Can Micro Investing Really Add Up? The Answer May Surprise You

Wondering if investing tiny amounts of money is worth it in the long run? We've got an answer for you.

Coins with plants growing on them
Updated May 13, 2024
Fact checked

We receive compensation from the products and services mentioned in this story, but the opinions are the author's own. Compensation may impact where offers appear. We have not included all available products or offers. Learn more about how we make money and our editorial policies.

Figuring out how to invest money can feel frustrating if you don’t have a lot of it. Thankfully, several micro-investing apps allow you to start an account with just the spare change in your pocket. In fact, some of the best investment apps allow you to open an account with no minimum balance and no minimum initial investment.

But is investing your spare change worth it? Micro investing can add up if you stick with it consistently. If you build a healthy micro investing habit, you may find even more money to invest down the road. In a decade or two, you might be surprised by the results of your small investments.

In this article

How does micro investing work?

Micro investing is the act of investing small amounts of money repeatedly over time. It hasn’t always been an option for investors because investment firms used to require minimum balances and purchases of whole shares of stock.

Today, many investing apps and brokerage firms do not have a minimum initial investment. Additionally, advances in the investment space have enabled the ability to buy fractional, or partial, shares of stock.

Fractional share investing can give you the ability to invest in a massive technology company with a $2,000 per share price with just $1. You would own just 0.0005 shares, but you can still invest in the company without spending $2,000 to buy a single share.

Fractional share investing allows you to purchase a diversified portfolio of investments, a group of assets that spreads out risk over several companies. In the past, you would have to save enough money to buy a single share of each company you wanted to invest in to build your portfolio. Today’s fractional share investing option lets you divide your money between the stocks in virtually any manner.

Some investment platforms automate the process for you by rounding up your purchases to the nearest dollar and investing your spare change. Others allow you to set up recurring transfers of small sums to start your micro-investing journey.

Who is micro investing right for?

Micro investing could be a good investment strategy for new investors. The low monetary commitment required makes it an accessible way to start your investing journey.

It isn’t a good fit for everyone, though. Those with thousands of dollars available to invest might find other investment options that offer lower costs and more investment choices.

Can your money add up to something worthwhile?

Micro investing can add up, especially if you invest regularly for an extended period. Here are two examples to give you an idea of what to expect.

A person decides to cancel their $14 monthly streaming subscription and invest the money in an investment with 8% annual returns. They invest this amount every month for 40 years. At the end of 40 years, they have roughly $48,873 without accounting for fees.

Another person decides to use Acorns’ Round-Ups feature. The Federal Reserve Bank of Boston found people averaged 70 payment transactions per month in 2017. If each payment resulted in a 50 cent roundup, the person would invest $35 per month. They do this every month for 40 years and the investment has 8% annual returns. At the end of 40 years, they have roughly $122,185 without accounting for fees.

Micro investing: 5 best practices

  • Understand how investing works. Before you start investing, it’s good to research some of the core concepts that help you invest successfully. These include things like risk tolerance, compounding returns, long-term investing, and index investing.
  • Research micro-investing platforms. Before you start investing anywhere, you need to understand the platform you’re using to invest. Learn about the fees it charges and investment options it offers before you deposit money into an account.
  • Pay attention to fees. Fees can eat up a significant part of your return over decades, but they can also eat up a large amount of your investments as a micro investor. If you’re investing $25 per month, paying a $5 monthly fee takes up 20% of the money you contribute each month. Look for the monthly fees a micro-investing platform charges and the expense ratios the investments themselves charge.
  • Add recurring transfers when you can. Adding your spare change can be a great way to build an investing habit, but adding regular transfers on top of that can supercharge your investment account. Add a recurring transfer to occur each payday for whatever amount you can afford. Check in once per month to see whether you can increase that amount.
  • Don’t stretch to invest. Whatever you do, don’t stretch your budget to invest. If you can’t afford to invest one month, it may be better not to invest than to invest and put bills on a credit card with a high APR. If you stretch too far, you could have to sell your investments if you can’t pay your bills. If you do this when your investment has decreased in value, you lock in your losses. This may make you feel less confident about investing in the future.

Micro investing: 4 things to avoid

  • Investing outside of your risk tolerance: Before you start investing, take a risk tolerance quiz to see how much risk you’re comfortable with. If you don’t stick to your risk tolerance, you may get anxious about a down market and sell your investments at a loss.
  • Leaving your investments in cash: When you first start investing, it can be challenging to understand what to do. In some cases, depositing money into your investment account doesn’t mean it is invested. Instead, it sits in the investing account in cash. Make sure the cash you transfer to your investing account gets invested in the investments you choose.
  • Putting in money you may have to withdraw in the near-term: Investing money can result in gains or losses in the short-term. Over time, the gains tend to outweigh the losses in a diversified investment portfolio, though this isn’t always the case. If you invest money you need in the short-term, you may have to sell at a loss.
  • Staying with a micro-investing app forever: Micro-investing apps are a great way to get your feet wet with investing, but they may not be the best solution forever. When your balance reaches a few thousand dollars, research traditional brokerage firms to see whether they may serve your needs better.

1. Acorns

If you want to automate investing your spare change, Acorns may be the perfect micro-investing app for you. Its Round-Ups feature lets you link your bank account, debit card, or credit card to its system. Then, Acorns will round up your purchases in those accounts to the next dollar. Once the roundups equal $5, it’ll transfer that money to your Acorns Invest account.

Acorns allows you to invest in one of five portfolios of exchange-traded funds (ETFs) built with the help of Harry Markowitz, a Nobel Prize-winning economist. The portfolios offer different risk profiles based on your risk tolerance. The downside is you have to pay a monthly fee, starting at $1, to use the service. Learn more in our Acorns review.


Acorns Benefits

  • Bonus $20 after your first investment
  • No surprise fees
  • Get started for just $3 per month
  • Protected by bank level security
Visit Acorns

2. Betterment

For those without much money to start investing, Betterment is a relatively low-cost option that doesn’t require a minimum balance. Betterment is a robo-advisor, which gives you some of the benefits of using a traditional financial advisor. It keeps costs low by using technology solutions instead of human advisors.

Betterment allows you to invest in fractional shares of ETFs. It also provides other valuable services to help you achieve better investment returns including rebalancing, tax-loss harvesting, and asset allocation. Betterment charges a management fee of .25% of your balance annually. You also have to pay the fees of the underlying investments. Read our Betterment review to learn about it and the services it offers.

3. Public

Public provides options to micro invest with a social twist. Investors can sign up for Public and share insights and chat with a community of investors. Public doesn’t have a minimum amount required to open an account, offers commission-free trades, and allows you to buy fractional share purchases of stocks and ETFs.

Public also offers free stock when you refer your friends to the app. Both you and your friends receive a fractional share of stock in a company, which can help you start building your investment account balance. Find out more in our Public review.


Public Benefits

  • Get up to $10,000 when you transfer your brokerage account to Public.com1
  • Invest in stocks, ETFs, crypto, art, collectibles, and more
  • Get insights from millions of investors
Visit Public

4. Robinhood

Robinhood pioneered commission-free stock trading and supports micro investing on its platform by enabling you to buy fractional shares. Robinhood is more complicated than some of the simpler micro-investing apps, which may make it a better choice for more experienced investors.

With Robinhood, you have to choose the individual investments you want to invest in. It currently offers individual stocks, ETFs, options, and cryptocurrency investment choices. Robinhood provides a dedicated section of its website to help new investors learn the ins and outs of investing, which is available to everyone. Our Robinhood review covers more details.


Robinhood Benefits

  • Earn more interest on your uninvested cash with 5.00% APY (as of April 12, 2024)
  • Get up to $50K of your deposits instantly, so you can jump on investment opportunities faster
  • Borrow money to increase your buying power with margin investing at 8% (as of Nov. 15, 2023) APY for Gold members
Join Robinhood Gold here

5. Stash

Stash also offers micro investing in thousands of stocks and ETFs. Its platform focuses on long-term investing rather than day trading. One unique feature Stash provides is its Stock-Back debit card.1 When you shop with this card, you can earn stock in the companies you shop with, as long as they’re listed stocks on the Stash platform. Shopping at companies that aren’t listed on Stash will result in earning shares of an ETF of your choice.

The base Stock-Back rate you can earn is .125%, but it can be as high as 5% at select merchants. Stash charges a monthly fee, starting at $1, so that’s worth considering as you’re thinking about where to invest. You can learn more in our Ultimate Guide to Stash.


Stash Benefits

  • Get $20 to make your first investment2
  • Invest in stocks, bonds, and ETFs
  • Fractional shares available
  • Start investing with just $5
Visit Stash

FAQs about micro investing

Can you make money micro investing?

Investments will continue to increase and decrease in price whether you invest using small or large sums of money. That means investors that invest $1 should receive the same percentage gain as investors that invest $1,000 in the same investment, without accounting for fees that may be associated with particular investments.

What is the best micro-investing app?

The best micro-investment app is the one that aligns with your investing strategy and goals while minimizing management fees and transaction fees. For some people, this may be Acorns because its Round-Ups feature automates investing and helps you find money to invest. For others, it may be Robinhood because it offers no trading fees and you can choose which stocks and ETFs you want to buy.

Can you invest with $100?

You can definitely get started investing with $100. Several of the best investing apps have no minimum initial balance and allow fractional share purchases. In many cases, you could even start investing with smaller amounts, such as $20 or $5.

The bottom line on micro investing

Micro investing allows people to start investing in the stock market even if they don’t have much money to set aside. The best brokerage accounts and investing apps often have no minimum initial investment requirements and offer fractional share investing. This makes investing more accessible than ever before. Though all investments come with the risk of loss, it’s possible that the little money you set aside can grow to a decent sum, especially if you increase the amount you invest over time.

Although you can start micro investing easily, you should take it seriously. Educate yourself about the risks of investing and the basics of long-term investing. Once you understand the basics, find an investing app that can help you meet your financial goals, and start investing.

Learn More
Fractional shares available
Automate your investments with Round-Ups3 and Set Schedule transfers
Build a portfolio of stocks, bonds, and ETFs with personalized financial guidance

Author Details

Lance Cothern

Lance Cothern, CPA is a personal finance writer and founder of Lance's work covering several personal finance topics has been published in U.S. News & World Report, Business Insider, Credit Karma, Investopedia, and several other publications.