Micro-investing has opened up investment opportunities to a wider range of people, including those who don’t have a lot to start with. These platforms allow users to invest small amounts of money, sometimes as little as a few cents, into stocks, ETFs, and other assets. This style of investing is perfect for beginners or people who want to get comfortable with the market without risking a large sum of money. Here, we’ll look at some of the best micro-investing apps available today, covering their features, fees, and benefits.
Why Choose Micro-Investing?
Micro-investing helps make the world of finance more accessible. These apps make investing easy by automatically investing small sums from spare change or round-ups. Here are a few reasons why micro-investing might be a great choice:
- Lower Entry Point: Invest with minimal starting capital.
- Automated Investments: Many apps offer features like round-ups and auto-investing.
- Educational Tools: Some apps provide resources to help beginners learn.
Let’s dive into the top apps for micro-investing.
1. Acorns
Acorns is one of the most popular micro-investing apps. It rounds up your purchases to the nearest dollar and invests the spare change. Acorns uses a variety of portfolios to diversify your investments, including ETFs based on your goals and risk preferences.
| Feature | Description |
|---|---|
| Minimum Investment | $0 initially; starts investing with round-ups |
| Monthly Fee | $3 to $5 depending on the plan |
| Key Feature | Round-up feature for spare change investing |
| Educational Resources | Yes |
Pros:
- Automated investing with round-ups.
- Multiple portfolios to choose from.
- Additional educational resources for beginners.
Cons:
- Monthly fees can add up over time.
- Limited control over specific investments.
2. Stash
Stash offers a mix of micro-investing and financial education. With Stash, you can start investing with as little as $1. It also allows you to buy fractional shares of big companies, so even with a small budget, you can invest in high-value stocks.
| Feature | Description |
|---|---|
| Minimum Investment | $1 |
| Monthly Fee | $3 to $9 depending on the plan |
| Key Feature | Fractional share investing in major stocks |
| Educational Resources | Extensive, including articles and advice |
Pros:
- Allows for fractional investing in big companies.
- Personalized investment options.
- Provides financial education.
Cons:
- Higher fees at the premium tier.
- Some investments are limited to certain account types.
3. Robinhood
Robinhood is known for its commission-free trading, which makes it popular among micro-investors who want more control over their portfolio. With Robinhood, you can invest in stocks, ETFs, and cryptocurrencies. While it doesn’t have round-up investing, it does offer flexibility and a wide range of investment options.
| Feature | Description |
|---|---|
| Minimum Investment | None |
| Monthly Fee | Free; optional premium account at $5 |
| Key Feature | Commission-free trading |
| Educational Resources | Basic; limited tutorials available |
Pros:
- Commission-free trading for stocks and ETFs.
- Access to cryptocurrency.
- No monthly fees for the basic account.
Cons:
- No round-up feature or automated investing.
- Limited educational resources.
4. Public
Public is a social investing platform that lets you follow other investors and see their trades. This app allows fractional investing and has no account minimum, making it great for beginners. Public also offers a commission-free structure, and it has a social aspect where you can discuss trades and strategies with others.
| Feature | Description |
|---|---|
| Minimum Investment | None |
| Monthly Fee | Free |
| Key Feature | Social investing, allowing user interaction |
| Educational Resources | Provides community-driven insights |
Pros:
- Commission-free trading.
- Allows fractional share investing.
- Community-driven insights and discussions.
Cons:
- Social investing may distract from individual strategy.
- Limited to stocks and ETFs only.
5. Betterment
Betterment is an automated robo-advisor that offers both micro-investing and portfolio management. It is ideal for people who want their investments managed by algorithms tailored to specific financial goals. Betterment offers features like tax-loss harvesting and auto-rebalancing, which can benefit those with slightly larger accounts or retirement savings in mind.
| Feature | Description |
|---|---|
| Minimum Investment | None for general investing; $10 for premium accounts |
| Monthly Fee | 0.25% of assets under management (AUM) or $4/mo |
| Key Feature | Robo-advisor with diversified portfolios |
| Educational Resources | Extensive financial planning tools |
Pros:
- Personalized portfolio recommendations.
- Tax-loss harvesting and auto-rebalancing.
- Good for long-term goals like retirement.
Cons:
- Higher fees compared to other apps.
- Limited control over individual assets.
6. SoFi Invest
SoFi Invest provides both active investing and automated investing options. With SoFi, you can invest in stocks, ETFs, and even cryptocurrency without commission fees. They also offer a beginner-friendly Robo-advisor. SoFi also provides various tools and perks like free financial planning.
| Feature | Description |
|---|---|
| Minimum Investment | None |
| Monthly Fee | Free; optional Robo-advisor with no extra fee |
| Key Feature | Commission-free trading and crypto options |
| Educational Resources | Financial planning tools and advice |
Pros:
- No fees for trading.
- Automated investment options.
- Access to a financial advisor.
Cons:
- Fewer in-depth educational resources.
- Limited choice of automated investment options.
Tips for Choosing the Best Micro-Investing App
- Define Your Goals: Some apps are better suited for long-term growth (like Betterment), while others are geared toward active trading (like Robinhood).
- Look at Fees: Even small fees can add up over time, especially if you’re investing tiny amounts. Compare fees carefully to make sure they don’t eat into your returns.
- Consider Educational Resources: Some apps, like Stash, offer educational resources to help beginners. This can be helpful if you’re new to investing.
- Explore Automated Features: If you want hands-off investing, choose an app with round-up or auto-investing features like Acorns or Betterment.
- Community and Social Features: Apps like Public allow you to engage with other investors. This can be valuable if you’re looking to learn from others or enjoy the social aspect.
FAQs: Best Micro-Investing Apps
Can I really make money with micro-investing?
Yes, but growth is often slow due to smaller investments. Micro-investing is more about building the habit and growing over time.
Are micro-investing apps safe to use?
Most major micro-investing apps are secure and insured by organizations like the SIPC. However, as with any investment, there is a risk of loss.
Do I need to pay taxes on earnings from micro-investing apps?
Yes, any investment income is subject to taxes. The app should provide tax documents during tax season.
Disclaimer
This article is for informational purposes only and is not intended as financial advice. Always conduct your research or consult with a financial advisor before making investment decisions. Investing carries risk, and past performance does not guarantee future results.
I’m Pradeep Ahalawat, the founder and chief writer of this blog. (Holding the degree of M.Sc. IT with more than 15 years of expereince in IT sector) With a passion for storytelling and a keen interest in current affairs (Business), I started this platform to share my researches and perspectives on the issues that matter most to the Personal Finance.
