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Micro-investing apps can be a great way to get your money in the stock market — even if you’re tight on cash or have little to no investing experience.

But not all investing apps are created equal.

Micro-investing works by consistently allocating small sums of money to an investment portfolio. It sounds simple, but each app has different fees, features and flexibility.

If you’re interested in starting small, check out our list of the best micro-investing apps of 2021 to compare your options side-by-side and find one that works for you.

Stash gives users the option to choose how involved they want to be with their portfolio.

While the app features many of the same perks as Acorns — including round-ups, recurring deposits and the option to open an IRA — it also lets you tweak your portfolio with more than 3,000 ETFs and individual stocks.

If you prefer a more hands-off approach, Stash offers that too with its $3 a month Stash Growth account that functions much like a robo-advisor. (Stash Beginner is just $1 a month but offers only hands-on investing access.)

Stash+ is the app’s $9 a month option. You’ll get access to two custodial accounts, a higher reward with Stash’s Stock-Back Card and access to $10,000 worth of life insurance.

All Stash accounts include a bank account with no overdraft fees or minimum balance requirements. (It doesn’t earn any interest either.) You can also create goals by separating your cash into spaces for specific purposes, like buying a home.

SoFi Invest eliminates annual account fees, monthly charges and trading fees for users while still offering a $0 account minimum.

While SoFi doesn’t charge an annual or monthly fee, you’ll still pay expense ratios on ETFs and mutual funds. This is standard for any brokerage account. However, SoFi (and most micro-investing apps) offers a broad range of ETFs and mutual funds with very low expense ratios.

You can choose either an actively managed account for a more hands-on investing experience, or an automated portfolio for passive investing.

You can also opt for a retirement savings account, including a traditional, Roth or SEP IRA. Each of these accounts can be either passively or actively managed.

What makes SoFi unique from other micro-investing apps is you can chat with a financial advisor over the phone or on video at no extra cost. These certified financial professionals act as fiduciaries, meaning they’ll put your financial interests first and won’t try to sell you anything.

Finally, you can invest money in cryptocurrency on SoFi Invest. The app offers Bitcoin, Ethereum, Litecoin and 17 other coins and tokens. Be aware that SoFi does charge a 1.25% trading fee on each crypto transaction.

Acorns works as a robo-advisor by recommending one of five pre-made portfolios based on your age, financial goals and risk tolerance. Portfolios range from conservative to aggressive. You can choose a different portfolio if you disagree with the algorithm, but you can’t pick your own individual investments.

Acorns’ portfolios are comprised of low-cost exchange traded funds (ETFs), which bundle different stocks and/or bonds into a single share. Acorns — like all micro-investing apps — buys fractional shares of ETFs so you don’t have to save up hundreds of dollars to start investing.

The app lets you invest your spare change through its Round-Up feature. After linking a debit card to the app, your purchases are rounded up to the nearest dollar and the difference is invested into your portfolio.

You can also enable recurring transfers from your savings or checking account on a daily, weekly or monthly basis. You can set up this feature in addition to spare change round-ups to grow your money even faster.

Another unique feature is Acorns Earn, which allows users to generate “found money” by shopping with one of the app’s 350 business partners. For example, you can get 50 cents invested each time you order an Uber or get 3.5% of your Uber Eats purchases invested.

If you’re interested in socially responsible investing, Acorns offers Sustainable Portfolios, which the company says are “designed to provide exposure to more sustainable companies, while aiming to perform on par with a traditional portfolio.”

Acorns offers two pricing options: A $3 monthly fee for its Personal account or $5 a month for its Family account.

The Personal account includes access to an individual retirement account (IRA) and a checking account. The Family account includes all the features of the $3 account, plus you can add multiple custodian accounts for your children.

Prior to Sept. 21, 2021, Acorns offered a basic $1 monthly membership called Acorns Lite, which gave you access to its automated portfolio and investment services.

Acorns recently phased out Acorns Lite, but you can still lock in a $1 monthly account, now called Acorns Assist, by following these steps on the company’s website.

Public is a relatively new app built on the idea of growing a social investing community.

All portfolios are public by default, so you can track other users’ stock portfolios (and they can track yours). However, the app will never show how much money users invested, lost or gained on any individual stock.

The app has a large community forum where users can offer trading advice and ask questions about stocks. This can be attractive to beginning investors because it provides additional information, feedback and insight from more experienced traders.

Building on its social media-like interface, Public compiles a custom feed for your profile, populated with stocks that match your interests, recent IPO announcements, upcoming earnings reports and more.

Like other apps, Public lets you buy fractional shares of stocks and ETFs (called “slices” on Public) so you can invest with as little as $5.

Public doesn’t offer an automated portfolio like most of its competitors. Instead, it organizes stocks into user-friendly categories called “themes.”  For example, there’s a Stay at Home theme that includes companies like Peloton, Slack and Amazon.

These themes provide some diversification, but not in the same way as broad-based ETF portfolios offered by apps like SoFi and Stash.

However, Public does a great job teaching you about investing as you go. You can tap on key terms to learn simple definitions and see “safety labels” on riskier investments, like companies that recently filed for bankruptcy.

Like SoFi, Public doesn’t charge any monthly or annual fees, and offers commission-free trading. You can also buy and sell a limited number of cryptocurrency coins within the app, though a 1% to 2% markup fee applies to all crypto purchase orders.

One major drawback with Public is you can’t set up recurring transfers or deposits to the app from your bank.

Twine allows users to save and invest on their own or with a partner.

Saving and investing together is a unique feature that sets Twine apart from other companies. You can create and track joint goals, like a vacation or a wedding.

You can invite your partner to download the app, or you can sign up together on one device. Twine also allows you to connect both of your bank accounts to the app.

You can choose to save and/or invest your money by setting up recurring deposits. If you go the investing route, you’ll get a recommended portfolio based on your financial goals and risk tolerance.

Portfolios are comprised of fractional shares of ETFs and mutual funds. The app doesn’t allow you to change or add investments to these automated portfolios.

It’s free to save in Twine, but the app charges an annual 0.6% management fee on investment portfolio balances, which is higher than some other robo-advisor platforms, like Betterment. You also need $100 to start investing on Twine, which is much higher than its competitors.

Twine has a couple other drawbacks. First, there’s no Android app. There’s also little — if any — information about the ETFs and other assets inside its automated portfolios, so users don’t know the expense ratios of their investments.

Features of the Best Micro-Investing Apps

What should you look for in an investing app? Here are a few key features offered by the best micro platforms.

Easy to Use

These apps eliminate the blocky and confusing clutter of some traditional brokerage accounts. Their simple interfaces make them super easy to use and understand, even if you have zero investing experience.

Low Minimum Investments

Micro-investing apps get you in the market with as little as $5. They do so by purchasing fractional shares of ETFs and other assets — which isn’t an option at some traditional brokerage firms. This gets you invested quickly, even if you can’t afford an entire share at first. It’s also free to create an account, and most apps don’t carry account minimums.

Diversified Investment Portfolios

Even experienced investors struggle with asset allocation and diversification. If you’re just starting out, using an app that creates a diversified portfolio for you is a plus. Automatically generated portfolios eliminate much of the stress and guesswork new investors face.

Educational Tools

The best investing apps provide a host of educational resources and investment advice for beginners, including articles, videos and podcasts. While most micro-investing apps don’t offer access to a professional financial advisor, these free educational tools are a helpful way to boost your personal finance knowledge.

Recurring Transfers

Nearly every app lets you set up recurring transfers from your bank account. For example, you can set your Stash app to automatically transfer $20 a week to your portfolio. Setting up recurring transfers makes investing second-nature and helps grow your money even faster.

Other Banking Services

Some micro-investing apps offer other services in addition to their brokerage accounts, including access to a savings and/or checking account, an IRA and custodian accounts. You might pay more for these services, but the cost may be worth it depending on your goals.

Pros and Cons of Using a Micro-Investing App

Micro-investing apps offer several advantages, but they’re not for everyone. It’s important to understand the pros and cons before putting your money into any investing app.

Pros

Here are some of the top benefits of using micro-investing apps.

Around-the-clock access. You can quickly and easily monitor your account on the company’s website or mobile app. Fractional shares get you invested quickly. Stocks and ETFs can cost hundreds or even thousands of dollars a share, but fractional shares get you invested with whatever amount you can afford. Account minimums are much lower than some traditional brokerage accounts. Most micro-investing apps feature $0 minimum balance requirements so you can begin investing with just a few dollars. They’re safe. Just like a traditional brokerage account, micro-investing platforms must register with the U.S. Securities and Exchange Commision. The savings and checking accounts offered by some apps are also FDIC insured, giving you the same protection as traditional banks.

Cons

While these apps offer attractive features, they also come with some pitfalls you should be aware of.

Fees are high for accounts with low balances. Apps like Acorns and Stash advertise low fees, but getting charged $36 a year for a brokerage account isn’t a great deal, especially for users with low account balances. You’ll miss out on retirement plan tax perks — or pay more. Most of these apps offer retirement accounts, but you’ll usually pay more if you opt for an IRA. Using a taxable brokerage account is fine for short-term goals, but retirement savings accounts like 401(k)s and IRAs are the best option for long-term investing because they offer attractive tax benefits from the IRS. Your investment choices may be limited. You may or may not be able to handpick the investments inside your portfolio. They probably won’t help you meet your retirement goals. Retirement is really expensive, and making tiny contributions to an app isn’t likely to amass the nest egg you need to comfortably retire later in life.

Frequently Asked Questions

What are Micro-Investing Apps?

Micro-investing apps are programs that let you contribute small sums of money — as little as a few dollars — to a brokerage account. By connecting a debit card, these apps can consistently invest your money into a portfolio of ETFs or fractional shares of individual stocks.

Can You Get Rich from Acorns?

You won’t get rich quick from investing in Acorns or any micro-investing app. The app’s fees are actually rather high if you have a low account balance. However, using an app like Acorns can be a good introduction to the stock market if you’re new to investing or you struggle with saving money.

What is the Best Investment App for Beginners?

For new investors, using an investment app with a robo-advisor might be a good idea. A robo-advisor is an online broker that uses algorithms and advanced software to automatically invest money and manage your portfolio.

After creating your account, you answer a brief questionnaire to assess your risk tolerance and financial goals. The app then selects a pre-made portfolio, so you don’t have to choose any investments yourself.

Each app we reviewed in this post offers a robo-advisor feature except Public.

Rachel Christian is a senior writer for The Penny Hoarder.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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