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When I first started investing my money years ago, I felt overwhelmed at all of the investing apps that were available to me. Robinhood was new on the scene with promises of commission-free trading and the ability to purchase fractional shares for as little as $1. For a broke college student, this was appealing. The problem was that I already had an investment account which led me to ask this question: can you use more than one investing app?
Investors are able to use more than one investing app, but it does require more work to keep up with investments spread out across multiple platforms. However, by using multiple platforms, investors receive increased protection through SIPC insurance and can take advantage of unique features that different apps offer.
If you have been on the fence about opening accounts with multiple investment apps, here is everything you need to know about why it might be a good idea for your finances.
Can You Use More Than One Investing App?
Many individuals who are looking to diversify their portfolios may want to consider whether they want to use more than one investing app. The good news is that having multiple accounts across different brokerages is more than okay.
There is nothing illegal about spreading out investment dollars and diversifying holdings.
When making a decision, remember that opening up multiple accounts means you will have more to manage. Investors who intend to purchase the same assets in each app may not find a compelling reason to open more than one account. It will just be one more thing for them to manage.
However, there are exceptional circumstances where it makes sense to use more than one investing app.
Why Using More Than One Investing App Makes Sense
When does it make more sense to utilize two or more investing apps? Keeping up with a single app is great for simplicity, but there are some convincing reasons to split up investments across multiple investing apps and brokerages.
If you are thinking about opening a new account with an app like Robinhood or M1 Finance, then you need to know when it makes sense to do so.
The first reason to divide your investments across multiple accounts is to protect the investment. This does not guarantee that you will make money or that you won’t lose your investment. It does protect you in the event that your brokerage fails.
Account insurance maximums are up to $500,000 per broker. This means that the Securities Investor Protection Corporation (SIPC) will replace your assets if the brokerage goes out of business up to that amount. If your investments are split into $500,000 chunks across multiple investing apps, you stand a better chance of protecting your financial future.
Investing across multiple apps also allows you to diversify what those funds are designated for. For example, you may use one investing app to set money aside well into the future for your retirement. Another app may be used more as a rainy-day fund in case you need to access that money sooner than planned. It can be used to save up for a down payment, a wedding, a vacation, or other major life expenses.
Of course, you can also open multiple accounts if you want to take advantage of the perks given to new customers. You might get great features such as cash bonuses that can be directed toward your new investments.
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Why Using More Than One Investing App Makes Sense
When does it make more sense to utilize two or more investing apps? Keeping up with a single app is great for simplicity, but there are some convincing reasons to split up investments across multiple investing apps and brokerages.
If you are thinking about opening a new account with an app like Robinhood or M1 Finance, then you need to know when it makes sense to do so.
The first reason to divide your investments across multiple accounts is to protect the investment. This does not guarantee that you will make money or that you won’t lose your investment. It does protect you in the event that your brokerage fails.
Account insurance maximums are up to $500,000 per broker. This means that the Securities Investor Protection Corporation (SIPC) will replace your assets if the brokerage goes out of business up to that amount. If your investments are split into $500,000 chunks across multiple investing apps, you stand a better chance of protecting your financial future.
Investing across multiple apps also allows you to diversify what those funds are designated for. For example, you may use one investing app to set money aside well into the future for your retirement. Another app may be used more as a rainy-day fund in case you need to access that money sooner than planned. It can be used to save up for a down payment, a wedding, a vacation, or other major life expenses.
Of course, you can also open multiple accounts if you want to take advantage of the perks given to new customers. You might get great features such as cash bonuses that can be directed toward your new investments.
How To Use More Than One Investing App
Are you convinced that using more than one investing app is the financially savvy move for your investment strategy? All you have to do is sign up for multiple accounts and fund them with the account minimum to get started.
Keep in mind that these accounts are likely to require a social security number upon registering. This allows the app to track the money you earn and report it for tax purposes at the end of the year.
For information on investing apps that don’t require a social security number, we have a complete guide here.
The first thing you need to do when opening multiple accounts with top investing apps is to find the programs that are best suited to your investing needs. Weigh the account minimums, fees, and the types of assets available for purchase on each app.
Two of our favorite investing apps are Robinhood and M1 Finance. You can see the benefits of each and what they specialize in below:
Benefits of Robinhood
Many investors love the simplicity of the Robinhood app. It is especially good for those who are just starting out and may not have much in the way of extra cash. You can invest in thousands of stocks for just $1 or more by purchasing fractional shares.
This allows investors to completely diversify their portfolio with no account minimums.
Robinhood also has a number of other features to consider taking advantage of:
- Commission-free trades for stocks and ETFs
- Ability to invest in cryptocurrency
- User-friendly platform with mobile access
- Promotional offers such as one free stock for new users
Benefits of M1 Finance
If you have a small amount of money set aside for potential investments, then M1 Finance may be the best fit for you. They have a minimum investment requirement of $100 ($500 for IRAs), but they share some of the same features as Robinhood including 0 percent fees for stocks and ETFs.
At M1 Finance, there are several options for how money can be invested. The first is through self-directed trading and the second is through automated investing. Investors can determine what percentage of their overall funds they want to give toward each investment.
Not sure how to get started? You can also make good use of professional portfolios that have built-in diversification. M1 Finance has close to 100 of these created portfolios for investors to choose what suits them most.
Unlike Robinhood, M1 Finance does not allow for trading in cryptocurrency or options.
Investing Across Multiple Platforms
Can you use more than one investing app? There are no hard and fast rules about the number of investment apps you can legally use. This leaves DIY investors free to open accounts with any app that promises great features and outstanding customer service. It is simpler to keep everything in one place, but there are circumstances where investing in multiple apps may make more sense.
For example, investors who have more than $500,000 in any one app may want to consider the possibility of opening multiple accounts to take advantage of SIPC protection. They may also want to take advantage of special offers such as free stocks or cash bonuses.
If you are ready to invest in multiple platforms, then you should highly consider opening accounts with both Robinhood and M1 Finance. Both feature low fees on stocks and ETFs with little to no account minimums. Be sure to sign up for one of these platforms today!
