It’s never too early to begin investing, even if you’re a college student. In fact, now is the very best time to begin! College is preparing you for adult life, and investing needs to be part of that life. If you begin while you’re still in college, you’ll have a built-in advantage going into the “real world.” That’s because one of the biggest stumbling blocks to investing for new college graduates is just getting started. But if you’ve already crossed that hurdle before graduation, you’ll be way ahead of everyone else.
Fortunately, it’s easier for college students to invest than ever before. That’s because robo-advisors make investing simple, automated, and inexpensive. Sign up with the right robo-advisor, and all you need to do is fund your account—the robo-advisor will handle all the management details for you.
And don’t let lack of money be an obstacle! You can get started investing through a robo-advisor with literally no more than a few dollars. That’ll be plenty to get started, and you can continue to build gradually between now and graduation.
For that reason, we provide this list of the six best robo-advisors for college students.
Best for: Best all-around robo-advisor for college students.
Why SoFi Automated Investing is a good robo-advisor for college students: SoFi is the best all-around robo-advisor for college students, but not because it necessarily stands out in any single category. Instead, it’s an excellent robo-advisor across the board. For starters, no minimum investment is required, and there are no fees to manage your account. SoFi Automated Investing would be an excellent choice if that were all they provided. But there’s a lot more.
For example, if you want to engage in self-directed investing—along with your managed portfolio—you can do it through SoFi Active Investing. They also offer unlimited access to financial advisors at no additional cost. And if, like most college students, you’re likely to have student loans to refinance upon graduation, SoFi is one of the leading sources of student loan refinances. The platform functions as a community where you can get help and connect with other SoFi participants.
All those benefits make SoFi Automated Investing the top choice among robo-advisors for college students.
Why SoFi Automated Investing is the right choice for college students:
What may hold SoFi Automated Investing back:
Best for: Robo-advisor provided by a broker where you can also participate in self-directed investing.
Why Fidelity Go is a good robo-advisor for college students: If SoFi Automated Investing didn’t exist, Fidelity Go would easily be our top choice. They offer many of the same benefits, including no minimum initial investment, and no advisory fees—at least on the first $9,999 in your account. They also use Fidelity Flex Funds in the construction of your portfolio, which is important because these funds have no investment expenses. Those are the investment expenses that exist just below the surface of all funds, that reduce investment returns the same way advisory fees do. Fidelity Go eliminates these fees with their Flex Funds.
But we also like that Fidelity Go is part of Fidelity Investments. That means you can try your hand at self-directed investing with one of the very best investment brokerages in the industry, while having most of your money managed through the robo-advisor. The company is also near the top in customer service, and even has about 140 local branches in major cities around the country.
Why Fidelity Go is a good robo-advisor for college students:
What may hold Fidelity Go back:
Best for: Robo-advisor with high-interest savings, no-fee checking and no minimum investment requirement.
Why Betterment is a good robo-advisor for college students: Betterment is the company that introduced robo-advisors to the world and continues to be a leading innovator of the product. They provide complete investment management with an annual advisory fee of 0.25% on all account balances under the Digital plan. And if you’re fortunate enough to build a $100,000 account, you can switch over to the Premium plan and get unlimited access to certified financial planners. But that’s in the future, and it does include a higher advisory fee.
What we like about Betterment is that the U.S. stock positions are invested in value stocks. Those are companies often overlooked in the current investment environment that can provide exceptional long-term returns. But we also like that Betterment provides banking services to go along with your investments. That includes a high-interest cash account, currently paying 0.40% APR. They also allow you to create different account types, like emergency savings and spending goal accounts. Plus, there’s a no-fee checking account that comes with a Visa debit card.
Why Betterment is a good choice for college students:
What may hold Betterment back:
Best for: Robo-advisor with high-interest savings and no-fee checking.
Why Wealthfront is a good robo-advisor for college students: There are a lot of similarities between Wealthfront and Betterment, and it’s not an accident. They’re the two largest independent robo-advisors in the industry and compete with each other directly. So, it’s no surprise Wealthfront offers many of the same services as Betterment. That includes comprehensive portfolio creation and management, with tax-loss harvesting, at an annual advisory fee of 0.25%. They even offer a high-yield cash account, currently paying 0.35% APR, as well as free checking with a Visa debit card.
But where Wealthfront outperforms Betterment is in portfolio diversification. In addition to stocks and bonds, they also offer positions in real estate and natural resources. Those allocations can enable your portfolio to grow in environments where a stock and bond portfolio might not.
Why Wealthfront is a good choice for college students:
What may hold Wealthfront back:
Best for: Robo-advisor that lets you choose your own investments.
Why M1 Finance Expert Pies is a good robo-advisor for college students: What makes M1 Finance Expert Pies unique among all robo-advisors is that they allow you to choose your own investments, then provide complete management. They do this through a system referred to as “pies.” Each pie is composed of up to 100 exchange traded funds (ETFs) and/or individual stocks.
You can choose from 80 pre-built pies or construct your own pie allocations. Once a pie is created, you’ll enjoy automated management with no advisory fee. And you can create as many pies as you like. This is perfect for the college student who wants to choose his or her own investments but doesn’t want the hassle of managing them.
Why M1 Finance Expert Pies is a good robo-advisor for college students:
What may hold M1 Finance Expert Pies back:
Best for: New investors who need help saving money to invest.
Why Acorns is a good robo-advisor for college students: Acorns’ advantage among robo-advisors—particularly for college students—is that it also helps you accumulate the money you need to begin investing. That’s because Acorns is a micro-savings app, in addition to being a robo-advisor.
This is done through a process they refer to as “round ups.” You’ll connect your spending accounts, like bank account debit cards and credit cards, to the Acorns app. Each time you make a purchase using one of the cards, Acorns will round up the sale. For example, if you make a purchase for $4.17, it’ll be rounded up to an even $5, with $0.83 going into your investment account. That will allow you to save money through regular spending activity, helping you build savings for investment on the platform.
Why Acorns is a good choice for college students:
What may hold Acorns back:
You’re going to need to begin investing as soon after graduation as possible. The sooner you do, the better off you’ll be. Now is not too early. Sure, you’re in school and you have other obligations. But never underestimate the importance of getting started when it comes to investing. Studies and surveys have shown that those who begin investing early in life are more successful at it over the long term.
You have an opportunity to do just that right now. And because of robo-advisors, lack of funds or investing experience are no longer obstacles. You can open an account with no money at all and begin funding it gradually—literally, with just a few dollars at a time.
The robo-advisor you sign up with will create a fully balanced portfolio for you, then provide complete management going forward. That will include rebalancing your investment positions as necessary, and even reinvesting dividends. Best of all, you can open a regular investment account as well as an IRA. That will also give you a chance to get a head start on preparing for retirement.
Carpe diem—seize the day! When it comes to investing, you can do that using a robo-advisor. Right here, right now, using nothing more than a few dollars and a commitment to continue funding your account, regardless of how little that might be.