How Does Cash App Investing Work? A Complete Guide to Growing Your Money

Have you ever wonderd how to start investing without all the fancy financial jargon and complicated platforms? Cash App Investing might be your answer! As someone who’s been using this feature for a while, I wanna share everything about how Cash App makes investing accessible to everyone – even if you’re just starting with a few dollars.

What is Cash App Investing?

Cash App Investing is a feature within the popular Cash App that lets users buy stocks and Bitcoin directly from their phone. It’s made by Block, Inc (formerly Square) and gives you a simple way to enter the investment world without needing a traditional brokerage account

The best part? You can start with just $1. Yep, that’s right – no need to save thousands before you can begin investing!

Getting Started with Cash App Investing

Before you can start buying stocks and Bitcoin, you’ll need to:

1. Download Cash App from App Store or Google Play
2. Create and verify your account
3. Enable investing by providing additional information

Setting Up Your Investing Account

To enable investing, Cash App needs some extra details from you:

• Full legal name
• Date of birth
• Social Security Number
• Employment information
• US residential address

They need this info to comply with financial regulations – all standard stuff for investment platforms. Once verified, you’ll get access to the investing tab in the app.

How to Buy Stocks on Cash App

Buying stocks on Cash App is super simple. Here’s how we do it:

1. Open Cash App and tap the investing tab (looks like a graph)
2. Browse available stocks or search for a specific company
3. Select the stock you want to purchase
4. Enter the dollar amount you want to invest
5. Review and confirm your purchase

The best thing about Cash App is that you can buy fractional shares. This means if a company like Amazon is trading at $3500, you don’t need that full amount – you can invest just $1 if you want!

Exploring Cash App’s Investment Options

Cash App offers two main investment types:

Stocks and ETFs

You can invest in hundreds of publicly traded companies and ETFs (Exchange-Traded Funds). Some popular ones include:

• Tech giants (Apple, Amazon, Google)
• Financial institutions
• Retail companies
• ETFs tracking market indices

Bitcoin

Cash App also offers Bitcoin purchasing. You can:

• Buy as little as $1 of Bitcoin
• Set up automatic purchases (daily, weekly, or monthly)
• Send Bitcoin to external wallets
• Track price movements

Understanding Your Cash App Investing Account

Your Cash App investing account works similarly to other brokerage accounts but with some unique features.

Account Types

Cash App offers two types of investing accounts:

1. Standard Investing Account: This is the default account type that all users get when they enable investing.

2. Cash App Investing IRA: For retirement-focused investing with potential tax benefits.

Account Protection

Cash App Investing accounts are covered by SIPC protection, which means:

• Securities in your account are protected up to $500,000 (including $250,000 for cash claims)
• This protects you if Cash App Investing faces financial difficulties
• Important note: SIPC doesn’t protect against market losses

Fees and Pricing

One of my favorite things about Cash App Investing is the straightforward fee structure:

• Stock trading: $0 commission fees
• Bitcoin purchases: Small fee built into the exchange rate
• No monthly maintenance fees
• No minimum balance requirements

This transparent pricing makes it easy to know exactly what your investments cost.

Making Money with Cash App Investing

There are two main ways to make money through your investments:

1. Capital Appreciation

This happens when the value of your stocks or Bitcoin increases over time. For example, if you buy $100 worth of a company’s stock and it grows to $150, you’ve gained $50 in capital appreciation.

2. Dividends

Some companies share profits with shareholders through dividend payments. When you own dividend-paying stocks on Cash App, you’ll receive these payments directly to your investing account.

You can track your gains and dividend income right in the app under your investing portfolio.

Cash App Investing vs. Traditional Brokerages

How does Cash App compare to traditional investment platforms? Here’s a quick comparison:

Cash App is definitely more limited in investment options, but it’s much more accessible for beginners.

Tips for Smart Investing on Cash App

From my experience, here are some tips to make the most of Cash App Investing:

• Start small: Begin with amounts you’re comfortable with, even just $5 or $10
• Invest regularly: Set up automatic investments to build your portfolio consistently
• Diversify: Don’t put all your money in one stock or just Bitcoin
• Think long-term: The market goes up and down, but historically trends upward over long periods
• Use dollar-cost averaging: Invest fixed amounts at regular intervals regardless of price
• Research before buying: Take time to understand companies before investing

Potential Downsides of Cash App Investing

While I love the simplicity, Cash App Investing does have some limitations:

• Limited investment options compared to full-service brokerages
• Basic research tools that might not satisfy advanced investors
• No retirement account options beyond Cash App IRA
• Limited customer service compared to traditional brokers
• Can’t transfer existing investments from other brokerages

Managing Your Cash App Investment Portfolio

Cash App makes it easy to monitor and manage your investments:

Tracking Performance

The app shows your:

• Current holdings and their values
• Total gain/loss (both percentage and dollar amount)
• Individual stock performance

Selling Investments

Selling is just as simple as buying:

1. Select the stock or Bitcoin you want to sell
2. Choose the amount to sell
3. Confirm the transaction

When you sell, the money goes back to your Cash App balance and can be:

• Transferred to your linked bank account
• Used to make other investments
• Spent using your Cash App Card
• Sent to friends

Tax Implications of Cash App Investing

This is important stuff that many beginners don’t think about! When you sell investments for a profit, those gains are taxable:

• Short-term capital gains (investments held less than a year) are taxed at your regular income tax rate
• Long-term capital gains (investments held more than a year) are taxed at lower rates (0%, 15%, or 20% depending on your income)
• Dividend income is also taxable

Cash App will provide a tax document (Form 1099-B) if you meet certain thresholds of investment activity. Keep track of your transactions throughout the year to make tax time easier!

Is Cash App Investing Right for You?

Cash App Investing could be a good fit if:

• You’re new to investing and want a simple platform
• You don’t have much money to start investing
• You prefer doing everything on your phone
• You want to invest small amounts frequently
• You’re interested in fractional shares

It might not be ideal if:

• You want to trade advanced securities like options
• You need comprehensive research tools
• You’re looking to open specialized retirement accounts
• You want personalized investment advice

Final Thoughts

Cash App has democratized investing by making it accessible to literally anyone with a smartphone and a dollar. It’s not the most powerful platform out there, but it’s an excellent gateway to the world of investing.

I started with just $5 a week on Cash App, and it helped me build confidence before moving to larger investments. The simplicity and low barrier to entry make it perfect for beginners.

Remember that all investing carries risk, and you should never invest money you can’t afford to lose. Start small, learn as you go, and enjoy watching your money potentially grow over time!

Have you tried Cash App Investing yet? What has your experience been like? We’d love to hear your thoughts and questions in the comments!