Investing is a great way for young people to plan for their future and work towards financial independence. With the rise of fintech, it’s never been easier for young investors to open a brokerage account. However, many established investment platforms require a minimum investment, which can be daunting for young investors.
Thankfully, there are many brokerages that offer under accounts. These accounts allow investors to start building their investment portfolio with as little as $5. In this article, we’ll introduce you to the 12 best under accounts for young investors, starting with:
1. Robinhood
Robinhood is a commission-free brokerage app that allows investors to buy and sell stocks, ETFs, options, and cryptocurrency. The platform is known for its simple and easy-to-use interface. Investors can open an account with as little as $1 and start trading immediately. Additionally, Robinhood offers fractional shares, which means investors can buy a portion of a stock rather than a whole share.
2. Stash
Stash is an investment app that allows investors to buy fractional shares of ETFs and individual stocks. The platform offers a selection of curated ETFs that are categorized by themes like green energy, technology, and emerging markets. Investors can start with as little as $1, but Stash also offers a premium subscription with added benefits.
3. Acorns
Acorns is an investment app that rounds up your purchases to the nearest dollar and invests the difference. The platform allows investors to choose from five different portfolios based on their investment goals and risk tolerance. Investors can start with as little as $5 and take advantage of Acorn’s automatic investment features.
4. M1 Finance
M1 Finance is a commission-free brokerage that allows investors to create a custom portfolio of stocks and ETFs. The platform offers fractional shares and allows investors to build their own portfolio or choose from pre-made portfolios. Investors can start with as little as $100 or open an IRA with as little as $500.
5. WiseBanyan
WiseBanyan is a free robo-advisor that creates a customized investment plan for each individual investor. The platform offers a selection of ETFs and allows investors to start with as little as $1. WiseBanyan also offers a premium service with access to financial advisors.
6. Betterment
Betterment is a robo-advisor that creates a customized investment portfolio based on an investor’s risk tolerance and investment goals. The platform offers a variety of portfolios with different risk levels and allows investors to start with as little as $10. Betterment charges an annual fee of 0.25% of your account balance.
7. Public
Public is a commission-free investment app that allows investors to buy fractional shares of stocks and ETFs. The platform offers a social element that allows investors to follow other investors and see what they’re buying and selling. Investors can start with as little as $5 and take advantage of Public’s automatic investment features.
8. Charles Schwab
Charles Schwab is a well-known investment brokerage that offers commission-free trades on stocks, ETFs, and options. While there is no minimum investment, Charles Schwab offers a variety of account types that may require a minimum balance. However, the platform offers a variety of educational resources for young investors.
9. TD Ameritrade
TD Ameritrade is another well-known investment brokerage that offers commission-free trades on stocks, ETFs, and options. While TD Ameritrade does not require a minimum investment, it does offer a variety of account types that may require a minimum balance. The platform offers a range of educational resources for young investors, including a virtual trading simulator.
10. E*TRADE
E*TRADE is an established brokerage that offers commission-free trades on stocks, ETFs, and options. While there is no minimum investment, E*TRADE offers a variety of account types that may require a minimum balance. The platform offers a variety of research and educational resources for young investors.
11. Ally Invest
Ally Invest is a low-cost brokerage that offers commission-free trades on stocks, ETFs, and options. The platform offers a variety of account types with no minimum balance requirement. Ally Invest offers many educational resources for young investors, including a virtual trading simulator.
12. Fidelity
Fidelity is a well-known investment brokerage that offers commission-free trades on stocks, ETFs, and options. While there is no minimum investment, Fidelity offers a variety of account types that may require a minimum balance. Fidelity offers a range of educational resources for young investors, including a virtual trading simulator.
1. Why are under accounts important for young investors?
Under accounts allow young investors to start building their investment portfolio with a small amount of money. This is important for those who may not have a lot of disposable income but are still interested in investing.
2. What fees should I be aware of when using under accounts?
While many under accounts offer commission-free trades, some may still charge fees for certain transactions. It’s important to read the fine print when opening a brokerage account and understand any fees that may be associated with the account.
3. Can I use under accounts for retirement savings?
Yes, many under accounts offer individual retirement accounts (IRAs) that can be used for retirement savings. These accounts may have different minimum investment requirements, so it’s important to do your research before opening an account.
4. What is a robo-advisor?
A robo-advisor is a digital platform that uses algorithms to create and manage investment portfolios for investors. This allows investors to have a customized portfolio without the need for a human financial advisor.
5. Are under accounts safe?
Yes, under accounts are safe as long as you choose a reputable brokerage. Make sure to do your research before opening an account and choose a brokerage with a good reputation.
6. How do I choose the right under account for me?
Choosing the right under account depends on your investment goals and risk tolerance. Research each brokerage and compare their offerings to see which one aligns with your investment strategy.
7. Can I have multiple under accounts?
Yes, you can have multiple under accounts with different brokerages. However, it’s important to keep track of all your investments and make sure you’re not over-diversifying your portfolio.
8. What is fractional shares?
Fractional shares allow investors to buy a portion of a stock rather than a whole share. This means investors can invest in expensive stocks without having to buy a whole share.
9. What is automatic investing?
Automatic investing is a feature offered by many under accounts that allows investors to set up regular investments into their account. This can help investors build their portfolio over time.
10. What is a virtual trading simulator?
A virtual trading simulator is a tool offered by many brokerages that allows investors to practice trading without risking real money. This can be a great way for young investors to learn about investing without the risk of losing money.
Investing is a great way for young people to plan for their future and build wealth over time. Under accounts make investing accessible to everyone, regardless of their financial situation. By choosing the right under account and taking advantage of automatic investing and other features, young investors can start building their investment portfolio today.
