Investing in stocks can be an effective way to grow your money over time. And with the rise of mobile investing apps like Cash App, getting started has never been easier. Cash App makes it simple to buy and sell stocks right from your smartphone.
In this comprehensive guide, we’ll walk through how to invest in stocks on Cash App.
Overview of Cash App
For those who are new to the platform, Square created the well-known payment app Cash App, which enables users to send and receive money with ease. The app also facilitates stock investing and bitcoin trading, in addition to peer-to-peer transactions.
Cash App has gained significant popularity due to its user-friendly interface. It’s especially useful for millennials and younger investors interested in buying stocks from their mobile devices.
Here are some key things to know about the Cash App:
- Cash App can be downloaded as a mobile app for both iOS and Android devices.
- The basic app is free to download. Certain additional features, like stock investing and bitcoin, incur fees.
- Cash App allows you to create a free account connected to your debit card. This enables quick transfers between your Cash App and bank account.
- In addition to sending/receiving payments, Cash App offers stock trading, bitcoin investing, and a Cash Card debit card.
- Cash App is suited for beginner investors given its simple, intuitive design. More advanced traders may want platforms with more robust research and tools.
Now that you understand the basics of what Cash App is, let’s look at how to use it for investing in stocks.
Getting Started With Cash App Investing
Here are the steps to begin buying and selling stocks through the Cash App:
Step 1: Download the Cash App mobile app and create an account
- Cash App can be downloaded for free from the App Store (iPhone) or Google Play Store (Android).
- Upon opening the app, you’ll be prompted to enter your phone number or email to create an account.
Step 2: Link a bank account or debit card
- Under the main “My Cash” tab, tap the bank icon in the top-right corner.
- Choose your debit card or bank account. Enter the details to link it to your Cash App account.
Step 3: Deposit funds into your Cash App account
- Once your bank account is connected, tap the same icon again and select “Add Cash.”.
- Enter the amount you wish to transfer from your bank to Cash App. The minimum is $1.
- Deposited funds will show up immediately in your Cash App balance.
Step 4: Tap the “Investing” tab at the bottom to start trading
This is where you can buy and sell stocks. Let’s look at how investing on the Cash App works.
How to Buy Stocks on Cash App
Purchasing stocks on the Cash App takes just a few taps. Follow these steps:
- Tap the “Investing” tab on the bottom menu.
- Enter a stock symbol or company name in the search bar at the top.
- Tap the stock you want to buy from the list.
- On the stock overview page, tap “Buy” at the bottom.
- Enter the number of shares or dollar amount you wish to purchase.
- Tap “Preview Buy” – verify your identity via your PIN or Touch ID.
- Review the preview screen, confirming details like fees, and tap “Buy” to place the trade.
That’s it! The stock will show up under the “My Portfolio” section once the order is filled.
It’s important to note that while you can place trades 24/7, they will only be executed during normal market trading hours (9:30 AM – 4:00 PM Eastern).
How Much Does It Cost to Buy Stocks on Cash App?
The good news is that Cash App does not charge any commissions or fees to buy stock – you simply pay the market price of the stock itself.
There is a minor regulatory fee per transaction, but it is typically just a few cents. The fee shows up as “Cash App Investing Fee” when you buy or sell a stock.
So if you buy $100 worth of stock on the Cash App, you’ll pay exactly $100 for the shares themselves, with negligible fees added.
This makes Cash App very affordable compared to traditional online brokerages that may charge fees and commissions per trade. The zero commission model has become more popular with the rise of apps like Cash App and Robinhood.
How to Sell Stocks on Cash App
Selling stocks and cashing out your profits is easy on the Cash App as well. Just follow these steps:
- Tap the “Investing” tab and select “My Portfolio.”.
- Tap the stock position you want to sell.
- Tap “Sell” on the bottom.
- Enter the number of shares or dollar amount you wish to sell.
- Preview and verify the sell order details.
- Tap “Sell” to complete the order.
The proceeds from the sale will be deposited into your Cash App balance after the trade is executed.
Like buying, you can place sell orders any time of the day. But market hours will determine the exact execution. It’s important to research individual stocks and time your buys/sells wisely.
Additional Cash App Investing Features
Beyond basic stock trading, Cash App also offers a few other useful investing features:
- Fractional Shares – You can buy fractional shares on Cash App with as little as $1 invested. This gives you greater flexibility.
- Recurring Investments – Automatically invest a set dollar amount into a particular stock on a defined recurring schedule.
- Analyst Ratings – View analyst recommendations from top firms to gain insights on a stock.
- Notifications – Opt to receive notifications when a stock hits a certain price target.
- Bitcoin – Cash App supports buying and selling bitcoin cryptocurrency alongside stocks.
- Cash Card – The Cash Card is a debit card that lets you spend your Cash App balance. Use it to easily access returns.
Is Cash App Safe for Investing?
Cash App was designed specifically with beginners in mind. The investment platform utilizes encryption and other security measures to protect your personal information and transactions.
Assets held in your Cash App investing account are also kept separate from Square’s corporate accounts at independent broker-dealers like DriveWealth. This adds an extra layer of protection.
As with any investment app, it’s still smart practice to enable biometric sign-in like Touch ID for additional security. Also, be wary of suspicious links and never share your account login details or personal information.
But overall, Cash App does make safety in investing a priority. Your funds remain secure when using the app responsibly.
Pros and Cons of Cash App Investing
Here’s a quick rundown of the key benefits and drawbacks of using the Cash App for stock investing:
- Simple, easy-to-use mobile interface
- Zero commission fees on trades
- Low minimums – can buy fractional shares
- Supports basic stocks, bitcoin, and ETFs
- Useful investing features like recurring buys
- More affordable than traditional brokers
- Limited tools for research and charts
- No mutual funds, bonds, or options
- Cannot open joint or retirement accounts
- Lacks robust community and expert insights
- Minimal customer service support
Educational Resources on Cash App
While Cash App won’t provide formal investment advice, the app does offer some basic educational content.
New users are guided through an introductory tutorial explaining key investing concepts like stocks, ETFs, dollar cost averaging, and more.
The “Learn” tab has beginner guides that explain how to place different order types, use fractional shares, set price alerts, and understand fees. There is also a general investing overview.
-For official help, Cash App has support articles on its website. These cover account setup, deposits/transfers, bitcoin, the Cash Card, security, fees, and more.
But overall, the education on Cash App is still limited. Serious investors may need to turn to outside platforms, online courses, books, and financial advisors to further develop their knowledge.
Who is Cash App Investing Best For?
Cash App shines when it comes to providing an easy introduction to stock investing, especially for beginners looking to learn the basics.
Here are the types of investors who may benefit most from Cash App:
- Beginner investors – Those totally new to stocks will appreciate the straightforward mobile interface and educational guides.
- Casual investors – For those who just invest casually in their spare time, Cash App delivers a simple and affordable experience.
- Millennials/Gen Z – Younger tech-savvy generations tend to feel comfortable with the mobile-first Cash App.
- Smaller portfolios – The $0 commissions and fractional shares allow investors to invest small amounts affordably.
- Cryptocurrency fans – Cash App supports buying/selling bitcoin alongside stock investing.
For these types of investors, the Cash App serves as a great entry point into the world of stock trading and investing. The hands-on experience also helps beginners learn by doing.
However, more advanced active traders and serious investors are better off with a platform that provides stronger trading tools, research capabilities, charting, portfolio management, retirement accounts, and more educational resources.
While Cash App satisfies the needs of newer investors, your needs may evolve over time.
Common Investing Strategies on Cash App
Here are some of the most popular investing approaches you can implement on Cash App as a beginner:
Buy and Hold
This passive, long-term strategy involves buying stocks of companies you believe in and holding them for 5-10+ years. The goal is to benefit from the company’s growth over time. On Cash App, search for and invest in businesses you think have promising futures.
Dollar Cost Averaging
Rather than investing a lump sum all at once, dollar cost averaging has you invest small, equal amounts at regular intervals, like $50 a week, in the same stock. This helps reduce the risk of volatility. Cash App’s recurring buy feature supports this strategy.
Index Fund Investing
Index funds like ETFs offer instant diversification by owning a portfolio of assets that mirror major indexes like the S&P 500. Look for ETFs on Cash App that give you exposure to the overall market.
Stocks that regularly pay dividends can generate passive income. Seek out established, profitable companies on Cash App with solid dividend track records that you can hold long-term.
Socially Responsible Investing
Look for companies on Cash App that meet standards for social responsibility, environmental policies, governance, and ethics. Cash App has a dedicated SRI section.
Use limit orders instead of market orders for more control over the entry and exit price points when buying and selling stocks. Limit orders on Cash App are executed when the stock reaches the specified price.
Key Takeaways for Investing in Stocks on Cash App
Here are some key tips to summarize investing through Cash App as a beginner:
- Cash App offers an easy, affordable way to get started buying stocks and bitcoin.
- You can open an account for free, and there are no commissions on trades.
- The mobile interface is very user-friendly but provides limited research capabilities.
- Look to educational guides on the app and outside resources to keep learning.
- Passive long-term buy and hold strategies are well-suited for beginners.
- Start small, invest regularly, and diversify your holdings.
- Focus on building disciplined financial habits over simply chasing quick profits.
- Be mindful of risk and have reasonable expectations when getting started.
Investing on Cash App provides an excellent on-ramp to enter the stock market, especially for millennials and novice investors. Its mobile-first design makes the process of buying, selling, and tracking stocks intuitive.
While Cash App lacks some advanced functionality found on full-service brokerage platforms, it excels at offering a simplified and affordable approach to investing. The educational content also helps demystify concepts for total beginners.
Remember to start small, diversify your holdings, keep learning, and aim for steady growth over the long-term. Cash App delivers the features necessary to begin putting your money to work in the stock market.
By following the steps and advice outlined in this guide, you’ll be well on your way to successfully investing in stocks through Cash App.
Frequently Asked Questions
What types of assets can I invest in on Cash App?
Cash App allows you to invest in stocks (including fractional shares of select companies), bitcoin, and ETFs. Other assets like mutual funds, bonds, and options are not currently supported.
Can I open a retirement investing account on Cash App?
Unfortunately, Cash App does not currently offer IRAs or any other types of retirement accounts at this time.
Can I earn interest by keeping cash balances in my Cash App account?
Cash balances within your Cash App account do not earn interest. The funds are primarily intended to facilitate peer-to-peer payments and investing.
What research tools does Cash App offer for investing?
Research capabilities on Cash App are minimal – you’ll see basic stock graphs, news, and analyst ratings. For in-depth research, you’ll need to use outside websites, tools, and apps.
Is my money insured and protected when investing through Cash App?
Yes, Cash App takes measures to secure your personal information, funds, and investments. Assets are held at regulated broker-dealers like DriveWealth and protected up to $250,000 for securities and up to $250,000 for cash by SIPC.
In another related article, The 10 Best Long-Term Stock Investments for 2024 and Beyond
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