Have you wanted to invest for some time but not sure where to start? Have you done preliminary research regarding options to invest but are unable to meet the minimum account balances? I have been there. It is tough. There is so much information on the website that it can be confusing to figure out where to start.
I have good news, though! In the last few years, various companies have introduced Apps targeted at the millennial generation looking to invest. They all have small minimums to invest and take the confusion out of investing.
Take a look at the 3 Apps below that allow you to invest with $5 or less to find one that will work well for you.
Acorns truly makes investing possible for anyone! With Acorns, you link your checking account or savings account to the app and it automatically rounds up and invests your spare change. In addition to investments by rounding up previous transactions, with Acorns you can set an automatic investment for as little as $5 on a recurring basis.
Acorns invests in 6 different ETF’s (exchange traded funds). Your specific portfolio is based on a specific objective like aggressive and the 6 ETF’s are allocated to your account based on that objective.
The major benefits of Acorns includes the fact that there is not a minimum balance requirement and there are low fees. In addition, the account fees are $1 per month for balances under $5000 and 0.25% annually for balances over $5000.
I really enjoy Acorns! I have the app set to invest my spare change. In addition, every once in a while I will make a one-time investment for $20 or so. Since the app invests your spare change, it is easy to accumulate money without even noticing.
For more information about my personal experience with the app, check out this previous article posted to the site Acorns: Start Investing your Spare Change.
If you are ready to try Acorns for yourself, click here. You’ll get $5 added to your account to start off with. I’ll also get $5 added to my account. 🙂
Stash is an app that makes it easy to invest based on your interests, beliefs, and goals starting with as little as $5. With Stash, you can link your bank account to make regular reoccurring deposits. In addition, you can also make one-time deposits when you are looking to invest. Stash is only an application so to get started you do need a smartphone.
Similarly to Acorns, Stash is invested in ETFs (or exchange traded funds). During the setup process, Stash asks questions regarding your interests, beliefs, and goals. Through the questionnaire, Stash helps you to invest in what is most important to you. There are about 30 investments to choose from.
A few of the investing options with Stash include:
- Clean & Green: Invest in companies producing solar, wind, and other forms of renewable energy.
- Do the Right Thing: Invest in socially responsible businesses that make positive impacts on the world.
- Young Money: Invest in companies that could benefit from the spending power of millennials.
Similarly to Acorns, the major benefits of Stash is a low minimum balance requirement and low fees. With Stash, the account balance minimum is $5. The account fees are $1 per month for balances under $5000 and 0.25% annually for balances over $5000.
Update July 2016: I just started using Stash myself and it is pretty awesome – very user-friendly and easy to invest based on your beliefs. If you are ready to try it out, use my link and you’ll get $5 added to your account (and I will too)!
In comparison to Acorns and Stash, Betterment takes a different approach! Betterment looks at your goal (i.e. retirement, house down payment, etc…). From your initial deposit, monthly savings and time horizon, Betterment will tell you the chances of achieving your goal. Based upon those factors, your account is invested in a mix of 13 ETFs (exchange traded funds) automatically.
Also, Betterment provides more sophisticated account options. For example, the previous apps listed only provide for taxable or regular investment accounts. With Betterment, you can also open up an IRA if your goal is saving for retirement. In fact, if you have an old 401k or IRA, you can roll those assets into an IRA with Betterment. Also, if you are investing larger amounts and worried about the effect on your taxes, Betterment provides information regarding tax loss harvesting.
In terms of fees, Betterment is a bit higher than the other apps. If you auto-deposit at least $100 per month, the fee is 0.35% per month for an account with a balance less than $10,000. If you decide not to auto-invest, the fee is $3 per month for an account balance less than $10,000. And iff you exceed $10,000, the monthly fee continues to drop. Visit Betterment for more information!
Investing in the Apps listed above is different from a savings account. A savings account is FDIC insured up to $250,000. Therefore, your savings account is guaranteed to not lose value up to $250,000 in your account. There are risks associated with investing; therefore, only use money that you are able to sacrifice and even possibly lose. If you have extra cash and aren’t sure what to do with it, consider funding your emergency fund or retirement account prior to these apps listed above.
Related: Do these 3 things prior to investing
You May Enjoy These Other Posts:
- How to Invest with $100 or less
- The 5 Biggest Myths about Investing (costing you money)
- 4 Lessons the Gym Taught Me About Investing
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What has been holding you back from investing? If you have already started to invest, what tools do you use? Have you used any of the apps before to invest? If so, tell us your experience!