When I started investing, there were no apps. It was the late 90s and early 2000s. Practically the stone ages.
I had a Vanguard account, paid gobs of money for trades, and basically kept all my money in various mutual funds.
Back then, you didn't have much of a choice. Trading commissions were expensive and Vanguard let me buy and sell mutual funds for free.
I hadn't discovered E-Trade Financial yet, with their absurdly low trading commissions, but it didn't matter. I didn't trade that much. When I graduated, I discovered Ally Invest and their low-cost trades (now they're commission-free for U.S. stocks, ETFs, and options!) and I was in. There would be a few new entrants over the years, some offering free trades like Zecco, but they would all be acquired or shuttered once they discovered their model was not sustainable.
Today, the landscape is different. We're back in the heydey of financial technology (fintech as it were) and there is a lot of variety.
I want to compare some popular investment apps, head to head, to see which makes sense for you. Personally, our finances are at the point where we have a large portion of it invested in Vanguard mutual funds and dividend growth stocks. We don't have a need to shift to a robo advisor like Betterment, micro-investing apps like Stash and Acorns, or a free trading platform like Robinhood. That's not to say we don't like them, it's just that we have a well-established system in place.
With that in mind, we did take a closer look at each to find out what they do well and why they might be the investing app for you:
Betterment — Best Automated Robo-Investing
Betterment is the largest and perhaps best-known of the independent robo-advisors (another popular one that started in Canada is Wealthsimple). And for good reason. They've been one of the industry innovators, and have been a disruptive force in the investment universe. They brought professional investment management down to new and small investors, and at a very affordable rate.
You complete a short questionnaire that determines your risk tolerance, investment goals and time horizon. From that, a portfolio of exchange-traded funds (ETFs) is created to match your investment profile.
Your portfolio is comprised of 13 ETF's, that represent the general market, large-, medium- and small-cap stocks, international stocks, emerging market stocks, and various bond funds. They even offer a value fund that invests in stocks of out-of-favor companies. This is one of the most time-honored ways of making money in stocks, and one used by Warren Buffett.
Creating Investment Goals Feature. Betterment enables you to create customizable subaccounts referred to as goals. You can establish them for retirement savings, emergency savings, or for a medium-term goal, like making a down payment on a house. Each goal-based portfolio has its own portfolio allocation. You can add new goals at any time.
Betterment Fees: Betterment charges a single management fee of 0.25% per year. It's on the lower end of the range for management fees by robo-advisors.
What Betterment Does Well
- With no minimum investment required, and a low fee of 0.25%, it's the perfect investment platform for new and small investors. You can have a $2,000 account managed for just $5 per year.
- Betterment offers a cash management account for your cash balances, current yield is 0.30% APY
- Betterment's investment mix includes value stocks, which holds the potential for your portfolio to outperform the market. Most robo-advisors try only to match the market.
- Betterment offers tax-loss harvesting on taxable investment accounts (it doesn't apply to retirement accounts, since tax considerations don't matter).
- RetireGuide. Betterment offers this tool to help you plan for retirement. It's excellent for someone who is new to retirement investing.
- Betterment Advisor Network. If you like a personal touch with your robo-advisor, Betterment provides access to human investment advisor. The advisor is a vetted independent certified financial planner, who can develop a customized, comprehensive financial plan.
What Betterment Could Do Better
About the only weakness in Betterment's program is that they don't offer investments in real estate or commodities. Some robo-advisors have added these sectors for greater diversification. Betterment has not followed suit – yet.
If you'd like to open an account check out the Betterment website.
(if you're thinking about Wealthfront, you should read our comparison of Wealthfront vs. Betterment)
Robinhood — Best for Free Trades
Robinhood was the first investing app that offered free stock trades. It was so popular that it pushed the giant brokerages to follow suit. From there, they've become one of the more popular investing apps because they have no minimums, no fees, and a free stock referral program that has super charged their sign ups.
In the app, you can track stocks, and then either purchase them outright or place them on a watchlist to buy at a later date. There is no minimum balance to open or maintain your account. You can also set up automatic transfers between your Robinhood account in your bank account.
Robinhood Fees: There's no fee to open an account, there's no minimum investment amount, and there are no brokerage fees for the buying and selling of stock. When you buy and sell stock, you still pay the small Regulatory Transaction Fee and Trading Activity Fee to FINRA. The only fee you would pay to Robinhood is if you wanted to trade on margin, which requires a Robinhood Gold account ($5/month).
What Robinhood Does Well
- It offers free trades on stocks, ETFs, and options. It also offers free cryptocurrency trading if that's what you're into.
- Fantastic for very active traders, free trades is less of an incentive for buy-and-hold
- Mobile experience is very streamlined and desktop interface is similar.
- Robinhood will allow investing in Fractional Shares, with a $1 minimum, in real-time. (currently waitlist)
- Cash Management account for your cash balances, current yield is 0.30% APY
What Robinhood Could Do Better
Robinhood doesn't offer retirement accounts and you're out of luck if you want to buy mutual funds or bonds.
It also has limited customer support.
If you'd like to open an account check out the Robinhood website.
Acorns — Best for Automated SavingAcorns is similar to Stash as a mobile investment app. But it works with a different spin. Instead of funding your account through bank transfers, you invest using spare change. It's an excellent way for a person who is not a natural saver to begin investing money. You literally accumulate investment capital by your normal spending habits.
When Acorns first launched, you connected a bank account and your credit cards to your Acorns account. When you made a charge for $7.50, and 50 cents was held to be moved into your Acorns account. This process is referred to as Round-Ups. When you connect your mobile phone to your bank account and credit cards, the app automatically invests the change from your purchases. You can set roundups based on the next dollar, or the next $10. Once the total of your roundups reaches $5, it will be transferred to your Acorns account.
Now, when you sign up, you get Acorns Spend account – it's an FDIC-insured checking account with a Visa debit card. Acorns is fully integrated into the account and Round-ups appear in real time. They've also negotiated special cashback offers from over 350 Acorns Found Money partners, including Nike, Chevron, and Air BnB, sometimes up to 10%, and you get that deposited into your Acorns account too.
They've also introduced Acorns Later, their name for a retirement account where they recommend the IRA that's right for your needs. Acorns determines your investment profile based on a questionnaire. They then recommend up to five different portfolios, each comprised of a mix of six low-cost ETF's. Portfolios range from conservative to aggressive. Your account is fully managed by Acorns.
Acorns Fees: You pay $1 per month for account balances less than $5,000, and 0.25% per year once your account reaches this threshold.
What Acorns Does Well
- This is the perfect app for a person who has been unable to save and invest money in the past. The savings method is completely passive – you do what you always do, spend money, and the spare change ends up in your investment account. You also sometimes get bonus cash back from some retailers.
- There is no minimum account balance required, nor do you need to set up recurring deposits.
- Acorns makes the app available for free for full-time students.
- You do have the option to add recurring deposits if you want to fast-forward your investing.
What Acorns Could Do Better
- You have to open a new banking account (Acorns Spend) which is another item to manage, but you get the benefit of seamless integration.
- The same fee structure problem as with Stash – the fee is excessive on small balance accounts.
- The use of just six ETF's is a little on the light side. Most robo-advisors use only a limited number of ETF's, but usually at least a dozen.
If you'd like to open an account check out the Acorns website.
Stockpile — Best for Stock Gifts
Stockpile is a brokerage that lets you buy, sell, and gift fractional shares of over a thousand stocks and ETFs. The appeal is that you can buy small amounts and not wait until you have a full share's amount of cash.
The gifting aspect is in the form of Stockpile gift cards. You can give those to people, such as young investors (nieces, nephews, grandchildren, etc.), much like people use to give savings bonds or single shares of stock. They simply log into their account (or sign up) and redeem it for fractional shares of an investable company.
It operates just like a regular brokerage and trades are 99 cents each.
Stockpile Fees: No maintenance fees, just 99 cents a trade. When sending gift cards, there are additional fees. Digital gift cards cost $3.99 for the first stock and 99 cents for each additional stock, plus a 3% fee for processing the credit or debit card. If you want a physical plastic card, it ranges from $4.95 to $7.95 depending on the value of the card.
What Stockpile Does Well
- Stockpile lets you buy fractional shares of 1000+ companies and ETFs, exactly as advertised.
- You can give a Stockpile gift card that can be redeemed for shares of stock. $1 minimum, $2,000 maximum.
What Stockpile Could Do Better
- You are limited to the 1,000+ stocks and ETFs they offer.
- Sending gift cards costs extra but no fees for the recipient.
Our review of Stockpile goes into greater detail on the service.
Stash — Best for Beginners
Stash is an investment app that allows you to pick your own investments. It makes investing really easy as you can start with as low as a penny.
Much as is the case with Betterment, Stash has you complete a brief questionnaire to determine your risk tolerance. But rather than putting you into a standard portfolio, they instead let you create your own portfolio from 1,800+ individual stocks and ETFs. The themes are very specific, like Clean & Green, which is an ETF focused on companies involved in clean energy, and American Innovators Fund, which is an ETF that is focused on tech companies.
Stash doesn't actually manage your portfolio. Instead, they make investment recommendations and leave it up to you to handle the mechanics of investing.
Stash Fees: Stash has a flat fee structure regardless of how much you invest. The cheapest tier is STASH Beginner at $1 per month1, followed by STASH Growth at $3 per month1 and STASH+ at $9 per month1. The higher tiers offer more services with STASH+ offering a personal brokerage account, retirement account2, two custodial investment accounts for minors (UGMA/UTMA)3, a metal STASH Debit Card4 with 2x Stock-Back® rewards5, and a monthly market insight report.
They are running a promotion where you can get $50 to invest if you are able to direct deposit at least $300 in a thirty day period into your Stash banking account.6
What Stash Does Well
- The different investment themes give you an opportunity to choose specific market niches. This not only gives you the ability to invest in what you believe in.
- The fee structure is very straightforward – monthly fees rather than a percentage of assets.
- You can choose your investments, including individual stocks. This option is generally not available with other robo-advisors.
What Stash Could Do Better
- Stash doesn't handle investment management for you. That means that you may use their recommendations but actually handle the investing work yourself. That could include periodic rebalancing if you decide that's necessary.
- Since Stash doesn't actually manage your account, the fee you are paying is strictly for investment recommendations.
- The fee structure of $1 per month may be considered high if you have a small balance. For example, if your account has only $100, the annual fee will be $12 – or 12%. It's possible you could lose money on small balance accounts, just due to the fee structure but you do know it upfront.
If you'd like to open an account check out the Stash website.
1 You’ll also bear the standard fees and expenses reflected in the pricing of the ETFs in your account, plus fees for various ancillary services charged by Stash and the custodian.
2 Stash does not monitor whether a customer is eligible for a particular type of IRA, or a tax deduction, or if a reduced contribution limit applies to a customer. These are based on a customer’s individual circumstances. You should consult with a tax advisor.
3 The adult (or Custodian) who opens the account can manage the money and investments until the minor reaches the “age of majority.” That age is usually 18 or 21, depending on the Custodian’s state. The money in a custodial account is the property of the minor. Money in a custodial account can be used by the parent or legal guardian, but only to do things that benefit the child.
4 Debit Account Services provided by and Stash Visa Debit Card issued by Green Dot Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc. Investment products and services provided by Stash Investments LLC, not Green Dot Bank, and are Not FDIC Insured, Not Bank Guaranteed, and May Lose Value. In order for a user to be eligible for a Stash debit account, they must also have opened a taxable brokerage account on Stash. Account opening of the debit account is subject to Green Dot Bank approval.
5 Stash Stock-BackⓇ is not sponsored or endorsed by Green Dot Bank, Green Dot Corporation, Visa U.S.A., or any of their respective affiliates, and none of the foregoing has any responsibility to fulfill any stock rewards earned through this program.
6 Promotion subject to Terms and Conditions. Limit one cash reward per user under this Promotion. Promotion cannot be combined with certain other promotions. See Terms and Conditions or more information regarding eligibility. Promotion is not sponsored or endorsed by Green Dot Bank, Green Dot Corporation, Visa U.S.A. Inc., or any of their respective affiliates, and none of the foregoing has any responsibility to fulfill any funds earned through this promotion.
For Securities priced over $1,000, purchase of fractional shares starts at $0.05.
Wallet Hacks is a paid Affiliate/partner of Stash. Investment advisory services offered by Stash Investments LLC, an SEC registered investment adviser. This material has been distributed for informational and educational purposes only, and is not intended as investment, legal, accounting, or tax advice. Investing involves risk.
Which One Is Best?
It depends on what describes you as an investor!
If you are someone who wants to invest and isn't entirely sure how, or you want someone to handle it for you, Betterment is the best one.
If you are experienced and simply want a powerful hassle-free platform that gives you free trades, Robinhood is the best one.
If you want a micro-saving app to help you save more money while adding a bit of investing, Acorns is the best one.
Finally, if you are a novice investor and want a bit of hand-holding as you work your way into the jargony world of investing, Stash is the best one.
As you can see, each one serves a slightly different purpose and so the best one is the best one for you at this moment in your investing life.