Public.com is one of the newest stock brokerage apps that not only allow you to trade stocks with no fees; they also give you the option to buy fractional shares of stock.
These and other features make Public an interesting option for those looking to use an app-based interface to start investing. This Public app review will help you decide if it is the best option for your investing needs.
What is Public.com?
Public is the latest in a growing group of online brokerages that offer commission-free trading.
The trading is 100% through the Public app. This easy to use interface makes it one of the few app-only brokerages. This also limits the research and tools that are available with other online brokerage accounts.
For anyone looking for an easy to use app that can help you get started buying and selling stocks and ETFs, Public.com does an excellent job of meeting those needs.
How Does Public Work?
Public makes the process of using their services very easy. The initial sign up process took me less than 5 minutes. Here’s how to get going.
Download the App
The Public.com app is available for both Android and IOS. If you aren’t using one of these platforms for your phone or tablet, then you probably aren’t cool enough to use this app anyway.
Create a Profile
The profile process is simple, with only a few questions, and gets your information into the system. This is where they get the tax information needed for your account.
There are pieces of this profile that will be made available to the public. Part of Public.com’s social component is a “public profile” available to be seen by all users.
Choose Your Investments
Public does not have every stock and ETF that is available on the market, but they have more than enough to get anyone going. There are more than 5,000 stock and ETF options available for investment.
Public is based in the USA, so there are no international stocks available.
Tracking
Public gives you an easy to understand table of all your investments. As your stocks receive dividends, that money is deposited into your cash account.
You can elect to have the money automatically reinvested into the stocks that generated the dividend. Dividend reinvesting is typically the best strategy so that your money starts working for you right away.
Refer Friends
Public has a generous referral program. Whether you are referring someone or are being referred, each person will get up to $50 of a random stock.
Once an account is “approved and verified”, You will get to select one stock from a group of nine. This group of stocks can change, and you get a slightly random amount up to the $50 max.
Features
Even though Public.com is geared toward beginning investors, that does not mean it is devoid of valuable features. These
Fractional Shares
The introduction of fractional share investing is a game-changer for small investors. No longer are we relegated to just ETFs and Mutual funds if we want to invest in large companies that have high stock prices.
As of this moment, a share of Apple stock is $290, and Netflix is $424. In the past, you would have to have $714 to invest in these two companies.
With fractional shares, you can decide what dollar amount you want to invest. For example, if I wanted to invest $50, I could buy $25 of Apple and $25 of Netflix stock. That translates into 8.6% of a share of Apple and 5.9% of a share of Netflix.
Social Aspect
What separates Public.com and other fractional share no-fee brokerages is their social components. People make their investor profiles public so that they can learn from each other.
On top of the profiles, there is a very active forum where traders comment, ask questions, and exchange information. There is a wealth of information, but we should all be careful about from whom we take advice.
For me, the forums have been great because it takes away the feeling that we are doing this all by ourselves.
Easy to Understand Categories
One of the more frustrating parts of learning about stock investing is how companies are categorized. Public takes some of that frustration away with their “Themes”.
Instead of the standard market industries, themes give users an idea of how a company might benefit from what is going on in the real world. You can see companies categorized as working on self-driving cars or the space industry.
The system isn’t perfect as I found a few questionable categorizations, but overall it makes understanding companies much easier for new investors.
In-App Support
The Public app has live chat support available Monday through Friday from 9 AM to 5 PM Eastern time. These hours line up nicely with when the stock market is open.
Fees
Any trades that you do on your own are 100% free with Public.com. Once again, very friendly to accounts where people only make smaller trades.
There are a few activities that will charge you a fee, but none of them involve self-directed trading. These fees include:
- Broker assisted trades – $30
- Wire transfer – $30
- Overnight checks – $35
- Returned checks – $35
- Stop payment – $35
- ACAT transfer – $75
- Paper Statement – $35
Is the Public App Legit?
Yes, Public.com is a legitimate online brokerage with an app-only interface. The SIPC insures them for up to $500,000 per account.
The company was started in 2017 and was initially marketed under the name Matador. Matador seems like a veiled reference to taming the bull, as in “bull market”. Pretty cheesy, but a lot of companies have cheesy names.
Matador was considered a pioneer when it came to making investing products available to the public, and those who knew of them will be excited that the company is back in the form of the Pubic app.
For proof of safety, the app is AES 128-bit encrypted and utilizes TLS 1.2 secure data when in transit.
How Does Public.com Make Money?
When brokerages take away the fees for trading, it always begs the question of how do they make money? Public.com makes money in a few different ways.
Lending Securities
Some people invest by shorting a stock. A shorting strategy means that people will borrow stock so that they can sell it at the current market price.
The goal is to repurchase the stock at a lower price, returning what they borrowed to the lender, and make a tidy profit. Public.com gets revenue from lending out stock to these types of investors.
Cash Accounts
Any cash that is stored in Public.com and not invested is stored for interest by the company. They currently get an interest rate of 0.2% on the money you store there.
Order Rebates
When orders for stocks are placed, they go through a clearing firm. Sometimes that clearing firm issues a rebate for the trade. Public.com keeps this rebate since we aren’t paying for the trades.
Subscriptions
Currently Public does not have any subscription fees, but they have clearly stated that they intend to add premium services in the future that may require a subscription.
We are being assured that the current services will remain free with no minimum balance.
Alternatives
- Robinhood – Probably the most popular investing app, our Robinhood review explains how it changed the game for app investing.
- M1 Finance – One of the first fee-free brokerages with fractional shares, read our M1 Finance review to see how they compare to Public.
- Webull – Focused on fee-free trading and top-notch tools, our Webull review explains how this brokerage is a good step up for more experienced investors.
Pros
- Free to use
- The social component makes learning about investing easier.
- Chat support for platform questions
- Fractional shares for easier trading
- Free trades
- Excellent educational resources
Cons
- No web account access.
- It only supports investments in stocks and ETFs.
- Still has a few bugs in the system, but getting better.
- Only available in the United States
- No availability of joint or retirement accounts
Final Thoughts on our Public.com App Review
Public is one of the better apps for beginners to get started with buying and selling stocks and ETFs. Their app-based brokerage experience allows even the most novice to feel comfortable with their account.
The brokerage may not have all the features that more experienced investors are looking for, and restricting trading to only stocks and ETFs is a definite drawback.
Public.com is not for everyone, but new investors are going to benefit greatly from the ease of use and wealth of information available from other traders.
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