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In today’s fast-paced world, investing has evolved alongside technology with the emergence of investment apps. Whether you’re a seasoned investor or a newcomer, these apps make it easier for you to execute your investing strategy and work on achieving your financial goals.
In addition to allowing you to trade financial securities, a good investment app will give you research tools, market data, educational resources and analytics. However, just like the investment opportunities they provide, some investing apps from online brokerages are far superior to others.
Whether you’re an active trader, experienced investor or a newbie, read on to learn about how to find some of the best investing apps that can help you begin executing your financial planning.
How to find the best investment apps
The best investment apps offer user-friendly interfaces that allow you to track your performance and make trades on the go while providing you with access to a wide range of investment tools. These mobile apps’ tools include charting and data to assist you in analyzing investment options for trading stocks, exchange-traded funds (ETFs), mutual funds and other securities, thereby helping you make better investing decisions and potentially build wealth.
Depending on which trading platform you decide on, these brokerages’ investing apps can also provide educational resources aimed at assisting beginners with developing their strategies and ultimately becoming better traders. However, choosing the best investment app first requires you to understand your personal finance goals.
Before getting started, determine which investment products you’re interested in. Among other questions, begin by asking yourself the following:
- Do you want to open a self-directed, traditional or Roth IRA (individual retirement account)?
- Do you want to use options trading as part of your investment strategy?
- Do you need a trading platform that allows you to purchase fractional shares?
- Do you want commission-free trading?
- Do you need debit cards or credit cards to fund your account balance requirements?
- Do you need easy access to customer service?
Additionally, consider things like accessibility. It may seem obvious, but you’ll have to learn if the best investment apps are able to be used on both Android and iOS devices. You’ll also have to decide if you want an investment app with no required account minimum, or one that waives certain fees. Some brokerages with mobile trading platforms also offer tax-loss harvesting and access to financial planners for investment advice.
Once you establish these parameters, you can set out to find which trading app offers the best functionality to suit your individual needs.
What is an investment app?
Before discussing how the best investment apps work, it’s worthwhile to explain exactly what an investment app is. Investment apps are mobile applications that provide investing platforms designed to buy and sell investment options such as stocks (whole or fractional shares), ETFs, mutual funds and often options, cryptocurrency, CDs, bonds, alternative assets and high-yield savings accounts.
These apps allow you to develop a diversified portfolio while offering interactive tools and research to help you better understand the stock market and how to approach individualized financial planning. Some investment apps also give you access to your investment account, either from the app itself via a mobile device or through a web-based trading platform on the brokerage’s website, which can be done from a computer.
Types of investing apps
Of the numerous investment apps available today, most typically fall into one of three categories.
A robo-advisor is an investment service provided by a brokerage that involves a minimal amount of human supervision and operates on automated algorithmic trading. In short, they are designed to largely eliminate human decision-making from investment decisions. Most robo-advisors build and manage portfolios automatically so investors won’t need to worry about your positions or diversification, which are handled for you.
Most companies offering robo-advisor services charge management fees based on the total assets under management (AUM). Robo-advisor services have grown considerably more popular in the past decade, with users and AUM expected to reach 234 million and $4.66 trillion, respectively, by 2027.
Unlike robo-advisors, apps from discount brokerages offer users complete control over the financial securities that constitute their investment portfolios. These apps allow you to buy and sell stocks, bonds, ETFs, options and sometimes cryptocurrency at reduced commissions, low fees or no commission or fees at all.
Like discount brokerages, full-service brokerages allow you full control over your portfolio, but with a spectrum of services based on a more traditional approach. They will typically offer a wider array of services and products compared to discount brokerages, including investment guidance from financial advisors. These additional products and services typically mean higher minimum account requirements, fees and commissions.
How investment apps work
After deciding which investment app you’d like to use, visit your smartphone’s app store to download it. Next, you’ll have to create an account. Often you’ll be required to include personal identifiable information — your name, address and Social Security number — then link the investment account to your savings or checking account. From there, you will choose which type of account you want to open (e.g., margin account, cash account or IRA).
In order to fund the account minimum if required, you may have to verify test transactions from the brokerage or wait a certain number of days before the account is authenticated. Once the account is established and the minimum balance is transferred, you can begin investing.
Before you do, familiarize yourself with the platform and user interface. Explore its features (e.g., charts, educational resources, market news) and learn how they can benefit you. Some investment apps include stock ratings and analysis at no additional cost, so be sure to thoroughly survey the available resources before diving into any investments.
Last, some of the best investment apps offer perks, like free shares of stocks when you sign up, complete educational training or refer others. Be sure to research the options before deciding on which app is best suited for you.
How to choose the best investment app
Note that not all investment apps provide access to identical financial securities or investment products. As previously discussed, before choosing which app you want to invest through, you need to determine which investment products you want available; whether you’ll need a margin account, cash account or retirement account; how you want to fund your account and make purchases; and what kind of fee structure you’re comfortable with.
Once you have a good idea of that framework, you can begin researching investment apps. The following section details other considerations you should make when actively searching for which app is the best fit for you.
Understand your investment experience
Your own level of investing experience can help guide you through the decision-making process. If you are a new or passive investor used to index funds and ETFs, it may benefit you to choose an investment app with a robo-advisor. These apps generally offer straightforward designs, as well as automated investing and portfolio management.
If you want more control over your investments, look for apps that let you place your own trades. In this case, be sure the investing app you decide on has a variety of educational tools and resources, including simulated trading (i.e., paper trading) to help you practice and gain experience.
Experienced investors and active traders may prefer investment apps that give access to a wider selection of investment products, advanced trading tools and diverse financial securities. For example, if you are interested in derivatives like options trading, make sure the investment app allows that before moving forward with it.
Assess your financial goals
After determining which investment apps align with your experience level, consider your financial and investing goals. If you are interested in long-term investments, most apps could likely work for you. However, if your goal is retirement savings, you’ll want to make sure an investment app offers the option to open an IRA.
If you’re looking for short-term investments, make sure the investment apps you research offer some of those options. Some do not offer CDs, short-term bonds or other short-term investment products, so you may be better off looking for brokerages or banks that do. Similarly, if you’re interested in trading cryptocurrency, while some investment apps offer access to digital assets, you may be better off opening an account with a crypto exchange.
Knowing your financial goals will help provide a better understanding of the type of investment app you should choose.
Verify the app fees
Depending on which investment app you choose, the company may charge several fees. These can include advisory fees for full-service brokerages, trading fees, transaction fees, monthly fees or annual fees. However, since many investment apps are discount brokerages, they offer low cost or commission-free trading, which can negate many of those potential fees.
Some brokerages charge annual management fees or monthly subscription fees that, when added up, can end up taking more than you get in return. When evaluating your options, be mindful of any fees these companies may charge and how that could adversely impact your financial goals.
One important factor to keep in mind when evaluating investing apps fees is the expense ratio. This ratio determines the percentage of your investment that goes toward paying annual fees. It divides the total annual fee by the total amount invested.
Flat fees vs. AUM-based fees
Investment apps with flat fees charge you a fixed rate regardless of the value of your portfolio. This type of fee typically benefits those with larger balances since the alternative — AUM-based fees — take a percentage of the total balance you have invested. The average AUM-based fee is 1%.
Flat-fee investment apps cost less for investors with large balances. For new investors or those with smaller balances, an AUM-based fee structure could be the better option as it may potentially save them money until their balances grow significantly.
Learn about the broker’s background
Investment apps should be trustworthy and take an active role in protecting your money. Most trustworthy investing apps are transparent about their fee structures and are registered with regulatory agencies like the Securities Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA), both of which ensure brokerages abide by certain fiduciary regulations.
Additionally, investing apps should be insured by the Securities Investor Protection Corporation (SIPC), a private nonprofit organization that protects investors against the loss of securities and cash up to $500,000 in case of a brokerage firm’s insolvency.
How to find the best investment apps FAQs
Can you use investment apps for retirement accounts?
Do the best investment apps charge fees?
Can I purchase cryptocurrency with an investment app?
Summary of Money's How to Find the Best Investment App?
Investment apps are mobile applications that allow you to easily trade financial securities while providing you with research tools, market data and educational resources that can help you become a better investor. These apps help you develop a diversified portfolio tailored to your investing strategies and financial planning needs. They generally fall into three categories: robo-advisors, discount brokerages and full-service brokerages. The fees you could be charged depend on the type of investment app as well as the investment products offered. Understanding your investment goals, experience and risk tolerance can help guide you to the best app for you.