You’ve probably encountered the term micro-investments if you’ve been learning how to play the markets to become a savvy investor and secure your future.

Below, we answer the question: “How does micro-investing in Australia work?” and tell you why it’s the perfect jumping-off point for beginner traders.

Let’s get to it!

What Is Micro-Investing?

As a relatively new investment strategy, micro-investing involves redirecting smaller sums of money and spare change from your everyday transactions into various investment options, especially Exchange-Traded Funds (ETFs) and fractional company shares.

Moreover, you don’t need a large sum to start investing, and you can even use an app to learn how to invest, monitor your savings, and accumulate your earnings over time.

How Does Micro-Investing in Australia Work?

Most micro-investment apps in Australia automate the entire investing process.

Related Reading:

  • Differences between ETFs and index funds
  • How to Buy Index Funds in Australia

In most cases, you are required to sign up for a micro-investment platform, download its convenient app, and connect your internet banking to it.

From there on, you can set up a round-up feature, which saves your spare change, arrange recurring investments, which top up your account each day, week, or month, establish a savings goal, and choose one of several diversified portfolios.

Finally, most micro-trading platforms allow you to monitor your balance, withdraw, and switch portfolios at any time, and it all comes at low or no extra costs.

Note: If you have just taken up investing, review our thorough beginners’ guide to get you started.

Pros & Cons of Micro-Investing in Australia

This type of beginner investing in Australia is a great option when first starting with stock trading as it comes with a slew of advantages:

  • Invest as little as you want—most micro-investing opportunities allow you to invest mere cents into ETFs and fractional shares;
  • Different platforms to invest—micro-trading platforms offer diversified portfolios with access to thousands of companies and their shares;
  • Automatic investment feature—most of these investing apps allow you to set automatic purchase orders on a weekly, fortnightly, or monthly basis;
  • Low subscription fees—since you are paying smaller deposits, micro-trading platforms do not charge high maintenance costs, if at all;
  • Redirect your spare change—these apps automatically round up your purchases to the closest dollar and use the change for investment purposes.

However, before jumping on board, novice investors should also consider several disadvantages:

  • Won’t bring you an early retirement—you won’t get the same returns as experienced investors trading on the big markets;
  • You can’t pick specific ETFs and micro shares —most micro-investing apps offer preselected portfolios that you cannot adjust.

Ultimately, the benefits far outweigh the drawbacks as traders using micro-investing platforms in Australia save, invest, and earn without any impact on their lifestyle with apps that offer low-risk and low-cost trading opportunities. Moreover, they learn about different investments and how to develop a diversified portfolio over time.

Note: Aussies can also utilise other investment venues, all with their own pros and cons.

The Best Micro-Investment Apps in Australia

Below, we go over some of the best micro-investing apps in Australia you can use today:

Spaceship Voyager

This fairly new micro-investing platform lets you invest in various financial instruments, including stocks, bonds, and ETFs, with as little as you like and a single monthly fee. You just set your long-term investment goals and track your progress from time to time.

When starting, you only have to pick one of three curated portfolios (Universe, Earth, or Origin) to start earning on your interest. If and when your balance surpasses $100, you will begin paying a $2.50 monthly fee without any additional costs.

Raiz

Self-praised as Australia’s No. 1 micro-investing app, Raiz expedites the investment process by automatically redirecting your daily spare change into your own diversified portfolio. However, you can also set recurring investments or pay a lump sum at any time.

Sharesies

If you’ve ever wanted to invest with as little as one cent, Sharesies is the platform for you! After signing up, you’ll gain access to over 8,000 companies and ETFs in Australia, New Zealand, as well as US stocks, which you can filter by industry, values, or country.

However,  while this app also implements an auto-invest feature to set up regular orders, it employs a different pricing plan. Namely, while there’s no subscription fee, you pay a 0.5% transaction fee (or 0.1% on amounts over $3,000) when buying and selling shares.

CommSec Pocket

When it comes to the best investing apps in Australia for ETF trading, CommSec’s app is near the top as it offers easy access to seven diverse ETFs for at least $50. While gradually building your portfolio, the platform being among the best stock trading apps in Australia will also teach you everything about share investing.

The platform’s costs only include a flat $2 fee for trades up to $1,000 without any account management costs now or ever. Also, you can set automatic fortnightly or monthly investments, but you will need a NetBank or CommSec ID to create an account.

Is Micro-Investing Worth It?

When taking up beginner investing in Australia, don’t skip over micro-investments, as they are a great introduction to the world of stock trading. Micro-investing is also easy to get into with the right mobile app, which will help you to build a nest egg and learn more about developing a diversified investment portfolio and a better income for you and your family.

1.How do micro-investments work?

This modern and low-risk investment strategy entails investing small amounts of money into various financial asset classes, such as stocks, bonds, mutual funds, and ETFs.

2.Can you make money on micro shares?

Yes, you can. The average market return is around 10%, but your profits will ultimately depend on the amount you’ve invested and the risk you’ve undertaken.

3.Are micro shares worth it?

It depends on your money-saving goals and expectations. While micro-share investing might not give you a comfortable retirement, you can still earn a well-deserved vacation over time. Moreover, you’ll garner the experience needed to invest in the big market.

4.What is the best micro-investing app in Australia?

You’ve learned how does micro-investing in Australia work, and now you want to know what is the best app for it? As of now, you can choose between several low-risk and low-fee apps, including Spaceship Voyager, Raiz, Sharesies, and CommSec Pocket.