoFi Invest, Stash focuses on education. The app has a lot of resources, such as articles, videos, and quizzes, to educate users on investing and personal finance.
Advantages and Disadvantages:
Stash offers fractional shares and thematic investing, which makes it an especially appealing option to those who are new to investing and want to experiment with a wide range of investments at a low cost. The learning material and automated savings plans also make it more attractive to people who want to establish a good base in investing.
Disadvantages:
Although Stash is an easy-to-use platform, users have reported that the fees on the platform are a bit higher than those on other investing apps. Also, the small number of investment options that are offered under some of the themes might not be suitable to the needs of all investors.
9. Credit Karma
Although Credit Karma is best known to provide free credit score monitoring services, it has since diversified its services to include investment services following its acquisition ofPersonal Capital.
It is necessary to mention, though, that the investment services offered by Credit Karma are still in the development phase and are not yet available to a wide audience.
Key Features:
Free Credit Score Monitoring:Credit Karma is one of the most popular free credit score monitoring platforms. By connecting your bank accounts, you will be able to monitor your credit score, get notifications on possible fraud, and get personal recommendations to enhance your financial wellbeing.
Investment Services:Credit Karma now offers investment management services through Personal Capital. Although these services are not yet widespread, they give an idea of what Credit Karma is going to offer in the future in terms of investments.
Financial Planning Tools: Credit Karma has a variety of financial planning tools, such as budgeting trackers, retirement calculators, mortgage and loan calculators. These tools assist the user to have a clear picture of their financial status and plan to achieve long-term objectives.
Advantages and Disadvantages:
The advantage of Credit Karma is that it has a powerful credit score tracking and financial planning feature. The acquisition of Personal Capital investment services has potential to bring the services of Credit Karma to more people.
The transparency and ease of use that the platform has maintained has ensured that it remains a reliable brand in the financial services industry.
Disadvantages:
Credit Karma is a relatively new player in the investment market and its investment services are still under development and may not be available to all users yet.
Also, the emphasis of the platform on credit monitoring and financial planning might not be enough to satisfy investors who want to be guided on all aspects of investing.
Regardless of whether you are a complete novice or an experienced investor who wants to diversify your portfolio, there are a lot of cheap investing apps on the market today. Each of SoFi Invest, Stash, and
Credit Karma has its own features and advantages that may suit various investment requirements and interests. With an initial investment of only $5, you can start to create a strong investment base and can potentially increase your wealth in the long run. It is important to note that the secret to successful investing is not only selecting the right platform but also being informed, having clear goals and being disciplined in your investment strategy.