Are investment apps safe?

Investment apps are a convenient way for you to manage your portfolio. But can you trust them to look after your money? This guide explains if investment apps are safe.
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Updated: Jul 8, 2022

Lots of people now use an app to manage their investments. With so many on the market it can be difficult to know if they’re trustworthy. This guide will help you learn if investment apps are safe. We’ll explain what they are, if they are safe, and compare the top ones around. 

What is an investment app?

It’s an application that lets you track your portfolio as well as buy and sell assets from your mobile device. These apps can be downloaded to your smartphone or tablet and connect you to the markets from anywhere in the world, at any time of day or night. Most brokerage firms offer apps that give you the same functionality as their desktop versions. 

Similar to online investing, apps can include specific asset classes or a selection of assets. For example, if you wanted to invest in the stock market, you could use an app from a brokerage that specialises in shares. You could also go with an app that has a range of different markets available. 

There are two types of investment apps and below is a brief explanation of each:

  • DIY apps: These types of apps are the most common. When using a DIY app you’ll have full control over what, how, and where you invest. DIY apps are offered by most the best brokerage firms and are best suited to investors with some experience. eToro, Hargreaves Lansdown are a couple of examples. 
  • Robo-advisors: A new kind of approach to investing known as Robo-Advisors has become popular recently. When using a Robo-Advisor you simply download an app, fill in some information about what your goals are, deposit some money, and the app invests automatically for you. Nutmeg is one of the most popular Robo-Advisors.     

Are investment apps safe?

Yes, they generally are, although it is important to remember that you can still lose money while investing. Apps from brokers or service providers that are regulated by the proper governing bodies are considered the safest. Users are better protected through compensation schemes which provide a safety net if an app goes out of business. 

There are apps that some people deem to be unsafe. Investment apps that could be considered unsafe are from brokers that conduct their business in an unsatisfactory manner. For example in 2021 when Robinhood halted sales of Gamestop shares, it came under major user backlash. 

Most investment apps belong to well known brokerage firms, or Robo-advisor services that have been in operation for many years. The financial industry is heavily regulated and shady business practices are difficult to pass these days. Investment apps are for the most part safe and in the section below we’ll take a look at a few features to consider when choosing one. 

How to tell if an investment app is safe

There are a lot of features you can consider before downloading an app to tell if it’s safe or untrustworthy. Before depositing money you’ll want to make sure the app is secure – you can follow the guidelines below to help:

Regulation

Investment apps should be properly regulated. Every region has its own laws and regulations so you should make sure any app you’re planning to use is regulated in your jurisdiction. Regulation also provides compensation and you can easily check if an app is regulated by checking its disclaimer where its licence number will be.  

Customer reviews

Using online review sites is one of the easiest ways to find out how safe an app is. Some apps have a large number of users and you can find lots of ratings and other people’s experiences using reviews. If you find lots of poor reviews its probably best to stay away while if they’re mostly positive then you can have confidence the app is probably safe. 

Fee transparency

Investment apps should be completely clear about their fees, or how they make money if they let you invest for free. You will be able to find this information on their websites or within the app itself. Make sure you take the time to understand how much you will be charged as any surprises could eat into your profits. 

Security measures

A secure app is a top priority when it comes to safety. Two-factor authentication is offered by some and is a good way to add an extra layer of security when logging into your account. Most apps now can be unlocked using fingerprint or facial recognition. SSL encryption is also important and is used to encrypt data transferred between your account and a server.   

Customer support

If you ever run into difficulties while using an app you’ll want to make sure your issue is resolved quickly and efficiently. Each app will offer a different level of customer support, some may be through the app only while others may have a phone number. A good app with strong support will likely care about its customers safety. 

Are there any risks to using an investment app?

There are some risks involved when using an investment app. All investing has a certain element of risk attached to it. The stock you’ve bought could go down in value with market fluctuations for example. 

The growing trend of commission free and fractional share trading has also increased the number of inexperienced users trying their hand at making money. There is a risk that these apps make it too easy for beginners to invest. However, Robo-advisors are a way to help less experienced users invest without any prior knowledge. 

What are the safest investment apps to use?

Our investment experts have tested the most popular apps on the market and selected the ones which are ranked the safest. They have been tested for a range of safety and security features and you can download them and start investing in just a few minutes.

1
Min. Deposit
$10
Promotion
User Score
10
Trade/invest in stocks with just $10
Deposit with ACA, Wire, Pay with my bank
Invest for dividends and get payout on stocks on Ex-Dividend day
Start Trading
Pros:
Trade/invest in stocks with just $10
Deposit with ACA, Wire, Pay with my bank
Invest for dividends and get payout on stocks on Ex-Dividend day
Payment Methods
Bank Transfer, Wire Transfer
Full regulations list:
CySEC, FCA
Investoo Ltd is compensated if you access certain of the products or services offered by eToro USA LLC and/or eToro USA Securities Inc., as applicable. This compensation incentivizes Investoo Ltd to describe those products and services in favorable terms. Any testimonials contained in this communication may not be representative of the experience of other eToro customers and such testimonials are not guarantees of future performance or success.
2
Min. Deposit
$0
Promotion
User Score
9.3
$0 commission and $0 Options contract fees
Upgraded research with advanced charts
Smart Menus for faster trades
Start Trading
Pros:
$0 commission and $0 Options contract fees
Upgraded research with advanced charts
Smart Menus for faster trades
Payment Methods
Full regulations list:
3
Min. Deposit
$500
Promotion
User Score
8.7
We offer one of the best execution speeds in the industry with low latency
Award-winning support in 14 languages
Trade with precision from 0.5 pips on EURUSD
Start Trading
Pros:
We offer one of the best execution speeds in the industry with low latency
Award-winning support in 14 languages
Trade with precision from 0.5 pips on EURUSD
Payment Methods
Bank Transfer, Bank Wire, Credit Card, Debit Card, PayPal, Sofort, neteller, skrill
Full regulations list:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >

Prash Raval
Financial Writer
When not researching stocks or trading, Prash can be found either on the golf course, walking his dog or teaching his son how to kick a… read more.