The best investment accounts for young investors are simple and inexpensive—regardless of how much you want to invest.Investing is intimidating for those just getting started, but new brokers and robo-advisors are making it easier than ever for young adults to invest confidently with almost any amount of money.
Overview of the best investment accounts for young investors
|TD Ameritrade||Advanced trading tools and research|
|Acorns||Teens or students|
|Ally Invest||Discount stock broker|
|Zacks Trade||Customer service – human approach|
|Wealthsimple||Simple investing platform|
Wealthfront is a great account for the beginner investor because you only need $500 to start investing, and it’s a low-fee automated investing platform.
While $500 may seem like a lot to invest at first, you’ll be happy to know that Wealthfront will manage your first $10,00 for free. You’ll be hard-pressed to find that low of a fee anywhere else. That combined with the other features Wealthfront offers makes it an amazing opportunity for first-time investors.
These features include:
- Free financial planning
- Starting a 529 College Savings Plan
- Wealthfront’s Portfolio Line of Credit (for those with $100,000 or more invested)
Like many of our recommended accounts, Betterment is a robo-advisor. That’s just a funny name for a company that uses an algorithm to automatically manage a diversified portfolio for you.
Betterment charges 0.25% a year rather than a monthly dollar amount, with no minimum balance.
For investors who want more than an automated portfolio, Betterment offers premium plans that include either annual or ongoing consultations with a team of Certified Financial Planner® and investment experts.
As you accumulate more wealth, you may decide you want some professional advice on both your portfolio and your savings goals.
Betterment offers a Premium plan that provides additional account monitoring and calls with their financial experts.
The Premium plan requires a minimum account balance of $100,000 and increases your total annual fees to 0.40%. At this level, you get access to their CFP® team for advice.
Betterment also offers a checking account that doesn’t have any fees, offers mobile check deposits, and reimburses your ATM fees.
You Invest by J.P. Morgan
You’ve probably heard of J.P. Morgan & Company, a respected investment banking institution. You Invest by J.P. Morgan is an app geared toward making do-it-yourself investing easy for everyone. If you’re a newbie, you’ll love the interface. You just set up an account and start Researchuing investments.
Another reason this option is great for newer investors is that there are no fees and no minimum contribution requirements. That means you can start with just a few bucks, then up the amount as you get more comfortable with investing.
For bigger spenders, there’s the Portfolio Builder. You’ll need at least $500 to use this feature, but you’ll just input some information about your goals, timeline, and risk tolerance to get started. This is a great way to diversify your investments once you’ve gotten comfortable with investing.
Disclosure – INVESTMENT PRODUCTS: NOT A DEPOSIT • NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
Public offers fractional shares of thousands of stocks and ETFs with no commission fees or minimums alongside an interactive social investing experience, which is great for beginners because it makes it possible to build your financial literacy in a community setting.
When you sign up for Public and choose a username, you create a Public profile which shows all the stocks/ETFs you are invested in, without the $ amounts. It sort of looks like a Venmo feed in that you can see where your friends are investing with no dollar amounts shown. If you want, you can explain why you believe in the investment and other members can comment to ask questions and learn about companies, trends, or investment approaches in the context of investing.
Public also has a chat function made for investors, curated themes, designed to help you discover stocks based on what you’re into, and “safety labels” which provide context around risky stocks.
With Webull, you get a dashboard you can access either on desktop or your favorite mobile device. This dashboard shows you stock market updates in real time, which not only helps you make the best investment decisions, but also gives you the tools you need to learn.
For newer investors, one of the best things about Webull is its affordability. You’ll pay no commission on your trades, and you can start small, with no minimum balance required. Although the platform is built for you to manage your own stocks, you aren’t alone. Just pick up the phone and call customer service if you need help.
Although signup is easy, you will need to verify your own identity. Just provide any government-issued ID card that has your photo, name, and date of birth, and you’ll be set.
Acorns is a mobile-first robo-advisor that’s free for students and anyone age 24 or younger.
I like Acorns because it strips nearly all of the complexity out of investing. You download the app, link a bank account, answer a few questions, and you’re an investor.
Acorns is unique in that you can connect it to any number of debit or credit cards and Acorns will automatically “round up” each of your purchases and invest that amount on your behalf. That’s clever if a bit gimmicky. Thankfully, Acorns handles regular automatic deposits, too.
A big downside to Acorns is that you can only open taxable accounts – no IRAs. Pricing is 0.25% a year for accounts over $5,000 and $1/month for accounts under $5,000. But here’s the neat bit: Acorns is free for investors under 24 or students with a valid .edu email address. If that’s you, you can get started investing any little amount -even just your spare change – without worrying about fees eating up your entire balance.
A popular investment app, M1 Finance, uses artificial intelligence to guide your investment and help you earn your money while managing all your investments – all for free.
Instead of paying fees, you can put every dollar toward earning money. Once you’ve invested $10,000, you can borrow up to 35% of your money at an interest rate of only 3.5%.
But what really sets M1 Finance apart is its move toward an all-in-one financial solution. Soon, you’ll be able to set up a checking account that’s attached to your M1 investment portfolio. That gives you the freedom to easily transfer funds between accounts and manage everything in one place.
The real attraction is the app, though, which makes managing your investments easy. You’ll get a pie-based display of your investments that shows you, at a glance, how your stocks are performing. Once you have an M1 Finance account, you can:
- Create a custom portfolio of stocks you hand select
- Choose from 80 expert portfolios
- Diversify your funds by setting up fractional shares
- Set up investing schedules to keep things going even when you’re away
- Take advantage of the app’s dynamic rebalancing to automate investing
With so many options and no fees, M1 Finance is an especially great option for those new to investing.
Zacks Trade is an online broker that offers low-fee trading on stocks, ETFs, and options. Stocks and ETFs that are greater than $1 per share – the fee is $0.01 per share but note that there is a $3 minimum. Stocks & ETFs that are less than $1 per share – the fee is 1% of Trade Value also with a $3 minimum. And it’s $3 for the first contract and $0.75 for additional contracts.
What makes Zacks Trade unique is that they offer free live support for trades. While Zacks Trade is recommended for more experienced investors, we all can’t know everything, so it’s nice that Zacks Trade customer service gets great reviews.
Another unique feature of Zacks Trade is the fact that you can invest in international stocks – which come with more risks, but also a higher reward. You can trade securities in 19 countries, and on over 90 different exchanges.
E*TRADE is a complete investment brokerage firm. They offer all types of investments, including stocks, bonds, mutual funds, ETFs, futures and FOREX trading. And if you want to mix managed investment options with your self-directed investing, you’ll have plenty of choices. E*TRADE has no less than four managed investment options, and two of them have multiple variations.
But where E*TRADE really stands out is with options trading. Their Power E*TRADE platform is one of the best in the industry. It offers interactive charts, technical pattern recognition, a snapshot analysis enabling you to evaluate risk/reward probabilities, the ability to run “what-if” scenarios, and a live-action capability where you can scan for unusual options activity, based on above-normal volatility.
E*TRADE also offers just a flat out AWESOME commission structure. The normal trading fee for options is $0, plus $.50 per contract. The trading fee for stocks is also $0 so you really can’t beat either with another discount broker.
If you’re a seasoned options trader, or you’re just looking to break into it, E*TRADE is an excellent choice.
It’s also a top platform for fund trading. That’s because they offer more than 250 no-commission ETFs, and well over 4,000 no-transaction-fee mutual funds. There’s also the added benefit of E*TRADE Savings Bank, just in case you prefer to bank where you invest. It offers a free checking account, a high-interest savings account, and a revolving line of credit that enables you to borrow up to 50% of the value of your account, for any purpose except buying investments on margin.
TD Ameritrade is one of our favorite brokers for young investors right now. First and foremost, there is NO minimum investment amount needed to open an account. As a young investor, that’s HUGE. But what makes TD Ameritrade even better is the number of extras it offers for all levels of investors – beginner to advanced. Here are a few of the standout features, according to TD Ameritrade themselves:
- Web Platform: You can access independent third-party research, educational resources, and planning tools, stay up to date on the news, and even pull social trading insights from Twitter.
- thinkorswim: This is a professional level trading tool that gives you things like tools to perform stock analysis and test strategies, form ideas with market scans and watch for potential risks and rewards, and utilize onboarding tools like the thinkManual and platform tutorials.
- Mobile Trading: You get a selection of device-optimized mobile apps, including the Apple Watch, all of which give you the ability to handle your investments, embrace opportunities, and much more.
- Heat Maps: Pinpoint the health of the market by using a visual and intuitive platform.
- Objective Research: You’ll get access to amazing third-party research from some of the best in the game — all for free.
- Integrated Watch Lists: Track your investments wherever and however you want with detailed and customized watch lists.
- Live-streaming Media: You’ll feel like a professional trader with live-streaming from places like CNBC and the TD Ameritrade Network, for breaking news and other investment-related advice.
- myTrade Community: A social platform to share ideas with other investors and get authentic advice from some of the best out there.
- Idea Generation: You can use TD Ameritrade’s tools and research to develop new, innovative ideas and strategies for investing.
Few other brokers have this amount of robust research and tools available. You’ll also find things like a virtual trading simulator to test out your ideas.
Some things to be aware of are the trading fees, which are a bit higher than some of our other favorites. But we feel the pros definitely outweigh the cons with TD Ameritrade.
Fidelity Investments is one of the largest investment companies int the world. Fidelity is a full-service broker, but also offers thousands of direct mutual funds and a portfolio of commission-free iShares exchange-traded funds.
For the DIY investor who wants to be able to trade individual stocks but also have access to thousands of mutual funds in one place, Fidelity is a great choice.
Although Fidelity used to be one of the more expensive brokers, they have recently dropped a lot of commissions and fees bringing them inline with the competition. Stock trades cost just $4.95, and Fidelity is reducing expense ratios on a number of index mutual funds to match – and sometimes undercut – Vanguard.
My favorite thing about Fidelity is their portfolio of commission-free iShares ETFs. You can trade them as much as you want without ever paying a trade commission.
If you want to be a more hands-on investor, you can build your own portfolio of mutual funds. For that, I recommend Vanguard.
Although I have money in several of the accounts listed here, most of my investments are in various Vanguard accounts for one simple reason: Vanguard pioneered low-cost investing. Now that the investing public has caught on to the simple fact that investment fees matter, Vanguard’s competitors are playing catchup.
Although you can buy and sell mutual funds through just about any stock broker, you’ll save on trade commissions by creating a direct account with a mutual fund company like Vanguard.
The downside to investing this way, however, is that you’ll need to know what you’re doing. When you open an account, you’ll need to choose one or more mutual funds in which to invest. This step paralyzes a lot of people.
In addition, most mutual funds require minimum investments of $1,000 or more. In my experience, it’s also more difficult to set up automatic investments using a Vanguard mutual fund account.
Summary of the best investment accounts for young investors
|Company||Minimum investment||Fees||Investment options|
|Wealthfront||$500||They manage your first $10,000 for free.||Individual and joint taxable accounts; traditional, Roth, rollover and SEP IRAs; trusts and 529 college accounts|
|Betterment||None ($100,000 for Premium)||0.25% a year||Stocks|
|You Invest by J.P. Morgan||None||None for self-service option||Stocks|
Exchange Traded Funds (ETFs)
|Acorns||None||Free for students and anyone age 24 or younger; 0.25% a year for accounts over $5,000 and $1/month for accounts under $5,000||Stocks|
|M1 Finance||$100 minimum account balance to open a taxable account, and a $500 minimum to open a retirement account||$0.00.|
No trading commissions, no account maintenance fees, and no charges for deposits or withdrawals.
|Zacks Trade||$2,500||$0.01 per share ($3 minimum) stock & ETF trade||Stocks|
|E*TRADE||$500-$1,000||$0 on stocks, options, bonds||Options|
|TD Ameritrade||None||None for online stock trades, ETF trades, option trades||Stocks|
|Fidelity||None||Stock trades cost $4.95||Stocks|
|Vanguard||Typically $1,000||$20 for most accounts||Stocks|
The best investment accounts for a young or first-time investor meets the following criteria:
- Doesn’t overwhelm you
- Doesn’t cost too much or penalize you for a small opening balance
- Makes it easy to set up automatic investments to help you build wealth