8 of the Best Kids Investing Apps to Set Your Teen Up for Success | INVESTEDMOM
As a parent, you likely manage your kids' finances. They're young and free from responsibility, which makes it an opportune time to introduce them to investing. Teaching kids at a young age the importance of money and planning for the future is invaluable.
Do you trust your kids to invest responsibly at a young age? Probably not. A recent survey by PR News Wire shared that 43% of children used social media to learn how to invest, and 25% of them showed an interest in investing in cryptocurrency - which, given the latest news of crypto scams and frauds, is concerning.
Fortunately, there are investing apps for kids that relieve many parents' worries and concerns.
In this post, we look at what an investment app is, what features you should look for, and a review of eight kids investing apps.
What is an Investing App?
An investing app is a downloadable or web-accessible app that lets you directly and conveniently invest in financial markets. These apps differ from traditional investing significantly due to the convenience and accessibility they offer.
Investing apps can be downloaded on your smartphone to directly invest in stocks, bonds, exchange-traded funds (ETFs), or mutual funds. You can also manage your investments from these apps, as many provide user-friendly dashboards and analytics.
Traditionally, you had to meet with a stock broker who had access and the know-how of financial markets and would invest for you as the middleman. This would involve having high trust in that person and was costly due to the stockbroker's fees.
Benefits of Using Investing Apps to Get Your Teen Started with Investing
Since investing apps provide people with a modern way of investing, there are numerous benefits to using an app compared to traditional investing.
Easy to Access
Investment apps take away the burden of finding a trustworthy stock broker and can be readily used by anyone over 18. Most apps have a beginner-friendly interface and smooth onboarding, which helps you start using the app as soon as you launch it.
Previously, it took a lot of financial know-how to invest, making it difficult to start investing early on. With investment apps, however, anybody with a smartphone can have access.
Easier Accessibility to Financial Markets
By cutting out the middleman, people worldwide, no matter their background, can start investing by gaining direct access to global financial markets. This makes investing more accessible to people who cannot find anyone to invest on their behalf or would look to profit from the stock market.
Custodial Account
The age to legally start investing is around 18 or 21, depending on your state. But, according to studies, most kids pick up their financial habits from the early age of 7, so teaching your kids about investing early is very beneficial.
Most investment apps let parents open a custodial account to invest on behalf of their child. A custodial account is available through the Uniform Gifts to Minors Act (UGMA) and the Uniform Transfers to Minors Act (UTMA). These accounts allow an adult to transfer assets to a minor.
A custodial account gives parents a degree of control over their children's investments and banking accounts. This could include features to track and monitor your teen's investments and spending and set up notifications for whenever they make a transaction.
Tax Benefits
Other than making it easy to transfer wealth, a UTMA or UGMA account grants tax cuts on an income of around $1000. There are also no contribution limits, and the money can be used for any purpose, unlike 529 accounts. 529 accounts have a limit on contributions, and withdrawals can only be used for education purposes.
What Features Should You Look for in a Kids Investing App?
We've highlighted the importance of choosing the right investing app, but how do you know which one is right?
Below are some features you should keep in mind when choosing an investing app.
Cost
Although you'll be able to find many free investing apps on the market, they may not offer all the features your child needs to become a successful investor. Some apps charge a fee upfront or on every transaction you make, while others may charge a monthly fee which includes maintenance and reporting.
You don't have to spend a lot of money on a kids investing app. Instead, it would be best to use an app with a simple payment structure while giving you all the features you require for your children.
Easy to Use
Being a parent is hard enough. You're busy managing everyone's needs and probably reached your capacity. Adding one more thing feels too overwhelming.
Fortunately, there are investing apps for kids that are easy to use. Some even do the majority of the heavy lifting for you.
Investing apps were designed to make investing easy, so your chosen app should be easy to navigate and user-friendly. Since your kids will be managing all their investments from this app, it must have a dashboard with relevant analytics that lets them see where their money is going and how they should invest in a particular asset.
Parental Controls
The last thing you want is stressing over your child blowing all their money on some random investment.
You might want the ability to monitor your child's investments so you can make sure they're being responsible with their money. You can't expect your child to know money management without your help.
Some apps have parental controls or features to alert parents of their child's transactions or ensure they invest only in pre-approved investment options. This will give you peace of mind while letting your children make sound investment decisions simultaneously.
Accessibility
Investing apps targeted towards kids should give parents a degree of control over their child's investments and be accessible enough for children to invest themselves.
Many apps have strict controls over where you can and cannot invest. If you plan to brief your children on a long-term investment strategy, using an app that gives you control over how you invest can make a big difference.
8 Best Investing Apps for Kids
Greenlight
Greenlight is an excellent banking + investing app with plenty of parental controls. It's the perfect app for kids because you can monitor their transactions and get them a personalized debit card and a bank account for allowance.
This app has many features you'd appreciate as a parent, including transaction alerts and pre-approved stores - ensuring your child invests in the right places. Greenlight also has no monthly charges or fees while giving kids access to financial markets, enabling them to buy fractional shares in companies.
Since Greenlight started as a banking app, you should already have opted into their mid or top-tier card options to access the investing features.
Create your Greenlight account today and get your teen started with investing.
Chase
If you're an existing Chase checking customer, you can open a Chase First Banking account for your kids - even if they're under 18. The Chase First Banking account gives your teen a hands-on approach to investing and banking and a personalized debit card that they can use across 16,000 Chase ATMs.
The transaction limit for the ATM is $100, and the account doesn't pay interest, but it's worth noting that opening a Chase First account is free. It also has a chores and allowance feature - similar to the hire and fire your kids app - which allows you to track chores, reward them, and deposit their allowance directly into their debit account, giving them a sense of responsibility on how to use that money.
A highlight of the app is its fantastic parental controls and monitoring features. Its top-rated mobile app lets parents control how much money their child can withdraw from the ATM and set up transaction alerts and notifications.
They can also limit how much they can spend on certain activities such as shopping or food. These features enable parents to teach their children about budgeting and saving at an early age while building a bright financial future for them.
Ready to get your kid their first debit card? Open a Chase First Banking Child account today by clicking here.
Early Bird
Early Bird is a sure competitor for all other apps we've discussed here, as it was made primarily with families in mind. Their app boasts a user base of 70,000+ families and makes investing in your child's future easy.
They partnered with BlackRock to create an algorithm that helps you choose the best type of portfolio for your child and easily make a long-term investment strategy that works.
With Early Bird, parents create an UGMA custodial account that would transfer the property to the child once they reach 18 or 21. These investments could be used for any purpose, whether pursuing higher education, starting a business, or traveling the world.
Unlike other investing apps mentioned here, Early Bird charges a monthly fee of just $1 after you exceed your first allocated limit of $200 under asset management. They also charge an extra $2 processing fee on every contribution made by a member who isn't the custodian.
A great thing about this app is that it incorporates the family vibe. You can capture and share memories, invite other contributors, and see a projection of the estimated investment value once they reach 18.
Get started with Early Bird and get a free $15 bonus.
Stockpile
Stockpile allows the creation of custodial accounts for teens under 18. It is considered one of the best investing apps for beginners or youngsters just breaking into the financial world.
It should be noted that Stockpile is not geared towards multiple investment options like bonds and ETFs; instead, its main focus is on stock market investing. It offers 3,000+ stocks to invest in and can be a great option to get your teen started with strategic investing.
This app is excellent for your children because of the supervision controls it offers to parents. Teenagers registered under custodial accounts must get all their investments approved by their parents first. Stockpile has a convenient way to manage this by providing separate log-ins for the child and the parents. You'd log into your account whenever your kid invests in an asset and approve the transaction.
Stockpile costs $4.95 monthly for one adult and up to five kids. Start investing in stocks with Stockpile today.
Stash
Stash is an excellent investment app with a mobile-friendly design for beginner investors. Apart from letting you open a custodial account to invest for your child, it also gives you personalized investment guidance that fits your child's specific needs.
With Stash, you can invest in fractional shares and let your child's wealth grow, making a nice little nest egg for their future.
Their auto-stash feature is also great for automating investments, allowing you to consistently stick to your investment goals.
Unfortunately, custodial accounts are only available on a Stash+ account which charges a monthly fee of $9/mo and allows you to create 2 Kids' Portfolio - which could be a drawback for parents who want to invest for 3 or more children.
Get started with Stash for free for the first 30 days here.
Acorns
Acorns is an investing app with automation features, making building your investment portfolio over time easy. You can get your kids started with investing through Acorn's multiple features like:
Round-up - rounds up your purchases to the nearest dollar and invests the remaining amount of spare change left automatically; this builds up well over time and can teach your children the value of each penny saved.
Recurring investments - teens can choose a certain amount to automatically invest after every day, week, or month starting from as little as $5, to grow their portfolio consistently.
Sending/receiving gifts - relatives, friends, and family members can contribute to your kid's investment accounts by sharing an amount through a custom link.
Bonus savings and investments - shopping at family-friendly brands like Disney+ or ABC Mouse can grant you additional exclusive offers, savings, and bonus investments.
To get started with Acorns, you'd need to pay a monthly $5 fee for their Acorns Early account, which is suited for teens under 18.
Get started with Acorns with just a $5 investment today.
Ally Invest
Ally Invest is an investment app geared more towards kids who aren't yet sure or very interested in investing. Their custodial account allows parents to make most of the decisions on behalf of their children. However, it is still registered as an account under the Uniform Gifts to Minors Act (UGMA) and/or the Uniform Transfers to Minors Act (UTMA). This means all acquired assets would belong to the child, not the parent. These assets would transfer to them when they reach the age of 18 or 21, depending on the state.
Ally gives parents two options when creating their investment account: self-directed or robo-investing. Their self-directed option charges no fees nor takes any commission on transactions, making it a great option to get your teen started in investing. They even offer a browser feature called LIVE, their beginner-friendly monitoring and reporting platform that self-directed account holders can use for more effective money management.
Their robo-investing option is also great for people who need more time to manage their investments. This can be a good option for teens to balance their finances with school or work.
Also, after seeing some initial success with robo-investing, teens might get motivated to get into investing themselves. It'll cost you $100 to start, but it might be worth the investment (pun intended).
Create an investment account with Ally Invest and register a custodial account for your children.
Fidelity
Fidelity allows parents of teenagers to open a Fidelity Youth Account on their behalf. This will act as a brokerage account, not a custodial one, where the teen is granted freedom over investment decisions. Also, every investment will be named under the property of the teen and not the parent.
This may be a turn-off for some parents who want control over their child's investments, but if you're willing to trust your child and think they're mature enough to make their own decisions, Fidelity can be a great place to start.
A Fidelity Account will let your child invest, save, and manage their finances from one unified platform. They can easily get started, invest as little as $1 and buy fractional shares, gradually building their way up to reach their investing goals.
Open a Fidelity Youth account today and get a $50 bonus for your teen to get a headstart in their investment journey.
Understanding the Basics of Investing for Kids
TL;DR:
Investing is a crucial financial skill that can set kids up for future success.
Choosing the right investing app for your child involves careful consideration of various factors.
Parents play a significant role in guiding their kids in their investing journey.
What is Investing and Why is it Important for Kids?
Investing, in its simplest form, is the act of allocating money or resources with the expectation of generating an income or profit. It's like planting a seed today and nurturing it to grow into a tree that will bear fruits in the future.
For kids, understanding investing at an early age can be a game-changer. It not only equips them with a crucial life skill but also sets them up for financial success in the future. By learning to invest, kids can understand the value of money, the concept of risk and reward, and the power of compound interest.
Investing can also teach kids patience and discipline as they learn to wait for their investments to grow over time. It can also foster a sense of responsibility as they learn to manage their own money.
For further learning, books like "The Little Book of Common Sense Investing" by John C. Bogle and "A Random Walk Down Wall Street" by Burton G. Malkiel can provide a solid foundation in investing principles. Websites like Investopedia and Khan Academy also offer comprehensive resources on investing for kids.
How to Choose the Right Investing App for Your Child
Choosing the right investing app for your child is a critical step in their investing journey. It's not just about picking the app with the most features or the highest ratings. It's about finding an app that aligns with your child's learning style, interests, and investment goals.
When evaluating different apps, consider factors like user-friendliness, educational content, parental controls, and fees. Look for an app that is easy to navigate, provides engaging and age-appropriate educational materials, allows parents to monitor and control their child's activities, and charges reasonable fees.
Here’s a checklist for parents:
Does the app provide educational content?
Is the app easy to use and navigate?
Does the app allow parental controls?
What are the fees associated with the app?
The Role of Parents in Guiding Their Kids in Investing
Parents play a pivotal role in guiding their kids in investing. They can start by having open conversations about money and investing, explaining concepts in a way that their child can understand. They can also lead by example, showing their kids how they manage their own investments.
Supporting your child in their investing journey doesn't mean doing everything for them. It's about providing guidance and letting them make their own decisions (and mistakes). It's about helping them understand the consequences of their decisions and learning from their mistakes. That’s why I use the Hire and Fire your Kids App to teach my kid Recognition, Reward, and Consequences.
Hire and Fire your Kids App:
USP: Real-world job simulation experience
User Experience & Interface: Interactive and engaging for children and teens
Writing Quality & Versatility: High-quality content that simplifies financial concepts
Integrations & Compatibility: Compatible with most devices; integrates well with family calendars and reminder apps
AI Tech & Customisation: Basic AI for task management
Performance: Stable and consistent
Reliability: High reliability with regular updates
Accuracy & Error Rate: Low error rate, accurate tracking of chores and payments
Cost Comparison: Free to download with in-app purchases for additional features
Learning Curves: Moderately easy, designed for kids to quickly understand
Custom Support: Responsive support team accessible via app
Parents can also leverage resources to enhance their own understanding of investing. Books like "The Bogleheads' Guide to Investing" by Taylor Larimore and "Investing for Dummies" by Eric Tyson can provide valuable insights. Online courses on platforms like Coursera and Udemy can also be beneficial.
Frequently Asked Questions (FAQs)
Why Invest Early in Life?
A person's most valuable asset is time. Children have a clear time advantage when it comes to investing and taking risks. They can invest their money and create a nest egg to grant them financial freedom once they're older.
The sooner a person starts investing, the more beneficial and lucrative their investments likely will become.
As responsibilities pile up, adults cannot take as many risks as their livelihood and family members depend on their income. For this reason, most, if not all, people wish they had invested early in their life to gain financial freedom.
What is the Youngest Age to Invest?
Thanks to modern investing apps, parents can open a custodial account that lets them invest on behalf of their child. This means that parents could start investing for their child through a UGMA account, which would transfer the property to the child once they reach 18 or 21, depending on their residence.
The youngest age to start legally investing by yourself, without a custodian, is 18 or 21, depending on the legal age in your area.
Can a Child Who's Younger Than 18 Invest?
A child younger than 18 cannot invest directly but can start investing through a guardian or parent. Although many apps give the child freedom over their investments, most, if not all, are closely monitored by a parent, allowing them to approve investments or keep track of them through a personalized online account portal.
Why is Investing Good for Kids?
Investing is suitable for kids as it teaches them the value of budgeting, saving, and money management as they grow older. By giving them the freedom to invest through an investing app, they would learn how to be accountable and responsible for where their money goes and how to spend it.
Another significant benefit is the financial freedom your child gains as they let their investments grow when transitioning to adulthood.
Can Kids Have Shares?
Many public companies have clearly stated that minors under the age of 18 are not able to keep shares in a company. As a trustee, parents or guardians can invest in shares on the child's behalf. Doing this through a UTMA/UGMA account will enable the trustee to transfer the property to the child once they reach the age of 18.
Set Your Kids Up for Success and Help Them Build a Meaningful Financial Future
We've looked at how an investing app can benefit your child by investing early on. With hundreds of investing apps on the market, choosing the right one to get your kids started can be complicated or overwhelming.
The most important things to consider when looking at an investing app are cost, ease of use, parental controls, and accessibility. Remember, you want an app that doesn't complicate your life more.
It will be invaluable to teach your kids money management and investing early in their lives. You'll be setting them up for a financially stable future.
Being a parent is difficult enough to balance your responsibilities and your child's needs. To relieve yourself of the burden of teaching your children to invest from scratch, you can book a call with Invested Mom to get financial advice and learn how to develop an action-driven financial strategy to help your children gain financial freedom.
Meet the Author:
Inge was born and raised in Cape Town, South Africa, and moved to Canada in 2010 looking for a better life. She always had an entrepreneurial spirit and started her first side hustle when she was 9 years old – selling fudge at school during lunch breaks.
It wasn’t until much later that she realized that saving isn’t enough to get ahead. She was always very interested in real estate, but saving up for a down payment was grueling and slow, and the demands of life kept getting in the way.
She started investing in herself and upgrading her skills while learning how to invest. She quickly became debt free and compounded her money at a staggering rate.
It wasn’t until she became a coach that she realized how significant an impact she can make in people’s lives by sharing her journey, learnings, and processes.
So here she is, advocating for everyone who is invested and wants to build their wealth, especially the mommas!