Investing in the stock market can seem intimidating, especially for beginners. However, apps like Cash App have made it easier for everyday people to get involved in the stock market. Cash App is a popular mobile payment service, but it also allows users to buy and sell stocks directly from the app. In this article, we will walk through how buying stock on Cash App works in simple and clear terms.
What Is Cash App?
Cash App is a mobile payment service developed by Block, Inc. (formerly Square, Inc.). It allows users to send and receive money, pay bills, and make purchases. In addition to its core payment services, Cash App also offers features for buying and selling stocks and Bitcoin.
This makes it an easy way to start investing without needing a traditional brokerage account.
Why Buy Stocks on Cash App?
Before we get into how buying stocks works, let’s briefly discuss why someone might choose to buy stocks on Cash App:
- User-Friendly Interface: Cash App is designed to be simple, which makes it great for beginners who are just getting started with investing.
- No Minimums: You don’t need a lot of money to begin. Cash App allows users to buy fractional shares, so you can invest small amounts, even as low as $1.
- Convenience: Since many people already use Cash App for sending and receiving money, adding stock purchases makes it easy to manage everything in one place.
How to Get Started with Stock Buying on Cash App
Now that you understand what Cash App is and why it’s convenient for investing, let’s break down the steps for buying stock.
1. Download and Set Up Cash App
To start buying stock, you first need to have Cash App installed on your mobile device. The app is available for both iOS and Android users.
- Download the app from the App Store (for iPhones) or Google Play (for Android).
- Follow the instructions to set up your account. You will need to link your bank account or debit card to fund your purchases.
2. Navigate to the Investing Tab
Once you’ve set up your account, you’re ready to start investing. Here’s how to find the stock section in Cash App:
- Open Cash App.
- At the bottom of the screen, you’ll see a series of icons. Tap the one that looks like a line graph (this is the Investing tab).
- You will be taken to the “Investing” section where you can choose between stocks and Bitcoin.
3. Browse and Select a Stock
Cash App offers a wide range of stocks from different industries. To find a stock:
- In the Investing tab, you will see a search bar at the top of the screen. Type in the name or ticker symbol of the company whose stock you want to buy.
- You can also browse by different categories, such as “Biggest Daily Movers,” “Top 100,” or “Popular Stocks.”
- Once you find the stock you’re interested in, tap on it to view more details.
4. Choose How Much You Want to Invest
One of the unique features of Cash App is that it allows you to buy fractional shares. This means you don’t need to buy a whole share of stock, which can sometimes be expensive.
- After selecting a stock, tap “Buy.”
- Cash App will ask you how much you want to invest. You can choose a preset amount (such as $10, $20, or $50) or enter a custom amount.
- Once you’ve entered the amount, tap “Next.”
5. Confirm the Purchase
Before you complete your purchase, Cash App will show you a confirmation screen. This will include details such as:
- The stock you’re buying.
- The amount you’re investing.
- Whether you’re buying in real-time or placing an order to execute later.
If everything looks good, tap “Confirm.” You’ve just bought stock on Cash App!
Understanding Fractional Shares
A great feature of Cash App is the ability to purchase fractional shares. But what exactly does that mean?
When you buy a full share of stock, you are purchasing one whole unit of that stock. However, some stocks are expensive, and not everyone can afford to buy full shares. Fractional shares allow you to buy a portion of a share.
For example, if a single share of a company costs $500, but you only have $50 to invest, you can buy 10% of one share (0.1 shares). Fractional shares make it easier for beginners to invest smaller amounts of money.
How to Sell Stock on Cash App
Selling stock on Cash App is just as easy as buying it. Here’s how you can do it:
1. Go to the Investing Tab
To sell stock, start by opening the app and navigating to the Investing tab (the line graph icon at the bottom of the screen).
2. View Your Portfolio
Your portfolio is a summary of the stocks you currently own. Tap on the stock you want to sell.
3. Tap “Sell”
Once you’ve selected the stock, tap the “Sell” button. Just like with buying, you can choose a preset amount or enter a custom amount to sell.
4. Confirm the Sale
Review the details of your sale and tap “Confirm.” The sale will go through, and the proceeds will be added to your Cash App balance.
See Also: How Does Walmart Stock Work
Fees for Buying Stocks on Cash App
One of the appealing features of buying stock on Cash App is that there are no commissions or fees for buying or selling stocks. This makes it an attractive option for small-scale investors. However, keep in mind:
- Cash App may charge fees for transferring money from your Cash App balance to your bank account, depending on the transfer method.
- There may also be tax implications for buying and selling stocks, especially if you make a profit.
Tracking Your Investments
Cash App makes it easy to track your investments. In the Investing tab, you can view:
- The stocks you own.
- The current value of your investments.
- The percentage change in value since you bought the stock.
This information helps you monitor the performance of your portfolio and decide whether to buy more or sell.
Risks of Buying Stocks on Cash App
While buying stocks on Cash App is simple, it’s important to remember that investing in the stock market always carries risk. The value of your investments can go up or down, and you could lose money.
To manage risk, consider the following tips:
- Diversify: Don’t put all your money into one stock. Try to invest in different companies and industries.
- Do Your Research: Before buying a stock, take time to research the company and its performance.
- Invest What You Can Afford to Lose: Only invest money that you are willing to risk. The stock market can be unpredictable, especially in the short term.
Advantages of Buying Stock on Cash App
Here are some of the key benefits of using Cash App for stock investing:
- Simplicity: Cash App is designed to be easy to use, making it a great option for beginners.
- Low Entry Point: With fractional shares, you can start investing with as little as $1.
- Convenient: Since many people already use Cash App for payments, it’s convenient to add stock investing to the same app.
Disadvantages of Buying Stock on Cash App
While Cash App is great for beginners, there are some drawbacks to consider:
- Limited Features: Cash App lacks some advanced tools and research options that more traditional brokerage accounts offer.
- Stock Selection: While Cash App offers many popular stocks, it doesn’t provide access to all stocks and investment options, like mutual funds or bonds.
Conclusion
Buying stocks on Cash App is a simple and convenient way for beginners to start investing. With its user-friendly interface, low entry point, and the ability to buy fractional shares, Cash App makes stock investing accessible to everyone.
However, like any investment, it’s important to be aware of the risks and make informed decisions. Diversifying your portfolio and investing only what you can afford to lose are good practices to follow. Overall, Cash App provides a straightforward way to get started in the stock market with minimal hassle.
Related Topic:
How Stock Exchange Works In India
