Make Investing Simple Whether you’re putting away your first $1,000 or have been saving for the future for years, you’re going to want to consider investing your funds at some point. Doing so will allow you to maximize returns and exponentially grow your savings. Unfortunately, the investment process can be pretty intimidating, especially if you are starting out on your own. It’s hard to know how to begin, where to invest, how to balance your portfolio and even what sort of fees you should expect to pay along the way. That’s where the convenience and ease of today’s best investment apps can come into play. [youmaylike] What are Investment Apps? Once upon a time, your only choice for investing was to pick up the phone and call your stock broker to initiate a trade. You were charged for the service, either based on commission or as a flat fee per transaction. While stock brokers are still an option, you can take investing into your own hands these days, without ever needing to talk to another human. And it’s all thanks to investment apps and platforms. Today’s apps offer a range of services and features. With them, users can: Research funds and individual stocks. View fees and expenses related to investment choices. Invest funds on the go, and even automate regular contributions. Automatically reinvest earnings on current investments. Adjust portfolio for personal risk tolerance. View performance projections. Choose funds or individual stocks that align with personal beliefs, through portfolios based on socially-responsible missions. The best part? Investing through trusted apps is usually cheaper and faster and you’ll have instant access to your portfolio/reports at any time of day. Not only that, but you’ll also be able to set your investment risk tolerance, rebalance your portfolio and even reinvest earnings automatically. Who are Investment Apps Designed For? Whether you’ve been playing the market for ages or are ready to invest your first $100, the right investment app is worth considering. For those new to the stock market, apps will simplify the process and put the power of investing at your fingertips… literally. From your phone or computer, you can easily see portfolio recommendations based on your own goals, savings plans and even risk tolerances. The right app will tell you upfront how much you can expect to spend in fees throughout the year, and can even allow you to automate many of the more confusing aspects, such as picking well-performing stocks or even rebalancing. While investment apps are ideal for beginners, newbies aren’t the only ones who will see the benefits. Even seasoned investors will find the process easy to use, and may even learn that these platforms can maximize returns (and save them money in fees) along the way. Not to mention, many investment apps offer additional insight into specific funds, so you can choose to invest in companies that align with your own passions and beliefs. Now that you know why you should consider using an investment app for your own savings, let’s take a look at some of the best ones available today. Best Investment Apps Great for Beginners: Acorns Fees and expenses: For investors with less than $1 million invested, fees are between $1-3 per month depending on the account option you choose. Acorns is also free for college students. Beginning investment requirement: At least $5 to start Types of investments available: ETFs (exchange-traded funds) Portfolio options: Conservative, Moderately Conservative, Moderate, Moderately Aggressive, Aggressive Automatic investing?: Yes Automatic reinvesting?: Yes Automatic rebalancing?: Yes If you want an easy, hands-off approach to investing that won’t leave your head spinning, Acorns is a great first choice. This app not only simplifies investing for beginners but allows investors to completely automate the process from start to finish. After connecting the app to your debit card, the app will “round up” each of your daily purchases, putting the savings into an investment holding account. Once you reach the minimum required, Acorns will invest this money on your behalf, based on your account preferences. The app will also reinvest your earnings, as well as rebalance your portfolio when necessary. Great for Truly Free Investing: Robinhood Fees and expenses: Robinhood is a free investment platform in every sense of the word, pledging to never charge company fees or commissions to customers. Beginning investment requirement: You’ll need $2,000 to get started. Types of investments available: ETFs, stocks, cryptocurrency and options. Portfolio options: Interest-based options such as Fashion ETF, Tech ETF and Energy ETF, as well as a standard S&P 500 ETF, all with personal risk tolerance settings. You’ll also find “collections,” which are individual stocks grouped according to specific interests — such as companies with female CEOs or that are in the social media sector. Automatic investing: No. Automatic reinvesting: No. Automatic rebalancing: Yes. A great option for beginners and experienced investors alike, Robinhood makes the process both easy and affordable. How affordable? Well, it’s entirely free. By offering a truly free experience, Robinhood saves investors some serious cash over time. Additionally, the platform makes it easy to choose individual stocks or ETFs based on personal interests. If you want to invest in cryptocurrency or options, you can also do so through Robinhood. One of the biggest limitations of the platform, though, is its automation. While you can set up automatic deposits into your account, you will need to manually invest those funds and then reinvest (or withdraw) your dividends. Stash Fees and expenses: $1 per month fee for those with less than $5,000 invested, or $2 per month for retirement accounts with less than $5,000. For users under 25, fees on retirement accounts are waived. If you have more than $5,000 invested, your fee will be 0.25% annually. Beginning investment requirement: You’ll need at least $5 to begin investing (fractional shares are available) Types of investments available: ETFs (exchange-traded funds) and fractional stock shares Portfolio options: Too many to name, ranging from things you Want (portfolios that are conservative to aggressive mixes), things you Believe (such as groups of companies that believe in clean energy, LGBT rights, etc.), and things you Like (tech, retail and social media companies). Automatic investing: Yes. Automatic reinvesting: No. Automatic rebalancing: No. The closest competitor to Acorns, Stash seeks to make investing easy for everyone, regardless of your goals and passions. They have three account options to choose from, allowing you to manage your investment and retirement accounts, or even a child’s education savings through custodial accounts. With Auto-Stash, you can set any number of automatic investment options and transfers. However, Stash will not rebalance your portfolio for you, nor will they reinvest dividends on your behalf. Wealthfront Fees and expenses: 0.25% annually. Beginning investment requirement: $500 minimum initial investment. Types of investments available: ETFs (exchange-traded funds), individual stocks, retirement accounts (401k, IRA), 529 savings plans and trusts. Portfolio options: 11 asset classes to choose from, including natural resources and real estate. Automatic investing: Yes. Automatic reinvesting: Yes. Automatic rebalancing: Yes. Wealthfront’s investment platform is designed to be friendly for users of all experience levels. If you’re a seasoned investor, you’ll enjoy all of the options available to you, including the ability to manage your retirement accounts, education savings and even non-profits or trusts. If you’re a newbie, their free financial expertise center is the perfect place to learn all about investing and your future. TD Ameritrade Fees and expenses: The managed, automatic portfolio investment option (called Essential Portfolios) is available with a 0.30% advisory fee. Beginning investment requirement: $5,000 minimum for managed portfolios (no minimum requirement for traditional trading). Types of investments available: Stocks, ETFs, options, mutual funds, futures, bonds/CDs, Forex and cryptocurrency. Portfolio options: Essential Portfolios (EP) offer investors a range of options from Conservative to Aggressive, based on your passions, preferences and tolerances. Automatic investing: Yes, with EP. Automatic reinvesting: Yes. Automatic rebalancing: Yes. A more traditional brokerage app, TD Ameritrade is one of the most recognizable names in the industry. You can easily educate yourself on all things financial, thanks to their free videos and posts. If you want a traditional experience, you can choose your trades and pay per transaction. Prefer a more streamlined, automated approach? Opt for their Essential Portfolios, a hands-off investment option (robo-advisor) that charges a flat monthly fee and requires little-to-no oversight from you. Plus, their app makes the investing process easier than ever with a user-friendly interface, price alerts and no minimum to get started. If you prefer a desktop experience, this is also available to you through TD Ameritrade. Bottom Line Getting started with investing can be intimidating. With all of the terminology and account options out there, it’s easy to want to run and hide. Thanks to some of today’s best investment apps, though, you can not only get started with your first portfolio but also watch your money quickly grow… no matter how much of a beginner you may be! It’s important to choose an app that offers you the portfolio options and features you want most, with fees and deposit minimums that match your financial needs. The five apps above are our favorites for beginners, making that first foray into investing easier than ever before. The hardest part will be choosing the one you love most!
What Is a Credit Union?
In a world where there are seemingly hundreds of different banks, how do you decide where to put your money?
There are a million variables to consider. Some folks crave face-to-face interaction, while others are quite okay with doing everything online. Others might want an account with a good interest rate. Some banks specialize in one thing, while others seem like they have a branch located on every corner.
Some people don’t even bother going with a bank, choosing to entrust their money with a credit union instead. Credit unions seem to offer almost everything banks do, and their fans tend to be very loyal supporters. But many people don’t really know what separates a credit union from a traditional bank.
Is a credit union right for you? Should you entrust your money with one? Let’s take a closer look.
How Does a Credit Union Work?
Let’s start with the basics. What exactly is a credit union, anyway? And how does it differ from a bank?
I can understand why people might be confused about this part. On the surface, it seems like there isn’t a whole lot of difference between a credit union and a bank. They both offer deposits, loans, investment advice and other similar products. There’s very little visual difference between a bank branch and a credit union branch, too. Some credit unions even take steps to hide that fact, using generic names that could easily be mistaken for a bank.
But there are some important differences. The biggest one is a traditional bank is owned by shareholders, people who want to make a profit on their investment. A credit union, meanwhile, is owned by its members. If it makes any profit, that reward is shared by the members.
Most credit unions are non-profit entities. They strive to break-even, choosing to forego charging various fees that would lead to a profit. These cost savings are passed back to members, who get access to sophisticated banking products on the cheap. And when these credit unions do make a profit, they don’t have to pay corporate income taxes on the gains.
There are hundreds of different credit unions across the United States. Some are quite large with hundreds of different branches, millions of members and billions of assets under management. Others are much smaller, with only a few different branches.
Reasons to Use a Credit Union
For most people, choosing a credit union over a traditional bank comes down to a few very important factors.
The first reason is cost of banking. The average bank seems to charge for everything these days. Since credit unions aren’t so concerned with making money, they’ve eliminated many of these fees. Most credit unions offer no-fee chequing accounts and free ATM withdrawals. This advantage usually translates into better CD rates as well.
Most members also agree they get better service at a credit union versus a traditional bank. Since a credit union can afford to be less interested in profit, employees get more freedom to make customers happy.
Many credit union members also think they end up getting better investment advice versus folks who go with a traditional bank. Remember, major banks have major capital market divisions, which creates a certain amount of conflict of interest. Sometimes a bank will recommend a stock because it wants to help that company with its next share offer, not because it’s a good investment.
Finally, credit unions offer deposit insurance just like a regular bank. Both are ultimately backed by the federal government. You don’t need to worry; your cash inside of a credit union is just as secure as it would be inside a bank.
Reasons to Avoid Credit Unions
Although every credit union is different, most banking analysts agree that credit unions typically don’t offer great rates on mortgages or other loans. The reason is a bank might offer a low rate to entice customers to get a loan, while credit unions are only concerned with providing that service to its members. In other words, low interest rates on loans are viewed as a customer acquisition cost by a bank.
You must also apply to become a member of a credit union. Many open their branches to most everybody, but others are exclusive clubs that won’t allow just anybody to join. Some credit unions are exclusive to military personnel (like the navy federal credit union), certain big employers or even members of large trade unions.
Once you’re accepted as a credit union member, you’ll be required to make a token investment before you’re allowed to open a bank account or get a mortgage. Although this investment is usually only a few dollars, some people are annoyed to have to pay to belong to a credit union.
Many credit unions — especially smaller ones — don’t offer nearly as many perks as larger banks. It’s a lot easier to use a nationwide bank with tens of thousands of branches versus a small credit union with only a handful of locations, especially if you move. Large banks will also have more money to invest in technology, making that part of the banking process easier.
This also applies to credit cards. There are plenty of credit unions in the United States that don’t even issue credit cards. The ones that do generally have lackluster options. Credit unions can’t really compete on this front, and it shows.
Should You Join a Credit Union?
Ultimately, it all comes down to what you prefer.
You’ll likely get access to more branches, better technology and lower loan rates if you go with a traditional bank. You also won’t have to pay to join.
But credit unions offer many advantages too. You won’t get nickel and dimed on fees, your cash is protected, and you’ll likely get a better interest rate on CDs. Service when you’re inside the branch should be better as well, although some smaller banks will give credit unions a good run for their money.
More than 100 million Americans are members of credit unions. They continue to stick around because of excellent service, a member-oriented business outlook, and simply because of a kinder, gentler banking experience. If that sounds good to you, then maybe it’s time to give your local credit union a try; a simple way to start your research is to search "credit unions near me".