In recent years, fintech investment apps have exploded in popularity, providing easy and affordable access to investing for millions of people. With innovative features like fractional shares, automated investing, and low fees, these apps are changing how everyday investors build wealth. This article will explore the best fintech investment apps of 2020, examining their key features, investment offerings, fees, and user experience. We will look at leading contenders like Robinhood, Acorns, and Betterment to see how they stack up. Whether you are new to investing or looking to optimize your portfolio, understanding the top fintech apps can help you invest smarter and meet your financial goals.
Robinhood offers commission-free trading and fractional shares
Robinhood has become one of the most popular fintech investment apps, with over 10 million users. Its signature feature is commission-free trading of stocks, ETFs, options, and cryptocurrencies. This enables users to trade frequently without incurring commission fees that can add up. Robinhood also offers fractional shares, allowing investment in high-priced stocks like Amazon with minimal capital. Users can build a diversified portfolio with little money down. However, Robinhood also faces criticism for encouraging excessive trading and speculation through features like confetti animations on trades. Serious long-term investors may prefer an app more focused on building wealth gradually over time.
Acorns provides automated micro-investing capabilities
Acorns takes a different approach than Robinhood, focused on automated saving and investing spare change. Its signature feature is Round-Ups, which invests the extra cash from transactions by rounding up to the nearest dollar. For instance, a $7.50 transaction would trigger a $0.50 Round-Up investment. Users can also set up recurring daily, weekly, or monthly transfers. Acorns then invests this money in a diversified ETF portfolio based on your risk profile. Portfolios range from Conservative to Aggressive. At just $1-3 per month, Acorns provides an affordable way for beginners to develop saving and investing habits. The passive, set-it-and-forget-it approach is ideal for hands-off investors.
Betterment provides customized, automated portfolio management
Betterment is a leading robo-advisor, combining easy-to-use technology with human financial expertise. Users complete a questionnaire about their investing timeline, goals, and risk tolerance. Betterment’s algorithms then construct and automatically manage a personalized investment portfolio using low-cost ETFs. Portfolios can be socially responsible to align with your values. Betterment charges a 0.25% annual fee, in addition to the ETF fees. Betterment Premium has a 0.40% fee but provides access to human financial advisors by phone or chat. If you want professional portfolio management but don’t have the capital for a dedicated adviser, Betterment provides quality robo-advising on a digital platform.
M1 Finance offers customizable investing and borrowing
M1 Finance provides free automated investing with a high degree of customization. Its pie-chart interface allows you to design your own portfolio allocation across stocks, ETFs, and options. M1 automatically invests any deposits to maintain your target allocation via fractional shares. Users can also borrow against their portfolio at low rates, a unique option. However, M1 lacks premade portfolios based on goals or risk levels. You must build your own portfolio or use expert templates. With powerful tools but little guidance, M1 appeals to hands-on investors with clear investing preferences.
Fintech investment apps like Robinhood, Acorns, and Betterment are making investing more accessible than ever. Key features like fractional shares, automated investing, and portfolio management enable users to invest on their own terms. However, each app has strengths for different types of investors. Understanding these differences can help you choose the best app to invest smarter and achieve your financial goals.