In the past, investing was thought of as something only wealthy people did. And unfortunately, many people used this as an excuse to put off saving for retirement, saying they would do it when they earned more money.
But if you wait to start investing, you lose out on the benefits of compound interest and shortchange your retirement savings. So, it’s best to get started as soon as possible, even if you only have a bit of money to tuck away every month.
One of the easiest ways to invest money is by using micro-investment apps. This article will explain what micro-investing is, how it works, and six micro-investing apps we recommend trying out.
10 Best Micro Investing Apps
Micro-investing apps make it easy to get started with small amounts of money and learn the basics of investing. We’ve compiled a list of the best micro-investing apps on the market today. Whether you’re a beginner or a seasoned investor, you’re sure to find an app that fits your needs and investment goals.
ETF’s, cryptoGreat for beginners!
Robinhood aims to make investing accessible to everyone, which is evident in the fact that the company doesn’t charge any commission or management fees.
In addition, there’s no charge to open a brokerage account, and bank transfers are free as well.
The app is designed for beginners, so there is no confusing terminology, and the interface is easy to use.
Unlike other micro-investing apps, Robinhood lets you trade full stocks and cryptocurrencies like Bitcoin. However, it doesn’t offer mutual funds and bonds.
Check out our in-depth review of Robinhood.
2. Axos Invest (Formerly WiseBanyan)
New investorsor goal-based investing
You can get started with Axos Invest (formerly known as WiseBanyan) for just $1. The company doesn’t charge any trading fees for the most basic version. But if you upgrade to one of the premium versions, the company does charge fees.
Axos Invest focuses on goal-based investing, so once you sign up, you’ll be prompted to create your first “Milestone.”
Then, you’ll enter how much you want to save and by what date. From there, Axos Invest recommends how much you should save to reach your goal.
3. SoFi Invest
Account minimum$0 for Automated Investing$1 for Active Investing
Active and Hands-Off Investors
SoFi is a well known brand in the personal finance space, and their investing app is another high quality product.
This investment service provides users with the ability to either trade actively or opt for automated trading tools to take care of your account.
SoFi is geared towards trading in fractional shares, which they refer to as “stock bits”. This means the app is a solid choice for those wanting to invest their spare change.
You can also tap into savings accounts or make larger deposits to add more to your investment accounts.
$2 per month
Plynk is designed to guide your learning while you begin to invest. The Plynk app offers investors access to a selection of stocks, ETFs, mutual funds and four cryptocurrencies. And you can start investing with just $1.
One of the best things about Plynk’s platform is the straightforward, easy-to-understand language. You won’t find technical jargon or complex charts and tables.
The Plynk app also allows investors to easily set up dollar-cost averaging, which is an ideal investing technique for many new and experienced investors.
Active traders and investors
Webull is a stock trading app offering free stock trading as well as free trades on ETFs, options and cryptocurrencies.
Webull also allows users to trade fractional shares, making it a great choice for micro investing.
Webull provides users with plenty of powerful tools to assist with in-depth trading analysis, making it a solid option for active and experienced traders. Plus, setting up a Webull account is free and there are no account minimums to worry about.
$1 per month
New investorsor tax-advantaged
Stash is another hands-off micro-investing app designed for beginner investors. After you sign up, Stash will ask you a series of questions to determine your tolerance for investment risks. You will be labeled as a conservative, moderate, or aggressive investor.
One of the unique things about Stash is that you can choose the types of companies you want to invest in. So if there is a particular cause or type of company that you’re interested in, you can set that in your investing preferences.
After you’ve chosen the types of companies you’d like to invest in, you’ll set up your “Auto-Stash.” You choose how much you want to invest and how often.
(1-2% markup on crypto)
Public.com is a blend of both investment and social media platforms. It’s designed for younger and socially oriented investors who would like to own fractional shares of stocks and ETFs.
You can share ideas within a community of like-minded investors. You might think of it as a kind of investing social network.
The aim of Public.com is to create an inclusive and educational community focused on stock market trading and investment.
For young investors who wish to align their social and investing preferences, as well as learn from other investors, Public.com is a great option.
Low balance investorsGoal-based investing
If you’re looking for something a little more hands-on, then Betterment might be a suitable option for you. Betterment gives you the option to work with a financial advisor who can make investing recommendations.
There are two different plans to choose from, and the most basic plan doesn’t require any upfront balance to get started.
Betterment is a great option for anyone who wants an easy investing option while still maintaining a bit of control over their investment portfolio.
9. M1 Finance
M1 Finance might be the best micro investing app for more experienced investors. It is ideal for those looking for customized investment portfolios with some automated options, as well as those looking to set up commission free retirement accounts.
Purchasing fractional shares, setting up recurring deposits and extensive portfolio management options is easy with M1 Finance’s quality app. M1 Finance aims to be a singular personal finance app for building wealth and establishing a diversified portfolio.
Above all, M1 Finance makes investing easy. Simply deposit your funds, set your stock and index selections and use their automated service for commission free trading.
M1 Finance will also automatically rebalance your portfolio in accordance with your stated asset targets, to improve the overall performance of individual stocks.
$1 per month
Hands-off investors(e.g., College Students)
If you want a hands-off approach to investing, Acorns will be your best bet. After you sign up, you’ll connect your credit card or debit card to Acorns.
Then, whenever you make a purchase, Acorn rounds it up to the nearest dollar and deposits that “spare change” into your investment account.
For instance, if you make a purchase of $9.67, Acorns will save the additional 33 cents for you. Once your Acorns account reaches $5, the company will invest the money for you.
Acorns also gives you access to a robo-advisor, IRAs, and even a checking account.
What is micro-investing?
According to one survey, more than 47% of Americans are not saving for retirement. When pressed about their decision not to invest, over 34% said they don’t have enough money to invest.
The basic premise behind micro-investing is that you only need a few dollars to start investing. When you use a micro-investing app, you invest in very small increments by buying fractional shares.
With a micro-investing app, you can invest as little as $5. And with micro-investing, you don’t have to know anything about the stock market. The money you save is put in a portfolio of stocks that the company creates for you.
Is micro-investing even worth it?
Micro-investing will not get you rich, and it’s not going to help you fund your retirement goals. For that reason, it’s easy to write micro-investment apps off as not being worth your time.
But every day you put off investing is one less day that your money can grow in the market. So, you can wait until you feel like you have “enough money,” or you can work with what you have today.
Here are just a few benefits of using a micro-investing app:
- Invest with very little money: Micro-investing platforms allow you to invest, even if you only have $5 to spare. So if you can skip your morning latte, then you have enough money to give micro-investing a try.
- Save it and forget about it: It’s hard to set aside money in a savings account. You know it’s there, and it’s easy to access and spend. With a micro-investing app, it’s easy to save your money and forget about it.
- Build positive habits over time: Anytime you’re trying to build a new habit, it’s best to start small. Micro investing allows you to ease into investing, and you can start saving more money when you’re ready.
See also: How to Invest: A Basic Guide to Making Your Money Grow
Pros and Cons of Micro-Investing Apps
While it’s true that micro-investing provides many benefits, they’re not necessarily the right choice for everyone. It’s worthwhile taking the time to understand the all nuances before committing financially.
Using a micro investing app allows you full access to your investment account around-the-clock. You won’t ever have to worry about opening hours or holidays getting in the way of your ability to monitor and manage your funds.
Easy Fractional Investment
Traditional investment in stocks and ETFs requires large amounts of funding, but micro investment means you purchase fractional shares quickly and easily. This means you can begin your investment portfolio with your spare change, rather than hundreds or thousands of dollars.
Low Account Minimums
Another factor which makes micro investment apps attractive are the low account minimums. Most micro-investing apps have $0 minimum balance requirements, so you can begin investing with as little as you wish.
As with traditional investment accounts, legitimate micro-investing platforms will be registered with the U.S. Securities and Exchange Commission. On top of that, all savings and checking accounts with micro investing companies are FDIC insured.
Fees Can Be High
Account fees can vary, so it’s important to watch out for this. Don’t assume that an account with low minimums will also have low fees. If you’re only investing small amounts, paying high fees might not seem like a good deal in the long term.
Limited Investment Choice
Most micro investment apps won’t allow you to handpick the stocks inside your portfolio. While you will have choice regarding which set portfolios you invest in, you’re less likely to be able to pick and choose specific stocks.
Won’t Change Your Retirement Plans
One thing to keep in mind is that using a micro investment app won’t do much to affect your retirement on its own. It’s more about learning good investment habits, and getting familiar with maintaining and growing a portfolio.
Features of the Best Micro-Investing Apps
So, how do you decide which micro investing app is the right one for you? We’ve compiled a list of the most important features below to help you know what to look for. The best micro investment apps will have the following qualities:
Ease of Use
Fundamentally, the best micro investment apps will be easy and intuitive to use. They are often free of the usual clutter and jargon of some traditional brokerage accounts. With simple, easy to navigate interfaces these apps should provide an enjoyable user experience for all.
Low Minimum Investments
Good investing apps should allow you to access the market with just a few dollars. This is possible because they’re designed to allow you to purchase fractional shares of ETFs and other assets. Not all investing apps will come with a low minimum investment, however, so be sure to check if you’re a low budget investor.
The best investing apps will provide users with the chance to invest in diverse portfolios which are automatically generated. Asset allocation and diversification can be challenging even for experienced investors, so this is a great feature of these apps.
When you’re starting out as an investor, the sooner you can learn about diversification the better. And these apps should make it relatively easy for you to both practice and learn about asset diversity.
As most micro investing apps will be marketed to newcomers, education is an important factor. If you’re just starting out with investing, then the best micro investment app for you will likely provide a wealth of educational resources and advice.
Keep in mind, however, that most micro-investing apps won’t offer access to a professional financial advisor.
The best investing apps allow you to easily set up automatic transfers from your bank account to fund your investment account. A recurring transfer can remove some of the human error involved in managing your account and allow you to quickly build up a habit of funding your account.
While some apps are minimalist and simple, others come with the option of additional financial services. In addition to brokerage accounts, some offer access to a savings or checking account, as well as IRA and custodian accounts. Depending on your own financial goals, an app with additional services might be worth the extra fees.
Micro-investing apps make it simple for anyone, even those with just $5 to spare, to begin investing in the stock market. The apps we’ve covered in this article provide a great starting point.
While micro-investing might not cover all your retirement needs, it’s a smart way to begin saving, especially if your budget is tight. The crucial thing is to start investing and gradually increase your contributions over time. This way, you’re setting yourself up for a better financial future.
Frequently Asked Questions
Which micro investing app has the lowest fees?
Among the micro-investing apps listed, Robinhood, Axos Invest, SoFi Invest, Webull, Public, and M1 Finance all offer commission-free trading, which means they do not charge fees for buying or selling stocks and ETFs. So, you can consider any of these apps if you’re looking for a platform with low fees for micro-investing.
Which app is best for small investments?
Choosing the best app depends on your own budget, needs and goals. The market for micro investment apps has grown rapidly, and there are a lot of different options out there.
The list we’ve compiled in this article are our top picks, and are among the best micro investing apps available. These apps make it easy and convenient to begin investing. They also provide various unique features, low fees, good customer support and educational resources.
Who should use micro investing apps?
Micro investing apps are a fantastic way to begin investing small amounts while you learn the ins and outs. But who will benefit the most from using these apps?
- Beginner investors: These apps are perfect for young investors and newcomers because you only need a small amount of money to start.
- Passive investors: Most of them are actually robo-advisors which invest on your behalf based on your needs and budget. This automated investing allows you to establish a diversified portfolio based on your goals that you can simply set up and forget about, letting it work away in the background.
- Emotional investors: Automated investing means you can’t make rash emotional decisions based on market swings. Instead of constantly worrying about market performance, you just invest small amounts and build your portfolio slowly over time.
Can you get rich from micro investing?
Micro investing is primarily a strategy for saving and building wealth gradually over time. While it’s a valuable tool for starting your investment journey with small amounts of money, it’s important to have realistic expectations. It’s unlikely to lead to rapid wealth accumulation or “getting rich” in a short period.
How do I start micro investing?
Investing today is more accessible than ever before. Nevertheless, it still seems an intimidating world for those who have no experience or education. If you don’t know where to start, you can follow these steps to begin investing with confidence:
1. Decide Between DIY or Automated Investing
If you’re not yet comfortable choosing your own investments, and managing your own portfolio, you’ll want to start with robo-advisor investing. It’s totally normal for beginners to feel uncomfortable choosing stock to invest in, and automated investing is the safer option in any case.
2. Identify Your Investment Goals
This is often the hardest step for new investors, but it’s one of the most important. Figuring out your short and long term financial goals will help bring purpose and structure to your investment decisions.
Generally speaking, investing is successful when considered a long term project. You’re much more likely to find success with investments by holding stock long term, rather than trying to figure out when the best time to buy or sell is.
3. Determine Your Monthly Investment
The traditional advice is to save and invest 20% of your monthly income. With the rise of micro investing, however, you don’t even need to invest much to begin with.
It’s important to pick an amount you can reasonably commit to. Of course, you can always change your automatic investment amount, or just add on extra when necessary, but it’s always better to set it and forget it. Even if it’s a small amount, consistency and time and the key ingredients to good investing.
4. Choose an Account That Fits Your Goals
Once you’ve got your budget and goals determined, it’s time to choose a platform to begin investing with.
Keep in mind that you can always switch the platform you use for micro investing, use more than one, or even open a brokerage account. Just make sure to take all fees into account before you sign up and get committed.
Are there any limitations on the types of investments I can make with these apps?
Micro-investing apps typically focus on stocks, ETFs, and sometimes cryptocurrencies. While they offer a wide range of investment options within these categories, they may not provide access to more complex financial instruments like options, futures, or mutual funds.