Micro investing as you can understand by the name itself that investing with very little amount. So, these are the apps with which anyone can start investing only as low as $5. These apps are specially designed to convert the art of investing in fun by providing user-friendly interfaces. They basically made every description easy for you so that you should know what and why are you doing.
That doesn’t mean these apps will teach you the details of investment and its theory. Instead, they will allow you to do hassle-free process of getting started irrespective of how many assets you have. If you’re serious about it and ready to use your intelligent mind, you can even earn some handsome amount from these apps.
Why young fellows Love Micro Investing
Due to the rise of so many platforms especially Acorns and Stash, millions of young fellows have invested in Micro Investing. Because, these platforms are very user-friendly, easy to use and now becoming like a game.
Truly, this micro investing has synced good enough with the present lives. As these platforms are available on apps so it’s also easy to use and manage these accounts on the smartphones. For sure, it’s not the platform that will be used by your grandpa.
When it comes to registering on these apps, these are super easy to do. They will hardly take two minutes for all of the setups and along with this, you don’t have to talk with some agent as well. This all will be done with a stylish investment app and your little amount of money.
Since there are so many apps with investing feature but I will show here some best of them.
This investing app is the most popular app among all micro investing apps. It has a very cool design that can be easily understood by everyone and also how to use it. If you’re a true beginner, then I recommend you to go with the Acorns. It is best for you because it assumes all of its users as beginners so it will perform accordingly. You can start your investing career with as little as $5.
How it Works:
Acorns will ask some questions from you and depending on them it will provide you with a portfolio about the financial goals. It will select the ETFs low-cost exchange-traded funds instead of the individual bonds and stocks to make the portfolio for you.
Later on, you can sign up for Acorns for the additional fee that will let you open the IRA. For another fee, the Acorns app has a special checking account to boost your investment account
Acorns app also allows you to make manual as well automatic deposits. It has also a round-up feature by which you can round your purchase to the nearest dollar. So that the difference can be deposited to your investing account.
By linking your credit or debit card with the acorns, you’ll get access to the money found partners. This will be useful for you when you do some shopping. In return, you will get some cashback in your investing account. These retailers include Expedia and Lyft.
Acorns app has the following charges for its monthly packages
. Acorns Core: $1
. Core and Acorns Later: $2
. Core and Acorns Later with Acorns Spend: $3
Another cool investing app for the ones who are beginners to the investment is the Stash app. The company reports about its users as its 84% of customers are new to this. Just like Acorn, it only needs $5 to kick-start.
How it Works:
Stash has a little bit flexibility from Acorns in terms of choosing your individual investments. It has a diversity of Stocks and ETFs so that the user has more options to put a custom portfolio. If you’re just a beginner and very conscious about the money, then Stash can help you by creating a portfolio by itself.
The Stash provides IRA to the users with its growth plan with an extra fee. You can upgrade your stash plan to Stash+ plan and as a reward you will get IRA plus to use on up to 2 accounts.
Stash has many deposit options for the users like automatic deposit, one-time deposit, round-up deposit and even 4th option as smart-stash. This feature is used to automatically stash money instead of setting up times and minutes.
Stash also provides the users a checking account. You will also be provided with a debit card that will give you cash-back in terms of stocks for the purchases you do every day.
There are three levels of service in the stash
. Beginner: $1/month
. Growth: $2/month
. Stash+: $9/month
Betterment is another investing app which is considered as the best robo-advisors of all the time. Though it is providing app facility most of the people go with its website for investing.
How it Works:
Once you start making your account, betterment will ask some questions so that it determines what type of account you are willing to open like personal account or some IRAs. They will also check your goals and your risk threshold. And after that, they will choose a suitable portfolio and will manage it for you as well.
The only thing that is in your hand is to deposit money. You can choose between manual deposits and automatic deposits. They also don’t have any limitation of depositing on account opening so what are you waiting for. Get your account today and start depositing whenever you have enough money to invest.
You might not find the betterment as flashy or showy as the other micro investing platforms, but they are also different in many ways. Betterment offers a much more universal way to invest. You can totally rely on betterment in terms of investing needs. Even to save you more money, they are backed by an investing technique as tax-loss harvesting.
Charges of the betterment are fair enough. They have an annual fee of 0.25% as the main investing service. When you upgrade your account to premier plan then the annual charges will be 0.40%.
Robinhood comes with an objective to make investing as cheap and easy for individuals as it is easy for big companies. But the Robinhood’s app is a little advanced and not friendly for the newbies so if you’re new in investing I recommend you to not go with Robinhood.
How it Works:
This app allows you to purchase individual stocks, cryptocurrencies and ETFs. It also has some options where you don’t have to pay trading fees. Well, it doesn’t offer that much features which Acorns and Stash do.
Here at Robin-hood, you are at your own. It means there is no option for automatic investments or deposits. That’s why it is specially made for the experts of trading. Along with this, Robin-hood has some limitations in buying stocks as you can only buy the whole shares and they might be very expensive too.
The biggest feature which made it unique from others is the offer it gives to the users. You can trade totally free. Usually, you have to pay a $10 fee per trade. So with the Robinhood, you can save a lot of money when you trade regularly
The platform of Robinhood is totally free to use. If you want to go advance in trading and do investments on margins, upgrade your free plan to Robinhood Gold. In the gold plan, the fee will be $5 per month.
It can be a problem for someone if he has to buy an individual stock because it is too much expensive. And it would be a great problem if you’re running out of money. That’s where Stockpile is gonna help you.
How it works
The Stockpile provides one easy way to invest. It works as you can buy fractional shares of the stocks and ETFs. So I should here tell you that this app is not gonna help you with what should you invest. You’re at your own and have to decide for yourself.
The speciality of stockpile is that if offers to buy fractional shares of individual stocks, bonds and ETFs. By having this offer, you don’t have to make huge investments with some high price tag. Basically, with the stockpile, you just buy only a portion of stock for an effectively reduced price. You can start trading and investing in the stockpile with as minimum as $5.
It has a fee of $0.99 for every trade you made.
Is Micro Investing a Good Choice?
These micro investing apps are generally designed to be attractive. Many people love them as they do really help in investments for the newcomers. But there are also factors too that you should consider before deciding whether these apps are good and right for you or not.
One of micro investing’s strengths is that you can get started with whatever money you have today. That’s great for reducing the barrier to entry, but it has other side effects, too
Minimum Deposit Requirements
One of the best thing that micro investing gives to its user is that you don’t have to be rich enough to get started with it. You can just start with as little money you have.
“I’m cautious to depress anyone from saving the money for future,” says founder of the Approach Financial, “but to achieve goals like, financial independence, education funding, or a key purchase, you need substantial dollar expenses. My fear is that folks feel as they’re doing much more than they really are with these investing apps.”
Though this micro investing is a great start, but one shouldn’t be relying on these occasional deposits of few dollars as a primary approach of saving money.
Another factor with micro investing is that due to a lot of apps available, the choices for investing is limited to their attractive and neat package. You can’t make a portfolio with full ranges of funds or stocks that is a big asset for your wealth for the long term.
Well, they are pretty much good for the starters who want an easy investment but in the long run, you’ll need other methods too.
Every person likes to get a return on their investments. So, most of the people use these investing apps and invest in funds and stocks for which they seem fun and interesting to them. In the end, it’s a good thing as because of this people like to invest
But this story isn’t the same for all. A fund or stock that you’ve invested in can grow poorly and even its value can decline also. This is what you never want to see as it’s not good for your money as well.
Along with this, most of the investing apps have relatively high fees on trading as compared to the other competitors. So, you have to keep this in mind as it can eat your money resulting in losing your earnings.
Micro Investing: A Long-Term Strategy
Micro investing is an excellent investing tool making the concepts and access especially to the beginners so easy and effective. Those people who don’t know even about basics about the stock market can now invest in funds, stocks and ETFs all because of Micro investing. Though it’s a great tool for investments it’s not good to be your entire strategy of investing.
Just make sure that you are considering how this micro investing fits in your broader wealth-building dreams.
You should use these apps as a booster for your investing journey. With these apps, learn how to do investments effectively, and after that use online brokers, investment advisors or robo advisors to create an attractive portfolio for your goals.
After all, these apps are just a great tool to use but one thing that makes the difference is how you use these apps.