Making regular investments is crucial if you want to retire on time. Whether you’re new to investing or an experienced investor, these free investing apps let you skip the brokerage fee to invest more money each month. Even if you want an app that does everything for you, there’s an option for you too.
Most online brokerages charge $4.95 to trade a stock or ETF. Although that doesn’t seem like a lot, those fees add up over the course of your investing career. By using these free investing apps, you can skip the fee and invest in the same stocks or ETFs that your current brokerage charges you to trade.
When you might only be investing $100 at a time, those trade fees make investing expensive as your money needs to work harder to recoup the fee cost.
Free Investing Apps Let You Buy Partial Shares of Stocks and ETFs
Besides being free to use, many of these free investing apps also let you buy or sell partial (fractional) shares of stocks and ETFs.
With traditional brokerages, you can only buy an investment when you can buy an entire share. If a share costs $102 and you only have $100 to invest, you need to scrape together another $2 before you can make the trade. When you can buy a partial share, your $100 investment will purchase 98% of a single share. While you’re not getting the entire share, your money is fully invested in the market and has the opportunity to earn compound interest.
One of the hardest parts of investing is having enough money to invest. Now you can truly get started with only $1 because you can buy partial shares.
Try These Free Investing Apps First
Very few investing apps are truly free. These apps can be a good option for DIY investors and those who prefer to leave the investment decisions to the experts.
Investment Options: Stocks and ETFs
M1 Finance is probably the most extensive investing app that’s a great fit for beginner and experienced investors. You can trade individual stocks and ETFs or you can also invest in one of their “expert pies” that let you invest in numerous investing strategies without the hassle of building your own portfolio.
With M1 Finance, you choose the portfolio size percentage for investment. If you invest in 10 different stocks, you might decide to have a 10% target allocation so M1 invests $10 for every $100 you contribute.
Because every investment performs differently, your investments will need to be rebalanced periodically. New cash contributions will automatically buy underperforming stocks to rebalance your account. Or, you can rebalance at any time by clicking the “Rebalance” button and M1 will automatically reset your portfolio to the target allocation during the next trading session.
Investment Options: Stocks, Options, and ETFs
The Robinhood app is purely for trading individual stocks and options for free. This app is the perfect option if you want to buy shares of individual companies like Amazon, Microsoft, and Under Armour for example. The one caveat is that you can only trade full shares of stock.
If you want to add individual company stocks to your portfolio, this can be an excellent investing app to avoid those trade fees. Because individual stocks are riskier by nature since you’re only investing in one company compared to many companies with an ETF, Robinhood might be better for those with some prior investing experience and a diversified portfolio at their current brokerage.
Investment Options: ETFs
While Robinhood is entirely self-directed and only lets you trade individual stocks, WiseBanyan takes the opposite approach to investing. WiseBanyan bills itself as the “world’s first free financial advisor.” If you know you need to invest for the future, but the word investing intimidates you, WiseBanyan does all the hard work for you.
With WiseBanyan, you take a short quiz to determine your investing goals. Based on your answers, WiseBanyan will recommend a portfolio allocation of stocks and bonds that offer your desired income potential with minimal risk. All you must do is invest at least $1 and they automatically invest your money in a basket of ETFs for instant diversification.
The fully automated investors are sometimes called “robo-advisors.” There are several other fully-automated investing platforms, but they charge a monthly fee. That isn’t the case with WiseBanyan which has a similar investing strategy.
Other Low-Cost Investing Apps to Consider
Although these apps charge a small fee to invest, you might prefer the additional features or access to customer service that the 100% free investing apps don’t offer (yet).
Investment Options: ETFs
Acorns is a “micro-investing” app that rounds up your credit and debit card purchases and invests the additional amount. This trick helps you invest each time you spend. For example, Acorns will round up a $5.60 purchase to $6 and invest the extra 40 cents. If you’re a frequent spender, you can quickly build a small nest egg.
With Acorns, you can also get cash back for shopping with the “Found Money” feature by initiating an online shopping session through Acorns. These cash bonuses invest in your ETF basket too.
It only costs $1 a month to use Acorns and the app is free for college students. So, if you like the concept of investing through spending roundups, Acorns is very affordable to find money in places you usually don’t look.
Investment Options: ETFs
Betterment is another fully automated robo-advisor like WiseBanyan and costs 0.25% annually for your entire portfolio amount. For every $100 you invest, your annual fee will be approximately 25 cents; this is still cheaper than paying $4.95 per trade.
Betterment and WiseBanyan will both invest in similar ETFs and you will enjoy similar portfolio performance, but you might prefer Betterment for their 24/7 customer support and tax-optimized investing.
The two most significant roadblocks to begin investing are now knowing what to invest in and the initial costs. These apps eliminate both hindrances as you only need $1 to invest, and several apps will make the investment decisions for you. If you’re ready to earn more passive income, free investing apps are one of the most valuable financial tools you can use.