It’s old news for apps to get a sustained run in mainstream headlines — think Snapchat, TikTok and WhatsApp to name three — but can you tick off any instance off the top of your head in which an app generated a Congressional hearing for its role in an episode of financial irrational exuberance?
That’s where Robinhood’s CEO landed in February, after his company blocked trades of GameStop shares on its stock investment app during the bizarre bubble for shares of the video game retailer. The GameStop stampede brought new attention to the proliferation of stock-trading apps like Robinhood — and there are a lot of them, both from startups as well as established giants like E-Trade, Fidelity and TD Ameritrade.
Shopping for an app to invest — or a new app? Here are a few to consider.
Backed by Square: Cash App
Before Robinhood shot to the top of Apptopia’s ranking of app downloads in the U.S., Cash App was tops for financial tools with 52 million downloads last year. Known best for its person-to-person payment, debit card and direct deposit apps, Cash App also has a stock-trading function. Cash App has a major plus in being backed by Square, a familiar name for many in small business. One downside is that details on the app take some poking around to learn, with your best bet to drill through investment topics on its cash.app/help page.
The app that rounds up: Acorns
Acorns has built a user base of more than 8 million people as of 2020 with a focus on growing lifetime wealth. The app’s wrinkle? Acorns rounds up any spare change in accounts to the next full dollar, giving a small boost to its auto-investment features that can add up over time. Acorns does not charge fees on stock trades, but has three tiers of plans that charge $1, $3 or $5 a month. For those oaks that bloom $1 million in greenbacks in Acorns accounts, it’s free after that.
Invest with the crowd: Stash
More than 5 million people use Stash for a range of wealth accumulation tools — like Acorns, Stash focuses on any coinage jangling in your virtual pocket by allowing you to purchase fractions of stocks, exchange-traded funds and other investments. One notable differentiator — Stash Stock Parties, under the slogan of “bring friends to pump the pot.” If that brings to mind the GameStop missionaries, there is no ulterior motive for the mass investment gatherings — it simply creates a bigger “prize pool” for participating investors to split. About 40,000 people took part in a February “party.”
Free stock to sign up: Webull
Webull has built a base of more than 2 million accounts — at least some of whom might have been lured by its offer of one free share of stock for signing up, and another for padding one’s account with an initial $100 infusion. Which issue? That’s randomized and awarded on a lottery basis, but if you get the luck of the draw you could end up with valuable stocks like Google parent Alphabet or Facebook. Refer a friend, get another share. Webull does not charge commissions on trades, but has fee schedules that vary by account.
Goal-oriented growth: Betterment
On a slower growth trajectory than Acorns, Stash and Robinhood, Betterment reports more than 500,000 users after a decade in business. But with its Great Recession roots, Betterment anchors its marketing to the concept of a slow and steady upward trajectory toward targeted goals, whether for next year’s vacation or retirement several decades away. There are no transactional fees on trades, but Betterment charges 0.25 percent on the balances in investment accounts, and up to a half-percentage point to cover fees charged by other funds you include in your portfolio.
Set it and forget it: Wealthfront
Wealthfront likewise has been on the flatter trajectory, with 400,000 accounts at last report under a “passive investing” mantra with its algorithms assessing investments primed for growth. Wealthfront’s engine does all the heavy lifting, investing in exchange-traded funds that carry low fees and, like Betterment, charging 0.25 percent on your portfolio balance annually. Wealthfront estimates it saved the average user more than 30 minutes a day in research — and more than $6,000 in fees they might have racked up across the 900-plus trades its PassivePlus executes in a given year.
Easiest for beginners: M1 Finance
Trumpeting that it got to $1 billion in account assets faster than Acorns, Betterment, Stash and Wealthfront, M1 Finance still has just 250,000 accounts at last report. M1 Finance routinely pops up in the fintech trade press as being the easiest for beginners to “invest, borrow, and spend, all in one place” in its words, including automated investment tools. M1 dangles a bounty of up to $3,500 as a bonus to transfer funds from another trading platform — but you gotta move $2 million; anything less than $20,000 gets you a $40 transfer bonus.
For sophisticated traders: Interactive Brokers
While Connecticut’s own Interactive Brokers offers a simplified trading platform, it is purpose-built for sophisticated day traders to trade not just stocks but options, futures, bonds and currencies. Like Robinhood, Interactive Brokers landed in the GameStop news cycle after restricting trading in the runaway stock, though executives with the Greenwich-based brokerage were spared getting hauled before Congress in February. Interactive Brokers has more than a million users today; earlier this year, an executive described “a flood” of new accounts as people have dabbled in stocks while stuck at home during the pandemic.