13 Great Ways to Invest Small Amounts of Money

13 Great Ways to Invest Small Amounts of Money

Investing is wise. But in most cases, a lot of money is needed and this locks some people out. If you are one of those people, you’ll be happy to know that investment does not always require lot of money. It is possible to start small and move up from there. Here are some of your options if you do not have much money. 

High-Yield Savings Account

Money in your savings account earns interest. However, most conventional banks pay a very low interest. Online banks, on the other hand, give high-yield savings accounts. 

Commission-Free ETFs and Funds

Securities are hard to invest in because brokerage companies require you to pay a fee to sell and buy the stocks. Given the amount they charge, it is only cost-effective for people who trade a lot of shares at once. 

Companies such as Charles Schwab and Fidelity now have a list of securities that can be traded without a commission.

Low Cost ETFs and Mutual Funds

Apart from commission-free securities, there are those whose expense ratios are low. One low-cost option is the index fund. 

401K Plan

Employer-sponsored retirement plans like 403b and 401K allow you to direct a portion of your income to another account and use it to invest in mutual funds. 

Even if your salary is low, you can contribute as little as 1% at first. 

Stash

This app helps you invest very little money. The best thing is being able to purchase fractional shares of ETFs and stocks. You only need $5 or more to start. 

Acorns

This is another app where you contribute your spare change for investment. You can start today for only $1 per month and for free if you are a college student. Link it to your bank account so it can round up your purchases and invest the difference for you. 

Betterment

Betterment is one of the most popular robo advisors in the world of investing. You don’t need a minimum balance and the annual fee is as low as 0.25%.

Robinhood

You can sell or purchase securities using this app. It even allows you to trade cryptocurrencies and options at no fees. A minimum account is not required but you should have $2000 if you want to get a margin account. 

WiseBanyan

This is one of the best investing apps. It offers free financial advice and a platform for trading ETFs. The minimum balance required is only $1. There are other paid services but they are completely optional. 

SoFi Invest

SoFi also gives financial advice and lets you invest for free. If you are managing your own investments, you will only need $5 to get started.

M1 Finance

M1 is a great option for new investors with limited funds. They don’t charge fees and have no set investing minimum.

Peer-to-Peer Lending

This involves lending your money to people through online platforms such as Prosper and Lending Club. 

Dividend Reinvestment Plans

When you receive dividends, consider reinvesting them by purchasing more shares.

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