There was a time when investing was meant only for the rich due to the large amount of money needed to invest. Thanks to fintech, those days are over. Fintech is the combination of finance and technology. This industry has picked up steam over the past decade with the numerous apps for not only banks, but also for financial institutions. There are apps created to give everyone a shot at investing, without a great deal of money. Let’s take a look at the top three apps.
- Robinhood — This online trading app does not require a large amount of money to invest. You can invest in stocks, options, ETFs and cryptocurrency. You can get instant deposits up to $1,000 or more with Robinhood Gold, which is a premium account. You can invest from any device, including Android. Robinhood makes money by earning interest on uninvested cash in a client’s account. It charges $10 per transaction made with a live broker, and $35 – $50 on some international transactions. It also makes money on the interest on money borrowed through Robinhood Gold. Finally, Robinhood makes most of its income from payment on order flow.
- Stash –– This app is geared more towards parents of children because you can create a custodial account. You can invest with it, and there is a $1 monthly charge for an investment account that has less than $5,000. With investment accounts with over $5,000, there is a cost of 0.25% a year. You can start investing with only $5.00 and choose from hundreds of stocks, bonds and funds. Also, there are no add-on commissions or trading fees.
- Wealthfront – This is a robo-advisor, meaning a computer automates the investing for you. Wealthfront uses passive investing, where the robo-advisor builds a globally diversified portfolio for you based on your answers to a series of questions. They save you money by choosing low-cost ETFs and only charge a 0.25% annual fee on what you invest. The software trades strategically to lower your tax obligation as well. Wealthfront also has banking options, like Stash.
The landscape of investing has changed thanks to fintech. Now, everyone can invest without paying the high fees traditional brokerages charge. Most of these apps also provide other banking services and products (e.g. a Roth account), so they can be a one-stop shop for your financial needs. And all apps use the latest technology to protect investors’ information and assets.