With interest rates at record lows, it just doesn’t make sense to save money in a bank account anymore. Thanks to inflation your money will be worth less and less each year if it just sits idle in your savings account. So what other options do you have? Well there are now a myriad of different investing apps that have popped up over the past couple of years. These apps make investing in stocks, ETFs (index funds) and bonds cheap and accessible to anyone, no matter how much money you have. In fact you can get started investing and growing your wealth with as little as $5.
Here are some of the top investing apps that have piqued my interest in 2020. I expect we will continue to see more and more innovate fintech apps launch throughout the year, and I’ll keep this post updated.
Raiz is a micro-investing app that allows you to invest in a diverse portfolio of stocks and bonds. You can start investing with as little as $5. I’ve been using Raiz for the past couple of years and have had lots of success with it. I like being able to set it up and just forget about it, knowing that each week my money is getting invested.
What I like about Raiz:
- Round-ups – You can set Raiz to track your spending account (with any bank). It will round-up all of your purchases to the nearest dollar and transfer the difference to your Raiz investment account. This way you can invest and save every time you spend!
- Choose Different Portfolios – you can choose from 6 different portfolios. All of the portfolios are made up of ETFs. You can choose an aggressive portfolio if you’re younger and looking for capital appreciation. Or if you’re just looking to beat inflation and maintain your capital then you can choose a conservative portfolio. They also offer a socially responsible portfolio.
- Reasonable Fees – For balances under $10k you’re charged a small $2.50 fee per month. For balances over $10k, you’re charged a % fee of 0.275%. I’ve found this % fee to be much lower than what my superfund charges. And it works out to be a much better deal than trying to buy ETFs on my own.
- Cashback Features – earn cashback right into your investment account when you shop online.
Bonus – Get $5 when you sign-up using this link
Spaceship Voyager allows you to invest in either an index fund of 200 top global companies or the “universe” portfolio made up of companies that Spaceship believes will be important in the future. If you’re sick of investing in coal companies and banks (cough cough superannuation) and want to invest in the future, then Spaceship is for you.
Personally I use the “Universe” portfolio. My account has done well over the past couple of years. Especially as companies such as Apple and Tesla have been booming recently! I like being able to invest in products that I actually use. And also in companies that will be around in years to come.
What I like about Spaceship:
- It’s Free – For balances under $5k you pay now fees. This is amazing for young people who are just starting to build a nest egg. For balances over $5k you pay just 0.10% for the universe portfolio and 0.05% for the index portfolio. Is this the cheapest way to invest in a diverse portfolio? Let me know in the comments if you can find something that’s better value!
- Start with just $5 – You don’t need to be rich to start investing. Anyone can start with as little as $5.
- Setup Recurring Investments – This is how I invest. That way it’s automated and keeps my balance growing.
- Future looking – invest in things that are more aligned to your lifestyle (think Netflix, Apple, Nike etc).
Bonus – Get $5 on Spaceship Voyager when you sign-up using this link
I’ve just downloaded this app and am about to test it out. Xinja is known as a neo-bank. Basically a next generation bank. They are completely app based with no branches. When you sign up to Xinja you get a transaction account with debit card and savings account. And the savings account currently pays more interest than any other account out there. I think it could be a good option for an emergency fund – aka cash you need quickly to pay a bill etc.
What I like about Xinja
- 2.25% Per Annum Interest – No strings attached. From my research this makes it the best paying savings account out there.
- Quick and Easy signup – was able to open an account online. Verification was quick and painless.
Commsec Pocket lets you invest in themed ETFs. You pay $2 to buy (and sell) shares through the app, which is much less than Commsec charges for regular brokerage fees. This is an ok option if you have a few hundred dollars and are looking to invest in ETFs. But as I discovered in this post, it’s not great for smaller investments like you’d made on Spaceship or Raiz.
What I like about Commsec Pocket
- Low Brokerage Fees – cheaper than commsec but still more expensive than investing in something like Spaceship. Although not directly comparable.
eToro is a social trading platform. You can trade stocks from markets all over the world as well as invest in forex, cryptocurrencies and commodities. This is a trading platform, so it’s more for experienced investors. Remember with a platform like this to never invest more than you can afford to lose as your capital is at risk.
What I like about eToro:
- Trade stocks like Apple and Tesla – have you always to buy stocks like Apple, Alphabet, Netflix etc but it’s been out of your price range. You can trade them on eToro with as little as $50 thanks to partial shares.
- CopyTrading – You can copy more experienced traders. eToro is like a social network, mixed with a broker. And you can automatically copy the trades made by other traders. You can see how profitable they have been in the past, how risky they’ve been and every trade they’ve made.
CoinSpot is the only product on this list that doesn’t have an actual app. But they do have an excellent mobile site. In fact most people probably use it through their mobile browser. CoinSpot is a crypto trading platform. If you’ve ever wanted to invest in Bitcoin or other cryptocurrencies, then this is the platform that I recommend to people.
Remember cryptos are a risky investment. They are still volatile so never invest more than you can afford to lose.
Why I like CoinSpot:
- Buy Bitcoin using PayID/Osko – PayID, which is the instant transfer method in your bank account, makes buying crypto really fast and safe. You can basically buy Bitcoin instantly, no need to wait days for a transfer to happen.
- Invest in multiple Altcoins – Coinspot supports a huge range of alt coins.
- Different way to invest – you can buy directly or place an order at a price you like.
- Nicely Designed – easy to use website. Which in crypto is pretty uncommon.
Dharma is a brand new app that takes advantage of a very futuristic for of investing – Defi. Defi or Decentralised Finance is basically an ecosystem of finance apps that are run decentralised using crypto. Dharma basically puts a really easy to use interface on top of Defi and lets you earn interest on your deposits. Your deposits are lent through the compound network – a global platform of borrowers and lenders. What makes Compound so cool is that all the loans are 100% over collateralised using crypto. Meaning they can’t default.
It’s quite hard to understand all of this if you’re new to crypto. But it’s a really interesting space. So I encourage you to read up on it.
p.s – On Dharma you deposit Dai, a stable coin that is pegged to the USD. You can buy Dai in Australia on Coinbase.
What I like about Dharma
- Earn 7.5% Interest – way more than what the banks are paying! The interest rate varies (as often as every 15 seconds), but I haven’t seen it dip below 4%.
- Earn instant interest – you’re deposit starts earning interest as soon as you deposit. You can see it going up in realtime.
- Withdraw instantly – withdraw your crypto back to your crypto wallet at anytime.
- You control your funds – Dharma is a smart wallet that stores your crypto’s private keys on your own device. No one but you can take your funds. Not even Dharma. That’s the magic of Defi!