Ever wonder which investing app gives you the most bang for your buck? Well, so did we. That's why we've taken the time to put together this super nerdy graph that we can all geek-out about. It's okay if you don't get stoked about investing fees, we've made the graph simple enough that all you have to do is look at it and move on!
Note: (12/13/17) M1 Finance is now free to use for all users and all account sizes. Their fee is exactly $0 per year no matter what. That means they are in fact the lowest fee app available for long term investing.
Our goal is to compare the cost of some of the most prominent investing apps on the market today so you can decide which ones are right for you. Be sure to check the notes about each app because some are totally free if you meet certain criteria.
We've included some referral links to give you free signup bonuses and cash to start investing. If you decide to use an app because of our reviews, please consider using our link to help us keep the site running!
The Annual Graph
We've compared the fees of different apps starting at $100 and moving up to $150,000 in $25,000 increments. Beware that the graph scale is not linear because the $100 and $1,000 are important fee breakpoints for many major apps and so we've included those at the beginning. We're not trying to trick you - but graphing in increments of $100 would make way too many data points.
Please note that the Robinhood Gold fee structure is a little complicated and we could only compare the cheapest RH Gold ($1k of margin power) as it's the only pricing tier that's available across all account sizes. For a complete list of Robinhood Gold fees and expenses, please see their document here.
Annual Fees Per Portfolio Size
The Portfolio Weighted Graph
We broke the news to you easy on the last graph. What you saw was simply a visual representation of the annual cost of using each service. Now you're going to get a look at how much each service charges you as a percentage of your overall assets under management (AUM).
For reference, even some of the most greedy hedge funds only charge about 2% of AUM per year. So let's see how each app stacks up against those big-league hedge funds.
Fees as a Percentage of AUM ($25k - $150k)
We had to break these graphs up into two separate graphs for the $100 - $1,000 range because the fees as a percentage of assets are so astronomical for some apps that it threw off our scale to the point where you couldn't even see the lower numbers. So, here's the graph of fees as a percetage of AUM for those of us with lower assets.
Fees as Percentage of AUM ($100-$999)
Now you probably understand why we had to break the charts into two segments for the lower asset ranges. The fees as a percentage of AUM were literally off the other chart. Here's what this means for you:
Why Investing App Fees Matter to You
For many of us, especially millennials like me who are investing and saving spare change through apps like Acorns, we need to be aware of the costs. While $1 per month of fees seems like nothing today, it's effectively highway robbery in the investing world.
Monthly fee pricing seems to be in your favor until you look deeper. For instance, Acorn's annual fee of $12 on an account with only $100 invested is equal to a 12% fee! That's six times higher than most hedge funds!
Now, keep in mind that we're not taking into consideration the value factor of their automatic withdrawals service. We also haven't factored in any cash back you might earn from their Found Money option. When we consider these two features, it very well may pay you to use the service!
There's also a way for college students to use Acorns totally free! For a full review of the Acorns fees, features, and how to use it totally for free see our in-depth review.
We compared Robinhood Gold's $1k margin account option because it's the only pricing tier they had available for all account sizes. Their higher tiers can cost up to $2,400 per year! If we were to try to chart that, it would break our scales.
Keep in mind, though, that what you're really paying for with Robinhood Gold is the ability to make more money! We can't predict how good of a trader you are or what kind of money you'll make.
The idea of margin trading is that you'll make enough money to pay for commissions, margin charges, and still take away a handsome profit. There are tons of dangers with margin trading though, so be prepared for things like margin calls and, um... going into debt to your broker.
Also, remember that the basic Robinhood app and service are totally free! If you want to just say "screw it" to the margin trading of Robinhood Gold and just stick with vanilla Robinhood, it'll cost you exactly $0 which is better than any app we've reviewed.
Check out their full list of fees and expenses here.
The clear winner among the apps we've compared is M1 Finance for portfolios under $1,000. They charge absolutely nothing to use their service if you maintain an account balance of less than $1,000.
For account balances of $1,000 - $100,000, they charge 0.25% annually and above $100k you'll be charged just 0.15% annually. Depending on your goals and the exact amount in your account, you'll see that M1 is most often the least expensive option.
Of course, you can't trade on margin with M1 and they don't have the spare change "round-ups" that Acorns has. However, due to the fees and expenses associated with other accounts, there's a strong case to be made for the efficiency of just automating deposits into M1 and calling it good.
If you want to know more about M1 Finance's fees, check out our in-depth review of all things M1 right here.