- Justin Sullivan/Staf/Getty
With so many startups trying to shake up the world of personal finance, there are more options than ever to get started investing and saving your money.
ETFs (exchange traded funds) in particular, are changing the way many young people are investing in the market. In the past 10 years, ETFs, which usually have lower costs than mutual funds, have gone from $230 billion in assets to around $4 trillion in early 2016. And many startups are trying to take advantage of this by presenting their take on a “new” style of investing.
But it’s hard to know which of these new apps and startups are worth your time.
Apple recently put together a handy list of the apps it thinks you should be using to invest and save your money. They range from apps that help you save without thinking about it, to no-cost ways of trading stocks.
Here are Apple’s top 8 apps for managing your money:
Robinhood lets you trade stocks without paying any fees.
Robinhood is an app built around one promise: no-fee stock trading. The app makes trading cheap, intuitive, and mobile. The beautiful interface also won an Apple Design Award. Just remember that no fees doesn’t mean you can’t lose your shirt trading stocks.
Digit analyzes your spending and automatically saves money for you.
Digit is an app that wants to make saving money as passive as possible. To do this, Digit analyses your income spending patterns, and then automatically saves a few dollars (typically $2-$17 every 2-3 days). You can also choose whether you want to raise or lower the amount you save in the app’s settings, and all saved money goes into a FDIC insured account. Digit doesn’t charge any fees and gives you a tiny bonus every three months (but at5 cents for every $100 you have saved, the bonus isn’t Digit’s selling point).
Acorns turns your spare change into an investment portfolio.
Acorns tries to distill investing down to a decision of “how much” you want to invest and “how much risk” you want to take.
There are two ways you can invest money in Acorns. First, you can make a lump sum or recurring deposit. Simply select how much money you want to invest and transfer it from your bank. The second way is “round-ups.” After you connect debit or credit cards, you can set Acorns to “round up” your purchases and invest the difference – if you spend $8.46 on lunch, Acorns will invest the $0.54.
Then you select how much risk you want to take, and Acorns invests the money into low-cost exchange-traded funds (ETFs).
E*Trade lets a self-guided investor get a quick start.
- YouTube / ETRADE Commercials
E*Trade is one of the largest online stockbrokers, and lets you buy and sell stocks, bonds, mutual funds, ETFs, and so on. The account minimum is just $500. E*Trade’s mobile app lets you place trades, get stock quotes, and take a look at your portfolio. One useful aspect of the app is you can set up personalized stock alerts so you can keep up with the market on the go.
Chime wants to be the modern bank account, and it rewards you for saving.
Chime’s main draw is similar to Digit’s in that it automates the act of saving money for you. But the way Chime works is by giving you a checking account (with debit card) and a savings account. Each time you use the debit card, those purchases are “rounded up” to the nearest dollar and the difference is put into your savings account. Spend a little, save a little.
Chime also pays you a 10% bonus on all your weekly round-ups.
One drawback of Chime is that it’s not particularly useful if you make most of your purchases on credit cards instead of debit cards.
Wealthfront uses algorithms to invest your money for low fees.
Wealthfront was started on the premise that an algorithm could construct you a better and more consistent investment portfolio than a traditional investment advisor – and for lower fees. It strives toward this goal by investing in low-cost ETFs, and giving you features like automated tax-loss harvesting. Wealthfront also recently launched an update called “Wealthfront 3.0,” which provides personalized financial recommendations for your entire life.
SigFig is a robo-advisor that is going for the retirees market.
- Screen capture
SigFig is a robo-advisor that works much the same way as Wealthfront, in that it seeks to build you a diversified, tax-efficient portfolio using software (and ETFs) instead of a traditional advisor. SigFig touts its free portfolio analysis, which can help you manage accounts from TD Ameritrade, Charles Schwab or Fidelity, and tell you when SigFig thinks you are exposing yourself to hidden fees or unnecessary risk. SigFig also has specific investing products focused on retirees.
Fidelity is one of the most prominent mutual fund providers.
Fidelity is one of the world’s biggest providers of mutual funds and other investment products. Fidelity’s app has similar functionality to E*Trade’s in that it lets you trade stocks, checks your accounts, and see real-time stock quotes. There is a minimum of $2,500 to open a brokerage account with Fidelity.