With the popularity of mobile devices, more and more investing apps are emerging to help people manage their money. However, most mainstream investing apps require users to be over 18 years old. For teenagers under 18 who are interested in investing early, the options are quite limited. This article will explore some investing apps that allow users under 18 to open accounts and start investing with parental consent.
What are the benefits of teens starting to invest early
Investing early can cultivate good financial habits and set teens on solid financial footing for life. The key benefits include:
1. Compounding returns – Starting early allows more time for investment returns to compound, turning small sums into far larger nest eggs.
2. Lower risk capacity – Teens tend to have few major financial obligations, allowing them to take more risks and invest more aggressively for higher returns.
3. Education – Learning about investing early develops financial literacy and equips teens with knowledge to make wise money decisions.
What apps allow teens under 18 to start investing
There are a few investing apps in the U.S. that allow teens under 18 to open investment accounts with parental consent:
1. Stash – Stash allows teens 14 and up to open custodial investment accounts with a parent/guardian as the custodian. It offers fractional share investing, retirement accounts, and financial education resources.
2. Greenlight – Greenlight issues prepaid debit cards for kids and allows parents to control spending online. It also has an investing feature to teach teens about stocks and ETFs by investing real money.
3. Public – Public offers Community accounts for teens 13+, enabling fractional stock investing with parental oversight. Parents manage permissions as the primary account holder.
Tips for parents helping teens start investing
For parents interested in helping their teens start investing early, here are some useful tips:
1. Have open conversations about money and investing to build trust and alignment. Outline your expectations and guidelines for investing.
2. Help teens set specific, realistic investing goals tied to long-term plans like college. This gives purpose and focus.
3. Start small with smaller sums of money you and your teen are comfortable with losing. Emphasize learning over returns.
4. Oversee teen accounts and set permissions on apps to retain guardrails. Slowly grant more autonomy as they demonstrate responsibility.
5. Embrace mistakes as teachable moments. Investing helps build critical thinking skills for life even if some investments underperform.
Investing apps provide a useful avenue for teens under 18 to start investing early with parental oversight. While options are still quite limited, a few fintech innovators like Stash, Greenlight and Public are paving the way. Early investing sets up good financial habits, but parents still need to provide guidance.