30 Nov A New Way for Millennials to Start Saving
There are new digital saving companies that cater specifically to people under 35, offering services for the smartphone that aim to be easy to use, have low fees and don’t require large deposits.
According to BigStory.AP.org, three startups, all of which launched in the last year and a half, say they are targeting young people that have been ignored by traditional banks and brokerage firms. Many of them charge fees or require a minimum opening deposit that may be too high for some millennials.
Being saddled with student debt, saving money can be a challenge for millennials.
Here are the three smartphone-based startup companies helping to solve that problem.
This app automatically puts money away for users by rounding up every credit or debit card purchase they make. For example, a $9.95 purchase at a grocery store will get savers 5 cents in an Acorns account. That money is then invested in a portfolio of exchange traded funds, which are a basket of stocks or bonds.
Digit links to a checking account and its algorithm looks at account activity to figure out how much you typically earn and spend. Based on that, it transfers small amounts into a Digit account. While an app is in the works, right now the initial sign up is done via their website and all communications come through text messages. While there is no cost for the service, text messages do count against your phone’s plan.
The app lets users invest in about 30 different ETFs of their choosing by linking their checking accounts for the investments. Stash tries to simplify the stock market for first-time investors and has a glossary throughout the app, explaining what a ticker symbol is or what historical performance means.
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