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The 5 Best Investment Apps for First-Time Beginners

Dan Price Updated 28-05-2020

Thanks to the growth of the web, it’s easier than ever to open an investment or trading account. The last couple of years have also seen several firms reduce their trading commissions to zero, meaning it’s also cheaper for beginners to buy stocks and funds than at any point in history.

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If you’re new to the stock market, it’s hard to know where to begin. Here are some of the best stock and investment apps for beginners.

1. Robinhood

When Robinhood launched in 2013, its decision to target millennials with commission-free trading irrevocably changed the market. In 2019, many of the world’s most well-known brokers, including TD Ameritrade, Charles Schwab, and E-Trade, finally followed suit. Today, millennials, often unfamiliar with the stock market, account for more than 80 percent of Robinhood users.

The service—which is probably the best stock app for beginners—lets you invest in equities, options, ETFs, and cryptocurrencies without paying a fee for each trade. If you pay $5/month, you can trade on margin. Remember, if you use leverage, you are taking a loan from your broker. Thus, beginners should not use this form of investment.

Robinhood has some drawbacks, however. It lacks the in-depth technical and fundamental analysis tools that you’d find on a more traditional broker’s platform. The company has also earned criticism for its practice of “payment for order flow.” Robinhood was selling real-time trading data to four large market makers and thus failed in its regulatory obligation to ensure the highest-quality trades for its users. FINRA fined Robinhood $1.25 million over the issue.

At the time of writing, Robinhood is only available in the US and UK.

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Download: Robinhood for Android | iOS (Free)

2. Betterment

Robinhood leaves you to your own devices when selecting your investments, but beginners might feel uncomfortable with that level of responsibility. If you’d like to access the benefits of investing without worrying about choosing your specific holdings, Betterment is a great option.

The company uses a robo-advisor model. When you create your account, you tell it about your preferred level of risk, investment objectives, time frames, and other pertinent information. Betterment will then automatically create your portfolio.

Betterment creates all its portfolios using global stock and bond ETFs; you won’t find any commodities or other volatile assets available. The ETFs include popular Boglehead passive investment funds such as Vanguard’s Total Stock Market (VTI) and FTSE Developed Markets (VEA). A selection of bond ETFs are also available, such as the popular high-yield corporate bond fund, HYLB.

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You can use Betterment to open regular taxable investment accounts, IRAs, 401Ks, and even checking accounts.

The app is only available to residents of the United States. The service has an annual fee of 0.25 percent of your account balance, which is $25 for every $10,000 invested. If you want on-demand access to Betterment’s team of CFP professionals, you can opt to pay 0.4 percent instead.

Download: Betterment for Android | iOS (Free)

3. WealthFront

WealthFront uses the same business model as Betterment; it’s an investing app for total beginners. You answer some questions about your goals, and the app advises you about your ideal investment portfolio.

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Like Betterment, your scope of possible securities is limited compared to Robinhood. The company maintains a list of nine primary ETFs across a selection of asset classes. Currently, the funds include the S&P 500-focused VTI, Vanguard’s VNQ real estate fund, and Barclays’ BND for US government bonds.

WeathFront costs 0.25 percent of your balance per year, charged monthly. You will also be exposed to the ETFs’ expense ratios, which are all under 0.15 percent.

Download: WealthFront for Android | iOS (Free)

4. Firstrade

You might be a beginner today, but if you’re serious about your financial future, you need to get your head around the ways markets work. It’s the key to clearing your debt and building your wealth in later life How to Get Rich: The Fastest Way to Get Out of Debt Imagine being debt free. No overdrawn balances or unpaid bills. There is a foolproof way of getting yourself out of debt. It starts with a plan and some discipline. Let's visit the other ingredients. Read More .

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Unfortunately, hands-off investment apps like Betterment and WealthFront won’t teach you anything. Meanwhile, services such as Robinhood are so thin on research tools that you won’t be able to learn much, even if you want to.

If you’re looking for a little more from your investment app, we recommend Firstrade. The company accepts customers from around the world and offers commission-free trading on stocks, options, and mutual funds.

Firstrade offers considerably more investment vehicles than the other apps here. There are more than 11,000 funds, a huge number of ETFs, and some fixed income products. On the downside, you can only trade securities listed on US exchanges; companies on the London Stock Exchange and Tokyo Stock Exchange are out of reach. Cryptocurrencies are also unavailable.

From a learning standpoint, Firstrade is excellent. The app offers free access to Morningstar’s stock reports and daily market analysis, Briefing.com’s newsletters, and Benzinga. There’s even an extensive in-house library of video training content that’ll teach you the basics of investing, plus an impressive amount of text-based content.

There is no minimum deposit required to open an account.

Download: Firstrade for Android | iOS (Free)

5. TD Ameritrade

No one wants to go through the tedious process of opening financial accounts unnecessarily. That’s why choosing the right account depends heavily on your goals. If you’re an investment beginner today, yet are interesting in learning and hope to become an experienced trader one day, you should consider opening an account with TD Ameritrade.

At face value, the web app and mobile app are both easy to use. However, once you gain some knowledge, you can start using the award-winning Think or Swim platform. Widely regarded as the best trading and research platform, it has vast amounts of data and charts for every stock and economic indicator you can imagine. It’s not suitable for beginners, though.

Your journey to gaining more experience will be sped up by TD Ameritrade’s impressive library of learning resources. There are hundreds of hours of video content, tests, guides, and much more. Again, TD Ameritrade is one of the leading brokers in this area.

The company offers taxable investment accounts, IRAs, 401Ks, and education saving accounts. Accounts are available to people from any country. Once you open an account, you’ll have access to commission-free trades, a vast number of stocks and ETFs, futures, options, Forex, margin trading, cash accounts, and more. A TD Ameritrade back crypto exchange—called ErisX—is due to come launch in the coming months.

Download: TD Ameritrade for Android | iOS (Free)

What About Beanstox?

A lot of people are interested in making Beanstox vs. Robinhood comparisons. However, this is not a fair contrast Beanstox has been through several incarnations (it was once a self-directed investment app) and is currently a robo-advisor.

The fact the app has switched focus immediately makes us cautious. We’re also not convinced Beanstox is safe if you have more than $25,000 in your account. In the company’s fee structure, it says the following:

“In the future, Beanstox may charge an annual fee of 0.25% on the net market value of Client Account balances of $25,000.”

Lastly, Beanstox’s website is lacking information; we struggled to find information on the underlying funds and ETFs that the app invests your capital into.

While we haven’t done a formal Beanstox review, we don’t think it’s one of the best investing apps for beginners.

Proceed With Caution When Investing

Remember, if you use any of the apps we’ve listed, your money is at risk. Investments in securities can go both up and down in value. You should never invest more than you can afford to lose, and if you’re unsure how to proceed, seek professional financial advice.

If you’d like to stay on top of market news to give yourself a better chance of successful investments, check out the best financial websites The 10 Best Finance Sites to Help You Stay on Top of the Market Looking for the best finance websites to keep you on top of the market? Here are the best sites for news, investing, and more. Read More . It might also be worth honing your skills before using real money by playing a stock market game.

Related topics: Android Apps, Financial Technology, Investments, iOS Apps, Personal Finance, Stock Market.

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