Boost Your Investment Balances With These 4 Micro-Investing Apps
Investing isn’t just for big money with these micro-investing platforms.
Contributing Writer at Tally
September 28, 2022
This article is provided for informational purposes only and should not be construed as legal or investment advice. Always consult with a professional financial or investment advisor before making investment decisions.
In the digital age, things once viewed as unattainable by a normal person are now within their reach. This includes investing in the stock market. New micro-investing apps allow anyone to invest with small amounts of money and low- or commission-free trading — thanks to their ability to offer exchange-traded funds (ETFs) and fractional shares of stocks.
Micro-investing apps are suitable for beginners as they provide automatic diversification, small minimum investment amounts and a range of investment options. Plus, some also include checking accounts that offer rewards in the form of stocks and cash back.
If you’re interested in giving micro-investing a try, here are four apps to consider.
4 Micro-Investing Apps to Jump-Start Your Portfolio
Micro-investing apps are popular with beginning investors who want to test the waters of the stock market. There’s no shortage of apps to choose from, but here’s a comparison of four of them.
Acorns is a unique option, as it offers several investment strategies. If you’re a beginner or a hands-off investor, the round-up feature could interest you. You simply connect your bank account to the Acorns interface, and it monitors your transactions. Each time you make a transaction, the app rounds up to the next dollar and invests the spare change.
For example, if you spend $1.50 at the store, it rounds the transaction up to $2.00 and invests the 50 cents.
Acorns also allows you to schedule recurring investments to boost your savings further.
On top of automated savings, Acorns handles all your investments for you. All you do is answer a few questions about your investment goals and the app builds you a diverse portfolio that is best-suited to meet your goals.
It also automatically rebalances your portfolio — the buying and selling of assets within your portfolio to match changing market conditions — to help keep your value growing. Plus, Acorns will invest up to 5% of your contributions in a Bitcoin-linked exchange-traded fund (ETF), further diversifying your portfolio.
Finally, Acorns offers a digital bank account that’s FDIC-insured and includes a custom metal debit card. This account offers mobile check depositing, digital check sending, and access to over 55,000 fee-free AllPoint ATMs. Acorns’ bank account also has rewards, like cash back and stocks, for shopping at select stores.
Acorns also has an iOS and Android app for on-the-go investing.
The downside is Acorns comes with a fee of $3 per month for an individual plan and $5 per month for a family plan.
Robinhood is another micro-investing app for iOS and Android with a broad range of options. Its bread and butter is its commission-free stock trading. Robinhood is popular with all types of investors, as you can invest in individual stocks, ETFs, cryptocurrency and more. Plus, your first stock is 100% free.
When it comes to Robinhood’s crypto trading, most of the digital currency is kept in cold storage, which are offline wallets that are virtually immune to hacking. Robinhood also has insurance covering your crypto if it is stolen in a cybersecurity breach.
Like Acorns, Robinhood offers a bank account it calls the Cash Card. The Cash Card works like any debit card, but it also earns you 10% to 100% rewards, including stocks and cryptocurrency. You earn these rewards by signing up for the automatic round-up, which rounds your purchases up to the next dollar and invests the difference. The downside is your round-ups and rewards are capped at $100 and $10 per week, respectively.
The bank account is FDIC-insured and offers access to 90,000 fee-free ATMs. You also can send checks.
While Robinhood doesn’t charge fees, there are government and bank fees the app passes onto the customer, including:
SEC fee of $22.90 per $1 million of principal sold (not valid for sales under $500)
FINRA trading activity fee of $0.000130 per share of equity sells or $0.00218 per contract (option sells) up to a max of $6.49
American depositary receipt (ADR) fees of 1 to 3 cents per share when applicable
Like others on this list, Stash offers an iOS and Android micro-investment app that allows you to make small investments to grow a retirement account, build a kid’s college fund or save for a future purchase.
Stash has a broad range of investment options, including individual stocks, ETFs, bonds and crypto. You can also automate your investing by setting up your Smart Mix, which allows you to designate what percentage of your cash goes toward each investment type, and a robo-advisor takes over from there.
Like Acorns, Stash also offers smart rebalancing. These rebalances occur once per quarter if you fall more than 5% away from your target allocation.
Like others on this list, Stash offers a bank account with a debit card it calls the Stock-Back Card. This FDIC-insured bank account includes a round-up feature that automatically invests the round-up amount from your transactions. The Stock-Back Card also gives you bonus stocks when you shop at select retailers. Finally, you will get access to up to 19,000 fee-free ATMs.
Stash doesn’t charge commissions, but it includes a monthly fee that runs $3 for the basic Stash Growth account or $9 for the Stash+ account. You need a minimum of $5 to open a Stash account.
The $3-per-month Stash Growth plan offers:
Access to a personal, smart and retirement portfolio
Banking with the Stock-Back Card
$1,000 in life insurance
The Stash+ investment account offers a few extra features, including:
Financial advice and market insights
Two kid portfolios (custodial accounts)
Double the stock back with the Stock-Back Card
$10,000 in life insurance
Another Apple and Android micro-investing app to consider is Betterment. This app requires a minimum $10 investment and features automated tools to help maximize your growth.
Betterment has a handful of diversified portfolios to pick from, including:
Core: This is a diversified, low-cost investment portfolio built for long-term investing. It’s an eclectic collection of global stocks and bonds.
Innovative Technology: This portfolio focuses on high-growth-potential corporations, including those in the clean energy, semiconductor, robotic, virtual reality, cryptocurrency and nanotechnology industries. It also has a higher risk exposure, so this is for investors with a higher risk tolerance.
Broad Impact: This is a portfolio focused on corporations that rank highly in environmental, social and corporate governance (ESG) criteria.
Climate Impact: This is a portfolio focused on companies with lower carbon emissions.
Social Impact: This is a portfolio focused on companies that empower minorities.
Goldman Sachs Smart Beta: This is a portfolio that targets companies that may outperform the greater market but also include increased risk.
BlackRock Target Income: This 100% bond portfolio has different income yields and protects you from stock market volatility.
Cash Reserve: This FDIC-insured cash account earns a variable annual percentage yield (APY). As of August 31, 2022, the APY is 1.6%.
All Betterment portfolios use ETFs to keep the management fees low and increase tax efficiency. Some investors may appreciate this, but it eliminates the ability to invest in individual companies.
Betterment also offers a wide range of other investment options beyond portfolios to help you reach your investment goals. These include IRAs, 401(k)s, fee-free checking accounts and trusts.
Unlike other micro-investing apps with checking account options, the Betterment account has no stock-back option. Its rewards are straight cash back for shopping at select retailers.
Betterment’s basic bank account plan has no fees and no account minimum balance requirement (after the initial opening). If you opt for the standard digital investing plan, you’ll pay a 0.25% annual fee. If you opt for premium investing, which adds unlimited calls and emails with certified financial advisors and in-depth investment advice, the annual fee rises to 0.40%.
Grow your investments with micro-investing apps
Micro-investing apps have become a staple in millennial retirement plans, but they can span all ages and income levels. Apps like Acorns, Robinhood, Stash and Betterment offer low-cost trading and the ability to diversify without a wealth of investment knowledge. They are also all-in-one personal finance apps with their included advice and checking accounts.
When choosing the right micro-investing app, consider its investment types and fees to find the right one for you.
Want more personal finance tips and news delivered to your inbox? Sign up for the Tally† newsletter.
†To get the benefits of a Tally line of credit, you must qualify for and accept a Tally line of credit. The APR (which is the same as your interest rate) will be between 7.90% and 29.99% per year and will be based on your credit history. The APR will vary with the market based on the Prime Rate. Annual fees range from $0 to $300.