If you are new with investing or considering getting started, it can be a bit intimidating to know where to begin.
This is especially true if you do not have much money to start investing, but you still have options to ensure you are building a future nest egg for yourself.
Thanks to technology and financial regulations, you can start with micro investing apps that allow you to invest with little money.
You’ll still have access to great investments and even retirement accounts, but you don’t have to worry about having thousands or even hundreds to start with.
Below, you’ll learn more about the concept of micro investing and the best micro investing apps that you should consider using. Ready to get started? Jump into the content below!
What is Micro Investing?
Micro investing involves saving and investing very small amounts of money, so little you barely notice the money leaving your wallet.
And what micro investing allows is really for people to get started with without having to commit large sums of money, sign contracts or understand every investing strategy or term. Naturally, you still want to educate yourself as you go, but micro investing helps you reduce risk and learn as you go.
Usually micro investing happens through an app: you connect your bank account or debit card to the app and the app helps you decide what to invest in as well as how much you want to contribute every month. Over time, your returns increase with the stock market.
Micro investing is an easy, simple and safe introduction into the world of investing; it helps users understand what an investment strategy is all about before risking a large amount of money.
What Can You Invest In With Micro Investing Apps?
Most micro investing apps will let you invest in stocks, ETFs and bonds through “fractional shares” or ETFs. Fractional shares means you are able to invest in 1/10 of a stock instead of purchasing the entire stock.
That means that with say $30, you could own part of a large share worth $500. This makes investing more accessible and means you still get a piece of the stock market pie.
You can also choose to invest in ETFs: a basket of stocks that target a specific industry (such as pharmaceuticals). With this flexibility you can easily invest in a cause that you believe in.
Micro investing apps offer two ways to invest: through round ups and automatic transfers you schedule.
With round ups, the app rounds up your purchases to the dollar, and invests the spare change. If you buy a burger at $2.60, the app will take and invest $0.4, completing your purchase at $3.
The other option is to set up automatic transfers: you pick how much you want to contribute every week or month, and the app does the rest.
9 Best Micro Investing Apps
Thanks to technology and more financial companies looking to make investing more accessible to people, there are plenty of micro investing apps to choose from.
Additionally, each has some unique features or differences about them. For example, many offer banking options and even spending analysis to help more areas of your finances. Which you decide to try and use is up to your personal finances and investing goals.
Stash is a great micro investing app for those who want complete control over their investments. The app does not charge any fees or commissions on trading, and any other fees are published clearly on their app.
You first need to download the app and then link your bank account. Stash will ask you some questions to determine the level of risk you are comfortable with, and encourage you to read an investor’s guide to make sure you understand the entire process.
Stash then offers the opportunity to pick specific companies and portfolios to invest in, so you have the freedom to invest in a cause you may specifically care about (environmental, security, etc).
You’ll be able to read more about the companies you’re picking, assess the risk and then start contributing.
Stash has a couple of interesting features when it comes to buying investments. They have a feature called “Smart-Stash” that will analyze your income and spending and will suggest how much you should contribute to investments.
It also has the “Auto-Stash” feature which will automatically send transfers every week or month. With Stash, you’ll need to deposit at least $5 to get started and you’ll be charged $1 per month for the beginner service. If you need more features, they have other tiers you can join which will be more per month.
Acorns is another micro investment app that focuses on contributing small amounts to different investment portfolios. Depending on your risk level and investor profile, you can pick one of five diversified portfolios.
Like Stash, you’ll need to download the app, link your bank account and verify your account with an ID. The minimum deposit is $5 but all deposits and withdrawals are free of charge.
With Acorns, you can choose to deposit a specific amount every month, or you can pick the “round-up” feature instead. With round-up, Acorns rounds up your purchases and invests the extra amount into one of their portfolios which you can pick from.
Acorns charges $1 per month but also offers other types of accounts with different fee structures for those who want to open an IRA or a checking account.
Robinhood offers both a traditional brokerage account along with micro investing features. You start by creating an account with Robinhood and then link your bank account.
This app also offers fractional shares, allowing you to own a piece of larger shares. And with their app, you don’t pay any commissions on stocks, ETFs or any of the larger cryptocurrencies.
Robinhood is a much more hands on type of micro investing app. It allows you to pick the stocks you want to choose and gives you detailed information on what you’re investing in.
They have both an app and desktop version, as well as a “Collections” section where you can discover new stocks in different categories. Additionally, some other features include information related to stocks, stock analytics and overall investing news.
Public allows you to connect with other investors like you would on social media. You download the app and start interacting with experienced investors to learn more about investing in general.
If you want to invest in environmental or animal conscious companies, Public will offer different themes to pick from.
They have different types of features that make it an attractive micro investing app: it’s commission free, you can invest in full shares (fractional shares), there’s no minimum deposit and you can trade at any time during the day.
You can own fractions of a stock with as little as $5, invest in popular ETFs from Vanguard and BlackRock with no commission fees.
Wealthsimple works in a similar way to the micro investing apps mentioned above. Although they have higher fees than other investing apps (0.5%), they offer portfolios that focus on socially responsible investing as well as higher returns.
Their sign up process is incredibly easy (it takes 5 minutes!) and they start by asking a few questions to assess the level of risk you’re comfortable with.
They focus on socially responsible ETFs, and offer a team of advisors to help users throughout the process if necessary. Their passive approach to investing and higher returns means their investment app is one of the most highly rated ones.
Pending on your investment amount, Wealthsimple offers three pricing tiers with different fees and features.
6. Twine App
Twine app is a micro investing app built for couples. This app helps couples who want to manage their and invest money together. Twine makes it easy for both partners to manage their money in a simple and easy way.
Both partners download the app and create an account on their phone. They need to define a specific investing goal and can then start saving towards the goal in a joint account.
These goals could be everything from a new house, to a vacation, to a wedding fund.
Each partner can contribute to the fund on their own phones and then track their progress together. Twine allows you to keep your savings in cash or invest it into a diverse range of ETFs. Investments cost Just 25¢ per month for every $500 you invest (Or 0.6% annually).
7. M1 Finance
M1 Finance is another micro investing company that allows users to invest in a variety of different accounts including IRAs and savings accounts.
It’s also a little more hands on: you get to pick specific funds or stocks to invest in and build a custom portfolio. They offer users fractional shares as well as dynamic rebalancing, which means M1 Finance automatically rebalancing your portfolio so you maintain your asset allocation.
One thing that is pretty cool with M1 Finance is they use what they call a “Pie-based” interface to make building and managing a portfolio easier.
You can Choose from more than 6,000 stocks and funds to build “Custom Pies” or select from nearly 100 Expert Pies that are already created that will help you meet different investment goals.
They don’t charge any commissions and offer investors the ability to contribute a specific amount every month. Users can also open a joint account, an IRA and trust investments with M1 Finance.
Betterment is a more hands-off type of investing platform that makes it easy for those who want to get started with investing but don’t want to get overwhelmed with investing details or jargon.
With Betterment, the app offers an intuitive, easy to use platform along with professional advice. When you get started with Betterment you’ll have the option to choose between Betterment Digital or Betterment Premium.
With Betterment Digital you’ll be able to invest for 0.25% of your assets with no minimum deposit required; you’ll also have access to financial advisors through the messaging system.
Betterment Premium is a more advanced product that gives users access to financial advisors with unlimited phone access as well as the messaging. For the Premium package you will need to commit $100,000 and pay an overall fee of 0.4%.
Stockpile allows users to open a micro investing account starting with $5. Users have access to over 1,000 stocks and ETF funds and you’ll only pay 99 cents per transaction. Plus there are no monthly fees or minimums to get started.
But like the others on this list, Stockpile is another investment app that allows users to buy fractional shares so users have access to a whole range of companies without having to commit a large amount of money.
They are also the only brokerage (so far) that offers gift cards or e-gifts that can be redeemed for stocks.
This could be a possible present for your day-trader friend or a possibility for teens and kids to track and place their own stock trades and start learning.
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Is Micro Investing For You?
Micro investing is a great way to get started with the investing world. The apps offer a wide range of options so you can contribute to causes you care about and they are also incredibly intuitive and easy to use, so you won’t get overwhelmed with strange jargon or concepts you don’t understand.
If your goal is to save a few extra bucks every month towards your goals, micro investing could be a good way to get started all while getting a higher return on your money.
If you are an advanced investor who already contributes a significant amount every month, micro investing won’t make much of a difference to your portfolio.What do you think of micro investing apps? Do you use any currently? Which ones do you like or are going to try? Let me know in the comments below!