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Cash App Investing Review: Tailor-Made for Beginner Stock Trading

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Square's Cash App has seen its active user base more than triple over the past two years to 24 million people, and the payments platform recently rolled out to its clients the ability to buy and sell stocks. Cash App Investing is still a very new brokerage option, having launched in the fourth quarter of 2019, but has emerged as a suitable alternative to other low-frills ways to invest.

In this Cash App review, we'll dive into the details of the platform, its pros and cons, buying stocks on Cash App, whether it might be right for you, and if you would be better off with a more feature-packed brokerage platform.

Ratings Methodology
Bottom Line

Cash App Investing is a no frills approach for any investor. Users are limited to stocks and certain cryptocurrencies, but it is one of only a handful of brokers that offers the ability to buy fractional shares.

Fees:

$0 for stocks, fees vary for cryptocurrencies

Account Minimum:

$0

Cash App Investing Review

This platform is a good fit for: Beginning investors may see the most value, both from the lack of commissions and ability to invest small amounts via fractional share purchases. Investors wanting to use Cash App for IRAs and other investments (for example, options and mutual funds) will want to look elsewhere. We'll be keeping an eye on these additional features, since the app may become a more robust investing platform in coming months and years.

Pros

  • No commissions
  • Great for beginning investors with fractional share investing
  • Cash management features

Cons

  • Limited investment options
  • Limited account types

Top perks

Easy to use

Investing with Cash App is designed to be as easy to use as possible. One of the biggest obstacles non-investors complain about is they "don't know how to get started." With Cash App Investing, it's easy. Simply open the Cash App, decide how much you want to invest in a particular stock, and make a purchase. The app needs to collect some legally required information such as your Social Security number, but it's a quick and easy process.

No commissions

Like many brokerages, Cash App Investing doesn't charge commissions for stock transactions.

Fractional shares investing

Cash App Investing is one of the few options for investors who want the ability to buy fractional shares of stock. For example, to buy one share of Amazon.com, you'll need more than $3,120 as of mid-January 2021. With Cash App Investing, you can buy a piece of your favorite stocks for as little as $1.

Cash App integration

To trade stocks using Cash App Investing, you don't need a separate app. You can trade stocks, send and receive money from other Cash App users, buy and sell bitcoin, and more.

TIP

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What could be improved

Nothing but stocks

Cash App Investing allows investors to buy and sell stocks (and bitcoin, elsewhere in the Cash App), but does not support mutual funds, stock options, or bonds. While these and other types of investments may eventually be offered, Cash App Investing is not an excellent option for people who want to invest in pretty much anything other than stocks and ETFs.

Tools and research

Cash App Investing offers some tools for beginning investors, such as its "my first stock" tutorial, but it doesn't offer access to stock research or thorough educational tools. The platform is designed for beginning investors and those who just want to dip their toes into the stock market. Investors who want to learn more or take a more analytical approach to choosing stocks may be better served with another brokerage.

IRAs or other account types

The only account type offered by Cash App Investing is standard, taxable, self-directed brokerage accounts. You can't open a joint account, and the platform doesn't support IRAs, solo 401(k)s, trusts, educational accounts, UTMA accounts, or any other type offered by other brokerages.

No margin

To be clear, at The Ascent we generally discourage investors from trading on margin, which essentially means buying stocks with borrowed money. However, there are some cases where it can make sense, and many active investors like having margin access. At this point, Cash App Investing doesn't support margin trading.

Alternatives to consider

To be fair, Square has hinted that it will add features to Cash App Investing over the coming months and years. After all, this is a very young investment platform. In its current state, Cash App Investing might not be an excellent fit for investors who want some of the more "traditional" features of other brokerages, such as the ability to open a tax-advantaged retirement account or access to stock research reports from major firms. Here are some alternatives if Cash App doesn't match your needs.

If you want a mobile investing platform with more investment options: Robinhood can go toe-to-toe with Cash App's slick mobile interface. Where it shines is the broker offers zero-commission trading for stocks, ETFs, options, cryptocurrencies, and fractional shares, as well as margin trading.

If you want a full-featured broker: Merrill Edge® is one of the best brokers for most people. Not only does it offer access to a wide array of investing offerings you won't find with Cash App, but it also offers a deep bench of account types to invest in, including taxable brokerages, retirement accounts, custodial accounts, and more.

Commissions

Like most brokerages, Cash App Investing offers zero-commission stock trades. It doesn't offer trading in options, mutual funds, and other products that generally still have commissions, so for the time being, Cash App Investing is a totally commission-free platform.

Stocks and ETFs Options Mutual Funds
$0 Not Available Not Available

Buying mutual funds

At this time, Cash App Investing is only designed for buying and selling stocks. Mutual funds are not currently offered on the platform, although this could change as additional features are rolled out.

Fees

Since the only thing you can do with Cash App Investing is buy and sell stocks, there are no investment-related fees. Many brokerages charge for things like options trading and mutual fund purchases, but those aren't offered on the Cash App Investing platform, so investors don't need to worry about them.

There are some fees for other functions within the Cash App, such as for sending cash to someone with a credit card, or for having cash instantly deposited to a bank account.

Trading platform

The Cash App Investing trading platform is extremely simple. You choose a stock, enter a dollar amount, and hit the buy or sell button, all within the popular Cash App. There is not a desktop or web-based trading platform at this time.

The Cash App is known for user-friendliness, and is highly regarded for its security and speed. It's currently rated 4.5 out of 5 in Apple's App Store and 4.2 out of 5 in the Google Play store.

Margin rates

While it may be available in the future, Cash App Investing currently doesn't support margin trading. In other words, if you want to buy $100 worth of a stock, you need to actually have $100 in your account.

Research offerings

Cash App Investing is designed for beginning investors who want to dip their toes into the stock market by investing small amounts of money in blue-chip (high-quality) stocks. It isn't well-suited for investors who like to analyze stocks on their own, as it doesn't have access to third-party stock research.

This brokerage is right for you if:

  • You're a beginning investor. Cash App Investing is clearly designed with beginning investors in mind, particularly those who want to invest a small amount of money in stocks. It is not intended for experienced investors, or those who want tons of features.
  • You already use Cash App. It can be very useful to keep your finances in as few different places as possible, and if you're already a fan of Cash App's other functions, it could be a good reason to invest through Cash App Investing rather than Robinhood or a competing brokerage.
  • You don't care about options, margin, or mutual funds. Cash App Investing allows you to trade stocks. That's all. If you want any other type of investment vehicle (besides bitcoin), you should look elsewhere.
  • You want a standard brokerage account. If you need to open an IRA or any investment account other than a standard taxable brokerage account, or if you want a joint account, you'll need to open it somewhere else.

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