As children many of us had the classic little, pink ‘piggybank’ in a corner of the bedroom, housing all your spare change and pocket money. Often, you’d open the little lid and count your accumulated coins, doing the math on how far off you were buying whatever you were enthusiastically saving up for. As we grew into teenagers and adults and entered the working life, we progressed to bank accounts and housed our precious funds there. However, more and more people are picking up on the notion that perhaps having money sitting there in a vault could be considered ‘dead money’ as it’s not increasing by much, other than the small credit interest here or there.
Investing is one way people let their funds do the money-making for them, however many of us aren’t ready to delve into that world or don’t have the financial capacity to do so yet. One way to dip your toe in the investing pool is with micro-investing apps whereby you invest small amounts of money regularly either from round-up apps on your daily purchases, or your own elected amounts.
Different apps take different approaches. Some buy units of pre-established exchange-traded funds (ETFs) and managed funds, while others build their own products from scratch. Below we’ve listed some of the micro-investing apps on the market for you to choose from:
- Raiz
Raiz allows users to automatically round up the spare change from purchases and then invest it into a selected mix of exchange-traded funds (ETFs). For example, if you buy a coffee for $4.50, Raiz will round up the purchase and take the 50c, charging your bank account $5 total and investing that 50c.
There’s also the option to make lump sum deposits or set up recurring payments. You can withdraw money from Raiz at any time with no cost attached. They charge a monthly $3.50 maintenance fee for accounts that have a lower balance than $15,000 and accounts above that are charged a monthly account keeping fee that equals 0.275% p.a. of the balance
Raiz allows you to choose from six different portfolios including conservative, moderately conservative, moderate, moderately aggressive, aggressive and emerald, the ethical investing fund.
- CommSec Pocket
Launched by Commonwealth Bank, CommSec has seven different ETFs available to invest in including Aussie Top 200 (IOZ), Aussie Dividends (SYI), Emerging Markets (IEM), Global 100 (I00), Sustainability Leaders (ETHI), Health Wise (IXJ) and Tech Savvy (NDQ).
It differs from Raiz as you require a linked Commonwealth Bank transaction account to deposit and withdraw funds.
A minimum trade of $50 is essential and you’re charged $2 per trade for investments under $1,000 and 0.2% of the trade value for amounts above $1,000. CommSec Pocket is the more affordable alternative to CommSec that has a minimum investment of $500 and a $29.95 brokerage fee per trade.
There’s also a late settlement fee to consider where if sufficient funds aren’t available when the money is withdrawn, you’re charged a $10 late fee.
- Spaceship Voyager
Founded in 2016, Spaceship Voyager allows you to transfer funds into one of three investment portfolios including Spaceship Universe Portfolio, Spaceship Origin Portfolio and Spaceship Earth Portfolio. You have the option to set up regular top ups and there are no fees on the first $5,000 invested.
When your balance rolls over $5,000 you’re charged a percentage of the balance:
- 0.10% p.a. for Universe portfolio and Earth portfolio
- 0.05% p.a. for Origin portfolio
When your balance reaches $10,000 you’re charged:
- $5 for Universe portfolio and Earth portfolio
- $2.50 for Origin portfolio
Prior to undertaking any investment journey, you must be aware of the risks. It’s up to you to do your research and weigh up the pros and cons. Some pros include convenience, ease-of-use, minimal spend and low costs. Cons may be fluctuation (when the share markets fluctuate the value of your investment will be affected), the concentration risk (assets that are concentrated in a single asset class or market may have negative returns if the concentrated exposure underperforms) and the currency risk (when exchange rates fluctuate it can impact your investment value.)
