If you’re new to investing and don’t want to dive in too deep right away, or if you’re just looking to invest small amounts of money because cash is tight, it can be pretty intimidating trying to find the right brokerage.
With shares of some stocks costing thousands of dollars (thanks Amazon!), and some brokerages charging huge commissions for every trade, it’s important to find a brokerage that fits your specific needs, and allows you affordable trading with access to fractional shares.
Luckily for you, my job is to help you with this challenge, so let’s go over the top 3 investing apps for micro investors.
But first, I should probably explain micro-investing very briefly for people who aren’t on the same page as the rest of us.
What is "micro-investing"?
With micro-investing, the name pretty much tells you everything you need to know.
While some people have access to seemingly unlimited cash, there are quite a few of us out there who need a smaller scale investing solution.
Micro-investing simply allows smaller investors to fairly participate in the market, without restricting their access to companies with a high stock value.
Micro-investing is NOT a PhD-level investing strategy, or anything like that, it’s just the word people use for investing with small amounts of money.
Here’s a list of the top 3 investing apps that allow users to micro-invest by offering fractional shares, low trading commissions, and very little fees.
Thanks to the popularity, and business model, of brokerages like Robinhood, today, we can enjoy commission free trades and easy access to the stock market.
Robinhood has fractional shares, a Dividend Re-Investment Plan, and is packed full of choices to invest in.
The app is free, unless you subscribe to Robinhood Gold, which isn’t really needed.
There has been a little negativity around the brand, but Robinhood has addressed all those issues, and the app is looking really great now.
Robinhood offers access to penny stocks, which are great if you know what you’re doing, and they’re cheap, or you can just invest in partial shares of blue chip stocks or ETFs.
Robinhood has it all so be sure to cheeck out our review by clicking below!
When micro-investing and passive investing fell in love and had a baby, M1 Finance was the result.
That’s really the most appropriate way to describe M1 Finance.
Fractional shares allow investors to buy portions of stocks, instead of requiring investors to purchase entire shares of stocks.
This allows people like you and me to get started with investing… WITHOUT having thousands of dollars to spend on a share of a stock.
The M1 Finance robo-advisor will invest all your cash when your account balance reaches, or exceeds $25.
With commission free trades, no monthly fees, and a robo-advisor that makes passive investing a breeze, M1 Finance is a top-notch investing app for people wanting to get involved in micro-investing.
M1 Finance is our investing app of choice for our passive investing case study, which you can read about here.
Cash App isn’t the most powerful investment platform to ever exist, but for people interested in micro-investing, it’s definitely a solid choice.
Cash App is free to use, has no minimums, offers fractional shares, and even has an instant money transfer service built-in.
The app is EXTREMELY easy to use and figure out, but lacks features, which is probably why it’s such a simple app.
It does NOT offer a Dividend Re-Investment Plan, which doesn’t make a lot of sense to me, considering they already have fractional share functionality within their service, but it is what it is.
Overall, Cash App is a pretty decent micro-investing app, and you should think about trying it if M1 Finance and Robinhood don’t seem appealing to you.
Micro-investing app alternatives
If none of these micro-investing apps look good to you, there ARE a few alternatives, although they come with some drawbacks.
Acorns, Stash, and Public, offer investors an affordable investing experience, but without the need for large amounts of capital.
Acorns and Stash both charge a monthly fee, which erodes your nest-egg, which usually wouldn’t even matter… EXCEPT, since you’re only investing small amounts, you most likely won’t have enough capital invested to make the fees worth it, even if the fee is only $1 a month.
The thing that makes Stash and Acorns stand out here, is the fact that both of them offer the Round-ups feeature, which rounds up purchases to the nearest dollar and invests the change for you, and they both offer fractional shares and a DRIP.
Public is a free investment app, and is a solid runner-up for the top 3, but I feel like the app lacks features and has a little work today before it is taken seriously in the fintech world.
Anyway, thanks for reading, hope this article helped you find an investing app!