Best Ways For College Students To Invest Money

Investing, particularly in the stock market, can seem too costly and risky — especially for young investors. But if done strategically, it can be a great way to grow one's personal finances.

And some of the best investment opportunities don't require a lot of capital to get started. However, accumulating wealth through investing does take time, so starting young is advantageous.

College is typically a great time to begin investing since students are generally not committed to long-term expenses like a mortgage.

Without these commitments, students are able to focus more of their energy on growing investments.

Investing can also be a crucial financial management skill that possesses the potential to benefit students long after graduating.

Undergraduates can make the most of this time by learning about the best investment opportunities for college students and how they can take advantage of the opportunity to build a bright financial future.

female student in blue and white plaid shirt looking at smartphone in her hands with a silver laptop on her lap

Commission-Free Investing

Brokers were once the only stock market liaisons between investors and companies or institutions. Before virtual trading platforms gained popularity in 2005, people had to go through a stockbroker to invest.

Now, online trading platforms or apps act as virtual brokerages, eliminating the need for brokers — and their charges. And what's more, it has paved the way for commission-free investing.

In commission-free investing, investors won't lose a portion of their funds to brokers.

This is beneficial to investors who have a limited budget — a struggle for many college students.

Students who choose commission-free investing as a strategy can invest in units of stock and exchange-traded funds (ETFs) for as little as $5. They may experience few to no management or trading fees as a result of these investment opportunities.

For the average undergraduate, this lack of associated fees makes commission-free investing one of the most economical investment strategies for college students currently available.

Exchange-Traded Funds

An exchange-traded fund or ETF is a group of investments or equities of varying risk levels, like a mutual fund.

The difference is ETFs can be traded at any time, like stocks — unlike a mutual fund, which has strict trading rules.

ETFs are passively managed, meaning it can be less expensive to hold than actively managed investments — like mutual funds.

As ETFs hold a diverse basket of stocks and are easy to maintain, it can be a good investment opportunity for college students looking to build a diverse financial portfolio.

Investment Apps

Investment apps make engaging in the stock market more accessible to those with little investable surplus, or money saved for investing.

This can be an ideal investment opportunity for college students with strict financial limitations.

In addition to offering commission-free ETFs and stocks, investment apps also act as or include robo advisors, sell fractional stocks, and allow users to earn financial products for free.

Robo Advisors

College students who are new to investing may find that the most efficient way to build and monitor a financial portfolio containing a good mix of investments is through a robo advisor.

Robo advisors are automated financial counselors that can design a diverse portfolio customized to the user's current financial needs.

Nearly all investment apps are or include robo advisors.

And although some apps charge annual or monthly subscription fees, it's usually no more than $10 or $12 per month, a minimal amount compared to the quality assistive services these apps provide.

Investment app subscriptions are even more economical when compared to the price of an in-person wealth manager, which can cost about $200 to $400 per session.

Robo advisors are a much more affordable alternative for those with limited funds or who would like to dip their toes into investing before taking a giant leap.

Using robo advisors allows college students to curate a customized financial portfolio at a low cost.

Fractional Stocks

Stocks, especially blue-chips or stocks from internationally renowned companies like Disney, can be very expensive.

Undergraduates on a tight budget typically can't afford a stock if it's priced at $1,000 per share.

But most investment apps allow investors to buy fractions of a stock rather than an entire unit or share — which reduces the price significantly.

Charles Schwab and Fidelity Investments both sell slices of stocks from major companies like Amazon and Apple for a minimal price — sometimes around $5.

By offering stocks in digestible fractions at affordable prices, these apps can generate great investment opportunities for college students.

Rewards & Benefits

Some apps, like Webull, are not only free, but also give rewards to first-time subscribers. For Webull, first-time subscribers get two free stocks with a total market value of $2,300.

Moomoo offers a similar gift to its first-time subscribers. New Moomoo subscribers are each awarded a single free stock valued at $350.

And users can even earn shares of stock for every direct deposit made into their investment account.

Investment apps that specialize in cryptocurrency, such as Coinbase, let users earn $3 to $5 in fractional shares from various digital currencies like Bitcoin — simply by engaging with the app's resources on a regular basis.

Stock-earning engagement activities can include reading articles and taking virtual investment courses. A small price to pay for a wealth of quality investment opportunities.

Invest in Yourself Through HRCCU

For college students, investments made now can create a strong base for a healthy financial future.

At HRCCU, those looking to open an investment account or create a diverse portfolio can get quality assistance through the credit union's wide range of resources.

This includes affordable financial advice from HRCCU's partnership with GreenPath Financial Wellness. At GreenPath, students can even receive free expert guidance on managing their education loans.

With HRCCU, members can become successful investors. Contact us today to learn more about how we can help you invest towards tomorrow.