How do investment apps work?

Investment apps let you manage and monitor your portfolio from the palm of your hand. This guide explains how investment apps work and how to pick which one works best for you.
By:  &  James Knight
Updated: Jul 19, 2022

It’s relatively simple to use an investment app, but to get the best use out of one it pays to understand how it works. This beginner friendly guide explains what investment apps are, the different apps you can use, and how they work. 

What is an investment app?

It’s a mobile application that lets you invest in the stock market or other assets using your smartphone or tablet. Apps are offered by online brokerage firms and a number of financial technology companies. They can be used for different purposes; some let you invest manually while others are completely automated. 

How do investment apps work?

Investment apps connect you to the financial markets via your smartphone or tablet. There are two main types of apps, active and passive, and they work in different ways. Below is an explanation of how each type of investment app works. 

1. Active

This type of app gives you complete control over how you invest your money and is offered by most brokerage firms. Active investing is when you decide what to buy or sell and is best suited to experienced investors. Using an active investment app is easy and all you need to do is download the application to your device, create an account, and deposit funds. 

When your account is funded you’ll then be able to start investing into whatever assets are available on the platform. Active investment apps are usually an additional way to access an account with an online brokerage firm, so you’ll also be able to manage your investments using a computer too. 

2. Passive – Robo advisors

Passive investment apps are often referred to as robo-advisors and give users a hands off way to invest their money. Robo advisors work by investing your funds automatically into stocks, funds, and ETFs. To use a robo advisor you need to download the app, create an account, and deposit funds. 

Once your account has been set up you then need to answer a series of questions so the software can understand your investment goals and risk appetite. The robo advisor will then use AI technology to invest your money automatically. When you use passive investment apps you can either invest a lump sum, or make regular investments. 

3. Passive – Micro investing apps

Micro investing apps are another type of passive investment apps. They work in a similar way to robo-advisors and the whole process is completely automated. The main difference between the two is micro investing apps let you invest a few pennies which is automatically debited from your bank account when you make any purchase.

Usually micro investing apps round up to the nearest pound on your everyday spending and invest into low cost ETFs, funds, stocks. To use one, you need to give the app access to your bank account. This is achieved through open banking. Open banking is a new feature offered by banks that securely lets you share your account details with other services. 

Which investment app is right for me?

Investment apps can be used by anyone who wants to invest and each type is best suited for certain individuals and circumstances. If you’re a well experienced investor then using an active investment app, like those offered by most online brokerage firms is your best option. Active investment apps give you the most control over your money. 

New investors and those with little money will find passive apps such as robo advisors and micro investors most suitable. Students in particular can make use of micro investing apps. Robo advisors are suitable for all types of investors, even those with some experience and it is possible to use more than one investment app to spread your money across different funds. 

Compare the best investment apps

Our investment experts have searched the market and selected some of the best apps you can start using right now. All of these apps are top choices for both beginners and experienced investors. Just click on any of the links below to get started in 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.

Where can I learn more about investment apps?

Here on Invezz we have lots of information about investment apps. You can check out our other in depth guides to learn more about apps and find out if they’re safe and which are the best ones to use. Alternatively, if you want to learn more about the stock market, or investing in general then visit our education section, where our experts break down complex information into easy to read, bit sized free courses.


Our editors fact-check all content to ensure compliance with our strict editorial policy. The information in this article is supported by the following reliable sources.

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.
James Knight
Editor of Education
James is a lead content editor for Invezz. He's an avid trader and golfer, who spends an inordinate amount of time watching Leicester City and the… read more.