Investing is risky. It comes with few guarantees. The only investing guarantee I can offer is this: everything held equal, the less you pay in fees, the better your returns.
Fees don’t have to stop you from making wise and lucrative investments. Thankfully, we live in the 21st century, and there’s never been a better time to be a small investor.
And now, in today's mobile world, investing is becoming easier and cheaper than ever.
Here are the top five investing apps that let you invest for free (yes, free).
1. M1 Finance - Build A Free Portfolio
M1 has become our favorite investing app and platform over the last year. With commission free investing, the ability to invest in fractional shares, automatic deposits, and more, M1 Finance is top notch.
If you’re looking for a way to create and maintain a free, diversified portfolio of stocks and ETFs, look no further than M1 Finance. M1 Finance is a pretty revolutionary tool/investing app that allows you to setup a portfolio and invest into it (correctly allocated) for free.
What do I mean? Well, imagine a portfolio of ETFs - maybe you have 5 ETFs at 20% each. Well, instead of having to do 5 transactions (and commission for each) when you buy, you can now simply invest and M1 Finance takes care of the rest - for free!
If you don't know exactly how to set it up, you're more than welcome to use one of their already setup portfolios as well.
It doesn't get much better than M1 Finance when it comes to investing for free.
2. Fidelity - Free ETF Trades & No Minimum IRA
Fidelity is one of our favorite apps that allows you to invest for free. This surprises most people, because most people don't associate Fidelity with "free". However, Fidelity offers a range of commission-free ETFs that would allow the majority of investors to build a balanced portfolio.
Fidelity IRAs also have no minimum to open, and no account maintenance fees. That means you could deposit just $5, and invest it for free. That makes this a much better deal compared to companies like Stash Invest.
Furthermore, Fidelity just announced that it now has two 0.00% expense ratio funds - yes free. So, you can not only invest commission free, but these funds don't charge any management fees. Truly free investing.
But to make it a top app, it has to have a great app, and Fidelity does. Their app is the cleanest and easiest to use out of all of the investing apps we've tested. They have a ton of features, but it all works well together.
Plus, you get the benefit of having a full service investing broker should you need more than just free. Check out Fidelity's app and open an account here.
3. TD Ameritrade- Free ETF Trades
If you’re set on cutting fees while maintaining a well diversified portfolio, you’ve probably discovered Exchange Traded Funds (ETFs). ETFs maintain a tax advantaged structure, and they usually carry lower fees than equivalent mutual funds. But, most brokerages charge you to buy and sell ETFs.
Not so with discount broker TD Ameritrade. TD Ameritrade offers over 100 commission free ETFs from industry giants iShares, Vanguard and more. Because of the diversity of no load ETF funds, TD Ameritrade is my top broker for people who want to consider tax loss harvesting on their own.
Furthermore, TD Ameritrade also have no minimum and no maintenance fee IRAs. That makes it a better pick to options such as Acorns, which charge maintenance fees.
TD Ameritrade’s mobile app also offers research, information and portfolio analysis that make the free investing that much sweeter. Just remember, TD Ameritrade charges for some ETFs, mutual funds, and equity trades. Filter for no load ETFs before you buy.
It's app also isn't as user friendly as Fidelity's but we put them as a very, very close second.
4. Robinhood- 100% Free Stock Trades
Robinhood is an app lets you buy and sell stocks for free. Users can buy or sell stocks at market price. The app allows you to make limit orders and stop loss orders too. Unless you’re an active trader, this is plenty of functionality. Plus, the app comes with a clean user interface and basic research tools.
Most serious investors should pair Robinhood with one or more free research tools. This will help them develop a more systematic approach to investing. That said, you can’t beat Robinhood’s free trades, but its shortcomings here make it third.
The drawbacks are really limited, but they include the fact that you can't buy fractional shares.
If you’re curious how Robinhood makes money, it’s through Robinhood Gold. Robinhood Gold is a margin account that allows you to buy and sell after hours. Buying on margin means you double your expected returns. It also means you double your expected losses. The result (based on the magic of compounding) means that trading on margin tends to eat into your principal.
Check out the other options for trading stocks for free.
Check out our full Robinhood review.
5. Vanguard - Commission Free Investing
Vanguard is consistently known as the low cost investment service provider. They were one of the original mutual fund and ETF companies to lower fees, and they continually advocate a low-fee index fund approach to investing.
At Vanguard, you don't pay any commissions when you buy and sell Vanguard ETFs. You also pay no account service fees if you sign up to receive your account documents electronically, or if you're a Voyager, Voyager Select, Flagship, or Flagship Select Services client.
Furthermore, Vanguard recently announced that they won't charge a commission on a huge amount of competitor's funds and ETFs as well!
Vanguard also doesn't have an account minimum, and there is no minimum purchase requirement, except the cost of 1 share.
What holds Vanguard back is that their app is a little more clunky that the other apps. It feels a little "old school", and it seems to be built for the basics only.
However, it is free, so maybe only the basics are needed?
There are a lot of apps and tools that come close to being in the Top 5. When the competition is so good, it's hard to make the cut.
Charles Schwab also offers commission free ETF trades, similar to Fidelity and TD Ameritrade. In fact, Charles Schwab advertises that they offer more commission-free ETFs that most other companies, and they even offer some commission free mutual funds.
However, what keeps Charles Schwab out of the top is that they have a $1,000 account minimum for almost all account types.
E*Trade also offers a large selection of commission free ETFs. We are actually big fans of E*Trade for our solo 401k account, but they don't make the top 5 when it comes to investing apps and free investing.
While they do offer IRAs with no minimums, and charge no transaction fees, we didn't find their app as user friendly as the rest. Similar to their website, it's just a bit harder to use. However, we still really like E*Trade and they are definitely a runner up.
WiseBanyan offers absolutely free asset management.
If you opt into their automation program you’ll pay a 0.02% fee each month (prorates to a 0.24% fee). The fee maxes out at $20 per month. In a year or two, WiseBanyan may leap to the top of the list, but the company doesn’t allow enough customization for users today.
Have you ever heard of any of these investing apps? Which one is your favorite?