Top 5 Investment Apps to Make Money with Minimal Risk

webymoneycom
Dec 21, 2024
15 min read

In an era when financial independence is more attainable than ever, many individuals are turning to investment apps to grow their wealth. These digital platforms' beauty lies in their ability to simplify investing, making it accessible to everyone, from seasoned investors to beginners looking to dip their toes into the market.

But with many options available, how do you choose the right tool to maximize your returns while minimizing risk?

This is where we come in. We’ve scoured the digital landscape to identify the top five investment apps that promote growth and prioritize safety. Each platform offers unique features tailored to different investment styles, ensuring you can find the perfect match for your financial goals. So, whether you’re looking to build a diversified portfolio or simply want a straightforward way to start investing, you’re in the right place.

Get ready to explore how these innovative tools can empower you on your investment journey, allowing you to make informed decisions confidently. Your financial future awaits!

Here are the top five investment apps that can help you make money while minimizing risks.

1. Acorns

Acorns simplifies investing by using a method called micro-investing. Here’s the basic idea: every time you purchase with a linked debit or credit card, Acorns rounds the transaction up to the nearest dollar. The difference—your "spare change"—is automatically invested into a diversified portfolio.

Example:

You buy coffee for $3.50.
Acorns rounded the purchase to $4.00 and invested the $0.50 difference.
Over time, these small amounts add up, giving your investment portfolio a steady stream of contributions.

Portfolios Tailored to Your Risk Level

Acorns offers pre-built portfolios designed by financial experts. These portfolios consist of a mix of exchange-traded funds (ETFs), which spread your investments across multiple asset classes like stocks and bonds.

Risk Levels:

Conservative: Focuses more on bonds to minimize risk.
Moderately Conservative: A balanced mix of bonds and some stocks for growth with lower risk.
Moderate: A 50/50 blend for those comfortable with moderate fluctuations.
Moderately Aggressive: More stocks than bonds, aiming for higher growth with higher risk.
Aggressive: Primarily stocks for maximum growth, suitable for younger investors.

During signup, you answer questions about your financial goals and risk tolerance, and Acorns recommends the best portfolio for you.

Features That Make Acorns Stand Out

Recurring Investments: In addition to spare change, you can set up recurring deposits. For instance, you might invest $10 weekly or $50 monthly to accelerate growth.
Found Money: Acorns partners with brands and retailers like Apple, Nike, and Walmart. When you shop with these brands through Acorns, they contribute a percentage of your purchase into your investment account. It’s like cashback but for investing!
Round-Ups Multiplier: If you want to invest more aggressively without changing your spending habits, you can multiply your round-ups (e.g., 2x, 3x). For example, a $0.50 round-up becomes $1.50 with a 3x multiplier.
Educational Resources: Acorns has built-in financial literacy tools and articles to help users comprehend the basics of investing, budgeting, and saving.

Costs and Accessibility

Acorns charges a flat monthly fee:

$3/month: Includes investing, retirement accounts, and banking features.
$5/month: Adds family accounts like custodial options for children.

There are no account minimums, which means you can start investing with as little as a few cents.

Why Acorns Is Great for Minimal Risk

Automatic Diversification: Your money is spread across various assets, reducing the impact of market fluctuations.
Passive Investing: Set it up and forget about it—Acorns does all the heavy lifting.
Steady Contributions: Small, consistent investments add up over time, making it easier to grow wealth without feeling the pinch.

Who Should Use Acorns?

Acorns are ideal for:

Beginners: Those new to investing and looking for an easy start.
Busy Professionals: People who want to invest but lack the time to actively manage a portfolio.
Anyone Seeking Discipline: Acorns automates the process if you struggle to save or invest regularly, ensuring you stay on track.

Acorns might not make you a millionaire overnight, but it’s an excellent app for building a strong foundation. Turning small, everyday actions into investments helps you create long-term wealth with minimal effort and risk.

2.Betterment

Betterment is a leading robo-advisor that takes the guesswork out of investing. It uses technology and financial expertise to help you grow your money in a way that aligns with your goals, preferences, and risk tolerance. Let’s explore how it works and why it’s an excellent choice for low-risk investing.

How Betterment Works

Betterment automates the entire investment process, from setting up your portfolio to rebalancing it over time. You start by answering a few questions about:

Your financial goals (e.g., saving for retirement, a home, or building general wealth).
Your timeline (short-term or long-term).
Your risk tolerance (from conservative to aggressive).

Based on your answers, Betterment creates a customized, diversified portfolio for you. It focuses on low-cost exchange-traded funds (ETFs), which spread your money across asset classes like stocks and bonds, reducing risk.

Features That Make Betterment Stand Out

Goal-Based Investing:

Betterment allows you to create multiple "buckets" or goals, such as:

Emergency Fund: Invest conservatively in low-risk assets.
Retirement: Aim for growth with a mix of stocks and bonds tailored to your age and target retirement date.
Big Purchases: Create a plan for shorter-term goals with appropriate risk levels.

Each goal has its portfolio, and the app automatically adjusts the investments to align with the timeline and risk.

Automatic Rebalancing:

Market fluctuations can cause your portfolio to drift from its original allocation (e.g., you might end up with more stocks than bonds, increasing your risk). Betterment automatically rebalances your portfolio to align with your chosen risk level, ensuring your investments remain balanced.

Tax-Loss Harvesting:

Betterment offers tax-loss harvesting for taxable accounts, which helps minimize the taxes you pay on investment gains. It does this by selling investments at a loss and replacing them with similar ones, reducing your tax liability without affecting your overall portfolio.

Low-Cost, Transparent Fees:

Betterment charges a flat annual fee of 0.25% of your account balance for its basic plan. For example, if you have $10,000 invested, you’ll pay $25 annually. This fee covers all portfolio management and advice.

For advanced services, like access to certified financial planners, you can opt for the Premium plan, which charges 0.40% annually.

Retirement Planning Tools:

Betterment excels in retirement planning, offering:

Retirement Savings Calculator: This helps you determine how much to save based on your age and goals.
Tax-Smart Rollover: If you have an old 401(k) or IRA, Betterment makes it easy to roll it over into their system.

Portfolios for Every Risk Level

Betterment offers different portfolio strategies to cater to investors of all risk appetites:

Conservative Portfolio: Heavily weighted toward bonds for stability and minimal risk.
Balanced Portfolio: A combination of stocks and bonds for consistent growth.
Aggressive Portfolio: Primarily stocks for higher potential returns, suitable for long-term investors.

Additionally, Betterment has specialized portfolio options:

Socially Responsible Investing (SRI): Focuses on companies that meet environmental, social, and governance (ESG) criteria.
Income Portfolio: Designed for retirees seeking steady income with low volatility.

Why Betterment Is a Low-Risk Option

Diversification: Betterment reduces the impact of poor performance in any area by investing in a wide range of assets.
Automation: The app handles everything—investing, rebalancing, and tax optimization—minimizing human error.
Custom Portfolios: Your portfolio is tailored to your goals and risk tolerance, ensuring you’re not taking unnecessary risks.

Who Should Use Betterment

Betterment is an excellent choice for:

Beginners: Its simplicity and automation make it perfect for those new to investing.
Busy Professionals: If you want to invest but lack time to manage a portfolio, Betterment does it for you.
Retirement Savers: The retirement planning tools and tax advantages are ideal for long-term savers.
Low-Risk Investors: Its diversified portfolios and conservative options make it a safe bet for cautious investors.

Real-Life Example

Let’s say you’re 30 and want to save for retirement at age 65. You set a retirement goal with Betterment, and the app creates a moderately aggressive portfolio. Over time, as you approach retirement, Betterment automatically shifts your investments toward safer assets like bonds, reducing risk while preserving your savings.

Betterment makes sophisticated investing accessible to everyone. Its automation, low fees, and personalized approach are game-changers, especially for those looking to grow their money with minimal risk. If you’re looking for a "set it and forget it" investment app that helps you achieve your financial goals, Betterment is a top contender.

3.Robinhood

Robinhood is a popular app that democratized investing by eliminating trading fees and offering an intuitive, mobile-friendly platform. It’s ideal for people who want to invest actively without being bogged down by high costs or complex tools. Let’s take a closer look at what makes Robinhood a standout choice.

How Robinhood Works

Robinhood allows users to trade stocks, ETFs (Exchange-Traded Funds), options, and cryptocurrencies directly from their smartphone or desktop. Unlike traditional brokerages, Robinhood charges no commissions, meaning you can buy and sell investments without incurring trading fees.

Key Features:

Commission-Free Trades: Buy and sell assets at no cost, even for single or fractional shares.
Fractional Shares: Invest as little as $1, even in expensive stocks like Amazon or Tesla.
User-Friendly Interface: Simple charts and straightforward navigation make it accessible for beginners.
Real-Time Market Data: Keep track of stock prices and trends in real-time.

Key Features That Set Robinhood Apart

No Minimum Account Balance:

You don’t need a large amount of money to start. You can open an account with $0 and begin investing whatever amount fits your budget.

Fractional Shares:

Robinhood lets you buy fractions of a share, making it easy to invest in high-priced stocks. For example, if a stock costs $3,000, you can still own a small piece with just $10.

Diverse Investment Options:

Robinhood supports multiple asset types, including:

Stocks: Trade shares of publicly listed companies.
ETFs: Invest in funds that track indexes like the S&P 500.
Options: Advanced trading strategies for experienced investors.
Cryptocurrencies: Buy, sell, or hold popular cryptocurrencies like Bitcoin, Ethereum, and Dogecoin.

Cash Management:

Robinhood offers an optional cash management account with a competitive annual interest rate on uninvested cash. It also comes with a debit card for straightforward access to your funds.

Recurring Investments:

Set up recurring investments in stocks or ETFs. For instance, you can schedule $50 weekly to buy shares of your favorite stock.

Robinhood Gold:

For $5 per month, Robinhood Gold offers advanced features like:

Margin Trading: Borrow money to buy more shares (only recommended for experienced investors).
Level II Market Data: Get detailed insights into stock price movements.
Bigger Instant Deposits: Access funds faster after transfers.

Why Robinhood Is Popular

Accessibility for Beginners: Robinhood’s simple design is welcoming for those new to investing. The app provides essential educational tools, making it easy to understand the market and make knowledgeable decisions.
Active Trading with No Fees: Unlike traditional brokerages, which charge $5–$10 per trade, Robinhood’s commission-free model allows you to trade frequently without reducing your profits.
Flexibility with Small Investments: The fractional shares feature allows you to build a diversified portfolio even with a small budget. This is great for beginners who don’t have thousands to invest.
No Hidden Fees: Robinhood is transparent about costs. Apart from optional Robinhood Gold, no account maintenance fees or inactivity charges exist.

Who Should Use Robinhood?

Robinhood is best for:

DIY Investors: People who want complete control over their investment choices.
Active Traders: Frequent traders who wish to minimize costs.
Crypto Enthusiasts: Investors looking to diversify into cryptocurrencies.
Budget-Conscious Investors: Those starting small and seeking low barriers to entry.

Considerations and Risks

While Robinhood is great for active and beginner investors, it does have some limitations:

Limited Research Tools: The app provides primary market data but lacks in-depth analysis tools in other platforms, such as Fidelity or TD Ameritrade.
No Retirement Accounts: Robinhood doesn’t offer tax-advantaged accounts like IRAs, which are crucial for long-term retirement savings.
Encourages Risky Behavior: The gamified design (e.g., confetti animations for trades) can tempt users to trade impulsively, leading to losses.

Real-Life Example

Imagine you want to invest in Apple stock but can’t afford the $200+ price per share. With Robinhood, you can buy a fractional share for $10. Over time, you could add small amounts regularly, building your position without stretching your budget.

Why Robinhood Is a Low-Risk Option for Beginners

Fractional Shares: Start with small amounts and scale up gradually.
No Fees: Every dollar you invest goes directly into your portfolio.
Diversification: Access to ETFs allows beginners to spread risk across multiple assets.

Robinhood has revolutionized investing by removing barriers like high fees and complex interfaces. While it’s an excellent tool for active traders and beginners, its simplicity means it’s not the best for those seeking in-depth financial planning or retirement savings. However, Robinhood is a fantastic starting point if you aim to build wealth and learn about the markets without incurring unnecessary costs.

4.Stash

Stash is a user-friendly investment app that combines the simplicity of investing with the power of education. It’s designed to help beginners build their portfolios while learning the fundamentals of personal finance. Stash offers fractional shares, automatic investing options, and personalized guidance, making it a perfect choice for cautious investors and those new to the market.

How Stash Works

Stash simplifies investment by letting users start with as little as $5. It emphasizes education and empowerment, helping users decide where to invest their money. You can invest in individual stocks, ETFs, or curated portfolios aligned with specific goals or values.

Key Steps:

Set Up an Account: Choose a plan (starting at $3/month) and complete a quick questionnaire to determine your risk tolerance and financial objectives.
Choose Investments: Browse options based on your interests, such as environmentally friendly companies or industries you believe in.
Invest Regularly: Automate your investments with recurring contributions or round-ups (more on this below).
Learn as You Go: Access educational content to build your financial literacy.

Key Features That Make Stash Stand Out

Fractional Shares:

You don’t need a fortune to start investing. With fractional shares, you can buy a portion of expensive stocks like Amazon or Tesla for as little as $1. This lowers the entry barrier and helps you diversify your portfolio on a budget.

Curated Investment Options:

Stash offers thematic portfolios and curated ETFs to match your values and goals. For instance:

Clean & Green: Invest in companies focused on sustainability.
Young Money: Target growth industries like technology.
Blue-Chip Stocks: Invest in well-established, reliable companies.

Automatic Investing:

Stash allows you to automate your investments with two key features:

Recurring Investments: Schedule weekly, bi-weekly, or monthly contributions to your portfolio.
Round-Ups: Like Acorns, Stash rounds up your everyday purchases and invests the spare change into your portfolio.

Stash Banking:

Stash offers a built-in banking feature, including a debit card that earns Stock-Back® Rewards. When you make purchases, you receive a percentage of the amount back as fractional shares in the companies you shop at (e.g., buying from Starbucks earns you fractional shares of Starbucks).

Personalized Guidance:

Stash provides tailored recommendations based on your preferences and financial goals. This helps you understand the "why" behind your investments and builds confidence in your financial decisions.

Educational Resources:

Stash includes a wealth of financial literacy tools, articles, and tips. Topics range from basic investing concepts to advanced strategies, ensuring users grow their knowledge as their portfolio grows.

Costs and Plans

Stash charges a flat monthly subscription fee, making it straightforward and predictable:

$3/month: Includes personal investment accounts, financial education, and banking features.
$9/month: Adds retirement accounts (IRAs) and custodial accounts for kids, along with advanced investing tools.

There are no trading fees or commissions, but you’ll still incur ETF expense ratios (typically 0.25%–0.50%, depending on your choices).

Why Stash Is a Great Option for Low-Risk Investors

Start Small: You can invest small amounts, reducing financial stress or risk.
Diversified Portfolios: By investing in ETFs and fractional shares, you can spread your risk across multiple assets.
Steady Growth: Automatic investing ensures consistent contributions to your portfolio, taking advantage of dollar-cost averaging.
Education Focus: Stash empowers you with knowledge, helping you make smarter investment decisions over time.

Who Should Use Stash?

Stash is perfect for:

Beginner Investors: If you’re new to investing and want to learn as you go.
Small-Budget Investors: Those looking to start small and grow their portfolio gradually.
Value-Driven Investors: People who want to invest in industries or causes they care about, like renewable energy or tech innovation.
Parents: The custodial account feature helps parents start saving for their children’s futures.

Example: How Stash Helps You Invest

Let’s say you want to invest in clean energy but don’t know where to start. Stash offers an ETF called Clean & Green, which pools investments in top renewable energy companies. You invest $5 per week automatically. Over time, as you learn more about the market, you might add fractional shares of individual stocks like Tesla or NextEra Energy to your portfolio.

Meanwhile, you use your Stash debit card for groceries, earning Stock-Back® Rewards automatically investing in the retailers you shop at.

Pros:

Affordable Entry: Start investing with as little as $1.
Automated Options: Simplifies the process for busy individuals.
Educational Tools: Helps you learn and grow as an investor.
Thematic Investing: Aligns your portfolio with your values or interests.

Cons:

Monthly Fees: While affordable, fees can feel high for smaller accounts.
Limited Advanced Tools: Not ideal for active traders or advanced investors.
No Tax-Loss Harvesting: Unlike Betterment or Wealthfront, Stash lacks this feature for taxable accounts.

Stash is an excellent platform for beginner and low-risk investors who want to combine investing with learning. Its fractional shares, automated investing tools, and educational resources make it easy to start small and grow steadily. Whether saving for retirement, building wealth, or just testing the waters, Stash offers a user-friendly way to take control of your financial future.

5.Wealthfront

Wealthfront is a leading robo-advisor that offers a fully automated investment experience. It combines powerful financial planning tools, tax-efficient investing strategies, and low-cost portfolio management to help you build wealth while minimizing risk. Wealthfront goes beyond simple investing by providing features like cash management accounts and personalized financial advice.

How Wealthfront Works

Wealthfront employs advanced algorithms to create and manage a diversified portfolio tailored to your financial goals. The process starts with a simple questionnaire that evaluates your preferences:

Risk Tolerance: How comfortable you are with market fluctuations.
Time Horizon: When you’ll need access to your money (e.g., retirement or short-term savings).
Goals: Whether you’re saving for a house, building wealth, or planning for retirement.

Based on your answers, Wealthfront creates a custom portfolio using low-cost exchange-traded funds (ETFs). The app then automates everything, from rebalancing your portfolio to optimizing taxes.

Key Features That Make Wealthfront Stand Out

Automatic Portfolio Management:

Wealthfront builds a portfolio based on Modern Portfolio Theory (MPT), which aims to maximize returns for your desired level of risk. Portfolios include a mix of asset classes like:

US Stocks: To capture domestic market growth.
Foreign Stocks: To diversify globally.
Bonds: For stability and income.
Real Estate: Through REITs (Real Estate Investment Trusts).
Commodities: For inflation protection.

Once your portfolio is set up, Wealthfront automatically rebalances it over time to maintain your desired allocation.

Tax-Loss Harvesting:

Wealthfront’s tax-loss harvesting feature is one of its standout benefits. It works like this:

When an investment declines in value, Wealthfront sells it to realize a tax loss.
The proceeds are reinvested in a similar asset to maintain your portfolio’s balance.
These losses can offset capital gains or even reduce your taxable income.

This feature can significantly boost after-tax returns, which is especially useful for taxable accounts.

Path Financial Planner:

Wealthfront’s Path tool is a digital financial advisor offering personalized insights and guidance. It helps you:

Plan for retirement by estimating how much you need to save and invest.
Create a savings plan for specific goals like buying a home or paying for college.
Forecast your financial future using actual data (e.g., income, spending habits, and investment returns).

High-Interest Cash Account:

Wealthfront offers a cash management account with a competitive interest rate, making it a great place to park emergency funds or short-term savings. Key features include:

No Fees: No account or overdraft fees.
FDIC Insurance: Coverage up to $5 million (via partner banks).
Quick Transfers: Easily move money between your cash account and investment portfolio.

529 College Savings Plan:

Wealthfront also supports 529 college savings accounts, a tax-advantaged way to save for education expenses. Its automated management and investment strategies help maximize your savings while keeping costs low.