Public app review 2021

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Public.com
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Public is a trading app that truly tries to run an investor-aligned outfit that fulfills its motto of being “a safer place for investors.” With plenty of easy-to-digest educational content, no commissions and fractional shares, it’s highly geared toward beginning investors. But Public does a lot more than other apps aimed at this demographic, including a social feed that connects investors to discuss their trades and “town hall” meetings with business leaders. Plus, Public has ditched the “payment for order flow” business model that makes many other brokers conflicted with their customers.

While Public is great for learning about investing, those focused on teaching young kids to invest may want to have a look at Stockpile. Others interested in investments beyond stocks and ETFs can look at trading apps such as Robinhood or traditional brokers such as Fidelity, which is also well-known for its educational offerings.

Best for

  • Beginning investors
  • Buy-and-hold investors
  • Fractional shares

Public at a glance

Category Public
Minimum balance: $0
Securities tradable: Stocks, ETFs
Cost per trade: $0
Customer service: Email, chat Monday-Friday 9 a.m.-5 p.m. ET
Account fees: $75
Mobile app: The Public mobile app is available on the Apple App Store and Google Play Store
Promotion: $5 in stock when you fund your account

Pros: Where Public stands out

Low trade minimum and no commissions

Public makes it astoundingly easy to buy into the market. You’ll need just $1 to get into the game. And you’ll have access to literally thousands of stocks and funds, so you’re likely to find that hot stock you want to buy. Public literally can’t lower the bar any further to stock ownership.

As part of its value proposition, Public doesn’t charge any commission. Zero-commission trading is not quite the hook that it was a few years ago when Robinhood started pulling this little trick. Still, it’s good to see that Public meets the standard industry commission structure.

Fractional shares

Public allows fractional shares on its platform, and that’s a great feature for beginners. With fractional shares you can buy a slice of even the highest-priced stocks or ETFs. And with the low trade minimum of just $1, you can own a piece – albeit a tiny one – of anything. This feature gets every last dollar of your money working for you, regardless of the stock price.

But not only does Public support buying partial shares, it allows you to reinvest in them, too. So when you receive a dividend, you can set the app to reinvest it into the stock that paid it.

Both features are good for beginners, and not many brokers offer both. In fact, Fidelity, Charles Schwab and Robinhood are the only major online brokers to offer both features.

No payment for order flow

Public discontinued accepting payment for order flow in early 2021, a practice common in the industry, especially among those driving the “commission-free” movement such as Robinhood. Payment for order flow encourages brokers to direct stock trades to certain exchanges, possibly harming individual investors with higher indirect costs. In effect, clients may end up paying for their “free” trades with inflated costs for stock purchases or lower prices for stock sales.

By making the switch, Public removes a major conflict from its business. The structure could incentivize brokers to encourage clients to trade even when it’s not in their best interest to do so, meaning the broker would make money if the client was doing something unproductive.

Instead, Public has switched to a model that encourages tipping for service (capped at 2 percent of trade value), lending out shares to investors and earning interest on uninvested balances. Both of the latter two practices are common methods to generate revenue in the industry and don’t suffer from the conflict of interest that payment for order flow does.

Social feeds

One of the more unusual – and interesting – features of Public is the social feed that allows you to follow other investors, scan through featured profiles and engage in some stock chat with them on the platform. So it’s not only stocks you can follow, but people, too. You can see why another investor likes a certain stock and when they might want to buy or sell it.

You can also search through thematically linked stocks (“Home & Garden” or “Women in Charge,” for example) to pull ideas and then see what other investors think. And of course, you can look for the day’s big movers and other similar sorts of pre-screened stocks.

Another cool feature is what Public calls “town halls,” which is a kind of question-and-answer session with CEOs of publicly traded companies, perhaps even one of your holdings. You submit written questions and leaders respond to them in a live forum.

Extensive education and news

Public does a good job of providing a plethora of educational content for beginning investors, including tons of “101” type information on the investing basics. So you’ll be able to read clear articles that explain the basics (“What is a short squeeze?” or “What causes market volatility?”).

But Public also includes many articles on trending topics, such as recent IPOs, including extensive coverage of these newly public companies (“Amazon stock split in 2021? What you need to know” and “Stripe IPO: What you need to know” among many others).

You’ll also get an extensive news feed from any stock that you want to follow as well as vital financial information, upcoming earnings reports and message boards for each stock.

Smooth account opening process

You’ll breeze through the account opening process in minutes after you answer the standard gauntlet of questions, and then you’ll be ready to start investing. You won’t be hanging around waiting for hours to see if you’ve been approved.

Plus, you can fund your account with a debit card and have the money available instantly. So you can truly get started trading in minutes if you’re able to fund your account that way.

Cons: Where Public could improve

Limited investment selection

If you want to invest in stocks and ETFs, like many investors, you’ll find what you’re looking for here. This selection will suffice for many and maybe most. These securities have enough risk and potential return — you can earn satisfactory profits without other types of investments.

But for investors looking for anything else – even relatively common choices such as bonds, options or mutual funds – will have to set up an account elsewhere. That’s the nature of an app that pitches itself to educating beginners on how to invest.

No margin loans

Public advertises that “We don’t sell you margin loans.” A margin loan allows investors to borrow money to buy stock, so that they can purchase more than they have the money for today. A margin loan magnifies your returns on the upside as well as the downside.

On balance, the fact that Public doesn’t offer this service is probably a good thing for beginners. It can be easy to get in over your head when you’re just starting out and have much to learn. And margin loans usually only steepen the learning curve while increasing your risk.

While Public touts its no-margin policy like it’s a good thing, it will absolutely turn off many investors who, rightly or wrongly, believe that they can safely handle the temptation of a loan. That said, beginners should not see this as a deterrent and may well view it as Public’s demonstrated commitment to helping them learn how to invest in a safe way.

Limited account types

You’ll already have created your account before you realize that you weren’t even asked for the account type. That’s because Public offers only the most straightforward option here: an individual taxable account. That’s probably not a dealbreaker for the kind of people Public is looking to attract, but many others won’t find it to their liking and may eventually go elsewhere.

Bottom line

With its focus on education in an easy-to-use app, Public offers a solid package to beginners in the investing game:

  • The educational and social elements will help newer investors engage with investing and offer them a reason to come back to the app even if they aren’t trading.
  • Beginning investors should appreciate no account minimum, fractional shares and more.
  • However, investors needing anything beyond the basic account types or security types won’t find what they’re looking for here.

Investors looking for brokers with strong educational offerings should check out Fidelity, Charles Schwab and Merrill Edge. Those needing more types of accounts could choose almost any other broker, though some of the larger players such as E-Trade will provide a wider selection.

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Written by
James Royal
Senior investing and wealth management reporter
Bankrate senior reporter James F. Royal, Ph.D., covers investing and wealth management. His work has been cited by CNBC, the Washington Post, The New York Times and more.
Edited by
Senior wealth editor