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Considering a budgeting and investing app? Here’s how to vet it before handing over your information

Covid-19 vaccination rates are increasing, restrictions are easing and Americans are getting back to a new normal — including spending.

For some, that may come with a need to reconfigure their personal budget after a year inside.

Those in that situation have a number of free or low-cost tools at their disposal. In fact, anyone with a smartphone can use it to help accomplish their financial goals, be that budgeting, saving, investing or more. Companies such as Robinhood, Stash, Mint and others have platforms to meet an array of needs.

"Financial technologies are here to make your life easier and do a lot of the heavy lifting," said Douglas Boneparth, a certified financial planner and president of Bone Fide Wealth in New York. But, if you aren't sure what you need help with, it will be difficult to find and effectively use any financial application, he said.

Here's what to consider before you hit download.

Establish what you're hoping to accomplish

Before signing up for any financial application and handing over your banking information, personal finance experts recommend being crystal-clear on your goals, or what you're hoping to accomplish by using this tool — do you need help saving, or are you looking to start investing?

"You have to know why you want to use the app," said Cathy Curtis, CFP, founder and owner of Curtis Financial Planning in Oakland, California, and a member of the CNBC Advisor Council. That will help you assess if different products will be useful to you, especially important if you're going to pay for one, she said.

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You should also decide if you're going to search for a free service, or if you're willing to pay a fee, which will generally give you access to more bells and whistles.

Read customer reviews

Once you're clear on your goals, do some research about each product, including its reputation, the company behind it, its leadership and other backing.

"There's so many new tools out there, I think it makes sense to do a little research and maybe talk to some people who've used it in the past," said Ben Carlson, director of institutional asset management at Ritholtz Wealth Management. 

That includes reading articles about each company and its products, as well as customer reviews.

Check security and insurance

A big thing to research before downloading an app or giving it any of your personal financial information is security.

First and foremost, see if apps use two-factor authentication and have other security practices in place to guard against breaches, said Trina Patel, financial advice manager at Albert, a mobile banking, savings and investing app.

Next, she said to check what kind of insurance the financial institutions that own the apps have in place. If you're looking for a banking-related app, make sure that the financial institution is insured by the Federal Deposit Insurance Corporation. Being FDIC-insured means that up to $250,000 of your deposited money is protected in the event of a bank failure.

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