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Best Investments for College Students

Best Investments for College Students

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Last updated on January 17, 2023

Investing. If that word sounds intimidating to you, you’re not alone. And as a college student, you’re wondering if you even need to worry about saving cash for retirement when it seems so far away. After all, there are more important issues at stake, like textbooks, going out on dates and shopping with friends.

The thing is, investing doesn’t need to be complicated, nor does it require a lot of money–your spare change will do for now. It’s a great way to ensure you’re taken care of in your older years (especially if you’re interested in retiring early) and doesn’t require too much effort on your part.

You’ve got time on your side, so it’s a great opportunity to take advantage of it.

In This Article:

Benefits to Investing While You’re In College

It bears repeating–you have time, which is one of the best ways to grow your wealth when it comes to investing. It’s not exactly fun to take fun money from today and stash it away in an account you won’t touch for years, but seeing a small like $100 grow into thousands of dollars is pretty darn amazing.

Just think: if you invest at 18 years old, you’ll need to invest (aka set aside) less than someone who is older, even by a few years in order to reach millionaire status.

Besides, even if you learn a little about money now, think about how much better your life will be after graduation. You can learn how to budget and set aside money for savings, so you can knock out that student loan debt fast. Or you’ll save so much that you can stop working a lot sooner than what most people can afford to do –maybe you can realize that dream of traveling around the world for a year.

Best Investment Accounts for College Students

The good news is that investing is much more accessible than it used to be, thanks to the power of technology. You’re not required to fork over large amounts of money to open an account, nor do you have to pay high fees for the privilege of investing–some are also free. There are also many that offer free educational resources to help you learn the ins and outs of investing.

The question is whether you want to manage the accounts yourself or have a service that helps you manage it. If you decide to DIY your investing, you’ll be responsible for funding your account and allocating your money into different investment options (stocks, bonds, ETFs or mutual funds) after you do your research.

If you get someone to manage it, all you have to do is hand over your money and a financial professional will handle the details for you. All you really have to do is mention what your goals are and how risk averse you want to be.

Managed investing comes with higher fees, but it doesn’t mean it’s a bad choice. If you rather focus on your studies then learning how to DIY later on, that’s fine. Or if you rather be more hands-off, it’s up to you.

The following are some popular investment firms to consider:

M1 Finance

This is what’s called a robo advisor company, which is a type of investment brokerage firm that manages your funds and can provide financial planning services. Instead of relying on human help, robo advisors provide algorithm-driven and automate services. What it’ll do is collect your personal information, including your future goals and current financial situation and use that to give investment advice and invest your money.

The great news about M1 Finance is that you be as hands-off or hands-on as you want. M1 Finance will manage your funds for you, but you can decide where you want the money invested.

You only need a minimum of $100 to open an account and their services are free, give it a try now.

Fidelity

As one of the largest brokerage firms, Fidelity stands out because it offers a bunch of services–including speaking with an advisor in person–and can help you as your money grows even more. It offers a wide range of accounts and some free investing accounts and ones with no to low minimums. However, Fidelity does make you pay commissions.

Explore the many investment opportunities with Fidelity.

Betterment

Another robo advisor, Betterment offers hands-off investing and there’s no minimum to open an account. Just like M1 Finance, you fill out a questionnaire with your personal information, goals and current financial situation and Betterment will handle the rest. There are fees but they’re lower than what you could be paying with a human financial advisor.

Checkout Betterment and start building your capital.

TD Ameritrade

Like Fidelity, TD Ameritrade offers a wide range of services and products that can grow with you as you get more sophisticated with investing. A potential downside is that some of their products do have higher minimum requirements and fees.

Check out the various TD Ameritrade offers.

Advertising disclosure – ConsumerismCommentary.com is partners with TD Ameritrade and we may receive compensation from them. Content was not influenced by the advertiser.

Acorns

This is what’s typically referred to as a “micro-investment” company because it lets you invest money using your spare change. With Acorns, you can open an account with your smartphone–just connect it to your bank accounts and credit cards. Once you do that, it’ll round up your purchases to the next dollar and invests the difference–which could be as little as a few cents.

The idea behind this is that you won’t miss the money so you’re saving without noticing that it’s happening. You just choose how risk-averse you want to be and Acorns will take care of the investments for you.

If you’re under 24 and in college, you won’t need to pay any fees. Otherwise, it’ll set you back anywhere from $1-$2 a month.

Stash Invest

Another type of micro-investment app, Stash is similar to Acorns that you can open an account with your smartphone but you choose the actual investments which is more hands-on. There are also fees you’ll need to pay and there’s a minimum requirement of $5.

Are you a micro-investment type? Test it with Stash Invest, with as low as $5.

Make Your Plan Error-Proof

Investing can seem intimidating, but it doesn’t have to be. As long as you’re willing to learn and keep investing long-term, you should see a return on your hard work. Consider setting up automated deposits to ensure you’re saving so you’ll always have a leg up.