The best investment accounts for young investors are simple and inexpensiveâ€”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.
Whether you want to start investing as little as $25 a month or have a big windfall to manage, the right company to help you reach your investing goals is just a few clicks away—here are Money Under 30’s picks for the best investment accounts for new investors.
Unless otherwise noted, you can open either a taxable investing account or an IRA with any of these accounts.
Overview of the best investment accounts for young investors
|J.P. Morgan Self-Directed Investing||Self-directed investing|
|TD Ameritrade||Advanced trading tools and research|
|Public||Building financial literacy with friends|
|Acorns||Investing spare change|
|M1 Finance||Fractional share investing|
|E*TRADE||Options trading |
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. Plus, they’ll help you move ETFs from other brokerages using a tax-efficient strategy.
Wealthfront also allows for a fair degree of customization as you become more comfortable with investing. You can add or remove vetted ETFs to and from your portfolio as you wish. You can also choose from categories like Socially Responsible Investing, Technology ETFs, Healthcare ETFs, Cannabis ETFs, and more.
You can even allocate up to 10% of your portfolio to two different crypto trusts, Grayscale Bitcoin Trust (GBTC) and Grayscale Ethereum Trust (ETHE).
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.
Robinhood is an excellent match for Millennial investors getting started building wealth. Not only is Robinhood easy to use, but they charge no trade commissions which is more money you can put toward building your portfolio. You need just $1 to get started and Robinhood has easy-to-use tools and customized news to help you learn more about the stock market.
One of the best things about Robinhood for new investors, though, is its fractional shares. You can build a portfolio made up of your chosen stocks. Simply tell Robinhood how much money you want to put into your portfolio, and the site will help you get started purchasing shares.
Advertiser Disclosure – This advertisement contains information and materials provided by Robinhood Financial LLC and its affiliates (“Robinhood”) and MoneyUnder30, a third party not affiliated with Robinhood. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Securities offered through Robinhood Financial LLC and Robinhood Securities LLC, which are members of FINRA and SIPC. MoneyUnder30 is not a member of FINRA or SIPC.”
Whether you’re a real go-getter and want to run your investment portfolio entirely on your own or you just want to download an app, set up an account, and be done with it, J.P. Morgan has an option for you! J.P. Morgan Self-Directed Investing, as you may guess, is the DIY version. If you’re looking for no fees, this is where you’ll wanna start.
You’ll pay $0 trades and commissions, you won’t need any minimum to get started investing, and you don’t have to worry about pesky management fees. Simply choose from stocks, options, mutual funds, ETFs, and fixed income and you can get started growing your portfolio.
There’s another option if you’d prefer to leave things up to the professionals: J.P. Morgan Automated Investing. You’ll pay 0.35% for an advisory fee and you will need $500 to invest, but everything else is entirely managed for you.
Disclosure – INVESTMENT PRODUCTS: NOT A DEPOSIT • NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
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.
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.
Acorns is a mobile-first robo-advisor that helps you invest, save for the future, and more.
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.
You’ll even earn bonus investments when you make those purchases. Spend at one of Acorns’ 12,000+ partner merchants and get stocks for your portfolio. Acorns even has technology to help identify bank fees you’ve paid, along with tools to get those fees refunded.
You can also sign up for Acorns Spend, which issues a debit card that you can use at one of 55,000+ ATMs with no fees. Best of all, when you use your debit card for purchases, Acorns can round up in real time to ensure your spare change goes to work for you quickly.
Once you’re ready to start putting money into retirement, Acorns can help with that, as well. Acorns Later is designed to help you put money into an IRA or other retirement account.
The only downside to Acorns is its monthly fee. If you’re operating with a small amount of money, you may do better with investment options that charge a percentage. But $1 a month isn’t much to spend for conveniently setting money aside for your future. You’ll pay $3 a month if you want to take advantage of the retirement savings or debit card options. There’s also a $5 monthly plan that includes everything you get with the other plans, plus investments for kids and exclusive offers and investing advice and articles.
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.
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 with attractive and low variable APR rates.
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.
|Company||Minimum investment||Fees / Trading Costs||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; crypto trusts|
|Betterment||None ($100,000 for Premium)||0.25% a year||Stocks |
|J.P. Morgan Self-Directed Investing||$0||$0||Stocks |
|Acorns||$5||$1-$5 monthly subscription||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.
|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
Not surprisingly, I think the newer robo-advisors have a significant advantage over traditional brokerages and mutual fund companies when it comes to appealing to young investors. They’re transparent, uncomplicated, fairly priced, and mobile-ready. At the end of the day, however, it doesn’t matter as much where you invest but that you invest somewhere.
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