As technology continues to advance, a number of Fintech products and services have been disrupting the traditional finance and banking industry. These Fintech platforms offer users more options for investment and trading, as well as the ability to hold their cash in online banks that support more than 10 currencies and even cryptocurrencies. Furthermore, these financial activities and transactions can be done entirely online, eliminating the need for face-to-face contact meeting brokers, fund managers or bank tellers. If you’re looking for ways to have your finances at your fingertips, here are some online finances tools that can help you manage your money from home.
1. Online Brokerages
If you’re interested in investing and trading, there’s a number of online brokerages that suit different market interests, wealth level, risk appetite and experience level. As a trader, maximising your investment returns is a priority. However, the commission and fees involved in trading can eat up some of your profits.
If you already have sufficient investment and trading knowledge, online brokerages offer a DIY approach to trading and allow you to build an investment foundation and portfolio. You'll also be able to save some money on fees—some online brokers charge fees as low as S$10 per trade compared to other brokers that charge fees between S$20-S$28. However, since investment comes with risks, it is recommended to take a careful and thoughtful approach and do your due diligence to avoid to costly investing mistakes.
2. Expense Tracking Apps
Expense tracking apps help monitor what you spend the most on so you can take control of your finances. They're also a useful tool to help you monitor your spending habits. An app like You Need A Budget (YNAB) allows you to track and share your finances with a partner, as well as provide online classes with a live instructor that teaches you budgeting basics. Wally is another expense tracking app popular with millennials. It uses artificial intelligence to track your expenses and provides feedback on your spending. Mint still remains the most popular expense tracking app as it’s free and contains features like budgeting, expense tracking, credit monitoring, and managing bills. In case you’ve never used any, download a few apps to see which suits you better. As you start tracking your expenses, you can reevaluate your spending and savings.
3. Digital Banks
Digital banks give you quicker access and control to your cash by allowing you to bank entirely from your smartphone with just an app. It's quick and easy to sign up for an account and in most cases, you'll get a physical debit card delivey within a one to two weeks. Most of these banks also give you the ability to hold multiple currencies and others, like Wirex, even let you hold cryptocurrencies, which are features that most traditional banks don’t offer.
These banks also offer competitive exchange rates for foreign currency spending and also allow you to make fee-free payments in multiple currencies, which will save you money especially when you’re travelling, shopping overseas or purchasing goods that are sold in a foreign currency online. If you need to send/receive foreign currencies, a digital bank like Transferwise charges fees that are lower than a telegraphic transfer through a traditional bank. As these banks operate entirely digitally, they come with smart security features that allow you to lock/unlock your physical card in case you lose it.
In the past, wealth management is mostly done through mutual funds curated by fund managers or financial planners, who charge exorbitant fees of 2-4%. For time-starved beginners interested in passive investment, robo-advisors offer wealth management and investment solutions digitally. Using machine learning, these platforms make automated and algorithm-driven investment decisions based on your investment goals.
Putting your investment amount into Exchange Traded Funds (ETFs), your fund will be exposed to different sectors in the global economy and diversified through a mix of equities and bonds. With minimum fees 0.25% to 1% depending on the investment amount, robo-advisors offer you a low-cost, diversified, passive investment solution. Robo-advisors are also more suitable for those who’d rather take a longer-term approach to growing their wealth instead of short-term investments and active trading.
Choosing the Right Wealth Management Platform
Whether you’re looking at saving, spending, trading, investing or budget tracking platforms, it’s important to test out and research on the different platforms out there that suit your needs. For instance, traders might want to consider the UI/UX of the online brokerages and product offerings in the market available on the different platforms in addition to fees, rates and investment options. Passive investors using robo-advisors would want to compare the fees charged, the portfolios offered, as well as the minimum investment requirements. As for online banking, be aware of the monthly fees, commission spending fee and ATM withdrawal fee charged by some digital banks. Regardless, these socially distant methods of saving and growing your wealth may be just the thing you need when in-person contact may not be advisable.