When it comes to Cash App Investing vs. Robinhood, both are designed to be low-frills brokerage platforms. Additionally, the main audience for both is younger investors who wish to buy and sell stocks quickly. In the last few years, Cash App has expanded its financial services to include brokerage services in addition to direct deposit and person-to-person money transfers. However, Robinhood invented the no-fee brokerage platform model, and it is widely acknowledged that this is the reason why the majority of the industry has embraced commission-free stock trading.
Unfortunately, there are certain parallels between the two that will turn off a lot of investors. For example, neither platform offers mutual fund investing. Thus, it would be best to look elsewhere if you’re looking for a broker with greater features. However, if you want a straightforward and uncomplicated method, check out our Cash App Investing vs The Robinhood review can assist you in determining which one is best for you.
Investing with Cash App: A Comprehensive Guide to Fees and Account Opening
Cash App, the popular mobile payment service has expanded its offerings to include stock trading through Cash App Investing. This innovative platform allows users to buy and sell fractional shares of publicly traded companies with no minimum investment requirement. While Cash App boasts commission-free trading, there are certain fees associated with stock transactions that users should be aware of.
This comprehensive guide delves into the intricacies of Cash App Investing fees, providing a clear understanding of the charges involved and how they impact your investment decisions
Understanding Cash App’s Fee Structure
Cash App’s fee structure for stock trading can be categorized into two primary types:
1. Regulatory and Government Fees:
- Trading Activity Fee (TAF): This fee is charged by the Financial Industry Regulatory Authority (FINRA) to cover regulatory and operational costs associated with the securities market. The TAF for equity sales is $0.000166 per share sold, rounded up to the nearest penny, with a maximum fee of $8.30 per transaction.
- Securities and Exchange Commission (SEC) Fee: This fee is charged by the US Treasury to help cover the costs of regulating markets and dealers. The SEC fee is $8.00 per million dollars of covered sales.
2. Other Fees:
- Outbound Stock Transfer Fees: Fees may apply when transferring stocks out of your Cash App Investing account to another brokerage. The specific fees vary depending on the receiving brokerage.
Key Points to Remember:
- Cash App does not charge any commission fees for buying or selling stocks.
- Regulatory and government fees are unavoidable and apply to all stock transactions across the market, not just Cash App.
- Cash App does not profit from these fees; they are passed on to the respective regulatory agencies.
- The TAF and SEC fees are relatively small and typically have a minimal impact on your overall investment returns.
Opening a Cash App Investing Account
Opening a Cash App Investing account is a straightforward process:
- Ensure you are a US resident aged 18 or older.
- Provide the following information: full name, date of birth, Social Security number, US residential address, employment status, and employer name.
- Make your first stock purchase using Cash App Investing.
Important Considerations
- Cash App Investing accounts are self-directed, meaning you are responsible for your investment decisions.
- Cash App does not provide investment advice or recommendations.
- Fractional shares investing may involve additional risks, such as non-transferability.
- Selling shares may have tax implications; consult a tax advisor for personalized guidance.
Cash App offers a convenient and affordable platform for investing in stocks, with no minimum investment requirement and commission-free trading. While regulatory and government fees apply, they are relatively small and transparent. By understanding Cash App’s fee structure and account opening process, you can make informed decisions about your investments and maximize your returns.
Additional Resources:
- Cash App Investing Fees: https://cash.app/help/en-US/5004-investing-fees
- Cash App Investing Account Opening: https://cash.app/help/5003-opening-an-investing-account
Disclaimer:
This information is for educational purposes only and should not be considered financial advice. Please consult a qualified financial advisor before making any investment decisions.
Cash App Investing vs. Robinhood: Investments available
Regarding investment options, these two platforms are (nearly) equal, but there are a few significant differences. As was previously mentioned, Cash App Investing doesn’t offer any kind of option trading, whereas Robinhood provides commission-free trading. Additionally, although both platforms allow users to trade cryptocurrencies, Cash App Investing only allows users to trade Bitcoin, whereas Robinhood allows users to trade multiple cryptocurrencies on its platform.
LEARN MORE: Best Options Trading Platforms
The most important thing to remember is that Robinhood and Cash App Investing are primarily made for investors who wish to be able to buy and sell stocks for any amount of money. (Both allow fractional share trading. With options and a number of other cryptocurrencies available, Robinhood is more geared toward traders, whereas Cash App Investing makes it simple for users to buy and sell stocks and Bitcoin.
Neither platform offers:
- Mutual funds
- Bonds
- Deposit products like CDs, futures, or forex trading
Since both are fairly straightforward, you would be better off looking elsewhere if any of those investment kinds are a major part of your plan.
READ MORE: Best Stock Brokers
| Cash App Investing | Robinhood | |
|---|---|---|
| Stocks and ETFs | Yes | Yes |
| Fractional shares | Yes | Yes |
| Options | No | Yes |
| Mutual funds | No | No |
| CDs | No | No |
| Bonds | No | No |
| Futures | No | No |
| Crypto | Yes (Bitcoin only) | Yes |
| Currencies | No | No |
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When it comes to Cash App Investing vs. Robinhood, both are designed to be low-frills brokerage platforms. Additionally, the main audience for both is younger investors who wish to buy and sell stocks quickly. In the last few years, Cash App has expanded its financial services to include brokerage services in addition to direct deposit and person-to-person money transfers. However, Robinhood invented the no-fee brokerage platform model, and it is widely acknowledged that this is the reason why the majority of the industry has embraced commission-free stock trading.
Unfortunately, there are certain parallels between the two that will turn off a lot of investors. For example, neither platform offers mutual fund investing. Thus, it would be best to look elsewhere if you’re looking for a broker with greater features. However, if you want a straightforward and uncomplicated method, check out our Cash App Investing vs The Robinhood review can assist you in determining which one is best for you.
Cash App Investing Fees Explained
FAQ
Is there a fee to sell stocks on Cash App?
What happens when you buy $1 of stock on Cash App?
Is trading stocks on Cash App worth it?
Is investing $1 in stocks worth it?
Does cash app investing charge fees?
Cash App Investing accounts are free to open, require no minimum balance to maintain, and charge no commission fees. Does Cash App charge regulatory and government fees? While Cash App Investing does not charge any fees or commissions on buy or sell trades, there are fees that are required by government agencies (such as the SEC and FINRA).
Does cash app investing charge a commission?
Similar to Robinhood and SoFi Invest, there are no trading commission fees when you use Cash App Investing to buy or sell shares. However, fees apply when you use the service to buy bitcoin. The Cash App Investing service is currently available in the U.S. only. You must be 18 years or older to open a Cash App Investing account.
How much does Cash App cost?
When it comes to fees, the Cash App investment platform really stands out. You’ll only need $1 to start investing, and after that, you’ll pay almost nothing. There are no monthly maintenance fees, no trade commissions and no minimum balance requirements. However, you may pay government-mandated fees when buying and selling certain securities.
How do I start investing with Cash App?
When you start investing with Cash App, you create a brokerage account with Cash App Investing LLC. Opening a brokerage account, sometimes referred to as an Investing account, allows you to buy and sell stocks and exchange traded funds (ETFs).