What Is Micro-Investing?


Micro-investing involves investing money in small amounts to purchase stock, exchange-traded funds (ETFs), or other securities through an app or online investment platform.

A parent watches as a child counts money,

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Key Takeaways

  • Micro-investing involves purchasing securities using small amounts of money.
  • Micro-investing apps can make it easy to invest small amounts automatically and purchase stocks, exchange-traded funds (ETFs), or other securities.
  • Using a micro-investing app could make it easier for some people to build a diversified portfolio while developing a regular savings habit.
  • It's important to understand the fees you might pay to use a micro-investing app.

Definition and Example of Micro-Investing

Micro-investing means investing small amounts of money into the stock market, often on autopilot via automatic deductions using an app or other tech tool.

Micro-investing allows people who might otherwise be shut out of the stock market to build an investment portfolio. High minimum investments can be a barrier for people who don't have a lot of cash on hand to buy stocks, mutual funds, or other securities.

Even if you do have money to invest, the learning curve associated with buying stocks can be intimidating. Typically, you may need $1,000, $5,000, or even $10,000 (depending on the fund) to make an initial investment in a mutual fund. You may need $2,000 or more to buy a single share of a stock such as Amazon (AMZN) or Google (GOOGL), which can quickly drain your cash reserves. For many investors, those stock prices might be out of reach.

A micro-investing app or platform, on the other hand, can make those kinds of investments accessible. Instead of investing thousands of dollars, you may be investing pennies instead. For example, a micro-investing app might round up your purchases and send the difference to your investments.


Micro-investing apps and platforms usually charge monthly fees of $3 to $12, which can lower your overall profits.

How Micro-Investing Works

Generally, micro-investing works by allowing you to build wealth over time using small amounts of money. But in terms of what it looks like in action, there typically are two paths you can pursue using downloaded apps.

The first method rounds up daily transactions in your bank account and invests the spare change from each transaction after it reaches a minimum amount, such as $5. After linking your bank account, the app scans your transaction history and finds the money to invest. These round-ups are usually invested into a diversified, prebuilt portfolio of exchange-traded funds that include stocks and bonds.

The other option for micro-investing is to use an app that lets you choose small amounts to invest on a daily, weekly, or monthly basis on what you can afford, also called dollar cost averaging. After linking the app to your bank account, you tell the app how much you want to invest and how often. That amount is debited from your bank account according to the schedule you set, then invested for you.

You can use an app such as Stash to invest in a portfolio, ETFs, or fractional shares of stock on a recurring or round-up basis. Fractional share investing allows you to purchase less than a full share of a particular stock.


Depending on the micro-investing app you're using, you may be able to open a taxable brokerage account or an Individual Retirement Account (IRA).

The portfolio your money goes into can depend on your risk tolerance, age, and investment goals. Micro-investing apps may ask you to complete a short risk questionnaire when you sign up to decide which portfolio you should invest in. Or you may be given your choice of portfolios. The app may or may not rebalance your portfolio for you automatically. Acorns and Qapital are two examples of micro-investing apps that offer automatic rebalancing of portfolios.

Pros and Cons of Micro-Investing

  • More accessible investing

  • Smaller initial minimum investment

  • Automatic investments can add up

  • Monthly fees

  • May fall short of your savings goals

  • Limited investment options

Pros Explained

  • More accessible investing: Micro-investing apps can help make saving and investing a habit for people who might otherwise feel shut out of or overwhelmed by the stock market.
  • Smaller minimum investment: Rather than needing thousands of dollars to invest, it's possible to grow a diversified portfolio with your spare change.
  • Automatic investments can add up: Even though you're investing smaller amounts of money, your total adds up over time through the power of dollar cost averaging and compounding interest.

Cons Explained

  • Monthly fees: Fees can detract from investment returns so it's important to know what you'll pay before downloading a micro-investing app.
  • May fall short of your savings goals: Investing your spare change alone may not be enough to help you reach your retirement savings goals.
  • Limited investment options: Micro-investing apps may limit you to investing in stocks, exchange-traded funds, or predesigned portfolios.

What Micro-Investing Means for Individual Investors

If you’re unsure about investing or don’t have a lot of money set aside to invest, micro-investing may be a way for you to start building your portfolio. It’s a way to create wealth, as small sums of invested money can grow into a large amount over time. There are multiple platforms to choose from depending on your investment style.


Micro-investing apps are not the same as micro-savings apps, which allow you to set aside small amounts in an FDIC-insured savings account. Read the fine print on any website, as some “savings” apps may have both savings and investment options.

While it offers convenience and access to markets, micro-investing does come with its own challenges of costs and limited investment options. Consider all factors before you invest your money, no matter how small the sum may be.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Vanguard. “Vanguard Mutual Fund Fees & Minimums.”

  2. Nasdaq.” Alphabet Inc. Class C Capital Stock.”

  3. Nasdaq. “Amazon.com, Inc. Common Stock.”

  4. Stash. “What Is a Fractional Share?

  5. Qapital. “Feel good About Investing.”

  6. Acorns. “Acorns Investment Account.”

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