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Myth: You need lots of money to start investing.
Micro-investing apps are everyday giving people access to the stock market for as little as $5.
Micro-investing allows you to start small — really small. Apps like Acorns and Stash work by transferring small sums of money from your bank account to a diversified portfolio.
Research shows that these tiny money moves can really add up.
According to a recent consumer study by Cornerstone Advisors, saving and investing apps like Acorns, Digit and Qapital helped consumers save an average of $600 a year above their standard level of savings — and one in five users saved more than $1,000.
Is a micro-investment app right for you? The answer depends on your financial goals and income.
What Is Micro-Investing?
Micro-investing allows you to automatically allocate small amounts of money into a portfolio of stocks and bonds — even if you know nothing about investing.
This fintech term applies to a handful of mobile-based platforms that make investing easy and painless.
Here are a few common features these micro-investing apps share:
- The ability to set up recurring transfers from your bank account to your investment account.
- The option to round up purchases and sweep the spare change into your investment account.
- Robo-advisors that select a portfolio of diversified investments tailored to your goals and risk tolerance.
- Fractional shares of stocks, which allows you to start investing with $5 or less.
- A flat monthly fee for services or a fee equal to a percentage of your account balance.
- Educational resources that teach you about personal finance.
Micro-investing can be a good option if you’re tight on extra cash or you’re new to investing and not sure where to start.
You can customize how much money you invest and how often — putting you in the driver’s seat. These apps also remove some of the barriers of traditional brokerage accounts, such as account minimums and trading…
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