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Stock markets and major commodities such as oil and gold seem to get most of the mainstream financial market headlines these days. Despite being the largest and most liquid trading markets in the world, the global currency markets do not nearly get the same attention.
There are a few key reasons for this – the lack of a true central currency exchange, the relatively small daily price changes and the seemingly opaque reasons for changes in currencies.
However, the value of our nation’s currency can have a strong affect on the stock market and the commodities markets as well as have a real affect on our lives. Our currency’s value is a basic fundamental component of our wealth and our ability to purchase goods – especially in this age of globalization. If we pay attention to the currency market trends, we can benefit by using this information to plan ahead for a vacation, search out deals on foreign products or take this knowledge into account when making our investment decisions.
For businesses, the value of a local currency can be even more important. A strong currency will make our exports more expensive to foreign buyers while possibly making imports downright cheap for us to buy.
As a currency trader, I can tell you that there are many economic factors to take into consideration when it comes to evaluating a currency’s strength. Some economic factors can have more influence at different times and for different countries.
Below, I touch upon four factors that I believe to be among the most important economic indicators anyone can follow by reading the news.
1. Interest Rates
The first factor contributing to the general strength or weakness of a currency is a country’s interest rate. Simply, interest rates are the amount it costs to borrow money. The interest rate level is moved higher or lower by a country’s central bank to either stimulate or slow down an economy. Higher interest rates impose a more costly fee to borrow money while lower interest rates lessen the fee and usually spur more borrowing (or access to cheap credit) in an economy.
When it comes to demand for a particular currency, however, the higher the interest rate usually means the higher the demand for that currency. Lower interest rates usually decrease the demand for a currency. The reason investors look to buy currencies with higher interest rates is it creates an additional rate of return on their currency exchange. A trader is compensated by the interest rate differential when the trader buys the currency with the higher interest rate compared to the lower interest rate currency. There is a popular currency trading strategy called the “carry trade” that seeks to exploit the differences in country’s interest rates (see more on the carry trade here).
The mechanics behind this can take some time and effort to fully comprehend, but the general take away is: Higher interest rates make a currency more attractive.
2. Inflation
Inflation is next in our economic factors list and is defined by the rise in prices of goods and services. When a product rises in price, it signals that there is an underlying demand for that product. Higher prices may not seem good to a consumer, but it is generally considered healthy for a country to have a moderate increase in inflation in a growing economy. Many central banks have a target inflation rate for their economy of around 2 percent a year.
When an economy sees too much inflation, the central bank will try to cool off rising prices and access to cheap credit with an increase in interest rates. This brings us back to number one in our list, where we see that higher interest rates make a currency more attractive. So in a growing economic environment, rising inflation rates will tend to increase expectations that interest rates will rise, which will in turn make traders have a positive outlook for the rise of the currency.
There are also downsides to inflation when not accompanied by a growing economy called stagflation (high unemployment, low growth, high inflation) and the dreaded deflation, which is when prices are in decline. This is usually a drag on an economy as prices of goods are falling, leading to declining wages in worker paychecks and less money workers will have to buy goods.
3. Economic Growth
The strength of an economy can go a long way to boosting the strength of the nation’s currency. A strong growth rate in a country will see a growing demand for products and services with better job prospects for workers as well as being an attractive destination for capital and investments.
The easiest way to watch a country’s economic standing is to pay attention to the gross domestic product (GDP). A strong GDP reading is growth of 3 percent or more in many cases, while growth close to zero percent or a negative reading shows that the economy could be headed for a recession. A typical definition of a recession is two consecutive quarters of negative GDP growth.
In an economy like the United States, which is driven by consumer spending, expanding growth that produces more jobs and better wages will allow workers to feel wealthier and help to further stimulate the economy through domestic consumption. More growth can bring higher inflation rates and the expectations for interest rate increases. Foreign investment and demand from companies abroad can also play an important factor in boosting the local currency of a strong economy.
4. Current Account Balance
The last on our list is the current account balance. It is considered to be the most extensive gauge of cross-border transactions of a country. Simply put, it is the total amount of goods, services, income and current transfers of a country against all of its trading partners. A positive current account balance signals that a country lends more to its trading partners than it borrows, and a deficit current account balance shows that the country borrows more from its trading partners than it lends.
This total amount of trade can influence the country’s exchange rate positively if there is more demand for that country’s goods (and currency) from other countries. A deficit or borrower country will see less demand for its own local goods and currency overall.
Conclusion
Economics and currency forecasting are both very much inexact sciences. Price movements can seem volatile and hard to understand, but for those seeking basic insight into currency trends, these important economic factors can go a long way.
Zachary Storella is the CEO of currency news website CountingPips.com.
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In a world where virtual investments like crypto increasingly receive media attention for their volatility and uncertain futures, people desire to put their money into something stable and tangible.
Real estate has historically been one of those investments, but the barriers to entry have always been steep—until the emergence of real estate crowdfunding platforms.
What is Real Estate Crowdfunding?
With real estate crowdfunding, individuals can pool their money to fund a property investment. Crowdfunding platforms benefit investors by allowing individuals to combine a relatively small amount of money with others so they can collectively fund a real estate investment they otherwise wouldn’t be able to.
The entity owning the property benefits from crowdfunding by receiving funds they otherwise wouldn’t through traditional investing.
Real estate crowdfunding gives all investors exclusive access to investments typically reserved for the ultra-wealthy.
Real estate crowdfunding can include debt or equity investments. Equity investing occurs when an investor owns a property and receives income through things like rent and profits from selling the property for more than what they paid.
Debt investing involves loaning money to real estate buyers. Those who loaned their money receive their investment in fixed increments, depending on the loan terms.
What Type of Investors is Real Estate Crowdfunding Best For?
Real estate investing was historically reserved for accredited investors, who, according to the SEC, must fulfill one of the following requirements to be considered accredited.
You have an individual income of more than $200,000 per year in the last two years and expect to maintain the same income level in the current year.
You and your spouse jointly have an income of $300,000 per year in the last two years and expect to maintain the same income level in the current year.
You have a net worth exceeding $1 million, excluding your primary residence, either individually or jointly with your spouse.
You invest on behalf of an entity with at least $5 million in assets or a business in which all the equity owners are accredited investors.
In addition to being accredited, investors need the time, effort, and knowledge available to find a property, conduct all activities related to property management, and take on all the risks of a single property.
While some real estate crowdfunding platforms do require individuals to be accredited investors, several do not. With these platforms, all investors, accredited or not, can invest in the relatively stable real estate market without the time, effort, and patience previously required.
You might be interested in investing in real estate via crowdfunding, but where do you begin? We’ve rounded up the top seven best real estate crowdfunding platforms in 2023, with some extra honorable mentions. We’ve found something for everyone’s specific financial needs, so read on to get started with your real estate investing journey.
Table of Contents
Best Real Estate Crowdfunding Platforms for 2023
Fundrise is an ideal platform for those just getting started in the real estate crowdfunding space. It’s also ideal for people who want a platform to provide increasingly larger investment opportunities as they grow as investors.
What You Need to Know:
Minimum investment: Depends on the chosen account level
Property types: Check out their assets page to learn about available property types, including apartment buildings, residential and commercial properties.
Pros
Variety of account levels offers something for everyone.
Relatively stable investing options through private real estate, as opposed to REITs or stocks
Diversified portfolio strategy via the soon-to-be-released Innovation Fund
Cons
Minimum iPO investment is $1,000
Limited customer support services
Lack of complete fee transparency
Fundrise prides itself on being an easy-to-use and low-cost option for those looking to break into real estate crowdfunding. Fundrise uses its commercial software to find and advertise properties to its investors. Utilizing its own software enables Fundrise to charge lower fees, leading to more money in investors’ pockets.
Fundrise currently has 330,000 investors using its site, a total asset transaction value of $7 billion, and $194 million in net dividends already earned by its investors. The company’s investments are all tangible, private real estate investments, typically more stable than REITs and stocks tied to the stock market’s performance. Also, because the company is investor-owned, Fundrise allows its users to invest in its iPO, or internet public offering.
While the platform offers something for the beginner up to the seasoned investor, it leaves much of the troubleshooting up to users, as Fundrise has limited customer service assistance. There’s no way to directly speak with a representative if you have an issue—only an email address and troubleshooting articles are on the website. Fundrise’s total fees for individual investments aren’t clearly stated on its website either.
If you’re a green investor looking to break into the real estate crowdfunding space, Fundrise may be an excellent option. Check out our Good Financial Cents Fundrise Review for more information.
RealtyMogul: Best for Single Property
If you’re an accredited investor looking to focus on finding and investing in the best single piece of property, RealtyMogul may be for you.
What You Need to Know:
Minimum investment:
$5,000 for individual property investments
$5,000 for REITs
Recurring management fee: Usually 1.0%–1.25% annual fees
Accredited investors only?: Yes for single properties, no for REITS
Property types: Office, residential, single-family, and others
Pros
Two REIT options to invest in focused on income and growth
Options for accredited and non-accredited investors
Trustworthy platform, evident by its A+ ranking with the BBB
Cons
Requires a high minimum investment.
High management fees and limited fee transparency
No secondary market for investments, making them illiquid
RealtyMogul’s beginning was inspired by a realization from its founder, Jilliene Helman. While working in wealth management, Jilliene’s experience with her clients showed her three things:
Real estate investors were her wealthiest clients.
There was no connection between her clients’ level of income and the amount of time they worked.
Her clients prioritized real estate investing for its ability to earn them passive income.
Thus, RealtyMogul was created to allow investors access to the real estate market and gain wealth through passive income strategies.
RealtyMogul currently has over 245,000 investors, over $950 million in investments, and $5.5 billion worth of potential deals currently listed on its site.
RealityMogul offers various investment options, including several property types and REITs available to accredited and non-accredited investors. Additionally, the platform’s Better Business Bureau’s A+ ranking provides the assurance investors need to know they are utilizing a trustworthy site.
RealtyMogul’s initial investment costs are steep—investors will need $5,000 to join the platform. Additionally, the company’s fee structure isn’t easy to navigate and depends widely on the investment. RealityMogul’s investments are also relatively illiquid, meaning investors won’t see a return on their investments until maturity, which could take upwards of three to five years.
Investors wanting to utilize a trustworthy platform to find their ideal single piece of real estate should look to RealtyMogul for assistance. Check out our review of RealityMogul to learn more.
DiversyFund: Best for Building a Portfolio Over Time
If you’re a non-accredited investor looking to grow your real estate investment portfolio gradually, DiversyFund may be right for you.
What You Need to Know:
Minimum investment: $500
Recurring management fee: Not available on website
Accredited investors only?: No
Property types: REITs (multi-family properties)
Pros
Relatively low minimum investment compared to other crowdfunding platforms.
Good option for non-accredited investors
Completely automated, making investing simpler
Cons
Few investment choices
Long investment timeline of at least five years
Lack of information on its website
DiversyFund offers a wealth-building, diverse portfolio to average investors. With DiversyFund, you don’t have to be an accredited investor or have thousands of dollars to invest in real estate. With a minimum of $500, you can invest in a multi-family REIT using DiversyFund.
The platform is completely automated, taking the guesswork out of investing in real estate. DiversyFund is great for everyday investors, especially those who aren’t accredited or don’t want to spend a lot of time learning the ins and outs of real estate investing.
DiversyFund does have a limited amount of investment options—it only offers multi-family property REITs. Additionally, investments take at least five years to see returns, which means those investing with DiversyFund should anticipate sitting tight for a while before realizing any gains from their investments. DiversyFund’s website also doesn’t include much information about how the company works.
If you’re a non-accredited investor looking for a simpler way to access the real estate market and gradually grow your portfolio, DiversyFund may be for you.
Roofstock: Best for Single Family Homes
Roofstock is an ideal investment platform for accredited investors who want to invest in single-family properties.
What You Need to Know:
Minimum investment: $5,000
Recurring management fee: Marketplace fee to buyers ($500 or 0.5% of the purchase price, whichever is greater)
Accredited investors only?: Yes
Property types: Single-family rentals
Pros
Variety of ownership structures to invest in
Investments monitored by property managers
IRA investment option
Cons
Minimum investment timeline of five years
Only accredited investors
No mobile app
Roofstock was founded to simplify single-family rental investing by making it as easy as possible for investors to enter the market.
Roofstock offers its accredited investors a variety of ownership structures to invest in, including individual accounts, joint accounts, limited liability companies, corporations, revocable trusts, irrevocable trusts, and limited partnerships. All Roofstock’s assets are managed by an asset manager and a property manager, taking these burdens off the investor and saving time. Roofstock boasts its ability to allow investors the benefits of passively investing in real estate without the headache of property management.
Roofstock enables investors to use an IRA as the title holder to their investment, a unique retirement investing strategy not offered by many other crowdfunding platforms. It also supports a 1031 exchange program, enabling investors to substitute one property for another while putting off paying capital gains taxes on the investment.
Some downsides of Roofstock include the patience required to see any returns, which may take at least five years. The platform is also limited to accredited investors and doesn’t currently offer a mobile app.
If you’re an accredited investor looking to break into the single-family home market, but you don’t want the headache of actually managing the property yourself, Roofstock can be a great option for you.
Cadre: Best for Multiple Investment Styles
Cadre seeks to be a one-stop shop for all things real estate investing.
What You Need to Know:
Minimum investment: $25,000
Recurring management fee: Yes, but the amount varies by investment
Accredited investors only?: Yes
Property types: Apartment, hotel, industrial, and other properties
Pros
Data-driven approach to finding investments
Wide variety of properties to invest in
Greater liquidity than other platforms
Cons
High minimum investment
No 1031 exchanges
Three to eight-year waiting period for investments
Founded by Ryan Williams to offer investors greater access to commercial real estate investing, Cadre’s data-driven approach enables its platform to source the most attractive real estate investment options in the most sought-after markets in the United States.
Cadre allows its investors to realize returns through a wide variety of investments. These include property deals, Cadre Funds (a portfolio diversification strategy), and the Cadre Secondary Market (which enables participants to buy and sell real estate shares).
Cadre currently has over $5 billion in total transactions, a rate of return of over 27%, and over $338 million in gross distributions to investors.
Cadre’s downsides include its high barrier to entry—accredited investors will need at least $25,000 to get started. There are also no 1031 exchange options, and property deals can take anywhere from three to eight years to see returns.
If you’re an accredited investor with a lot of money to invest and want to see quicker returns than traditional real estate investing, Cadre may be the best option.
AcreTrader: Best for Farmland
Folks looking to invest in farmland should check out AcreTrader.
AcreTrader’s mission is to provide direct access to farmland investments. AcreTrader chooses its farmland through an extensive underwriting process, enabling users to invest in the most sought-after farmland possible.
Historically, farmland was a problematic asset to invest in due to extensive research, administrative tasks, and property management. AcreTrader’s tool eliminates those burdens, enabling investors to yield passive income returns with farmland.
Using AcreTrader, investors purchase shares equal to 1/10 of an acre in the enterprise that owns the farm. That piece of land is chosen in a highly selective process to ensure that the investment will realize the 7.0%–9.0% returns AcreTrader boasts. AcreTrader also has self-directed IRA investment options for accredited investors looking to utilize AcreTrader’s platform.
AcreTrader’s downsides include the inherent risks associated with investing in farmland, including the land’s subjectivity to adverse weather conditions, the seasonable nature of crops, and government policies that could affect land’s market value.
Additionally, farmland investments may take anywhere from five to 10 years to see returns, so investors in AcreTrader need to ensure they are committed to this platform for the long haul. Farmland is also a highly illiquid investment, so AcreTrader’s platform users won’t be able to opt for an early return.
If you’re an accredited investor looking to invest in farmland but need someone to research which farmland to choose, AcreTrader may be a great platform for you.
Fund That Flip: Best for Fix-and-Flip Investments
Fund That Flip is a unique platform for individuals looking to invest in residential house flipping.
What You Need to Know:
Minimum investment: $5,000
Recurring management fee: 1.0%–3.0%
Accredited investors only?: Accredited investors only
Property types: Single or multi-family residential real estate
Pros
Up to 11% investment returns
Very rigorous underwriting process
Offer bridge loans, allowing borrowers to get funding as quickly as five to seven days
Cons
House flipping is inherently risky
Minimum investment is a bit high
Must be accredited
Fund That Flip utilizes extremely highly selective underwriting, only accepted 6.0%–8.0% of all potential real estate investments. The chosen projects are managed by a seasoned team of redevelopers, so investors know that their projects have the highest chance of seeing a return. Fund That Flip boasts up to 11% returns for its investors.
Additionally, Fund That Flip offers bridge loans to its borrowers to help further fund redevelopment efforts.
House flipping is inherently risky, but Fund that Flip reduces some of that risk by doing the underwriting and sourcing work itself. All investors must be accredited, and only 8.0% of loan applicants to this platform are approved, making it difficult for just anyone to join.
If you’re a real estate investor looking to break into the house flipping market but don’t want to deal with the headaches of finding a redeveloper and a property to flip yourself, Fund That Flip may be a great option.
Other Real Estate Crowdfunding Platforms to Consider
While we’ve mentioned our favorite real estate crowdfunding platforms, there are many other worthy sites to choose from. Here are a few of our honorable mentions:
HappyNest
HappyNest prides itself on enabling everyone who wants to join the real estate market to do so. HappyNest’s investments are unique because they involve investing in net lease (triple-net) agreements. With these agreements, renters pay some or all expenses associated with using the property, including maintenance, insurance, and taxes.
HappyNest can keep costs down and provide access to all investors. All it takes is $10 and a 0.04% monthly asset management fee—plus a willingness to wait at least three years—to see investment returns.
CrowdStreet
Crowdstreet offers a variety of debt and equity investments in various property types, including multifamily, retail, office, industrial, and land. The minimum investment is a steep $25,000, and fees may be required depending on the opportunity. However, Crowdstreet prides itself on the ability to grant investors access to previously inaccessible real estate markets.
PeerStreet
PeerStreet is a crowdfunding platform for real estate debt investing. Investors provide capital to borrowers in real estate, who pay interest every month on their loans. PeerStreet investors then receive a part of the monthly interest on the loan payments. There is a $100 minimum investment, with management fees around 1.0% of loan fees, but you must be accredited to participate with the platform.
EquityMultiple
EquityMultiple’s unique value proposition lies in its team of experts, who have over $75 billion in transactions under their belt and provide asset management through the entire investment process. Their technology is also easy to use.
This platform, reserved for accredited investing in commercial real estate, requires a minimum investment of $5,000. Fees for common equity investing are 0.5%–1.5%, and debt and preferred equity fees are 1.0%.
Jamestown Invest
Jamestown Invest has over 80,000 investors and $13.2 billion in assets under management. A platform for accredited and nonaccredited investors, Jamestown Invest requires a minimum of $2,500 to begin investing in its commercial real estate offerings, including office, retail, and mixed-use spaces in the United States.
Bottom Line – Choosing the Best Real Estate Crowdfunding Site
There are a host of real estate crowdfunding options for all investors, investment types, investment amounts, and accreditation statuses. Your personal investor profile and desired real estate investing outcomes determine the best real estate crowdfunding option.
While each platform is different, they all create a more accessible real estate market. While investing always comes with a certain amount of risk, real estate investing has traditionally been considered more stable.
Historically, its barriers to entry were high due to relatively high property costs and the time and effort needed to find and manage a property. With crowdfunding platforms, those barriers are reduced, making the real estate market more accessible for investors.
Best Real Estate Crowdfunding Companies
Company
Property Types
Minimum Investment
Annual Management Fees
Accredited Investors Only
AcreTrader
Farmland
$15,000
0.75%
Yes
Cadre
Apartments, hotels, industrial properties
$25,000
Varies
Yes
CrowdStreet
Multifamily, retail, office, industrial, and land
$25,000
Varies
Yes
DiversyFund
REITs
$500
Not available
No
EquityMultiple
Commercial
$5,000
0.5%–1.5%
Yes
Fundrise
Apartment, residential, commercial
$10
1.0%
No
FundThatFlip
Single or multi-family residential
$5,000
1.0%–3.0%
Yes
HappyNest
Pandemic and internet resistant businesses
$10
0.04% (monthly)
No
Jamestown Invest
Office, retail, and mixed-use spaces
$2,500
Varies
No
PeerStreet
Real estate debt
$100
1.0%
Yes
RealtyMogul
Office, residential, single-family
$5,000
Varies
Yes for single properties; No for REITs
Roofstock
Single-family rental
$5,000
$500 or 0.5% of purchase price
Yes
Have you invested in any real estate crowdfunding platforms? If so, what has been your experience?
Best Real Estate Crowdfunding Platforms FAQ
How should I pick a real estate crowdfunding platform?
First, determine if you are an accredited or nonaccredited investor. Next, decide how much money you’re willing to invest and how long you’d like it tied up. Using the above chart as a guide, choose a platform based on your specific criteria.
What are the common costs and fees for real estate crowdfunding?
Real estate crowdfunding has several associated costs, including but not limited to the initial investment cost, account-opening fees, and asset management fees. Initial investments can range from $10 to tens of thousands or more.
Account opening fees usually fall within 0.25%–1.0%, and management fees can have a fixed rate of anywhere from 0.5% to 2.0%.
What are the risks of real estate crowdfunding platforms?
Ultimately, crowdfunding platforms are tied to real estate assets with inherent risks. While platforms make it easier to search through properties, good investments are still challenging to find. Like anything online, there is a necessary amount of due diligence on the investor’s part to ensure that the platform is legitimate.
What is the minimum amount needed to invest in real estate?
With crowdfunding platforms, individuals can invest in real estate for as little as $10, although most of these platforms require at least $500–$1,000 to get started. Check out our resource for ideas on investing in real estate with any budget.
How can I invest in real estate with less than $5,000?
Some crowdfunding platforms allow you to invest less than $5,000 in real estate, including Fundrise, DiversyFund, and Jamestown Invests. In addition, you can use self-directed IRA funds or REITs to invest. Both options often enable you to invest less than $5,000.
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President Joe Biden has championed a substantial financial proposal in the latter half of his term: increasing taxes on businesses engaging in stock buybacks. This initiative aims to redirect corporate funds toward business expansion and job creation, instead of primarily benefiting executives who typically reap the rewards of such programs. However, despite its intended benefits, the proposal has encountered noteworthy resistance, even from traditionally supportive voices within the Democratic camp.
For help managing your own financial portfolio, consider working with a financial advisor.
Biden’s Plan
Currently, businesses pay a 1% tax on stock buybacks, a charge created when the Democrats passed the Inflation Reduction Act in 2022. In the State of the Union in January, though, Biden pushed raising the rate to 4%. Per a Morningstar report, he specifically called out the oil industry, noting that “Big Oil … invested too little of [their] profit to increase production and keep gas prices down. Instead, they used those record profits to buy back their own stock, rewarding their CEOs and shareholders.”
Biden also notes that this tax will increase federal revenue, which is important if he wants to continue pushing for progressive domestic policy in a potential second term.
The Pushback
One of the voices speaking out against Biden’s plan is a billionaire who would normally be on his side: Warren Buffet, who has publicly supported the Democratic Party for some time.
“When you are told that all repurchases are harmful to shareholders or the country, or particularly beneficial to CEOs, you are listening either to an economic illiterate or a silver-tongued demagogue (characters that are not mutually exclusive),” Buffet wrote in a note to shareholders of his company, Berkshire Hathaway.
More likely opponents of Biden’s have also chimed in. Writing in the Wall Street Journal opinion section in February, economist Burton Malkiel claims the tax won’t hurt just CEOs but average investors.
“While direct ownership of shares isn’t common among low-income people, indirect ownership through retirement plans exists across the income distribution,” he wrote. “Most common stock is held by the mutual (and exchange-traded) fund industry and by a variety of public and private pension plans,” he writes. “These institutions usually reinvest the proceeds from buybacks, and they rely on returns from the stock market to preserve the viability of their programs.”
The Bottom Line
President Biden is keen on increasing the tax on stock buybacks from 1% to 4%. While Biden and his supporters claim this would force companies to reinvest money in their business rather than enrich executives — while also increasing federal revenue — there are critics from both sides of the aisle who are pushing back.
Financial Planning Tips
If you need help planning your own stock market plan, consider working with a financial advisor. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Use SmartAsset’s asset allocation calculator to get a sense of what your portfolio should look like.
Ben Geier, CEPF®
Ben Geier is an experienced financial writer currently serving as a retirement and investing expert at SmartAsset. His work has appeared on Fortune, Mic.com and CNNMoney. Ben is a graduate of Northwestern University and a part-time student at the City University of New York Graduate Center. He is a member of the Society for Advancing Business Editing and Writing and a Certified Educator in Personal Finance (CEPF®). When he isn’t helping people understand their finances, Ben likes watching hockey, listening to music and experimenting in the kitchen. Originally from Alexandria, VA, he now lives in Brooklyn with his wife.
Whether you’re new to the state or a longtime resident, Michigan has plenty to offer. There’s also a wide range of financial institutions, from national banks with multiple branches to the small, independent bank that focuses on building community.
If you’re in the market for a new bank account, the options can be overwhelming. Here are some of the best banks in Michigan to help you find a bank that meets all your banking needs.
12 Best Banks in Michigan
Ready to start comparing banks? The below list includes some of the best banks in Michigan that offer checking accounts, savings accounts, and lending products.
1. Chase
With more than 4,700 branches and 15,000+ ATMs nationwide, Chase Bank is a great Michigan bank for those who frequently travel. Although the rates on savings accounts are low, Chase Bank has some impressive checking account options.
For many Michigan customers, Chase Total Checking will be the best deal. There’s a $12 service fee with that account, but it can be waived by either keeping a $1,500 balance, having $500 in direct deposit activity each month, or connecting a Chase savings account and maintaining at least $5,000 in combined balances.
Fees:
$12 monthly service fee (can be waived)
$34 overdraft fee
Balance requirements:
No minimum deposit to open
No minimum balance requirements ($1,500 to waive service fee)
ATMs:
Fee-free at 15,000+ Chase bank ATMs nationwide
$3-$5 fee for each out-of-network ATM transaction
Interest on balance:
.01% APY on savings accounts
Up to 3.75% APY on CDs
Additional perks:
$300 bonus for new checking account
Autosave feature helps you quickly build savings
2. Fifth Third Bank
Regional banks are often a great compromise between a large, corporate bank and a small, local bank. Fifth Third Bank is a regional bank with branches in Michigan, Ohio, Florida, Georgia, Illinois, Indiana, Kentucky, North Carolina, South Carolina, Tennessee, and West Virginia.
You’ll get access to cash while traveling in those areas, as well as expanded access through Fifth Third’s partner ATM network, which has more than 40,000 ATMs nationwide.
Fees:
No monthly service fee
$37 overdraft fee
Balance requirements:
No minimum deposit to open
No minimum balance requirements
ATMs:
Fee-free at 2,100+ Fifth Third Bank ATMs
Fee-free at 40,000+ partner ATMs nationwide
$3 for each out-of-network ATM transaction
Interest on balance:
.01% APY on savings accounts
Up to 4.75% APY on CDs
Additional perks:
Extra business day to resolve overdrafts
Early Pay gives you access to direct deposit two days early
3. Chime
Chime is an online bank with a full suite of banking services, including an online savings account that earns 2.00% APY. You’ll need direct deposit to qualify for Chime’s biggest benefits, including early access to your paycheck and SpotMe, a feature that covers you for up to $200 of overdrafts.
There are no monthly maintenance fees, and you can also withdraw money at more than 60,000 ATMs nationwide.
Fees:
No monthly fees
No overdraft fees
Balance requirements:
No minimum deposit to open
No minimum balance required
ATMs:
Fee-free at 60,000+ MoneyPass, Allpoint, and Visa Plus Alliance ATMs
$2.50 out-of-network ATM transaction fee
Interest on balance:
2.00% APY on savings
Additional perks:
SpotMe covers up to $200 in overdrafts
Access paycheck up to two days early
4. GO2bank
GO2bank is another online banking option with perks designed to compete with traditional banks. As long as you have at least one payroll or government benefits direct deposit monthly, the $5 monthly fee will be waived. You’ll have fee-free access to cash through Allpoint ATMs nationwide, as well as the ability to deposit cash at more than 90,000 retailers across the country.
Fees:
$5 monthly fee (waived with requirements)
$15 overdraft fee after 24 hours in negative balance
Balance requirements:
No minimum deposit to open
No minimum balance requirement
ATMs:
Fee-free at 53,000+ Allpoint ATMs nationwide
$3 for each out-of-network ATM withdrawal
Interest on balance:
4.50% APY on savings account
Additional perks:
5. Citizens Bank
Although it’s based in Providence, Rhode Island, Citizens Bank has branches in Michigan, as well as Connecticut, Delaware, Florida, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, Virginia, and Washington, DC.
Checking accounts come with a $9.99 monthly fee, but you can avoid it with at least one deposit a month.
Fees:
$9.99 monthly service fee (waived with requirements)
$35 overdraft fee
Balance requirements:
No minimum deposit to open
No minimum balance required
ATMs:
Fee-free at 3,200+ Citizens ATMs
$3 for each out-of-network ATM transaction
Interest on balance:
.01% APY on savings accounts
Up to 2.75% APY on CDs
Up to 2.75% APY on money market account
Additional perks:
Citizens Paid Early gives you access to direct deposit two days early
Citizens Peace of Mind helps you avoid overdraft fees
6. Huntington National Bank
Another regional bank with branches in Michigan is Huntington National Bank. You’ll get fee-free ATM access at Huntington ATMs, which are located throughout Michigan, as well as in Ohio, Colorado, Florida, Illinois, Indiana, Kentucky, Minnesota, Pennsylvania, West Virginia, and Wisconsin.
Customers who have recurring direct deposits coming in will qualify for perks like Standby Cash, which issues a line of credit as you need it. You’ll pay no interest on that loan as long it’s repaid in three months. After three months, the rate is only 1%.
Fees:
No monthly fees
$15 overdraft fee (waived up to $50)
Balance requirements:
No minimum deposit to open
No minimum balance required
ATMs:
Fee-free at more than 1,700 ATMs
$3.50 for each out-of-network ATM transaction
Interest on balance:
Up to .06% APY on savings accounts
Up to 5.13% APY on CDs
Up to 4.18% APY on money market account
Additional perks:
Standby Cash issues a no-interest loan as you need it
Early Pay gives you access to direct deposit up to two days early
7. Consumers Credit Union
If you live, work, or attend post-secondary school in the lower peninsula area of Michigan, Consumers Credit Union has plenty to offer. There are 26 offices in the area, as well as fee-free ATM access through the nationwide Co-Op Network. Consumers Credit Union has competitive rates on CDs, as well as great home and auto loan options.
Fees:
No monthly maintenance fee
$35 overdraft fee
Balance requirements:
No minimum deposit to open
ATMs:
Fee-free at Consumers Credit Union ATMs
Fee-free at 30,000+ Co-Op ATMs nationwide
$3 out-of-network ATM fee
Interest on balance:
Up to .25% APY on savings account
Up to 4.50% on CDs
Up to .50% on money market account
Additional perks:
Competitive rates on home and auto loans
Purchase discounts when using Consumers Credit Union debit card
8. Ally Bank
Online banking can help save you money, as long as you don’t need a local branch. Ally Bank gives you everything you need to manage your money through its website and mobile banking app.
As with many online banks, you’ll get competitive interest rates on deposit and savings accounts, including 0.25% APY on your checking account balance. Ally offers cash access through more than 53,000 Allpoint ATMs nationwide, as well as up to $10 in out-of-network ATM fee reimbursements each statement period.
Fees:
No monthly fees
No overdraft fees
Balance requirements:
No minimum deposit to open
No minimum balance required
ATMs:
Fee-free at 53,000+ Allpoint ATMs nationwide
Up to $10 in out-of-network ATM fee reimbursements monthly
Interest on balance:
.25% APY on checking accounts
3.85% APY on savings accounts
Up to 4.80% APY on CDs
4.15% APY on money market account
Additional perks:
Robo Portfolios help you invest
Spending Buckets help you budget
9. Flagstar Bank
Although it’s headquartered in Hicksville, New York, Flagstar Bank has a regional headquarters in Troy, Michigan. One of the best things about Flagstar checking accounts is the 0.25% interest rates you’re offered on home and personal loans when your payment comes from your checking account.
Although Flagstar does have a high-yield savings account that offers 2.50% APY, there’s a $35 monthly service fee for balances under $50,000.
Fees:
No monthly maintenance fee
$36 overdraft fee
Balance requirements:
$50 minimum deposit to open
No minimum balance required
ATMs:
Fee-free at Flagstar ATMs
Fee-free at 56,000+ Presto! and Allpoint ATMs
$2.50 for each out-of-network ATM withdrawal
Interest on balance:
Up to 2.50% APY on savings account
4.25% on CDs
Additional perks:
Discounts on loans when payments made from your Flagstar checking account
Robust business checking account options
10. Old National Bank
Based in Chicago, Illinois, and Evansville, Indiana, Old National Bank has branches in Michigan, Indiana, Wisconsin, Minnesota, Kentucky, and Illinois. Currently, you can earn a $300 bonus for a new checking account when you receive at least two direct deposits totaling at least $3,000 and enroll in online or mobile banking.
Old National’s free checking account requires at least $500 in direct deposit activity monthly. You’ll also have to maintain a minimum balance of at least $750 or maintain a $1,500 combined balance in all your Old National accounts. If you’re active-duty military, you can qualify for a free checking account without meeting any requirements.
Fees:
$6.95 monthly service fee (waived with requirements)
$36 overdraft fee (waived up to $25)
Balance requirements:
$50 minimum deposit to open
No minimum balance required ($1,500 to waive monthly fees)
ATMs:
Fee-free at Old National ATMs
Fee-free at 53,000+ Allpoint ATMs nationwide
$3 out-of-network ATM fee
Interest on balance:
Up to 4.85% on CDs
Up to 5.00% on money market account
Additional perks:
$300 bonus for new checking account
View all accounts, including those with other banks, in one dashboard
11. Diversified Members Credit Union
Diversified Members Credit Union has expanded over the years and now serves 25,000 members, with branches in Novi, Clawson, and Detroit. You’ll also get online and mobile banking options, as well as access to branches and ATMs through the Co-Op network.
Although DMCU’s checking accounts come with a $10 fee, you can avoid those monthly maintenance fees by enrolling in e-statements and online banking, as well as having at least 15 debit card transactions post each statement period.
Fees:
$10 monthly fee (waived with requirements)
$30 overdraft fee
Balance requirements:
$25 minimum opening deposit
No minimum balance required
ATMs:
Fee-free at DMCU ATMs
Fee-free at 30,000 ATMs nationwide
$2 out-of-network ATM transaction fee
Interest on balance:
.05% APY on checking
Up to .35% APY on savings
Up to 1.15% APY on money markets
Additional perks:
Robust business checking account options
Competitive rates on auto and recreational vehicle loans
12. Comerica
Although it was founded in Detroit in 1849, Comerica is now headquartered in Dallas. But it still has branches in Michigan, as well as Arizona, California, Florida, and Texas.
Comerica’s basic checking package comes with a $13 monthly fee that can be waived by keeping a $1,000 balance or having at least one $250 electronic deposit each month. Full-time students up to age 26 and military members can also request to have the fee waived.
Fees:
$13 monthly fee (waived with requirements)
$34 overdraft fee
Balance requirements:
$50 minimum opening deposit
No minimum balance required ($1,000 to waive service fee)
ATMs:
Fee-free at Comerica ATMs
$2.50 out-of-network ATM transaction fee
Interest on balance:
.01% APY on savings
Up to 5.00% APY on CDs
Up to 4.25% APY on money market account
Additional perks:
Earn up to $500 for referrals
Discounts on home equity lines of credit
Choosing the Best Bank in Michigan
When you’re in the market for a new checking or savings account, it’s important to recognize what’s most important to you. It likely will differ from what someone else finds important. Here are some features to consider when you’re comparing national, regional, and local Michigan banks.
Mobile Banking Features
These days, almost every bank offers mobile banking as a core feature. The best banks let you manage almost everything through either the app or an online web portal. Look for features that will eliminate your reliance on local branches and ATMs, including mobile check deposit and the ability to easily transfer money from your checking account to your online savings account.
That doesn’t mean you can’t choose a bank with branches in Michigan, though. You may like the features that come with a traditional bank account, including the ability to visit a local branch for in-person customer service. If a bank offers easy access to branches and ATMs, mobile banking will still give you the convenience of being able to manage your account when you can’t get to a bank.
Minimum Deposits and Balances
When searching for the best banks, you’ll notice that some come with requirements. Banks and credit unions may charge monthly service fees to access your account, and it can be tempting to go with a bank that advertises free checking. In doing that, though, it’s important to pay attention to the requirements that go with that account.
If you’re on a budget, the best checking accounts have very few fees while also refraining from requiring a minimum daily balance. That means you don’t have to stress about keeping a certain amount in your account. When looking at a bank or credit union, also look for the requirements to open the account. Some banks require a minimum deposit to get started.
Interest Rates
Saving money on fees isn’t the only priority when looking for a bank account. Your balance should earn interest, and the higher the annual percentage yield, the better.
It’s not unusual for a savings account and CD to earn interest, but there are also high-yield checking account options. An interest checking account will probably be a better fit for you if you routinely hold a high balance in your checking account. You can also find high interest rates on savings and CDs with online banks that might offset any out-of-network ATM fees you occasionally pay to access cash.
Michigan Bank Promotions
Whether you’re searching for a community bank or holding out for a great deal with a national bank, always look into any bank promotions currently going on. Typically, bank promos require that you maintain the account for at least a couple of months, as well as complete a fixed number of activities, such as electronic deposits or maintaining a minimum balance.
In some cases, promotions will be for specific product types, such as a business checking account. If you’re in the market for a new business bank account, you may get a better deal by going with a different bank than you use for your personal checking account.
ATM Access
Online banks, local banks, and credit unions will often increase their interest rates on savings and CDs to compete with bigger financial institutions, but there’s a downside. You might not get the cash access you’d find with a national bank. You may find a full selection of ATMs near your house, but when you travel, you’ll have to pay an out-of-network ATM fee to get cash from your bank accounts.
In recent years, though, online banking and credit unions have made this easier. Your credit union may be a part of a national co-op network that expands access to both branches and ATMs nationwide.
Online banks will partner with national ATM networks like AllPoint and MoneyPass to offer account holders cash. If you ever need to deposit cash, your online bank might let you take your debit card to one of many partner locations to add the funds to your app, although this usually comes with a fee.
In some cases, a small or online bank will offer ATM fee reimbursements. These may be limited to a small dollar amount per statement period. This could include a few banks who don’t offer fee-free ATM withdrawals among your options.
Our Methodology
Finding the right bank can be tough, so we took personal preferences into account. Here are some of the features we used to determine the best banks and credit unions in Michigan:
Variety of financial products: Checking and savings are typically the first features you look for in a bank, but there are other things to consider. We focused on banks that offer other accounts, such as money markets and certificates of deposits.
Local vs. online: Preferences can vary, so we chose a variety of account types, including small banks, credit unions, corporate banks with branches in Michigan, and online-only banks.
Interest rates: We noted the interest rates offered by each bank. If you’re hoping to save money, it’s important to get the best rates possible. We tried to include banks that offer an APY that’s above the national average.
Bank requirements: There are often minimums associated with an account, especially if you won’t pay monthly fees. We took a look at those requirements and disclosed them to make it easier for you to quickly identify what you’ll need. Those include the amount you’ll need to deposit to open the account and the minimum balance you’ll need to retain each day.
Other fees: You won’t just face service fees with a new account. If your checking goes into the negative, you’ll likely have to pay an overdraft fee. Some banks have a minimal out-of-network ATM transaction fee that’s in addition to any fees charged by the third-party bank. Check a bank’s fee schedule before signing on to make sure you know exactly what fees you’ll face.
Finding a new bank can be challenging. The good news is, once you’ve found the right fit, you probably won’t have to switch for a while. It’s important to take your time and compare as many banks as possible to make sure you’re getting the best deal.
Top 5 Reasons Why You Shouldn’t Co-Sign a Friend’s Loan – SmartAsset
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Co-signing your friend’s loan might seem like a nice thing to do. But it can put many things in your life at risk, including your finances, your credit score and even your friendship. While it’s possible to co-sign a friend’s loan and never face any negative consequences, it might not be worth it. Check out five reasons why you shouldn’t co-sign a friend’s loan.
1. You’ll Be Responsible for the Loan
No matter how trustworthy or wonderful your friend may be, he might end up defaulting on the loan he took out. Anything could happen. Your friend could lose his job or find out that a relative needs help paying for medical treatment.
If your friend can’t pay back the money he borrowed, you would have to pay for the loan if you co-signed it.
2. Your Credit Could Take a Hit
If you co-sign a friend’s loan and he misses a single loan payment deadline, your credit score could drop. If that happens, it might be harder for you to buy a house or get a low interest rate on a loan in the future.
If your friend fails to pay back whatever he owes, the lender might sue you first. In the lender’s eyes, you are far more likely to pay back the loan since your credit score is probably higher.
3. Your Property May Be at Risk
Sometimes a co-signer will secure a loan with his or her own property. If you (the co-signer) put up your car or house as collateral and your friend doesn’t pay back the loan, you could potentially lose your property.
4. You Could Destroy Your Friendship
If you’re forced to cover the cost of the loan you co-signed, you could end up resenting your friend. After all, it can be difficult to remain friends with someone who put you in a complicated financial situation.
5. It Could Be Harder to Get a Loan Later On
Co-signing your friend’s loan could make qualifying for another loan more difficult. For example, if you co-sign your friend’s car loan and then you try to take out a personal loan, a lender might reject your application. Co-signing your friend’s loan will affect your debt-to-income ratio (the amount of debt you’re paying off compared to your monthly gross income). A lender might not want to lend money to someone who already has a lot of debt to pay off.
Sarah Fisher
Sarah Fisher has been researching and writing about business and finance for years. She has worked for the Consumer Financial Protection Bureau and her work has appeared on Business Insider and Yahoo Finance. Sarah has a bachelor’s degree from Georgetown University and is from New York City. When she isn’t writing finance articles, she dabbles in animation and graphic design.
SingleCare vs. GoodRx: Which Is Better? – SmartAsset
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Saving on prescription drugs is a snap, thanks to companies like SingleCare and GoodRx. These platforms provide free coupons for users to lower their prescription drug prices. That said, understanding which to use can be confusing due to similarities between the services. When considering SingleCare vs. GoodRx, here’s how to tell which will suit you best.
A financial advisor can help you plan for healthcare expenses now and in the future. Find a fiduciary advisor today.
What Is SingleCare?
In 2015, founder and CEO Rick Bates founded SingleCare to make prescription drug prices more affordable. SingleCare is a free online tool and mobile app where users can find low prescription drug prices. You can sign up for free and use the service at no cost. SingleCare isn’t health insurance, but you can use it instead of insurance if your coverage doesn’t get you the lowest price.
What Is GoodRx?
GoodRx was founded in 2011 and also provides discounted prescription prices for users. It works similarly to SingleCare: website and mobile app users can search for the lowest drug prices in their area. GoodRx is free, and you can use it instead of insurance if it finds a lower price. Again, GoodRx isn’t insurance, but it can provide better prices on prescription drugs than your insurance plan.
SingleCare vs. GoodRx: Fees and Prices
SingleCare and GoodRx are both free to use. You won’t pay a cent to view prescription drug prices in your area or download the coupon needed to present at the pharmacy. Both services also offer a card to streamline the process of finding and using coupons.
In addition, GoodRx offers a Gold Plan, which can increase savings and allows users to renew their prescriptions with online doctor appointments starting at $19 per appointment (non-Gold Plan users can use the online visits for a higher price). In addition, you can sign up for free home delivery with the plan. The individual plan is $9.99 per month, and the family plan is $19.99, allowing you to add five family members (including pets).
SingleCare offers free home delivery through GeniusRx on many prescriptions. However, this service isn’t universal, so you might have to travel to get your prescription. That said, its prices are sometimes lower than GoodRx’s. Here’s a sample of drug prices between the two companies:
SingleCare vs. GoodRx: Cost Comparison
Atorvastatin
$0.38
$4.00
Citalopram
$3.05
$4.00
Fluticasone Propionate
$2.66
$12.33
Hydrochlorothiazide
$0.04
$4.00
Levothyroxine
$0.35
$4.00
Lisinopril
$0.26
$3.44
Lorazepam
$0.58
$9.10
Sertraline
$0.07
$5.00
Simvastatin
$3.37
$2.40
SingleCare Vs. GoodRx: Services and Features
SingleCare and GoodRx have built networks of pharmacies that accept their services. GoodRx has an advantage in this area, with over 70,000 pharmacies nationwide accepting GoodRx coupons and cards. On the other hand, SingleCare’s network spans over 35,000 pharmacies. Despite this difference, SingleCare still partners with the largest pharmacies, such as Costco and Kroger, so the typical customer may not have any trouble finding a pharmacy through SingleCare.
As previously mentioned, SingleCare offers free delivery on many prescriptions through GeniusRx. In addition, SingleCare shows drug price histories, allowing you to compare the past with the present.
Again, GoodRx offers a robust package of extra features. Specifically, its Gold Plan decreases drug prices even further and provides delivery through GeniusRx. Plus, Gold and free users can set up online appointments with care providers to get their prescriptions refilled, with Gold users receiving a lower price for appointments.
SingleCare Vs. GoodRx: Online and Mobile Experience
SingleCare and GoodRx offer similar online experiences. You can visit their websites and type in the name of a prescription drug. Each website then takes you to a page listing the price and the location of the pharmacy where it’s available. You can also create a profile for free on each website and occasionally receive better deals. Remember, you don’t need an account to perform searches and receive coupons.
On the mobile app side, SingleCare works the same. You can open the app, search for drug prices nearby, and get deals without creating an account. On the other hand, GoodRx requires you to create an account to use their app. Once you have a profile, you can use the app for the same functions as the website.
SingleCare Vs. GoodRx: Which Should You Choose?
SingleCare and GoodRx have built businesses on the same idea: connect customers to less expensive prescription drug prices. Because of the overlap, it can be unclear which will work better for you. First, accessibility is key. GoodRx has about twice the number of pharmacies in its network, so it might work better for customers in remote regions.
Next are the extra features. If you like GoodRx’s services and plan on using them long-term, a Gold Plan can increase your savings. Plus, if making it to doctor’s appointments is challenging for you, GoodRx’s affordable telehealth visits can help you refill prescriptions conveniently and affordably.
On the other hand, SingleCare usually provides better prices than GoodRx. So, if price matters most to you and you live near pharmacies in SingleCare’s network, you’ll likely save the most money with them.
Remember, you don’t have to commit to just one of these companies. You can create free accounts with both and search for prices nearby. Then, just like you would compare the price against your insurance, you can weigh the companies against each other to get the best deal possible.
Bottom Line
SingleCare and GoodRx make prescription drug prices more affordable for consumers. Both companies have identical aims, but SingleCare generally offers lower pricing and free delivery. The tradeoff is the extra features GoodRx offers in its paid plans and affordable telehealth appointments. Fortunately, you can create accounts with both services for free, try them out, and decide which is better for you. In most cases, these services will offer better prices than your insurance company.
Tips for Managing Healthcare Expenses
Healthcare is a looming cost for retirees, who struggle to afford the expenses despite Medicare coverage. According to this analysis of the EBRI study on out-of-pocket medical costs for retirees, the average American’s retirement savings might not be enough. Contributing to a health savings account (HSA) throughout your career can help close this gap. You may want to consider long-term care insurance, as well.
A financial advisor can help you plan for healthcare expenses now and in retirement. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Ashley Kilroy
Ashley Chorpenning is an experienced financial writer currently serving as an investment and insurance expert at SmartAsset. In addition to being a contributing writer at SmartAsset, she writes for solo entrepreneurs as well as for Fortune 500 companies. Ashley is a finance graduate of the University of Cincinnati. When she isn’t helping people understand their finances, you may find Ashley cage diving with great whites or on safari in South Africa.
If you’re looking for an affordable term life insurance policy that you can obtain quickly, you need to check out Ladder. Their streamlined online application can have you approved in a matter of minutes. And according to Ladder, many applications are approved without a medical exam requirement. Learn more in our Ladder review.
If you’re looking for an affordable term life insurance policy that you can obtain quickly, you need to check out Ladder. Their streamlined online application can have you approved in a matter of minutes. And according to Ladder, many applications are approved without a medical exam requirement.
In this Ladder review, I’ll let you know what types of policies they offer, key features, who is eligible, and how much you can expect to pay.
Easy to use online applications
No medical exams for up to $3M in coverage; just answer some health-related questions
Adjustable coverage
Table of Contents
Introducing Ladder Insurance
Ladder is a California-based online life insurance provider offering coverage through established life insurance companies. Founded in 2015 and launched in 2017, Ladder’s insurance partners include Allianz Life Insurance Company of New York, Fidelity Security Life Insurance Company®, and its affiliate, Ladder Life Insurance Company.
While the entire application process is online, you can get help from licensed insurance professionals, if needed, who are happy to help.
How Ladder Term Life Insurance Works
Ladder only offers term life insurance policies. Ladder’s mission is to offer affordable policies with speed and ease. Term life insurance best fits that product type.
When applying with Ladder, you should be aware the company does not offer policy riders. These optional additional coverage provisions provide more benefits but at a higher premium. That higher premium is the reason why Ladder doesn’t offer them.
Ladder’s most unique feature is that it allows you to increase or decrease your coverage as needed.
Laddering Up/Laddering Down
The name Ladder hints at its most unique feature – the ability to increase or decrease your coverage as needed. The process is known as ‘laddering up’ or ‘laddering down.’ Existing policyholders can increase their death benefit amount as their needs change, subject to underwriting and approval.
Conversely, if your coverage needs decline, you can reduce the death benefit. In short, Ladder Life puts you in charge of the policy’s face amount and the premium you’ll pay. You can request a change to your coverage by visiting the Ladder account page.
Laddering your policy, up or down, is completely free. And you can ladder your policy as often as you like. Naturally, the premium will increase if you ladder up the policy amount. And if you ladder down the death benefit, the premium will decrease.
Term Length Options
Ladder offers terms ranging from 10 to 30 years, the maximum term you can qualify for, regardless of age. That said, your age at the time of application may reduce the maximum term for which you qualify. The maximum issue age is 60.
Ladder uses a simple calculation to determine the maximum term length of a policy. Your current age, plus the term length, cannot exceed 70. For example, if you’re 40, the longest term is 30 years (40+30 = 70.) If you’re 50, the longest term is 20 years (50+20 = 70.)
Ladder policies are underwritten based on your nearest birthday. For example, if you will be 45 in four months, your age will be considered 45 years, not 44.
Policies are renewable for up to 5 years after the guaranteed level premium term. The new premium will be based on your age at renewal and, therefore, higher, but this is how term life insurance renewals work.
Ladder Pricing
Like all life insurance policies, Ladder policy premiums depend on a combination of factors. Those include your age at the time of application, health condition, occupation, hobbies and pastimes, and even geographic location.
We requested information for a non-smoking 40-year-old male in excellent health with no family history of major illnesses, and we received the following quotes for $1 million in coverage:
10 years – $37.50 per month
15 years – $47.70 per month
20 years – $61.80 per month
25 years – $96.90 per month
30 years – $114.30 per month
We then requested a policy for a non-smoking 40-year-old female in excellent health with no family history of major illnesses, and we received the following quotes for $1 million in coverage:
10 years – $35.40 per month
15 years – $46.80 per month
20 years – $52.50 per month
25 years – $77.10 per month
30 years – $88.50 per month
The monthly premiums for men are slightly higher than for women, which is common throughout the life insurance industry. This owes to the fact that women statistically live longer than men by several years.
The premium rate increases with the term of the policy because the longer the term, the greater the likelihood the company will ultimately pay the death benefit.
Ladder Maximum Coverage Limits
Ladder coverage limits range from a minimum of $100,000 to a maximum of $8 million (up to $3 million in CA). If you apply for $3 million or less, you won’t have to take a medical exam, just answer health questions. Applicants applying for benefits greater than $3 million may need to submit to a medical exam.
Policies offered through Ladder have a single death benefit payout, which is paid in a lump sum to the beneficiaries upon the death of the insured. Unlike some life insurance companies, there is no option to distribute benefits in installments or through any other payout method.
As mentioned, Ladder does not offer common life insurance riders, so you won’t have the ability to add provisions, such as a spousal rider, an accelerated death benefit (living benefits), double indemnity (increased death benefit for death caused by an accident), or a conversion provision that enables you to convert the term policy to a permanent, whole life policy before the term expires.
Ladder Coverage Eligibility
Ladder offers coverage for those between the ages of 20 and 60. If you are over 60, you’ll need to make an application elsewhere. Each application is for a single individual, so there is no capability to apply jointly with your spouse or to add your children. Each person will need to complete a separate application.
Policies are available only to US citizens and lawful permanent resident aliens who have lived in the US for at least two years. Ladder offers policies in all 50 states, as well as the District of Columbia.
Ladder Application Process
The application process takes place online, which helps Ladder keep premiums low.
You can apply for coverage in as little as 5 minutes. You will not be required to complete a medical exam for coverage up to $3 million.
But for coverage above $3 million, the approval decision may be delayed several weeks.
Ladder Underwriting
When completing the application, Ladder will request basic information, like your name and email address. In making the underwriting decision, they’ll also request the following information:
Your height and weight
The last time you used tobacco or nicotine products
Your date of birth
Whether a biological parent or sibling has been diagnosed by a physician with diabetes, cancer, heart disease, Huntington’s Disease, or Lynch Syndrome before the age of 60?
Your annual household income
How many children you have
Your remaining mortgage balance
Your answers to these and other questions will determine your eligibility for life insurance coverage, as well as the premium you’ll pay for the policy.
Is Ladder Legit?
Ladder Life is a legitimate term life insurance services provider, offering policies in all 50 US states. The following information indicates its financial strength and how it’s perceived within the insurance industry and by its customers.
Financial Strength
Since Ladder is not the direct issuer of the policies they offer, the company is not rated for financial strength by A.M. Best, the industry’s most well-recognized insurance company rating agency.
But the ratings for two of Ladder’s issuing companies are as follows:
Allianz Life Insurance Company of New York, A+ (Superior)*
Fidelity Security Life Insurance Company, A (Excellent)*
Since each of the companies is rated “A” or higher by A.M. Best, each is highly likely to have the financial strength to pay the policy death benefit, if necessary.
Ladder’s third issuing company is its affiliate, Ladder Life Insurance Company. Ladder Life Insurance Company has earned a Financial Stability Rating® (FSR) of A (Exceptional) from Demotech, Inc. FSRs are a leading indicator of financial stability, providing an objective baseline of future solvency. The most current FSRs must be verified by visiting www.demotech.com
Third-Party Ratings
In addition to financial strength ratings by A.M. Best, we’ve also considered the credit rating of each of the three providers behind Ladder. The credit rating indicates the company’s ability to meet its financial obligations and continue operations as a going concern.
The news here is as good as it is with the financial strength ratings. The table below shows the credit ratings of two of the companies from two major corporate credit evaluation agencies:
Insurance Company / Rating Service
Moody’s
Standard & Poor’s
Allianz Life Insurance Company of New York
A1 (5th of 21 ratings)
AA (3rd of 21 ratings)
Fidelity Security Life Insurance Company®
N/A
N/A
Customer Service Ratings
Perhaps the best indicator of Ladder’s reputation as a life insurance services provider is to look at the ratings provided by the people who deal most closely with Ladder – its customers. Ladder has an Excellent Trustpilot score of 4.8/5, based on almost 2400 customer reviews. 89% of customers have assigned them a 5-star rating, and only 5 % rated them three stars or fewer.
We could not locate a rating for Ladder with the Better Business Bureau. However, the BBB has an “A+” (highest) rating for Fidelity Security Life Insurance Company® and has been agency accredited since 1990. There is, however, no BBB rating for Allianz Life Insurance Company of New York, perhaps because the company is an affiliated organization.
How We Evaluated Ladder Life Insurance
We’ve evaluated Ladder based on the policy terms offered, the dollar amount of the death benefits, and the premiums’ cost. We’ve also taken into account applicant eligibility, as well as the apparent underwriting criteria the company uses.
We’ve also considered third-party information about the company, including its financial strength and reputation. Finally, we considered factors that make Ladder Life unique regarding what niche they fill in the insurance industry.
Ladder Pros and Cons
There’s a lot to like about Ladder, but it does lack some key features people look for when shopping for life insurance. Whether or not that matters to you will depend on what you want in a life insurance policy. Here’s our list of Ladder’s pros and cons.
Pros
Affordable term life insurance
Complete your entire application online
Good chance of no medical exam (if you’re in good health)
High maximum coverage of $8MM
Ladder up or down to change your existing insurance coverage
Excellent Trustpilot rating from Ladder Life customers
Cons
Is Ladder a Good Company?
Ladder is one of the best online life insurance companies for term insurance. While they don’t offer as many coverage options as other providers (term life only, no riders), they provide straightforward term coverage that’s affordable and easy to apply for. You can complete the entire process online, and if you’re in good health, you likely won’t require a medical exam.
Ladder partners with top-notch insurance companies and can boast very high customer ratings. And their Ladder Up/Down features only add to Ladder’s convenience.
Of course, if you fall outside Ladder’s qualifying criteria, i.e., over 60, want universal or whole life insurance, or require specialized coverage via insurance riders, then Ladder is not for you.
The bottom line is if you meet Ladder’s age requirements and are of good health, it’s one of the best places to get term life insurance – which is what the vast majority of American adults need.
FAQs on Ladder Life Insurance
Is Ladder a real life insurance company?
Ladder is a “real” life insurance company that provides online term life insurance. It was founded in 2015 and is headquartered in San Francisco, California. The company offers a range of term life insurance products that can be customized to meet the specific needs of individual customers.
Ladder’s insurance policies are underwritten by companies including Fidelity Security Life Insurance Company® and Allianz Life Insurance Company of New York, both of which are leading life insurance companies. Ladder’s website allows customers to easily apply for and purchase life insurance online, and the company also offers support through its customer service team.
Does Ladder pay out on their insurance policies?
Yes, life insurance policies sold through Ladder pay out in the event of the policyholder’s death, as long as the policy is in effect and the death is covered under the terms of the policy. Life insurance policies are designed to provide financial protection for the policyholder’s loved ones in the event of the policyholder’s death.
Is buying life insurance online safe?
Buying life insurance online can be safe as long as you take certain precautions. Here are some tips to help you ensure that your online life insurance purchase is safe:
1. Do your research: Make sure you understand the different types of life insurance policies available and what each one covers. This will help you make an informed decision about which policy is right for you.
2. Compare quotes: It’s a good idea to compare quotes from multiple insurance companies before you make a purchase. This will help you find the best rate for the coverage you need.
3. Check the company’s reputation: Do some research on the insurance company you are considering purchasing from. Look for reviews and ratings from independent sources, such as the Better Business Bureau.
4. Understand the policy terms: Make sure you fully understand the policy terms before making a purchase. Pay attention to details such as the policy’s length, coverage amount, and any exclusions or limitations.
5. Protect your personal information: Be careful when providing personal information online, especially when it comes to financial information. Make sure the website you use is secure, and protect your personal information by using a strong password and avoiding sharing it with others.
How much life insurance do I need?
Here’s what you need to know on determining how much life insurance you need include:
Your financial obligations: Consider the financial obligations you have, such as a mortgage, car loans, credit card debt, and other expenses. You’ll want enough life insurance to cover these obligations in the event of your death.
Your income: If you have dependents, you may want to have enough life insurance to replace your income in the event of your death. This can help your loved ones maintain their standard of living.
Your assets: If you have significant assets, such as a business or property, you want to have enough life insurance to cover the value of these assets in the event of your death.
Your future financial goals: Consider your future financial goals, such as paying for your children’s education or saving for retirement. You want to have enough life insurance to help your loved ones achieve these goals even if you are not there to contribute.
Product Description: Ladder is a life insurance services provider that offers term life insurance policies to consumers. It was founded in 2015 and is headquartered in Palo Alto, CA.
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Summary
Ladder offers term life insurance coverage of between $100K to $8M with no medical exams for coverage up to $3M (just answer health-related questions). Adjust coverage anytime.
Cost and Fees
Customer Service
User Experience
Product Offerings
Overall
4.3
Pros
Offers adjustable term life insurance ranging from 10 to 30 years in 5-year increments.
The company has a user-friendly website and offers a range of online tools and resources to help consumers understand and compare different life insurance options.
Offers no medical exam coverage up to $3M, which may be a good option for individuals who are unable or unwilling to undergo a medical exam as part of the application process.
Cons
No-exam life insurance policies are typically more expensive than traditional life insurance policies
May not be the best option for individuals with pre-existing health conditions or other risk factors
Do not offer riders on their insurance policies such as: Accidental death and dismemberment (AD&D) rider, waiver of premium rider, or return of premium rider.
*Allianz Life Insurance Company of New York has been rated A+ (Superior) affirmed October 2021 and Fidelity Security Life Insurance Company® has been rated A (Excellent) based on an analysis of financial position and operating performance, by A.M. Best Company, an independent analyst of the insurance industry. For the latest rating, accesswww.ambest.com.
Ladder Insurance Services, LLC (CA license # 0K22568; AR license # 3000140372) offers term life insurance policies: (i) in California, on behalf of its affiliate, Ladder Life Insurance Company, Menlo Park, CA (policy form # P-LL100CA); (ii) in New York, on behalf of Allianz Life Insurance Company of New York, New York, NY (policy form # MN-26); and (iii) Fidelity Security Life Insurance Company®, Kansas City, MO (policy form # ICC17-M-1069, M-1069 and policy # TL-146) in the District of Columbia and all states except New York and California. Only Allianz Life Insurance Company of New York is authorized to issue life insurance in the state of New York. Insurance policy prices, coverages, features, terms, benefits, exclusions, limitations and available discounts vary among these insurers and are subject to qualifications. Each insurer is solely responsible for any claims and has financial responsibility for its own products.
This year the IRS announced there will be an increase to the maximum employee 401(k) contribution limit for 2023, increasing it to $22,500, a $2,000 increase from the 2022 tax season.
There will also be a change to the maximum allowed for catch-up contributions. Those represent the additional amount of contributions that you can make to a 401(k) plan if you are age 50 or older.
For 2023, that number will increase at $7,500. That means the total contribution for plan participants age 50 and older is $30,000.
Every year, in October, the 401(k) contribution limits are reviewed.
Contribution limits increase more during years when the inflation rate is higher, and less when it is lower, as it has been in the past few years. At times, there have even been concerns that the contribution limits might be reduced, based on a negative inflation rate.
Fortunately, however, that scenario has never played out, and the limits have either been increased slightly or left flat.
Everything you need to know about 401k contribution limits for 2023:
The chart below shows the base 401(k) maximum contribution, the catch-up contribution for employees ages 50 and older, and the maximum allocation from all tax-sheltered retirement plans, from 2009 to 2023.
As you can see, the rate of increase over the past eleven years has typically moved at a snail’s pace. There has been only a $3,000 increase in the maximum contribution since 2009, and an even smaller increase in the catch-up contribution over the same space of time.
And as you can also see, contribution limits have stagnated in the past, such as 2009 through 2011, when they remain at $16,500 for three years in a row. Even more obvious is the lack of increase in the catch-up contribution for a full six years, when the amount remained at $5,500 from 2009 through 2014.
From 2009 through 2023, the maximum increased from $49,000 to $66,000. That’s an increase of $9,000 over 10 years, which works out to be over 2% per year.
Year
401(k) Maximum
Catch-Up Contribution
Maximum Allocation
2023
$22,500
$7,500
$66,000
2022
$20,500
$6,500
$61,000
2021
$19,500
$6,500
$58,000
2020
$19,500
$6,500
$57,000
2019
$19,000
$6,000
$56,000
2018
$18,500
$6,000
$55,000
2017
$18,000
$6,000
$54,000
2016
$18,000
$6,000
$53,000
2015
$18,000
$5,500
$53,000
2014
$17,500
$5,500
$52,000
2013
$17,500
$5,500
$51,000
2012
$17,000
$5,500
$50,000
2011
$16,500
$5,500
$49,000
2010
$16,500
$5,500
$49,000
2009
$16,500
$5,500
$49,000
For each year, the maximum allocation is increased by the amount of the allowable catch-up contribution (which applies to workers 50 and older). For example, for 2023, the maximum allocation is $73,500. That is the maximum allocation of $66,000, plus the $7,500 catch-up contribution.
The Contribution Limits Also Apply to Roth 401(k) Contributions
Contribution limits for Roth 401(k) contributions are the same as they are for traditional 401(k) contributions. That means you can contribute up to $22,500 per year to either a regular 401(k) plan, or a Roth 401(k) plan.
More likely, you will want to contribute to both, in which case you’ll have to allocate how much of the $22,500 limit will go into each part of your 401(k).
Not coincidentally, the 401(k) limits are virtually the same as the limits for both the 403(b) plan and the Thrift Savings Plan (TSP).
In addition, any employer matching contributions to the plans are not included in the employee contribution limits listed above.
Your employer can contribute a matching contribution that exceeds the $22,500 regular contribution limit, or even the combined $30,000 limit if you are age 50 or older. It is always a good idea to figure out whether a Roth 401k vs Roth IRA is best for you.
How Much You Should Contribute with the New Contribution Limits
The IRS determines whether or not to increase its contribution limits based on an annual basis. Sometimes changes in the Consumer Price Index (CPI) have been very small, like on the order of 2% per year. Congress prefers to increase contributions in increments of at least $500, which they did this year.
With the ability to increase your contributions by $500 in 2023, you may be wondering if you should. My answer is a resounding yes!
If you divide that amount into monthly contributions, you’re making only slightly smaller payments which will benefit you in the long run. Continuing to max out your 401k at this level is an ideal strategy,
Tips for Contributing to Your 401(k)
Participate
For most workers, the flat or level 401(k) contribution limits over the past three years isn’t the real problem. The real problem is a lack of employee participation. A large percentage of employees do not participate in a 401(k) plan, even though one is offered by their employer.
How much are American workers contributing to their 401(k) accounts? Each age group has different tendencies, of course. Data from Fidelity shows Americans in their 30s have an average of $38,400 in their 401(k) accounts, with an average contribution rate of 8% of income. For Americans in their 40s, that number was $93,400, also with an average contribution rate of 8%.
The same data shows workers in their 60s contribute 11% of their income to a 401(k).
Contribution limits have only been increased by $500 in five years, but $19,500 still represents a lot of tax-deferred savings potential. Do what you can to get as close to the maximum contribution possible, especially as you move closer to retirement.
Take Advantage of the Maximum Allocation
The biggest number on the chart above for each year is in the Maximum Allocation column. That is the maximum amount of money that you can contribute to all tax-sheltered retirement plans that you have available to you. It’s actually a more important factor than most people realize.
Despite the increasing 401(k) contribution limits, the average person isn’t coming close to maximize their potential contributions to retirement plans of all types. The 2023 maximum allocation for all plans is a very generous $66,000, or $73,500 for workers 50 and older.
That’s the amount of money that you can contribute even beyond your 401(k) plan. You may be able to make tax-deductible contributions to a traditional IRA, or non-tax-deductible contributions to a Roth IRA, if your income is within the limits for either plan.
Contribute to an IRA
Even if your income exceeds the threshold for a tax-deductible contribution – in addition to being covered by an employer plan – you can make nondeductible contributions to a traditional IRA, regardless of your income.
That may not get you a tax deduction, but it will enable you to put more money into a retirement plan where your investment earnings will accumulate on a tax-deferred basis.
A $6,500 IRA contribution, in addition to contributing $22,500 into a 401(k) plan, will increase your contribution to $27,000 per year (or $37,500 if you’re 50 or older).
But beyond IRAs, there are also several types of tax-sheltered retirement plans for the self-employed, including SEP and SIMPLE IRAs. If you have a side business, you can maintain these retirement plans for that business.
They will allow you to contribute more money into a tax-sheltered plan. You can go as high as $66,000 total, which gives you plenty of room to make more contributions.
Take Full Advantage of your 401k with Personal Capital
Aiming to make 401(k) planning more of a help and less of a headache, Personal Capital is an asset management software that steps in where your employer often falls short.
For instance, Personal Capital offers assistance with the following important tasks:
Avoiding: unwanted hidden fees
Evading: pesky account minimums
Determining: accurate stock-to-bond ratios
Assessing: whether your current plan meets your long-term retirement goals
Shifting: full partnering responsibility to employee instead of employer
The free 401(k) analysis tool provides managing suggestions you must pursue on your own.
Use their Fee Analyzer™ to find hidden fees
The app is 100% free
See all your money accounts in one place, in real time
What We Can Expect of Contribution Limits in the Future
The good news is that we have been in a prolonged time of low inflation. That’s good news in regard to the cost of living, even though it has kept a lid on maximum 401(k) contribution limits.
Since that seems to be a long-term pattern, we should probably expect several more years of either low or nonexistent increases in the contribution limits.
But that makes an even stronger case for maximizing the contributions that you make within the limits that we have, as well as investigating the possibility of contributing to the other retirement plans, such as IRAs or the various plans that are available for the self-employed.
We have to work within the limits that we have, and recognize that they are more than enough to help us reach our retirement goals. Those limits will allow us to do just that, even if they don’t increase significantly in the future.
Will Increased Taxes Impact 401(k) Contributions?
Concerned about how a potential tax hike could impact your 401(k) contribution? Some experts are expecting various tax hikes across the board due to COVID-19 expenses. Tax hikes could be passed to individuals as an increase in property taxes, income taxes or even business taxes.
Expert commentary on the 2017 Tax Cuts and Jobs Act also notes that there are federal tax increases every two years, starting in 2022 which could see even those earning below $75,000 annually facing a tax increase.
Since tax hikes could impact your monthly budget, it’s important to review your finances if these hikes come to fruition. Ensure you’re saving enough each month to make the retirement contributions you’re comfortable with.
FAQs on 401k Contribution Limits for 2023
What is the contribution limit for 401(k) plans?
For the year 2023, the contribution limit for 401(k) plans is $22,500 for individuals under age 50 and $30,000 for those 50 and older.
Can I contribute to both a 401(k) plan and an IRA?
Yes, you can contribute to both a 401(k) plan and an IRA, but the total contributions between the two plans cannot exceed the annual contribution limits. It’s worth noting that there are income limits for tax-deductible contributions to a traditional IRA.
How do I know how much I can contribute to my 401(k) plan?
Your employer should provide information on the contribution limits for their 401(k) plan and how much you are currently contributing. You can also check your plan’s summary plan description or contact the plan administrator for more information.
How can I increase my 401(k) contributions?
You can increase your 401(k) contributions by adjusting the amount you are contributing through your payroll deductions, or by contacting your plan administrator to make changes to your contribution amount. Keep in mind that the contribution limit must be followed.
The key now is not to get mired in the current slowdown but look to the future, he added: “We focus on the long term,” he said. “We know our models are going to work and it’s working right now. We know our way of doing business is the future. We’re dealing with the pain … [Read more…]
In only a few years, the rapid advancement of mobile technology has placed the power to invest at our fingertips and ushered in a wave of fintech startups, armed with new and innovative solutions for investors. Names like Acorns and Stash are now competing head-to-head with traditional brands such as E-Trade, and TD Ameritrade. (Imagine E-Trade being considered a “traditional” brand!)
With so many great options to choose from, it can be downright difficult to decide which investment app is right for you. To take out the guesswork, I’ve compiled a list of the best investment apps for 2021. From beginner investors to advanced traders, there’s something here for everyone.
Before we dive in, I should point out that this list of best apps is not a ranking. Instead, I’ve chosen what I believe are the best apps for a variety of situations – trading stocks, exchange traded funds (ETFs), no-fee, and micro-investing, you name it.
This means that the investment app I chose as best overall won’t necessarily be the top pick for every investor. Rather, it’s the one that I feel most clearly meets the needs of its target client. With that in mind, I present to you the Best Investment Apps for 2021.
Best Overall: Acorns
My top choice for investment app is Acorns. Not because it does everything well, but because it does what it’s designed to do, as well or better than the competition. Acorns was made specifically with new investors in mind, and it delivers precisely what so many of them are looking for: simple, automated investing, with very low fees, and no minimum balance requirement.
To achieve this, Acorns uses an innovative feature known as roundup savings. Here’s how it works. Acorns syncs to your debit and/or credit card, and automatically rounds up your purchases to the nearest dollar. It then deposits the “spare change” into your investment account. For example, let’s say you buy a cup of coffee for $1.48. Acorns will round up to the nearest dollar, setting aside $.52 into your savings.
Open an Acorns Account Today
From there, the money is invested in one of five professionally managed ETF portfolios, that match your recommended asset allocation. What I love about Acorns is how easy it is to set up an account directly from the app, and get saving. For account balances less than $5000, the fee is $1/month (.25% annually for balances over $5000). For an additional $1/month, you can now open an Acorns checking account, complete with a Visa Debit card, making the process even more seamless.
Features:
Ideal for new investors
Easy to use app
Innovative, roundup savings
Syncs to your credit/debit card for automated savings
No minimum balance requirement
Monthly fee: $1 (for portfolios up to $5000, over $5000, .25% annual fee)
Available Acorns checking account with free ATM use nationwide
Acorns Found Money – earn credit from retail partner stores
IRA account available
No stock trading functionality
Best for Automated Investing: Acorns, M1 Finance
While the real magic of automated savings comes in the form of roundups, Acorns offers even more layers of automation. For example, with Acorns Found Money, you can earn cash when you spend money at Acorns retail partner stores, a list that includes Sephora, Barnes & Noble, and Walmart. To register, simply download the Acorns Chrome extension, then sit back and watch as retail discounts are returned back to you in the form of credits to your Acorns account when you shop.
M1 Finance also gets a nod here, for their ability to invest preset amounts directly into an ETF investing platform, absolutely free of charge. Unlike Acorns, however, M1 will require a minimum balance of $100, and they lack some of Acorns added features.
Best for Beginning Investors: Acorns, Stash
From the Acorns app, you can access a huge assortment of educational content for beginner investors. Whether you’re learning about the differences between stocks and bonds, or the basics of dollar cost averaging, these articles will give you the confidence you need to start investing. With tools like this, it’s clear that Acorns understands its target market.
For beginning investors, Stash gets an honourable mention (more on them later), due to the creative names they’ve assigned to their various ETF portfolios, making it easy for beginners to visualize the underlying investments. For example, Stash account holders can choose from portfolio selections such as Retail Therapy, Delicious Dividends, or Robots Rising.
Best for Financial Management: Personal Capital
Personal Capital has become known for their cutting edge tools that help people budget and keep track of their net worth. However, they also act as an asset manager, providing customers with a dedicated advisor, and investment portfolios that include individual stocks and low-cost ETFs. On the downside, they are more expensive than other robo-advisors, charging an annual fee of .89% on assets up to $1MM.
If you meet Personal Capital’s asset threshold, and you’re looking for an investment app that will provide you with powerful tools to help you manage your finances, as well as dedicated advice, Personal Capital might be the way to go.
Features:
.89% fee up to $1MM
$100,000 minimum investment requirement
Free tools
Dedicated advice
App can sync all of your financial information
Best for Stock Trading: TD Ameritrade, E-Trade
TD Ameritrade has long been a leader in the discount brokerage space, with solid pricing (including an introductory offer of 60 free trades), powerful research & data analysis tools, and a very robust trading platform, making them a top choice with stock trading investors. What makes the TD Ameritrade mobile app great, is that it takes a lot of the functionality of the desktop site, and places it right at your fingertips.
Investors can access educational videos right from the app, receive price alerts on stocks they’re tracking, and place trades with ease. In addition to stocks, TD Ameritrade offers over 100 commission-free ETFs, with no account minimum. You can download the TD Ameritrade app for use on any iOS, Android, or Blackberry device.
I’m giving an honourable mention to E-Trade, which, like TD, boasts an easy to use app, loaded with functionality. They do have a $500 account minimum, however, and don’t offer commission-free ETFs.
TD Ameritrade Features:
Powerful research/data analysis tools
Educational videos available from the mobile app
No account minimum
$6.95 per trade (standard)
Free trades for the first 60 days (with qualifying deposit)
Over 100 commission-free ETFs
Best for Free Stock Trades: Robinhood
Robinhood is the investment app that boasts no strings attached, free trades on stocks and ETFs. If low fee investing is what you’re after, Robinhood is pretty hard to beat. In exchange for free trades however, you’ll give up some of the advanced features that come complimentary on competitor apps.
For example, access to research tools costs $5/month, and margin trading can only be done through Robinhood Gold, for which there is a cost. Think of Robinhood as a discount supermarket, offering rock bottom prices, with no frills service. In addition to free trading, there are no account fees, and no minimum balance requirement.
Active traders may be turned off by the reduced functionality, but if you’re ok with doing your own research and don’t require the margin capability, Robinhood may be the right investment app for you.
It comes as no surprise that Vanguard’s competitive advantage lies in its pricing. After all, would you expect anything less from one of the industry’s forerunners in low-cost investing? What I wanted to know was how well the Vanguard app measured up, when compared to the competition.
With the Vanguard app, you can place trades on thousands of funds and ETFs free of charge. In addition, there are no account fees, nor is there a minimum balance requirement. Where Vanguard comes up short is in its functionality as a stock trading platform. The app is not as capable as offerings from competitors such as TD Ameritrade, and E-Trade.
Not only that, Vanguard’s fee structure for stock trading is somewhat complicated, in fact, it could be argued that it’s biased against active trading. Here’s an example: If you have less than $50,000 in Vanguard funds, you’ll pay $7/trade. But after 25 trades, the fee increases to $20/trade, which alone is enough to steer active traders elsewhere.
In short, if you’re a buy and hold ETF investor, better yet, a dedicated Vanguard investor, you’ll likely find this to be a perfectly suitable investing app. But if you’re looking for a place to buy and sell stocks on a regular basis, it’s best to look somewhere else.
Features:
Well suited for the buy and hold, Vanguard ETF investor
No commission fees on thousands of ETFs
No account fees, or account minimum
Top-notch educational resources available
$7 trading fee for stocks, rises to $20 over 25 trades
Complex fee structure for stock trading
Not suitable for active traders
Best for Socially Responsible Investing: Wealthsimple
Canada’s largest robo-advisor is now making inroads here in the US, with a mobile app that is intuitive, enabling much of the functionality of the desktop site. With Wealthsimple, you can choose from a selection of low-cost ETFs that will fit your investor profile. What I love most about Wealthsimple however, is their focus on Socially Responsible Investing (SRI).
These days, more and more investors are steering clear of companies that may not reflect their values. Wealthsimple makes that easier through their SRI ETFs, which include holdings in the low carbon, cleantech, and affordable housing sectors. In addition, Wealthsimple offers a Halal portfolio, which only includes investments that align with Islamic investing principles.
In other words, any company profiting from the sale of alcohol, tobacco, gambling, pork, or weapons, is excluded from the Wealthsimple Halal portfolio. Halal portfolios do not include income investments, such as bonds or CDs, as they are considered debt instruments. Because of this, rather than ETFs, Halal portfolios are made up of 50 carefully selected, individual stocks.
Features:
Robo-advisor offering a broad selection of low-cost ETFs
.50% annual fee on portfolios up to $100,000, .40% over $100k
No minimum investment amount
Socially Responsible Investing (SRI) available
Halal portfolio available
Best for Real-Estate Investing: Fundrise
The Fundrise investment app was designed with a very specific customer in mind: the real-estate investor. Advertising themselves as an alternative to the stock market, Fundrise enables investors to select from portfolios comprised of private real-estate investments. Fundrise portfolios are tailored to three specific asset allocation models – income, balanced, and long term growth.
What I love about Fundrise is that they make real-estate investing accessible to almost anyone, with a $500 minimum investment. There is an annual fee of up to 1.00%, which is not far off some of the robo-advisor competition.
I will issue a note of caution relating to the historical returns that are advertised prominently on the Fundrise website. Not only is past performance not an indicator of future returns, but Fundrise portfolios have yet to endure a severe market downturn, having only been around since 2012.
That said, real-estate investing, in general, has proven to be a suitable long term investment for many generations. If you’re looking for a way to add some variety to a standard stock and bond portfolio, Fundrise may be a good alternative.
Similar to other micro-investing apps, Stash makes it easy to get started, by saving very small sums of money. What I love about their investment app, is that it allows you to open an account in only a couple of minutes. Not only that, but as soon as you deposit $5, they’ll match it with a $5 contribution of their own.
Investment apps like Stash make micro-investing possible because they have the ability to purchase fractional shares of the underlying investments (stocks and ETFs).
You can actually browse through a large selection of stocks and ETFs on the app, making it easy to choose a portfolio that aligns with your values. As I mentioned earlier, Stash ETF portfolios have some pretty creative names. Who wouldn’t want some Retail Therapy, or Delicious Dividends.
Features:
Same pricing as Acorns
Ability to invest small amounts with fractional share capability
Customized ETF portfolios to align with your values
$5 welcome bonus (with a $5 deposit)
Ideal for beginner investors
$1/monthly fee might not be worth it for everyone
Which Investment App is Right for Me?
To figure out which investment app is right for you, start by deciding which features are the most important.
If simple, automated savings is what you’re after, Acorns is probably your best bet. Serious stock traders will prefer the robust trading platforms and research tools offered by TD Ameritrade or E-Trade, while fans of Vanguard may be satisfied with its offering of thousands of free ETFs.
Either way, once you know what you’re after, the final decision becomes a lot easier.