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APY GUY: Maximize Your Savings & Earnings

APY GUY: Maximize Your Savings & Earnings

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Johnathan Maverick

Will CD Rates Go Up in January and February 2023?

Johnathan Maverick
January 19, 2023

If you’re looking to park some cash in a CD (certificate of deposit) then you’re probably wondering whether now is the right time to open it or if it will be possible to lock in higher rates sometime later this year.

While predicting anything in financial markets is nearly impossible, the general theory would be to keep your money in liquid accounts like a money market account or high yield savings account if you expect CD rates to go up – or – open a CD now if you believe they’re at their peak and are likely to come down.

Here’s what we know:

Following 7 rate hikes by the FED in 2022, the CME FedWatch Tool places a 97.2% chance on the FED hiking rates by 0.25% (and a 2.8% chance they raise them by 0.50%) at the culmination of their first meeting of 2023 on February 1st.

This would put the overall Federal Funds rate at 4.50% – 4.75%.

So When Will CD Rates Go Up?

CD rates are already on the rise to start 2023 and are expected to continue to do so, so long as the FED continues to raise the federal funds rate.

Since the Fed’s base federal funds rate for overnight loans to banks sets the benchmark for all other interest rates in the United States, the Fed’s policy shift is going to continue to affect the interest rates for other financial securities, including certificates of deposit (CDs), money market accounts, savings accounts, etc.

However, savers should keep their expectations in check, as rates on the savings side climb at a much slower pace than their counterparts on the loan side.

The difference in rates between what banks’ offer on their loans versus what they offer on their savings deposits is referred to as the “spread.” This is where banks generate their profit and also why mortgage rates are rising much faster than CDs and savings rates.

According to Freddie Mac, average 30-year fixed-rate mortgages rose from 3.45% in January 2022 to 6.27% in December of 2022.

By contrast, average 12 month CD rates only rose from 0.13% to 1.07% in that same time frame, according to the FDIC.

Will CD Rates Go Up in 2023

The general consensus among financial analysts and economists is yes, CD rates will continue to tick upward throughout the first quarter of 2023 (at least) but will likely plateau at some point. We should also note that the rise in CD rates in the first half of 2023 will be much softer than their rise was in the second half of 2022 when the FED was making a series of 0.75% rate hikes.

To get a better picture of how CD rates are moving to start the year, the table below shows the CD rate changes we’ve tracked following the most recent FED rate hike of 0.50% on December 14th of last year.

InstitutionCD Rate ΔBest APY
Bread Savingsno change4.50%
Edward Jones (brokered CD)Down 0.05%4.55%
Fidelity (brokered CD)no change4.65%
PenFed Credit Unionno change4.35%
Capital Oneno change4.40%
Vanguard (brokered CD)Down 0.05%4.70%
Synchrony Bankno change4.60%
Ally BankUp 0.10%4.35%
Marcus by Goldman Sachsno change4.40%
CD rate movement following December 14th FED rate hike

To put these rate bumps and current best APYs (annual percentage yields) into perspective, below is the national average for CDs terms 6 months to 6 years according to FDIC data pulled January 19, 2023:

  • 6 month CD rates – 0.81% (up from 0.65% last month)
  • 12 month CD rates – 1.28% (up from 1.07% last month)
  • 24 month CD rates – 1.21% (up from 1.06% last month)
  • 36 month CD rates – 1.16% (up from 1.02% last month)
  • 48 month CD rates – 1.11% (up from 0.97% last month)
  • 60 month CD rates – 1.21% (up from 1.09% last month)

To get an idea of how fast these averages have been climbing, here are the national averages for 12 month CDs and 60 month CDs every month since the start of 2022 to the start of 2023:

12 month CD avg.60 month CD avg.
January 20220.13%0.28%
February0.14%0.28%
March0.15%0.29%
April0.17%0.32%
May0.21%0.39%
June0.25%0.48%
July0.31%0.57%
August0.46%0.64%
September0.60%0.74%
October0.71%0.83%
November0.90%0.98%
December1.07%1.09%
January 20231.28%1.21%
source: fdic.gov

Will Savings Account Rates Go Up in 2023

Yes, the average APY for all variable-rate accounts including online savings accounts, interest checking accounts and money market accounts will likely rise in the first part of 2023 as long as the FED continues to raise rates.

Here are some popular FDIC-insured online banks and their savings rates movements since the FED’s last rate hike on December 14th, 2022:

Institution + AccountRate ΔAPY
PayPal high yield savings accountUp 0.25%3.75%
SoFi Checking and SavingsUp 0.25%3.75%
UFB Elite SavingsUp 0.10%4.21%
First Foundation Bank Online Savingsno change4.00%
Bask Bank High Interest SavingsUp 0.12%4.15%
Capital One Performance 360no change3.30%
Ally Online Savings Accountno change3.30%
APY = Annual Percentage Yield

Interest Rates Going Forward

During the December 14th meeting, the FED continued to reiterate their stance on raising rates to combat inflation. Future markets are only predicting a 0.25% rate hike (~97.2% chance) on February 1st with a much smaller chance of another 0.50% rate hike (~2.8% chance).

A Look at Certificates of Deposit

Certificates of Deposit (CDs) are deposit accounts held at banks or credit unions that provide fixed interest rates for a specific period of time. CDs differ from savings accounts in two primary ways:

  • CDs are time deposits – that is, the money put into a CD is set to remain invested for a specified period of time, such as six months, a year, three years, or five years. Investors can withdraw their funds early, but incur an early withdrawal interest rate penalty for doing so.
  • The interest rate earned with a CD is usually a fixed rate, while the interest rate paid on a regular savings account is commonly a variable rate. There are variable rate CDs available, but the vast majority are fixed rate.

CDs are favored by investors with a low risk tolerance, as they are considered one of the safest types of investments, being insured by the Federal Deposit Insurance Corporation (FDIC) just like other deposit accounts at a bank.

The downside of CDs is the fact that their real rate of return rarely keeps pace with inflation. Case in point: with even the best current CD rates around 4.75% and inflation around 6.5%, CD investors, while earning some nominal rate of return, are still encountering a negative real rate of return.

The only time CD investors win big real rates of return is when they invest in a long-term CD when interest rates are extremely high, and then prevailing interest rates drop substantially (along with inflation) over the term of their CD deposit.

However, most CD investors readily accept the reality of relatively low real returns. They are typically much more concerned with having a safe investment that earns some rate of interest than they are with having a growth investment that stands a good chance of being able to outpace inflation.

Past Trends for CD Rates

Back in 2021 when inflation started to pick up, CD rates were still dropping. By the end of that year, the average rate for one-year CDs had dropped from 0.21% to 0.14% and the average rate for five-year CDs had fallen from 0.36% to 0.26%.

In 2022, however the FED became much more aggressive in their fight against an unrelenting rate of inflation and completely reversed their stance on rates making a total of 7 historic rate hikes unseen in decades.

This pushed CDs up in a major way, albeit it took quite a while for them (especially the large banks) to raise their rates for savers.

For example, while the average 12 month CD has yet to hit 1.50%, top yields from online banks are already creeping over the 4.50% APY mark for 12 month terms.

Bigger banks and older traditional banks are normally the slowest to raise rates for savers.

Bankrate’s chief financial analyst, Greg McBride, cautions that banks may be a bit stingy with interest rate increases. According to McBride, “Most banks, and big banks in particular, are sitting on a pile of deposits and will be very hesitant to pass along higher yields to savers if they don’t need more deposits.” That fact may further dampen the direct effect of increases in the fed funds rate on CD yields.

All that to be said, in Q4 of 2022, even the largest banks in the country like Bank of America, Wells Fargo and Citibank had competitive CD rates on the menu for at least a couple of terms (mostly promotional options) with Citibank leading the way offering an 18 month IRA CD yielding 4.97% APY. Wells Fargo’s best CD rate to end last year was a 13 month promotional offer yielding 4.01% APY and Bank of America’s top rate was a “Featured CD” also with a 13 month term.

If the FED raises rates twice in Q1 of 2023 by 0.25%/each (0.50% total) it’s reasonable to expect top CD rates from the big banks along with online banks and credit unions to rise by 0.25% – 0.50% APY but the impact won’t be immediate.

Alternate Scenarios that May Impact CD Rates

There are, of course, at least two alternative scenarios regarding probable CD rates for 2023.

First, even if inflation continues to go higher, if the economy begins to stall out significantly, sparking fears of a recession or even a depression, then the Federal Reserve may alter its policy and change course yet again. It may postpone further rate hikes, or even abandon them altogether.

This seems unlikely though, as the FED has noted it won’t back down to some economic pain as long as employment stays relatively stable.

The other possible scenario is that inflation keeps increasing unabated, pushing the Federal Reserve into making more and/or higher interest rate hikes. In that event, the best available CD rates could well crest the 5-6% mark or more.

How to Find the Best Interest Rates on CDs

There are a number of banks that offer interest rates that are significantly higher than the average rate, on both savings accounts and CDs.

The trend in recent years has shown the best CD interest rates tend to be offered by the growing number of “online only” banks. Since they don’t have the massive overhead expense of physical branch offices to contend with, online banks have more free cash flow that they can use to entice depositors by offering higher yields on CDs.

Among the banks offering the highest CD yields recently are Bread Financial (formerly Comenity Direct), Barclays, Synchrony, and Marcus by Goldman Sachs.

With the futures market along with the FED’s messaging indicating smaller rate hikes in 2023, it’s not a bad idea to monitor CD rates periodically.

If you’re on the fence about opening a CD right now, you may also want to consider a variable-rate, high yield online savings account so that you can benefit from any future interest rate increases.

Alternatives

You may be able to earn higher returns while still holding investments that are considered very safe by making investments in alternatives to CDs.

One such alternative is a money market account. Some money market accounts pay higher interest rates than most CDs. They also offer the flexibility that CDs lack, as you can withdraw your money any time without suffering any interest rate penalty.

Another alternative investment is a tax-free municipal bond. Being tax-free already gives such an investment an advantage over a CD. You can also get a much higher return on investment (ROI) with municipal bonds, many of which are currently paying interest rates above 5%. Municipal bonds are not quite as safe an investment as CDs, but while the possibility of the bond issuer defaulting on interest rate payments does exist, such defaults have, historically, been very rare.

One often overlooked alternative investment, one that’s perfectly safe and tax-free, is, instead of depositing money in a certificate of deposit, using the money to pay down high interest rate debt, such as credit cards. Paying off the balance on a credit card that charges 19% annual interest has the same net effect on your finances as earning a 19% return on investment – with the added benefit that making such a move doesn’t incur any tax liability, thus, making for a 19% tax-free return on investment.

Treasury Yields

Short-term US Treasury Yields are currently providing higher yields than CDs. Below are current US treasury yields available as of market close on January 18, 2023 (source).

TermYield
1 month4.59%
2 months4.62%
3 months4.69%
6 months4.79%
1 year4.63%
2 years4.06%
3 years3.72%
5 years3.43%
7 years3.40%
10 years3.37%
20 years3.65%
30 years3.54%

This table shows an inverted yield curve – where short term interest rates are greater than long term interest rates – and it has become more pronounced in 2023.

In the past, this has been a successful indicator of a recession.

CD rates have also aligned with this trend as 12 month CD rates are now higher than 5 year CD rates on average for the first time since rates began to rise.

CD Rates Moving Forward – Summary

The short and sweet of it is that, given the Federal Reserve’s current stance on interest rates, the best CD yields should continue to tick upwards in 2023.

FAQs

Below are frequently asked questions by consumers.

Do CD Rates Go Up with Inflation?

Generally speaking CD rates are not directly correlated with the rate of inflation.

That said, the measures the FED tends to use to address inflation – like quantitative tightening and raising prime rates – does put upward pressure on CD rates.

Do CD Rates Go Up with the Prime Rate?

The prime rate set by the FED is the primary factor banks and credit unions use when determining the rate to charge on a loan to consumers. It also impacts the rates they provide on deposit accounts such as CDs and savings accounts.

Banks and credit unions use this prime rate because it is the rate they are charged by The Federal Reserve to fund their loan products.

Do CD Rates Go Up During a Recession?

Usually no. The Federal Reserve’s primary lever used to deal with a recession is lowering prime rates. This happened in the 1980’s and more recently with the 2008 recession where rates dropped from over 5% to historic near zero lows. CD rates followed suit in both instances.

That said, consumers still tend to flock to CDs more so in uncertain economic times.

Filed Under: CD Rates

CD Ladders – What they are and how to construct one

Johnathan Maverick
April 22, 2022

A CD ladder is a type of savings account investing strategy. It’s a strategy designed to enable an investor to maximize return on investment (ROI) with the higher interest rates offered on longer-term certificates of deposit, while also enjoying the benefit of easy access to invested capital.

A CD ladder consists of a portfolio of several CDs that have varying maturity dates. The staggered maturity dates mean that you have a regular, periodically recurring option to withdraw some of your investment capital, should you need it or want to invest in something else.

Understanding Certificates of Deposit (CDs)

A certificate of deposit (CD) is essentially a “time-locked” savings account. In return for keeping money invested in a CD for a specified period of time, a bank or credit union is willing to offer you a higher interest rate than what they ordinarily offer on a standard savings account.

The term lengths for CDs vary, with commonly available term lengths as short as three months, up to as long as five years. Long-term CDs usually pay higher interest than short-term CDs.

If you withdraw the money invested in a CD prior to its maturity date, then you incur an interest penalty. Early withdrawal interest penalties are usually figured in terms of “days of interest”. For example, if you withdraw your money from a five-year CD before maturity, your bank might subtract 180 days’ worth of earned interest. Thus, if you withdraw your money after four years, you’d only receive three and a half years’ worth of interest.

By using CDs with different terms and maturities, a CD ladder investing strategy reduces your risk of early withdrawal penalties.

What is a CD Ladder

A CD ladder is simply a portfolio of multiple CDs that have different maturity dates. Holding CDs with varying maturities offers the following benefits:

  • It lowers the risk of having money locked into a low interest rate CD if interest rates should rise
  • It also reduces your risk of missing out on the chance to earn higher interest rate returns if prevailing interest rates fall

Although some CDs are variable rate CDs, most are fixed rate investments. If you’re earning a high fixed rate on a five-year CD, and prevailing interest rates fall during the term of your CD, you’ll benefit from having locked in the higher rate.

How to Create a CD Ladder

A typical CD ladder is made up of five “rungs” of CDs, with maturity dates ranging from one year to five years.

As the image below illustrates, you create a five-rung CD ladder by making the following five initial investments (for this example, assume the total amount of investment capital committed to your CD ladder is $5,000):

  • Invest $1,000 in a one-year CD
  • Invest $1,000 in a two-year CD
  • Invest $1,000 in a three-year CD
  • Invest $1,000 in a four-year CD
  • Invest $1,000 in a five-year CD

As each of your five initial investments matures, you reinvest the funds in a new five-year CD. So, at the end of your first year, when your one-year CD matures, you reinvest that money in a five-year CD.

You then hold –

  • A two-year CD maturing at the end of the next year
  • A three-year CD maturing in two years
  • A four-year CD maturing three years from now
  • A five-year CD that matures in four years
  • An additional five-year CD that matures five years from now (the five-year CD you invested in with the funds from your original one-year CD)

At the end of four years, all your shorter term CDs will have matured, and you will then have five five-year CDs – with one of the five reaching maturity each year. You can maintain your CD ladder as long as you like. You can also opt to start a new ladder, again purchasing five CDs with maturity dates from one year to five years.

Note – Compounding Returns: Whenever one of your CDs matures, you can choose to pocket the earned interest and just reinvest the principal amount. However, you can get the benefit of compounded returns by reinvesting the total of your original principal, PLUS the interest you earned. For example, if you invest $1,000 in a five-year CD paying 3% interest, at maturity your CD will have earned $159.27 in interest. If you reinvest just the $1,000 principal, then you will again earn $159.27 interest in five years. However, if you invest your principal amount and your earned interest – $1,159.27 – then at the end of the next five years, you will have earned $343.91 in interest. That’s more than double the $159.27 you earned the first five years. Roll it all over again, and the next five years will earn you $557.96 in interest.

📊 Note – Different Types of CDs: You can populate your CD ladder with different kinds of CDs. For example, “callable CDs” offer higher yields, but give your bank a call option to pay you off and cash out the CD before it has run its full term. “No penalty CDs” pay lower interest rates, but don’t carry any early withdrawal interest penalties. Thus, they give you significantly increased liquidity.

Because of varying rates offered, you may want to create a CD ladder that is initially made up of CDs from different banks. One bank may offer the best three-year rate while another offers the best four-year rate.

When to Use a CD Ladder Strategy

There are two main circumstances that may make a CD ladder strategy a wise move.

  • Interest Rate Uncertainty
    A CD ladder, with varying interest rates spread across different maturities, may work to your advantage when there is a high level of uncertainty regarding future interest rates. The ladder gives you flexibility. You can easily make adjustments to your CD portfolio with the rolling maturity dates in a CD ladder. The flexibility of a CD ladder also offers you the option to easily move your investment capital into other investments as your CDs reach maturity.
  • Wanting More CD Liquidity
    Some investors employ a ladder strategy when they don’t want their savings tied up for a long period of time. With a five-rung ladder, every year you have the ability to cash out 20% of the capital you have invested in CDs, without suffering any interest penalties. Why is that a desirable option? – Perhaps you believe that you might incur some unexpected expenses in a year or two, so you want the option to access at least part of your savings deposits.

Do you want even more CD flexibility and liquidity? – Consider constructing a 10-rung CD ladder, with one CD reaching maturity every six months, as opposed to the “one-a-year” maturities a five-rung ladder offers.

Another circumstance where you might find using a CD ladder advantageous is if you anticipate wanting to move some of your investment capital into alternative investments that offer a potentially higher rate of return. Perhaps you expect your income to increase substantially within the next few years. That may raise your level of risk tolerance. You may then be willing to commit more money to higher risk investments that offer correspondingly higher potential profits.

Why – or Why Not – to Construct a CD Ladder: Advantages and Disadvantages

Every possible investment choice that you make will always have relative advantages and disadvantages. There are always trade-offs in choosing one investing strategy over another. Every investment carries an “opportunity cost”. Opportunity cost simply refers to the fact that whenever you choose to commit investment capital to one investment, you forgo the opportunity to invest it elsewhere.

The concept of opportunity cost is one of the factors that makes the flexibility of a CD ladder attractive. Should a much more appealing investment opportunity arise, a CD ladder, as already noted, gives you the regular, recurring option to cash out part of your CD holdings and transfer money into a different investment.

CD Ladder Pros

There are several basic advantages to constructing a CD ladder. First, it’s an easy means of earning a higher interest rate than what your bank offers with a traditional savings account or interest-bearing checking account. Second, because CDs are usually fixed rate instruments, they provide a predictable amount of interest income. Third, a ladder of CDs enables you to earn higher returns than you could make by investing all your money in a single short-term CD. But you still have liquidity similar to that offered with short-term CDs.

A CD ladder may offer a path that meets your short-to-medium term savings goals or needs. CDs work well as an investment vehicle when you’re saving for a specific purpose and within a timeframe – for example, if you’re saving money for a down payment on a house you hope to buy in a few years.

CD Ladder Cons

The primary disadvantage of a CD ladder is that even the highest-yield CDs offer a relatively low rate of return. Savings accounts of any type rarely, if ever, offer returns high enough to overcome the rate of inflation. However, CD investors are typically more concerned with making an investment that’s “safe”, rather than one that offers significant wealth-building opportunity.

Final Thoughts

CD laddering doesn’t require you to follow a strict, rigid structure. You can vary maturity intervals, how many rungs your ladder has, and how much money you invest in each CD. Construct a ladder that suits your personal financial goals, investing strategy, investment time horizon, and risk comfort level.

Filed Under: CD Rates

12 Best Free Stock Trading Apps & Brokerages for 2022

Johnathan Maverick
March 11, 2022

Commission-free stock trading is a relatively new phenomenon. The commission fees charged per trade by stock brokerages began rapidly declining in the last two decades of the 20th century, but commission-free trading has only become widespread in the past couple of years.

Charles Schwab began the trend among major stockbrokers when it started offering commission-free trading in late 2019. Fidelity, TD Ameritrade, and E*Trade rapidly followed suit.

Brokerage firms have plenty of other sources of revenue besides stock trade commissions. Among the most common are the following:

  • Investing and earning a return on money that’s sitting idle in trading accounts
  • Providing investment advisory services
  • Charging commissions on financial products other than stocks (e.g., futures)
  • Various account fees, such as transfer fees or IRA management fees

In any event, commission-free stock trading has pretty much become the industry standard. Rather than commission rates, investors now focus their attention on the services and resources that a broker offers, such as its trading platform, charting tools, and research and educational resources.

In this article, we’ll take a look at the commission-free stock brokerage firms that offer the best trading platforms, trading apps, and overall resources and services on their websites.

Top 12 Commission-Free Stock Trading Apps, Websites, and Platforms for 2022

Of course, the broker or trading app that’s best for you will depend on your personal investing needs and goals, the markets you trade (Just stocks? – Or futures? Forex? Cryptocurrency?), your trading strategy (Are you a day trader or a “buy and hold” investor?), and other factors, such as whether you do most of your trading on a computer or on your cell phone.

Note: There are two winners for best mobile-focused broker and best automatic investing app – just too difficult to choose one over the other in those two categories.

Best Commission-Free Stock Trading Platform – Thinkorswim

image credit: trade.thinkorswim.com

Thinkorswim is a stock trading platform offered by TD Ameritrade. It’s easily accessible – either online, with desktop software, or via mobile app – and is favored by many investors.

Thinkorswim’s long list of helpful features includes advanced stock screening, a wide range of up-to-the-minute market news and analysis resources, advanced charting and order customization, and live or demo (“paper”) trading. Users can enter trades across various financial markets, including assets such as stocks, options, futures, exchange-traded funds (ETFs), and forex. Market news and analysis sources include Morningstar, the Federal Reserve Economic Database, and the Center for Financial Research and Analysis (CFRA).

The investor education and training resources that come with Thinkorswim are unparalleled. They include extensive tutorials on how to most effectively use the platform, daily live broadcasts and webinars, “social sentiment” data, hundreds of archived articles and videos, and community chat rooms where you can discuss specific trade ideas or trading strategies with other traders from around the world. TD Ameritrade also publishes thinkMoney, a quarterly magazine dedicated to investor education.

The all-in-one research, analysis, and trading capabilities available through Thinkorswim are the main reason that TD Ameritrade got the nod from stockbrokers.com as their #1 trading platform pick.

Thinkorswim is well-known for its outstanding research and analysis capabilities, such as its extremely advanced and customizable charting tools that enable users to:

  • Access hundreds of trading strategies
  • Get real-time price quotes, including Level II quotes
  • Track specified chart patterns, and set price and/or chart pattern trading alerts
  • Study and back test trading strategies
  • Set up stock screens or automated trading strategies that use a combination of technical analysis and fundamental analysis indicators
  • Create your own contingent trade orders – for example, you can enter an order to “buy 100 shares of American Express if it trades below $180 within the next 22 minutes”

Best Commission-Free Stock Trading Website – TradeStation

image credit: tradestation.com

Two factors combine to put TradeStation virtually in a class by itself:

  • TradeStation was designed by actual financial market traders; In contrast, most brokerage trading platforms and facilities are designed by software engineers who may or may not (likely not) be experts on the financial markets
  • TradeStation was originally built and marketed as a trading software solution for professional institutional traders – Now, those tools and resources usually only available to such professional traders – like advanced screeners and the ability to easily create custom indicators – are now available to ordinary retail traders with TradeStation

Let’s get about the only negative with TradeStation out of the way right up front. TradeStation does offer commission-free trading of stocks, options, and ETFs – but it charges for trading just about any other financial asset. Mutual fund and bond traders get clipped for $14.95 per trade.

Let’s move ahead to the many TradeStation positives. First, investors can access virtually every financial market. Trading in stocks, options, ETFs, futures, forex, bonds, mutual funds, and cryptocurrencies is all readily available.

TS offers stellar research, news, and market analysis resources. The platform has its own market news network that enables clients to easily browse market news from multiple sources – Morningstar, Benzinga, etc. You can categorize your news feed to look at specific news areas, such as recent FDA decisions or news relevant to specific market sectors.

TradeStation also has its own YouTube channel, where clients can access videos on how to make the best use of every feature on the website. Live webinars, articles, and eBooks are all archived. In short, TS offers a university level education in financial trading.

TradeStation’s stock scanner can go toe-to-toe with high-end scanners that traders pay hundreds of dollars a year to access. You can choose from nearly 200 technical and fundamental analysis indicators to help you screen for the most promising trades throughout the day. Create watchlists, set up price alerts, and just wait for TS to notify you when a security has met your specified conditions for buying or selling.

The charting tools are just as advanced as the scanners. Charts can be customized from the shortest to the longest time frames, and overlaid with any of hundreds of indicators. In addition, the “EasyLanguage” feature enables traders to easily create their own indicators, without having to know any complex programming procedures.

TradeStation’s versatility reflects the fact that it’s a trading platform that was designed by traders, for traders. For instance, clients can place buy and sell orders from virtually anywhere within the website: from the order bar, from charts, from the “Market Depth” window – and by using tools such as customized hot keys or trading strategies with automated order execution.

Last, but certainly not least, TradeStation’s mobile app is one of the best in the business, providing nearly all the same advanced features as the desktop platform.

TradeStation Securities most recently won NerdWallet’s award as the “Best Online Broker for Stock Trading Platform and Research”. Stockbrokers.com recently recognized TS for having the “#1 Platform Technology” – for the 10th year in a row. The platform’s vast capabilities make it suitable for even the most sophisticated traders, while the website’s comprehensive educational resources make TradeStation very friendly to even novice investors.

Best Commission-Free Stock Broker – Charles Schwab

image credit: schwab.com

It only makes sense that Charles Schwab makes our list of 12 best commission-free stock trading providers. It was Schwab that, as the first major “discount broker”, began drastically cutting broker commission fees.

In addition to offering commission-free stock and ETF trading, Schwab has a number of advantages that combine to make it an excellent all-round brokerage firm. There are too many Schwab advantage features to discuss them all in detail, so let’s just note them in a brief rundown:

  • Tax-advantaged investing. If you’re in a high tax bracket, or otherwise focused on optimizing tax savings, Charles Schwab is looking out for you. It offers automatic tax-loss harvesting and suggests how to best structure your investments so as to minimize your tax liability.
  • Excellent news, research, and education. Schwab’s investor education resources are among the best and most extensive offered anywhere. In addition to providing access to top market news sources such as Market Edge, Schwab issues its own stock “report cards”. Archived investor education tools include articles, videos, webinars, and Schwab’s “On Investing” newsletter.
  • Broad market exposure. Investors can easily create a highly-diversified investment portfolio, thanks to the wide array of investment assets available to trade, including stocks – domestic and foreign, options, ETFs, mutual funds, fixed-income investments, commodity futures, and cryptocurrencies.
  • Sophisticated trading platform. Whether you trade through Schwab’s downloadable “SmartEdge” trading software, the website, or the Schwab mobile trading app, you have access to a trading platform that’s very advanced, while also being intuitive and easy to use. Stock screeners let you choose from multiple filters or metrics to narrow down your search for great trading opportunities.
  • Free Trade Advice. Schwab’s Trade & Probability Calculator will quickly calculate risk/reward factors on a trade or trading strategy for you.
  • Account Choices. Charles Schwab offers regular individual investor accounts, joint accounts, retirement accounts (e.g., IRA), education/custodial savings accounts, checking/cash management accounts, and credit card accounts through a partnership with American Express.
  • Automated Trading or Professional Advice. You can choose to utilize Schwab’s “Intelligent Portfolio” robo-advisor, or work one-on-one with a human financial advisor. In making trading decisions, you can opt in anywhere between totally independent trading and totally automated trading.

Best Mobile-Focused Stock Brokerage App #1 – Webull

image credit: webull.com

Webull was purposely designed to appeal to cell phone traders – investors who prefer to do their trading via a mobile app.

What Webull offers that many mobile app competitors don’t have is a wide array of surprisingly sophisticated trading tools. Investors can access stock screeners, economic calendars, research agency stock ratings, level II market quotes, and choose from dozens of advanced technical indicators to apply to customizable charts.

Webull also stands out by offering investments beyond just stocks, options, and ETFs – such as individual retirement accounts (IRAs). Clients also have access to investing in nine cryptocurrencies, including Bitcoin, Ethereum, and Dogecoin.

Low transaction costs are another plus for Webull. In addition to offering commission-free stock and ETF trading, Webull also offers option trading that is both commission-free and with no per-contract fees – a perk rarely found even among major brokerage firms.

2021 saw Webull garner a couple of notable awards:

  • Crowned “Best Investment App” by Benzinga
  • Rated “Top Broker for Fractional Shares” by stockbrokers.com

Webull has no minimum deposit requirement to open an account, and frequently offers a few free stock shares as an “open an account” bonus to new clients.

One area where Webull is somewhat lacking is investor education resources. However, that’s true of most mobile-focused stock trading apps.

Best Mobile-Focused Stock Brokerage App #2 – Robinhood

image credit: robinhood.com

Founded in 2013, Robinhood was one of the first stock trading firms aimed at beginning investors who favor mobile trading. This “stripped down”, very easy-to-use trading platform has gotten hugely positive reviews from clients who just want the ability to trade stock and options quickly and easily. Robinhood’s two primary claims to fame are (1) commission-free trading, and (2) easy mobile application trading.

Robinhood has, from its beginning, placed a major focus on eliminating, or at least drastically reducing, transaction costs. Clients get commission-free trading of stocks, options, and ETFs (mutual fund investments are not offered). Like Webull, Robinhood also doesn’t charge any per-contract fees on option trades.

In keeping with its streamlined, no frills approach to investing, Robinhood only offers regular individual trading accounts. Tax-advantaged retirement accounts are not available.

Robinhood’s cryptocurrency market offerings are limited. However, unlike the majority of existing cryptocurrency exchanges that charge exorbitant trading fees (up to around 5% of trade value), Robinhood offers no-fee trading, just like with its stock and option trading.

Caution Note: Robinhood’s crypto trading is rather restricted in that you can only buy cryptocurrency with US dollars and only sell cryptocurrency for US dollars. That means you can’t send your cryptocurrency to an external account (such as a crypto wallet), nor transfer crypto you own from an outside source into your Robinhood account.

Robinhood has never touted itself as offering outstanding investor education, news, and market analysis resources. It does, however, offer links to daily market news, and has gradually built up a pretty good library of basic investing education articles, with topics such as “What is an Annuity?” or “What is the Dividend Payout Ratio?”.

When you open an account at Robinhood, you automatically get a cash management account that currently pays 0.30% APY and comes with a debit card. The account features no account minimum deposit or balance requirements, no overdraft fees, and no transfer transaction fees.

Robinhood “Gold” is a premium account option that, for a $5 monthly fee, enables investors to access margin trading. The Gold account option also gets investors access to advanced market data (such as Level II price quotes) and research reports on individual stocks.

Robinhood has experienced some significant bumps in the road. The trading platform has had more than its fair share of outages. The company had to pay a $57 million fine to FINRA to settle charges of misleading clients and violating options trading rules. And in November of 2021, Robinhood suffered a data breach that may have revealed clients’ personal information.

On the positive side, Robinhood’s customer service, previously something of a sore spot for the company, has been acknowledged as making major improvements in 2021.

Best for Automatic Investing – Acorns

image credit: acorns.com

Automatic investing apps are a recent innovation in the financial services world. They can be particularly helpful for beginning investors, investors with limited investment capital, and people who find it difficult to regularly save money to set aside for investing. Essentially, Acorns makes investing automatic and simple. That makes it an excellent tool for beginning investors.

Apps such as Acorns (and Stash – Acorns’ primary competitor) can be set to automatically draw from your bank account just a small amount of money every month to invest – as little as $3. It doesn’t require a conscious decision and action on your part every month to ensure growing an investment account for you.

Acorns “finds” money for you to invest by having you link one or more of your credit or debit cards to your Acorns account. When you make a purchase with a linked card, Acorns takes the “spare change” (rounding up your purchase amount to the next nearest dollar amount) and deposits it in your Acorns investment account. The program works better, thanks to the fact that you can purchase fractional shares of ETFs through Acorns.

Using an AI (artificial intelligence) driven robo-advisor software program, Acorns uses your investments to gradually put together a portfolio of ETF investments designed to match up with your financial goals and risk tolerance. Creating that investor profile to guide the creation of your investment portfolio is done simply by answering seven basic questions. (And if your financial goals or risk tolerance change – as they likely will over time – you can adjust your portfolio by editing your previous answers.)

Acorns has continually expanded its services since its inception in 2014. It currently offers four different account types:

  • Acorns Invest – This is the basic personal investment account as described above
  • Acorns Later – This is an individual retirement account (IRA) that Acorns offers. You can choose to set up a traditional IRA, a Roth IRA, or even a Simplified Employee Pension (SEP) IRA. You can contribute to a tax-advantaged IRA with recurring scheduled transfers from a bank account. An Acorns Later account uses the same investing methodology as the Acorns Invest account – the Acorns robo-advisor tailors investments, based on your investor profile.
  • Acorns Checking – Acorns offers basic banking services, too, with a checking/debit card account.
  • Acorns Early – Acorns Early account is an investment account you can set up for your minor children, under the Uniform Transfers to Minors Act (UTMA) or the Uniform Gifts to Minors Act (UGMA). UTMA/UGMA accounts offer an advantage over specialized education savings accounts such as a 529 plan. The funds in a UTMA/UGMA account can be used to benefit your child in any manner. They aren’t restricted to only being used for educational expenses. These accounts offer tax advantages: The first $2,200 of investment gains are only taxed at the minor child’s tax rate, typically much lower than the parents’ rate.

Acorns also offers a rewards program that adds money to your investment account in the form of “cash back” when you make purchases at certain retailers online through the Acorns “Earn” extension.

Best for Automatic Investing #2 – Stash

image credit: stash.com

Stash is another automatic investing app, like Acorns, created with beginning investors in mind, or investors with only a small amount of investment capital. These automatic investing apps are also a good choice for investors who simply prefer a mostly “hands off”, “set it and forget it” approach to investing.

Stash was co-founded in 2015 (just one year behind Acorns) by former Wall Street executive, Brandon Krieg, who was previously a co-founder of Edge Trade, a pioneering trading software company. He and partner Eddie Robinson created Stash with the idea of making investing more readily accessible to the approximately 80% of the U.S. population who basically live paycheck-to-paycheck, have little or no savings, and fall into the category of “small retail investors”.

Stash offers automatic investing plans starting as low as $1 per month. You just set up your Stash account to automatically withdraw a specified amount of money each month from whatever bank account you designate to fund your “Auto-Stash” investing.

Stash will invest your money in individual stocks, ETFs, and/or cryptocurrency, using AI algorithms and your personal investor profile. The ability to get exposure to the cryptocurrency market is available with the Stash “Smart Portfolio” that comes with the $3/month Stash Growth Account or the $9/month Stash+ (“Stash Plus”) account.

Stash also offers clients a checking account (with no overdraft fees), through a partnership with Green Dot Bank (NYSE: GDOT). The checking account comes with Stash’ “Stock Back” debit card. Shop, using your Stash card, at retailers whose stock is listed on Stash – such as Amazon, Apple, or Starbucks.

A small percentage of whatever you spend (up to 5% of total purchase amount) will be used to buy you fractional shares of that company’s stock. (For example, the “cashback” you earn from buying coffee at Starbucks will get you a small piece of Starbucks’ stock. A nice extra is that you also get a percentage of cash back invested even when you shop with your Stock Back card at local or privately-held businesses. In those instances, Stash will use your cash back amount to invest in a stock or ETF that you choose.

Stash also offers retirement accounts in the form of traditional or Roth IRAs, and custodial accounts for children.

Both Stash and Acorns offer an extensive library of investor educational resources that can provide you with a solid basic education in personal finance and investing.

Best Multi-Asset Stock Trading Platform – Interactive Brokers

image credit: interactivebrokers.com

“Interactive” is a good name for this brokerage firm that offers exposure to the widest selection of investment assets. Traders with an Interactive Brokers account can execute low-cost trades in virtually every type of traded financial asset, including trading assets typically only accessible on foreign exchanges. Trading in stocks on foreign exchanges, such as the Shanghai Stock Exchange and the Hong Kong Stock Exchange, has become increasingly desirable with the rapid growth of China’s economy and the general increasing globalization of financial markets.

IB clients can trade on more than 130 exchanges, in more than 30 countries, and they can choose to fund their account in more than 20 currencies.

Investors can buy, sell, and manage investments in all of the following financial markets:

  • Foreign and Domestic Stocks (including fractional shares)
  • Options
  • ETFs
  • Mutual Funds
  • Commodity Futures
  • Precious Metals
  • Forex
  • Cryptocurrencies
  • Bonds

In addition to offering direct trading access to many more financial markets than what’s available through most brokerage firms, IB offers notably low trading costs across the board. Clients can enjoy unlimited free trades on US-listed stocks and ETFs, and a paltry $0.005 per share on foreign stock trades. Maximum transaction costs are set at 1% of total trade value. IB also offers trading volume discounts that can lower your trading costs even more. Margin trading rates are also extremely low.

IB is almost in a class by itself in charging no annual account fees, no transfer fees, no account inactivity fees, and no account closing fees. That’s a rare combination of savings in financial services fees – even more rare among firms offering the broad market access that clients of IB enjoy.

IB’s desktop Trader Workstation is considered, by even the most demanding traders, one of the fastest and most reliable trading platforms. Features include the ability to create multiple screens, alerts, and watchlists, on a dashboard that you can also customize. The platform can handle executing complex, multi-trade option orders. The charting program enables clients to simultaneously compare up to five trading strategies.

Interactive Brokers is an excellent choice for traders that are:

  • Searching for the lowest possible trading costs
  • Wanting access to the broadest possible range of markets
  • Executing complex trading strategies

It can be a bit confusing at first glance to navigate your way around the IB website, various areas of which are dedicated solely to institutional and proprietary trading. The trading platform has a learning curve that may be a bit steep initially, simply because it offers so many features.

Best Social Stock Investing App – Public

image credit: public.com

As a “social investing” app, Public is well-named. It aims to offer a “community investing” experience, with the stated goal of making it possible for any investor to own any stock, with an investment of any amount of money. Needless to say, Public offers trading in fractional shares. It’s an excellent choice for beginning investors who can only make investments in small increments. As, essentially, a social platform combined with a brokerage, Public – which has only been around since 2019 – is well placed to benefit from the growing trend of novice, small-time investors who believe there’s safety – or profit – in numbers. Investors can connect with other investors who have similar interests in various chat rooms and forums, and see what investments friends or other Public users are buying (or selling).

Since Public is specifically geared toward beginning investors, the app provides plenty of investor education material. Educational videos often feature respected business experts and market analysts. You can tailor your news and research sources to fit the kind of companies that you hold in your portfolio.

Investors can trade stocks or ETFs, commission-free. Through a partnership arrangement with Apex Crypto, clients of Public can also trade more than two dozen of the most widely-held cryptocurrencies.

One way to search for potential equity investments with Public is through checking out its “Themes” page. Public Themes are similar to market sectors, being composed of various companies that share certain characteristics. For example, one available Theme is “Women in Charge” – Click on it to bring up a list of more than 50 publicly-traded companies to choose from that have female CEOs. Other Themes include “Stay at Home” (shows work-at-home related companies), “Sports” companies, “Stocks with Crypto Exposure”, and “Payments” (payment processing companies, such as PayPal Holdings.

Public pays a generous amount of interest on money that’s sitting in your account, not currently invested. At last check, Public was offering a 2.5% yield when most banks were only paying  around 0.5%.

Best for Beginners – Fidelity

image credit: fidelity.com

Fidelity Investments, founded in 1946, is one of the most well-known and well-respected financial services companies in the world. The Johnson family that founded the company still holds a 49% equity interest in the firm, and still has a family member – Abigail Johnson – at the helm as CEO.

With more than $5 trillion in assets under management (AUM), Fidelity has continually been a leader in the world of investing. It manages a large number of mutual funds and ETFs, began offering computerized trading as early as 1984, and was one of the first major financial services companies to file with the Securities and Exchange Commission (SEC) to offer a cryptocurrency ETF.

Fidelity has long had a reputation for being user-friendly for the average individual retail investor. It has always maintained a strong emphasis on providing excellent investor education resources, and it’s unlikely that you’ll find the wealth of educational material that it offers matched anywhere else.

Fidelity’s Learning Center can take you all the way from complete “newbie” to investing to being a legitimate expert investor. The vast library of educational resources it offers includes articles, videos (Fidelity, of course, has its own YouTube channel), podcasts, and complete investing courses. New material is added and archived every week. Fidelity currently produces more than 100 live webinars every month. You can even get AI-driven recommendations on what investor education materials would likely be the most helpful for you, as determined by your investing interests, the amount of capital you have to invest, your level of investing expertise, and your long-term financial goals.

In addition to offering a plethora of educational content, Fidelity goes the extra mile by making it as easy as possible for you to navigate your way through it all. Articles, classes, courses, videos, and webinars are all organized by category, content type, and investor experience level. Much of Fidelity’s existing educational content is already organized into a kind of investor education “roadmap”, complete with tools to track your learning progress.

Fidelity has garnered numerous awards and accolades for its “Youth Account”, an innovative brokerage account designed specifically for teenagers. The Youth Account even has its own learning center, with content tailored to young, novice investors. Fidelity’s Youth Account center is a great online spot to direct your high-school age children to if you want them to develop solid personal finance habits and learn their way around the world of investing.

Fidelity offers ongoing support with Grade A news and research resources, market analysis, and trade recommendations. Its 17 third-party stock research reports (and five more just for ETFs) is more than any other stock brokerage provides. “Fidelity Viewpoints”, the firm’s weekly investor newsletter, offers ongoing sector analysis, technical and fundamental analysis, trading strategies, and specific trade ideas.

You can generate your own trade ideas by using Fidelity’s top-of-the-line screeners for stocks, ETFs, and mutual funds. Scan for specified trade conditions throughout the trading day, using any combination you want of the dozens of technical and fundamental indicators provided.

Fidelity’s mobile trading app is noted for being both easy to use and for offering nearly all of the features included with the company’s award-winning desktop trading platform, Active Trader Pro. Fidelity’s name continues to pop up on lists of “Best Trading Platforms for Day Traders”, “Best Stock Trading Platforms for Trading Options”, or just “Best Trading Platforms”. And in case I forgot to mention it, there are no commission fees for trading stocks, options, or ETFs. (Mutual funds, however, carry a $49.95 trade fee.)

Best for Cryptocurrency Investors – eToro

image credit: etoro.com

Most of the major, traditional stock brokerage firms offer little, if any, exposure to the rapidly growing cryptocurrency market. eToro offers a solution, as it provides investors with access to approximately 50 of the most widely held cryptocurrencies (the list of available crypto coins is continually expanding – just a few months ago, the list only numbered a little over 20).

Stock trading, ETF trading, and cryptocurrency trading at eToro are all commission-free. eToro offers another bonus savings for stock traders: When you sell a stock, eToro pays the SEC and FINRA regulatory fees for you. eToro also offers the option to purchase fractional shares.

One current drawback with eToro is limited investment selection. You can choose from a little over 1,700 stocks, which ought to be enough to satisfy most investors. (There are about 6,000 stocks listed on the NYSE and NASDAQ exchanges combined.) eToro’s selection of equities provides adequate representation of all market sectors. But the selection of ETFs is rather limited at 221. That’s only about 10% of the total number of ETFs currently available on US exchanges. But, again, eToro does attempt to offer a broad enough range of ETFs to cover the market.

Are you anxious to trade cryptocurrencies, but far from being a crypto expert? Then you may want to check out eToro’s proprietary feature, CopyTrader™. CopyTrader enables you to view the cryptocurrency trades of approved traders and copy them in your own trading account in real-time. Best of all, there’s no cost for the CopyTrader service.

Rather than following an individual cryptocurrency trader, investors also have the option to choose from a handful of “Smart Portfolios”. These are ready-made portfolios that hold a bundle of crypto assets and that follow a specific cryptocurrency trading strategy.

What if you’re on the other side of the coin – a red hot, expert crypto trader? eToro will pay you to share your trades with other traders, through its “Popular Investor” Program. The more traders who copy your trades, and the more money they invest doing so, the more eToro pays you. Popular Investor compensation starts at $2 per copier and increases, as you gain more followers, to as high as 2% of AUC (assets under copy).

Your eToro News Feed, which you can customize to your interests, offers a channel for interacting with other members of the eToro community to discuss the financial markets, or share trading ideas and trading strategies. You can post updates, make comments, and share the posts of other eToro traders.

Neither eToro’s web trading platform, nor its mobile app, offer the level of advanced charting and screening features available with some of the other brokerage firms mentioned here. However, traders can set up personal watchlists and get trading alerts. Whatever the eToro trading apps may lack in advanced features, they make up for in ease of use. Both the web platform and the eToro mobile app operate very intuitively. Even novice traders can quickly become adept at navigating their way around the trading platform. eToro’s mobile trading app, in particular, has garnered lots of positive reviews for its simple, straightforward navigation setup.

Best “All-in-One” App – M1

image credit: m1.com

“All-in-One” financial services firms are becoming increasingly popular. In the past, the traditional setup was to have your checking/savings account with a bank, your investment account(s) with a brokerage firm, and your credit card(s) through a credit card company. 

However, in recent years, more and more people are drawn to the idea of using an “all-in-one” financial hub – a single financial services company that provides everything: checking and/or savings accounts and debit cards, investment accounts, and credit cards and other loan services.

With nearly all personal financial business being conducted online, an all-in-one financial services website just simplifies your life. You can go to one website to manage all of your personal financial affairs. Transferring money from one type of account to another is much simpler than transferring money between two separate financial institutions – and usually instantaneous, rather than possibly having to wait up to five business days for a transfer to be credited.

M1 is among the most popular all-in-one personal finance companies. Offering commission-free trading in stocks and ETFs (including fractional shares trading), M1 gives investors a unique blend of investing automation and investor customization. With an M1 investment account, you create one or more investment portfolios that M1 refers to as “pies”.

M1 Pies

  • You can create as many pies as you want
  • Each pie can contain up to 100 different stocks and/or ETFs (each investment within a pie is referred to as a pie “slice”)
  • You can choose from dozens of pre-built portfolio pies that match up with different financial goals, investing time horizons, interests, and risk tolerance; Create your own individual pie; Or select a pre-built portfolio and then customize it to your liking by adding or deleting specific investments

M1’s selection of more than 80 pre-built investment portfolios will especially appeal to socially conscious investors, as it includes offerings such as “sustainable businesses” and “women-led businesses”.

M1 also offers great flexibility in terms of how much you want to automate or self-direct your investing. You can make all investing decisions and choices as they come – deposits to your account, whether you want to reinvest dividends, etc. – or you can automate everything, setting up regular contributions to your account and automatically reinvesting dividends.

One nice bit of automation that M1 provides is automatically rebalancing your portfolio(s) whenever you add funds to your investment account or make a withdrawal.

M1 – A Unique Rewards Program

M1 offers a unique cash back rewards program with its “Owners Rewards” credit card. When you use the card to purchase goods or services from companies whose stock you hold in an M1 investment portfolio, you’ll get up to 10% cash back (minimum 2.5%). All other purchases with the card earn 1.5% cash back. You can designate your rewards to simply be credited to your card account or checking account, or choose to have rewards automatically invested in one of your M1 portfolios.

The debit card that comes with your M1 checking account earns 1% cash back on all purchases, and the checking account pays a 1% annual percentage yield (APY) interest rate.

M1 Borrow lets you borrow up to 40% of the value of your investment account, at rates as low as 2%.

M1 offers retirement accounts – Roth or traditional IRAs – and custodial accounts used to benefit children.

Final Thoughts

You can enjoy commission-free trading with any number of stock brokerage firms. So, how do you find the one that’s best for you? – By thinking about what factors, other than trading costs, are most important to you.

  • What trading platforms are available? Do they suit your style of trading, and do you find them easy-to-use?
  • What financial markets do you have access to? If you’re interested in trading futures, cryptocurrencies, etc., then make sure you have access to those markets.
  • Investor education and research. Think about how much expert help you need or want with investing. Are you a novice trader, in need of a complete investor education? Or are you already an expert, with your own news and research resources?

There’s a great quote from famed investment fund manager, Peter Lynch, about picking a brokerage firm. He cautions that if you don’t take the time to compare them, then you’re likely to “have the same success buying stocks as you do in a poker game if you bet without looking at your cards”.

At a bare minimum, you want a trading platform that’s reliable (you don’t ever want to be needing to exit a trade but unable to do so because your broker’s trading platform has crashed) and a broker that offers good customer service. Look at recent online reviews and ratings of brokers that you’re considering. Doing that will also help ensure that you’re aware of any changes, positive or negative, that have recently occurred. A broker may have just added a new service – such as access to trading the crypto market – or may have dispensed with a previously available service.

Commission-Free Stock Trading – FAQ

Below are frequently asked questions that consumers have related to commission-free stock trading apps, websites, platforms and brokerages along with our responses.

What are the best mobile stock trading apps?

Younger investors who tend to do everything on their mobile phone also like to do mobile trading and investing. This has led to the rise of brokers, such as Webull and Robinhood, that put their emphasis on creating the best mobile app experience for stock trading. In technology development, this is called the “mobile first” approach, and it has proven successful in capturing the younger generation(s) of investors.

What is a robo-advisor?

A robo-advisor is a software program designed to suggest or pick investments for you based on your answers to questions about things such as your financial goals and risk tolerance. Since pioneer robo-advisors such as Betterment and Wealthfront first appeared, automated trading has become both more popular and more sophisticated with the development of artificial intelligence programs.

Is it possible to invest for free?

In terms of stock market investing, yes. All of the platforms listed above allow people to buy and sell both individual stocks and ETFs free of charge.

Can you start investing with $100?

Yes. And, in fact, many free stock trading apps and websites let you also buy fractional shares, so although you might not be able to afford to buy a share of amazon or alphabet (google) you can still own pieces of these companies.

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