Best Micro Investing Apps 2024

Jeremy Biberdorf Image
Updated
Jul 19, 2024
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Quick Breakdown

Best Micro Investment Apps


  • Best overall, especially for hands-off investors looking for custom portfolios.

  • Best for those seeking diversified portfolios with financial advice.

  • Best for commission-free stock and crypto trading.

  • Best for turning everyday debit card purchases into investments.

  • Best for socially-conscious investing with a community.
In today's age, investing is not just for the wealthy. Thanks to micro-investing apps, everyone can start their investment journey with just a few dollars. These platforms allow users to invest small amounts of money, transforming pocket change into potential profits. This article will guide you through the best micro-investing apps, breaking down their features, benefits, and how they might fit into your financial journey.

Micro-investing can be the perfect solution for beginner investors or those without substantial sums to invest. By diving into fractional shares, individuals can buy parts of stocks or ETFs, allowing for a diversified investment portfolio without the hefty price tag. Let's delve into our top picks for micro-investing apps and discover which might be best suited for your investing style.

The Best Micro Investing Apps in 2024

M1 Finance

4.9 stars
Cost Free
Best For Hands-off investing
Benefits
Overview
Company
  • Free platform
  • Automated investing
  • Fractional shares
  • Custom portfolios
  • M1 Spend for spending and investing
  • No minimum balance
  • Retirement accounts
  • High-quality educational resources
M1 Finance's platform strikes a harmonious balance between self-directed and automated investing. At its core, users are provided a unique opportunity to design a custom "Pie", a visual representation of their investment portfolio.

This "Pie" can be filled with a variety of financial products, be it individual stocks, mutual funds, or ETFs. Once established, the platform takes charge by automatically balancing the pie, ensuring that your portfolio is consistently attuned to your desired investment strategy.

Furthermore, with the introduction of the M1 Spend feature, users can flawlessly integrate their investment accounts with an FDIC-insured checking account. This innovative fusion not only facilitates seamless transactions but also streamlines the entire investing process. Another compelling trait of M1 is its robust support for fractional share investing.

This ensures that every cent is put to work, empowering you to maximize every dollar's potential. Also, those who are future-focused will appreciate the provision for retirement accounts, giving them a head start on securing their financial futures.

M1 Finance, incepted in 2015, has swiftly carved its niche in the bustling world of micro-investing apps. Their avant-garde approach to finance seamlessly combines facets of active and passive investing, bestowing more control upon the user.

With its headquarters rooted in Chicago, the company stands firm on its commitment to demystify investing, making it more approachable and comprehensible for all.

SoFi

4.7 stars
Cost Free
Best For Diversified portfolios
Benefits
Overview
Company
  • Free financial advising
  • No account fees
  • Fractional shares
  • Diverse investment options
  • Crypto trading
  • SoFi Invest for active traders
  • Automated investing options
  • Access to a financial planner
SoFi, or Social Finance, endeavors to offer more than just a basic investment platform. The company's holistic approach caters to both active traders and those leaning toward automated investing. Its spectrum of investment options includes everything from individual stocks and ETFs to even cryptocurrency.

For those feeling overwhelmed by the vast expanse of the financial market, SoFi provides free access to certified financial planners. This ensures users can make informed decisions, complementing their financial goals.

SoFi Invest, another feather in their cap, is meticulously crafted for the active trader. It furnishes a plethora of advanced tools, allowing for a deeper dive into the stock market. Meanwhile, for those who prefer a more hands-off approach, the platform's automated investing feature might be more up their alley.

By understanding an individual's risk tolerance and financial objectives, it crafts a tailored investment strategy, all the while keeping management fees at bay.

SoFi, which stands for Social Finance, commenced its journey in 2011 in San Francisco. Initially focusing on student loan refinancing, the company has now burgeoned into a multifaceted financial powerhouse.

Its primary objective remains to assist members in realizing their financial ambitions, whether that's through investing, lending, or even personal finance advice.

Robinhood

4.5 stars
Cost Free
Benefits
Overview
Company
  • Commission-free trading
  • No minimum balance
  • Options and crypto trading
  • Real-time market data
  • Customizable interface
  • Extended trading hours
  • Quick funds availability
  • Fractional shares
Robinhood has reshaped the landscape of investing by introducing commission-free trades. Their platform is celebrated for its user-friendly interface, making stock trading accessible even to the uninitiated.

Whether you’re interested in trading traditional stocks, delving into options, or exploring the crypto market, Robinhood caters to all. With its provision for real-time market data, users are always in sync with the market's pulse, enabling timely and informed trading decisions.

A notable facet of Robinhood is its extended trading hours, which grants users a jumpstart before the market opens and lingering moments after it closes. This ensures that they never miss out on potential investment opportunities.

The app's swift execution ensures that funds from stock sales are available immediately, which can be reinvested or withdrawn without delays.

Established in 2013 by Baiju Bhatt and Vlad Tenev, Robinhood had a singular vision: democratize finance for all. Headquartered in Menlo Park, California, the company's ethos is built on transparency and accessibility.

By eliminating traditional barriers in investing, such as commission fees, Robinhood has indeed revolutionized how the new-age investor approaches the stock market.

Acorns

4.7 stars
Cost $1 - $5/mo
Best For Spare change investing
Benefits
Overview
Company
  • Automatic round-ups
  • Recurring investments
  • Multi-tiered pricing
  • Educational content
  • Retirement and IRA options
  • Customized portfolios
  • Acorns Checking with debit card
  • No minimum balance
Acorns has garnered acclaim for its unique approach to micro-investing. Their flagship feature, the 'Round-Ups', automatically rounds up your debit card purchases to the nearest dollar, investing the difference.

This novel concept ensures that every purchase, be it a cup of coffee or groceries, contributes towards growing your investment portfolio. Additionally, Acorns offers users the liberty to set recurring investments, either daily, weekly, or monthly, ensuring a steady and consistent growth strategy.

The platform doesn’t just stop at investing your spare change. It delves deeper by offering retirement options like IRAs, ensuring users are financially equipped for their golden years.

To complement this, Acorns provides an abundance of educational content. This aids novice investors in navigating the complexities of the stock market, ensuring they’re equipped with the requisite knowledge.

Acorns, since its inception in 2012, has been on a mission to foster a community of informed and confident investors. With its headquarters in Irvine, California, the company has steadfastly prioritized making investing a part of everyday life. Through their suite of innovative tools and features, they've succeeded in demystifying investing for millions.

Public.com

4.5 stars
Cost Free
Best For Social Investing
Benefits
Overview
Company
  • Commission-free trades
  • Fractional shares
  • Social feed for investors
  • Curated themes
  • Transparent portfolios of public figures
  • Educational content
  • Collaborative culture
  • Real-time discussions
Public.com offers more than just an investment platform; it's a social network for investors. Bridging the gap between social interaction and stock trading, Public.com has established an ecosystem where investors can discuss, debate, and share their investment strategies.

Its unique social feed is reminiscent of popular social networks, but it's meticulously tailored for investors. Users can follow not just friends but also financial experts, gaining insights and perspectives directly from the industry's maestros.

One of Public.com's standout features is the transparency it brings to the portfolios of public figures. Curious about how a well-known personality is investing? Public.com allows you to peer into their investment strategies.

Moreover, for those new to the investment realm, the platform offers curated themes, guiding users towards sectors or industries that align with their interests or values.

Founded in 2019, Public.com is a relative newcomer to the investment app scene. However, its fresh approach, which mingles social media dynamics with stock trading, has made it a standout.

With its base in New York, Public.com aims to make the stock market an inclusive space, fostering a community where every voice, novice or expert, finds resonance.

Frequently Asked Questions

What is micro-investing?

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Micro-investing is the practice of investing small amounts of money, often less than the cost of a single share. This is usually done through fractional shares, allowing investors to own a piece of a stock or ETF without buying a whole share. It's a method favored by beginner investors or those looking to start investing with minimal funds.

How do fractional shares work in micro-investing apps?

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Fractional shares allow investors to purchase a portion of a stock or ETF instead of a full share. This means if a stock costs $100, but you only have $10, you can still invest and own 10% of that stock.

Micro-investing apps facilitate this by pooling user funds and purchasing whole shares, then distributing the fractional shares to users based on their contribution.

Why are micro-investing apps popular among beginners?

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Micro-investing apps provide an accessible entry point for novice investors. Their user-friendly interfaces, minimal initial deposit requirements, and the ability to invest small amounts make them less intimidating.

Furthermore, many of these apps offer educational content and tools, helping beginners learn about the stock market, investment strategies, and financial planning as they go.

How does micro-investing differ from traditional investing?

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Traditional investing often requires a more substantial initial deposit, deep market knowledge, and a hands-on approach. It typically involves purchasing whole shares of stocks, mutual funds, or other securities.

Micro-investing, on the other hand, is more passive and designed for individuals who might not have extensive financial knowledge or large sums to invest initially. It focuses on accumulating wealth over time through small, regular contributions.

Is micro-investing suitable for long-term financial goals?

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Micro-investing can be an excellent starting point for those new to investing, but it shouldn't be the sole strategy for long-term financial goals. While it allows individuals to grow their investments gradually, for substantial financial objectives, such as retirement, it's essential to diversify and consider more aggressive investment strategies as one becomes more experienced.

How do micro-investing apps generate revenue if they offer commission-free trading?

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Many micro-investing apps, while offering commission-free trading, have other revenue streams. These can include monthly subscription fees, earning interest on uninvested cash in user accounts, margin trading fees, or by routing orders through specific market makers and receiving a fraction of the bid-ask spread.

Can I withdraw my money from micro-investing apps anytime?

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Most micro-investing apps allow users to withdraw their funds, but the process can vary between platforms. Some might process withdrawals instantly, while others may take a few business days.

However, it's essential to be aware of any withdrawal fees or conditions, especially if you're invested in accounts with tax implications like IRAs.

Are my investments safe in micro-investing apps?

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Micro-investing apps in the U.S. are typically regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). Many are also members of the Securities Investor Protection Corporation (SIPC), which protects the securities of its members' customers up to $500,000.

While this provides some level of protection, it's crucial to remember that all investments come with risks, and the value can go up or down.

What is the difference between automated and self-directed investing in these apps?

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Automated investing, often referred to as robo-advising, uses algorithms to determine the best investment strategy based on an individual's risk tolerance and financial goals. The app automatically allocates and rebalances the portfolio as needed. Self-directed investing, on the other hand, gives users full control over selecting and managing their investments.

How do I determine my risk tolerance with micro-investing apps?

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Many micro-investing apps feature questionnaires or quizzes that assess factors like your financial goals, investment horizon, and how you might react to market volatility. Based on your answers, the app suggests a portfolio that aligns with your risk tolerance, be it conservative, moderate, or aggressive.

How do these apps handle taxes?

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Most micro-investing apps provide tax documents for their users, such as the 1099 forms, detailing any taxable events that occurred within the account throughout the year.

Some platforms might also offer tax-advantaged accounts or tax-loss harvesting features, which strategically sell off underperforming investments to offset taxes on gains.

Do micro-investing apps offer retirement accounts?

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Yes, several micro-investing apps offer Individual Retirement Accounts (IRAs) or Roth IRAs. These accounts come with specific tax advantages and are designed to help individuals save for retirement.

However, they also come with specific rules and contribution limits, so it's essential to be aware of these when investing.

Jeremy Biberdorf

About the Author:

Jeremy Biberdorf is the founder of Modest Money. He’s a father of 2 beautiful girls, a dog owner, a long-time online entrepreneur and an investing enthusiast.