If you’re like most Americans, you reach for your smartphone dozens of times a day to catch up on news, touch base with friends and family, and manage your personal life. You may even check your bank balance or use an app to pay a buddy back for the movie ticket she bought you last night. 

That computer in your pocket can come in handy when it’s time to make investment decisions, too. Investing isn’t just for high-income individuals who meet face-to-face with an expensive financial advisor and have the means to put a lot of money in the market. Discount and online brokerages have opened the door to more modest investors

The smartphone offers the next chapter in this story: micro-investing apps are designed for investors who don’t have a ton of money to invest right away, but want to add incrementally to their savings over time. 

Before you take the plunge, it’s important to think clearly about why you’re investing and what you hope to get out of an investing app. Instead of diving into the detailed specifics of any specific app, start by thinking about the services that make the most sense for you. Then you’ll be able to narrow the field of apps.

What to look for in an investing app

Beginner-friendly micro-investing apps tend to focus on two areas: education and access to the markets.  Education guides   investors through the process of building and managing their portfolio. For most apps, the education component focuses on providing information and background on how the markets work. 

Making it as easy as possible to access the markets allows new investors to make purchases on a scale that works for limited budgets. Many apps  offer lower fees or lower investment minimums required to start an account. 

These apps aim to provide a mix of comfort and convenience. If you wind up tossing and turning all night, worrying about how your money is doing, the app is not doing its job. Here are some features to look for that could help you sleep better at night.

Low minimum investment—These days, you should have no problem finding a reliable app with a required minimum investment in the single digits. Every great investor has to start somewhere, and you should be able to find a way to begin with an investment of as little as $1. 

Fees and commissions—Historically, Wall Street has charged clients fees each time they buy or sell stock. Some of today’s micro-investing apps do the opposite, typically offering trades without any fee at all. While free trades may look attractive, you often get what you pay for. So read the fine print: Low fees often involve a tradeoff in the level of service an investor receives. For example, a small monthly fee could pay off in the form of useful guidance and flexibility. 

In many cases, your fees also will decrease as your account balance grows. One note of caution: for investors starting small, flat fees can outweigh percentage-based fees that mutual funds typically charge, so it pays to calculate the fees that you will actually pay.

Fractional shares and dividend reinvestment—Maybe you want to make a play on Amazon stock but don’t want to fork over more than $2,000 for a single share. Many apps will allow you to purchase a fraction of a share. This is a great way to dip your toes in the market before you jump into it.
Some companies pay out dividends, or a distribution of the company’s earnings. If you buy a stock that pays periodic dividends on your shares, you can use those dividends to automatically purchase more shares of the stock. This feature is known as a dividend reinvestment plan, or DRIP, and was once traditionally available only through the company offering the stock. Many apps allow you to automatically reinvest dividends.

Links to banking services—New apps may offer a wide range of financial services associated with investing in the stock or bond market. Some will allow you to directly link your external bank or credit card accounts with your trading account, while other services allow you to do your banking through the app itself. 

The app might include attractive options such as  branded debit cards, individual retirement accounts (IRAs) or accounts held in the name of a minor. When considering these perks, think about how attached you are to your current bank and whether moving to app-based banking fits with your day-to-day, real-world life. If you like looking a teller in the eye, or if using an ATM will require an additional fee, you may be better off sticking with your existing bank accounts.

Periodic savings—Many apps offer ways to set up regular transfers from users’ bank accounts to their savings or investment accounts held through the app. These incoming transfers can be automatically applied to a specific investment, or set aside to earn interest until the user decides on an investment. Some apps offer “round-up” features which round each debit card purchase to the nearest dollar and invest the difference automatically.

Education and advice—This is a huge part of the value of many apps. Beginning investors can benefit greatly from educational resources ranging from a glossary that explains the basic vocabulary of the stock market,to daily market commentary, to more sophisticated research on specific companies and industries. Some allow users to read up on the importance of U.S. Treasury bond’s yield curve or to listen to a podcast on emerging markets. Some apps have developed their own versions of investing games to acquaint novice investors with the ups and downs of the markets. These tools allow users to compete in investing competitions with friends, using virtual money, before getting into the real thing.

Robo-advising—Robo-advising is technology which provides the sort of financial guidance that a broker would give. Robo-advisors use an algorithm to offer investing advice based on certain parameters. Since there’s no human interaction involved, they tend to provide that advice for a lower fee than a financial advisor would charge.

Micro-investing apps tend to use the term “robo-advising” to refer to the bundling of stocks or investments to fit a specific theme. The possibilities are endless, but are often structured around your own personal interests. For example, themes can include food, travel or socially responsible investing.

A broader approach to financial health

However you take that first step into the world of investing, you’ll probably get better results if your investing is part of a broader, integrated approach to your financial well-being. Your smartphone can be the central place for that approach, with the right apps for each component of your plan, including your micro-investing platform. A budgeting app can get your spending under control, while a debt management app can help you formulate a reliable and feasible plan for eliminating personal debt. Credit apps can track your credit rating and alert you of any red flags that you might otherwise miss.

There are countless apps and combinations of apps that fit those descriptions, so it could take some looking to find the right one for you. Keep in mind that everybody’s circumstances are different, so there may not be one app that perfectly fits your needs. With a bit of research, discipline and clear-eyed awareness of your own situation and tendencies, though, you can find the mix that works best for you. Stick with it, find out what works, and you’ll be on your way before you know it.

Consider Stash 

As you do your research, consider Stash, which includes education to help you start investing, fractional shares to help you start small, Portfolio Builder to help you create a customized portfolio, and many of the other features mentioned above. 

With Stash, you can start investing with any dollar amount today.

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