Of the few micro-investing platforms out there, Acorns is probably the best-known of the round-up bunch. Nerdwallet recommends Betterment for investors who want to be hands-off, are retired, want automatic rebalancing, have low balances or like goal-based tools. The Betterment app is available on the App Store and Google Play, but you can also access the tool online. With Betterment Digital, you can speak with financial advisors through the app’s messaging system.
While there are plenty of benefits to this process, it does come with some drawbacks. Here are some factors to consider when signing up for a micro-investing account. Let’s say that you did decide to save money and buy individual shares of stock at a higher price.
If you choose the Premium service, you’ll get unlimited phone access to those advisors in addition to the in-app messaging. It’s important to note that you’ll also need a $100, 000 account minimum to sign up for the Premium service, so most of us will have to stick with the Digital package. STASH Beginner ($1/mo. ) helps customers learn the basics of saving and investing with a personal brokerage account and access to banking services, including Stock-Back™ rewards.
In addition to “round-ups, ” Acorns also allows you to set up recurring contributions or one-time additions to your account. You can choose when the money is withdrawn from your bank, and you can postpone a monthly contribution if necessary. This app has been growing in popularity lately, thanks to its easy-to-use interface and unique benefits. Acorns works by rounding up purchases to the nearest dollar and adding them to the account in five-dollar increments. To get started, all you have to do is connect a debit card or PayPal account. Also, if you do have sufficient funds to purchase individual shares, you don’t have that capability with micro-investing. Alternatively, you’ll have to go to a brokerage firm or set up an online trading account.
As such, it may only transact business with residents of those states and residents of any other state where otherwise legally permitted subject to exemption or exclusion from registration requirements. Found money works by investing a small portion of your purchases with corporate partners. The best part about this feature is that you’re getting free money from these companies. Another advantage of this app is the Acorns Later account. You can set up either a Roth or Traditional IRA to help you save for retirement. The best part about Roth IRAs is that you can withdraw contributions tax-free and without penalty. This way, you can build a small nest egg while still having access to your money.
For example , perhaps you wait until you have $500 to invest. If you took that money to a brokerage firm, they would charge you a fee for that transaction. Each platform invests a little differently, so compare your options to find the right fit for your budget and spending habits. And if you’re not sure what’s available, check out our guide to the world of investments. Many micro-investing platforms offer a quick and simple way to link your bank account, acting like an electronic piggy bank for your spare change. SoFi Invest brings together a wide array of options into a single combination that offers just about everything except rounding up your purchases. Like Robinhood, it features a fractional share feature called Stock Bits as well as no fees or commissions on stocks, ETFs and cryptocurrencies.
Once linked to your bank account, you can take advantage of a limited amount of instant deposits, and there are no commissions on stocks, ETFs, options or cryptocurrencies. There are no minimum account balances, and deposits and withdrawals are free. All you need to do to get started is link a bank account and provide ID, income information and your financial goals. Keep an eye out for other fintech startups looking to break into the market in the coming months and years. Micro-investing is a relatively new sector on the American financial scene.
Be sure to first consult with a qualified financial advisor, tax professional, or attorney before implementing any strategy or recommendation discussed herein. NextGen Wealth LLC is registered as an investment adviser in the states of Missouri and Kansas, and is notice-filed in the State of Texas.