Micro investing has gained immense popularity in recent years, especially among younger investors looking to dip their toes into the world of investing without committing large sums of money. With micro investing apps, users can invest small amounts of money, often starting as low as $1, and gradually build their portfolios over time. These apps are designed to make investing accessible, simple, and even fun for those new to the world of finance. In this detailed guide, we’ll explore the best micro investing apps, their features, pros, cons, and who they’re best suited for.
What is Micro Investing?
Micro investing refers to the process of investing small amounts of money, often on a recurring basis, into a diversified portfolio. The idea behind micro investing is to lower the barriers to entry for people who may not have large sums of money to invest initially. Micro investing apps typically allow users to invest their spare change from purchases, set up automatic investments, or invest small, regular amounts into stocks, bonds, or exchange-traded funds (ETFs).
Micro investing can be a great way to begin building wealth over time, and these apps provide a convenient way for users to grow their investments passively.
Key Features to Look for in Micro Investing Apps
Before diving into our top picks for micro investing apps, it’s essential to know what to look for when choosing a platform:
- Low Minimum Investment: Most micro investing apps allow users to start with as little as $1, making them perfect for new investors or those without much disposable income.
- Automatic Investing: Many apps offer automatic recurring investments, making it easy for users to invest without actively thinking about it.
- Diversification Options: The best micro investing apps offer a range of investment options, from stocks to ETFs to diversified portfolios that can help manage risk.
- Ease of Use: A user-friendly interface is crucial. Micro investing apps should be intuitive and easy to navigate.
- Low Fees: Since micro investors typically make small investments, high fees can quickly eat away at profits. Look for platforms with low or no fees for small-scale investing.
- Educational Resources: For beginners, having access to educational tools and resources can be a valuable feature in micro investing apps.
1. Acorns: Best for Automated Investing
Overview
Acorns is one of the most well-known micro investing apps. It helps users invest their spare change automatically by rounding up everyday purchases to the nearest dollar and investing the difference. Acorns also offers a range of tools to help users start investing with minimal effort and knowledge.
Key Features
- Round-Ups: Acorns automatically rounds up your everyday purchases and invests the spare change.
- Recurring Contributions: You can set up daily, weekly, or monthly recurring investments.
- Portfolios: Acorns offers diversified portfolios based on your risk tolerance, investing in low-cost ETFs.
- Retirement Accounts: In addition to individual investment accounts, Acorns offers retirement accounts (IRA, SEP IRA, etc.).
- Found Money: Acorns partners with popular brands to offer cashback, which can be invested automatically.
Pros
- Automatic Investing: Great for beginners who want to invest without thinking about it.
- Low Fees: The fees are relatively low, with plans starting at just $3 per month for individuals.
- Educational Tools: Acorns offers basic investing education, making it a good choice for beginners.
Cons
- Fees for Small Accounts: While the fees are reasonable, they can be a higher percentage of the investment for users with smaller portfolios.
- Limited Control: Acorns handles everything for you, so if you’re looking for more control over your investments, this might not be the best fit.
Best For
- Beginners who want a hands-off, automated approach to investing.
- People looking to invest their spare change automatically.
2. Stash: Best for Customizable Investment Options
Overview
Stash is a micro investing app that allows users to invest small amounts of money into a variety of individual stocks and ETFs. Unlike Acorns, Stash offers more customization options, allowing users to choose investments based on themes like sustainability, technology, or specific sectors.
Key Features
- Fractional Shares: Stash allows you to invest in fractional shares, meaning you can invest in high-priced stocks with as little as $5.
- Personalized Investment Plans: Stash offers several investment plans that are tailored to your risk tolerance and goals.
- Education Center: Stash provides a wealth of educational resources, including articles, courses, and videos, to help you learn about investing.
- Retirement Accounts: Stash also offers IRAs for retirement planning.
Pros
- Customizable Portfolio: Users have more control over their investments, allowing them to choose individual stocks or ETFs.
- Low Minimum Investment: You can start investing with as little as $5.
- Educational Resources: Stash offers robust educational tools for beginners.
Cons
- Higher Fees: Stash has a monthly fee that starts at $1 for the Beginner plan but can increase based on the features you choose.
- Fees Can Be a Higher Percentage: For small accounts, the fees may be a larger percentage of your portfolio.
Best For
- Investors who want more control over their investment choices.
- Those who want to invest in individual stocks or themed portfolios.
3. Robinhood: Best for Free Trading
Overview
Robinhood is a popular investment platform known for offering commission-free trading. While it isn’t strictly a micro-investing app, Robinhood allows users to start investing with no minimum deposit and offers fractional shares, making it suitable for small-scale investors.
Key Features
- Commission-Free Trades: Robinhood offers zero-commission trading on stocks, ETFs, and options.
- Fractional Shares: You can buy fractional shares of expensive stocks, starting with as little as $1.
- Cryptocurrency: Robinhood allows you to invest in a variety of cryptocurrencies, making it a good choice for investors interested in digital assets.
- Cash Management: Robinhood offers a cash management account with a debit card and the ability to earn interest.
Pros
- Free Trading: No commissions on trades, which is a significant advantage for small investors.
- Fractional Shares: Allows you to invest small amounts in high-priced stocks.
- User-Friendly: The app has a clean and intuitive interface, making it easy for beginners to navigate.
Cons
- Limited Educational Resources: Robinhood is less educational than some other platforms.
- Customer Service Issues: Robinhood has faced criticism for its customer service, which may be a concern for those who need assistance.
Best For
- Investors who want to trade without worrying about commission fees.
- Those looking to invest in stocks and cryptocurrencies without a minimum deposit.
4. Public: Best for Social Investing
Overview
Public is a unique micro investing platform that combines investing with social media elements. Public allows you to invest in fractional shares of stocks, ETFs, and cryptocurrency, while also following other investors and sharing investment strategies.
Key Features
- Fractional Shares: Public lets you invest as little as $1 in fractional shares of stocks and ETFs.
- Social Investing: Public’s social feed allows users to see what other investors are buying and selling, providing insights into market trends.
- No Commissions: There are no commission fees on trades, making it accessible for small investors.
- Crypto Investing: Public also offers the ability to buy and sell cryptocurrencies.
Pros
- Social Features: The social aspect allows you to learn from other investors and share ideas.
- No Fees: Like Robinhood, Public doesn’t charge commissions for trades.
- Fractional Shares: Allows for smaller investments in high-value stocks.
Cons
- Limited Investment Options: Public doesn’t offer as many investment options as some other apps.
- Newer Platform: Public is relatively new compared to other platforms, so it may lack some advanced features.
Best For
- People who enjoy socializing and sharing investment strategies.
- Beginners who want a social, community-driven investing experience.
5. Betterment: Best for Robo-Advising and Automated Investing
Overview
Betterment is a robo-advisor that takes a hands-off approach to investing, automatically creating a diversified portfolio for users based on their financial goals and risk tolerance. While it’s not a traditional micro-investing app, Betterment’s low minimum deposit and automated investing make it an excellent choice for beginners.
Key Features
- Automated Portfolio Management: Betterment creates a portfolio for you based on your risk profile and financial goals.
- Tax-Loss Harvesting: Betterment uses tax strategies to reduce your tax burden on investments.
- Recurring Contributions: You can set up automatic deposits to fund your account regularly.
- Socially Responsible Investing: Betterment offers portfolios that focus on sustainable and socially responsible investing.
Pros
- Automated Investing: The app handles all of the investment decisions for you, making it a great choice for passive investors.
- Diversified Portfolios: Betterment offers broad diversification across stocks and bonds.
- Low Fees: Betterment’s fees start at 0.25% of assets under management, which is quite competitive.
Cons
- Higher Fees for Small Balances: For smaller accounts, the fees can be a bit high compared to other micro investing options.
- Limited Control: Users don’t have much say in the individual assets in their portfolios.
Best For
- Investors who want a fully automated, hands-off investing experience.
- Those looking for a robo-advisor to manage their investments for them.
Conclusion
Micro investing is an excellent way to begin building wealth, even with limited capital. The apps mentioned above each have their own unique features and advantages, so the best one for you will depend on your investing style and goals.
- Acorns is perfect for those looking for automated, passive investing.
- Stash offers more control for users who want to choose their own investments.
- Robinhood is ideal for those who want commission-free trading with access to fractional shares.
- Public is a great choice for those interested in social investing and sharing strategies.
- Betterment is the top pick for anyone looking for automated, hands-off portfolio management.
Ultimately, all of these apps make investing accessible to people who may not have large sums to invest, and they can be a great starting point for building wealth over time. Whether you’re just getting started or looking for a platform to grow your portfolio with small investments, there’s an app that can help you meet your financial goals.
