Beyond Robinhood: 4 Financial Apps That Help Individual Investors Get Started in 2022
While Robinhood Markets Inc.
The trading app is getting all the attention, most finance professionals agree that short-term trading is not the way to build long-term wealth.
The app caused a stir last year, with its stated aim of democratizing investing, while coming under fire for fueling an online trading frenzy that burned many short-term investors.
But Robinhood isn’t the only financial app available. A host of others are available to help young savers and investors get started, giving them an inexpensive way to diversify their portfolios. Here is an overview of some of them.
What you can do: The Acorns app combines personal checking, investment, and retirement accounts in one app. The automated investment account offers a choice of different portfolios with diversified holdings designed for long-term investment. Users can invest small change from daily purchases and make daily, weekly or monthly recurring investments. Additionally, users can automatically invest a percentage of their salary. The company also offers advice on family financial literacy, investment accounts for children and a donation function for extended family members. Users can earn bonus investments from purchases made at any of Acorns’ 15,000 partner stores.
What you cannot do: Acorns does not offer day trading or access to options or margin trading. At this time, clients cannot invest in individual stocks. But in the coming months, the company plans to expand its investment offerings to also allow clients to trade stocks and certain other investments. Acorns plans to recommend that clients invest 90% of their money in the diversified portfolios it offers and 10% in stocks. Cryptocurrency is not currently available, but the plan is to include it when wallets are customizable.
Costs: Acorns is a subscription business with no hidden fees or transaction fees. Currently, customers are offered two subscription levels. Acorns Personal, for $3 a month, bundles investing, retirement, and checking, plus ways to earn more money and build financial literacy. Acorns Family, which costs $5 a month, offers all the features included in Acorns Personal, plus investment accounts for kids, family financial literacy, and gifts.
What you can do: M1 Finance app users can buy whole shares or fractions of over 6,000 stocks and exchange-traded funds to create a personalized investment plan. They can also choose from more than 80 wallets created by M1. Portfolios can be automatically rebalanced as investors deposit and withdraw money. M1 also offers a checking account and a debit card, and users can borrow from their investment account for up to 35% of the account value. Account holders must be over 18, but custodial accounts are available.
what you can’t do: Options trading is not offered. Users also cannot buy mutual funds or crypto, although there are plans to offer these features at some point. For Basic account holders, trades are processed once a day beginning when the New York Stock Exchange opens at 9:30 a.m. ET and ending when all orders have been filled.
Costs: The basic trading and savings account is free. M1 does not charge management fees or commissions. There are various fees for certain services, such as wire transfers or paper statements. The platform also offers a premium subscription for $125 per year which includes perks such as an afternoon trading window, custodial accounts, cash back on debits and checks, better payment rates. borrowing and credit card access from the platform.
What you can do: Stash is a subscription-based platform that offers budgeting tools, direct deposit, checking account, and managed investment portfolio with crypto exposure and other products based on around 3,500 investments. Fractional shares in single stocks and ETFs can be purchased. Users of the Visa Stash debit card, issued by Green Dot Bank, can get a percentage of their in-stock purchases back. When the transaction involves a participating trader listed on the platform, the shares issued are in that trader’s company; otherwise, it is a stock or ETF of the card user’s choice.
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what you can’t do: The platform does not allow real-time trading; stock trade orders and other investments are executed during four trading windows throughout the day when the market is open. Users cannot talk to a financial advisor, buy options, trade on margin, or sell stocks.
Costs: A monthly fee of $1, $3 or $9 is required to access most services. For $1 a month you get the basic wealth building services. The $3 tier also comes with a retirement account. The $9 price tag offers additional features like double stock rewards and investment accounts for kids.
What you can do: The Stockpile app offers to trade over 4,000 stocks and ETFs. Fractions of shares may be purchased. Children under 18 can have custodial accounts, although all of their trades must be approved by an adult. App users can link a basic checking account or fund their account using a debit card. There is no minimum balance.
What you cannot do: Options trading and margin trading are not available. Trades are processed once per day, at the end of the trading day. Users cannot buy stocks that trade below $3 per share, cryptocurrency, bulletin board stocks, pink sheet stocks, or certain foreign stocks.
Costs: There are no membership fees or commissions. Stockpile charges transaction fees for certain services such as domestic transfers, account transfers, paper checks and returned checks. The money comes from clients’ trading activity, specifically from its clearing house where it routes client orders, in accordance with regulatory documents.
Ms. Winokur Munk is a writer in West Orange, NJ. She can be contacted at email@example.com.
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