What is Micro-Investing and How Do I Start?

By: Tara Blaine • Reviewed by: Heather Comella

Published: Mar 19, 2024 • Updated: Jun 09, 2026

In this article:

1. How does micro-investing work?
2. The rise of micro-investments
3. Benefits of micro-investing
4. Disadvantages of micro-investing
5. How to start investing small amounts
6. Start small with Stash

Micro-investing is the act of investing very small amounts of money over time instead of a big lump sum all at once. It’s akin to putting your spare change in a piggy bank. Except in this case, your piggy bank is the stock market and the spare change goes toward investing in fractional shares and exchange-traded funds ( ETFs). Micro-investing provides an accessible entry point for new investors who may feel intimidated by the market or people who may not have a large amount of money to invest in a popular stock, which could cost hundreds or thousands of dollars per share.

Making micro-investments can break down the barriers of traditional investing and allow you to ease into the market at your own pace and budget. Additionally, you can use an automated investing app to do most of the work, so you can become a consistent investor without being an expert in finance or shouldering the expense of a financial advisor.

How does micro-investing work?

Micro-investment accounts usually offer fractional shares of ETFs and individual stocks. This allows you to purchase a portion of a share, making these investment options possible even if you don’t have the money to buy an entire share. And with automated investing, your investment app will regularly deposit money from your bank account into your investment account on a schedule you set, making it easy to continually add to your portfolio.

On a practical level, here’s how micro-investing generally works: You open an investment account and link it to your bank account. Then the investment app allows you to deposit small amounts of money from your checking account into your investment account on a recurring weekly, bi-weekly, or monthly basis. Some platforms may offer features to help you increase the amount you invest bit by bit. Other platforms may automatically round up your purchases to the nearest dollar and deposit the excess money into your investment portfolio. Whichever feature works for you, the important piece is that you’re consistently adding to your investments.

You have plenty of options when it comes to building and managing your micro-investing portfolio. Just like traditional investing, you can take a hands-on approach with self-directed investing, in which you choose the investments you’re interested in. Or you can use an investment app’s robo-advisor to guide you in choosing your portfolio according to your interests and risk profile.

Making regular investment contributions like this, also known as dollar-cost averaging, is a widely recommended strategy because it can help investors stick to their investment plans, reduce the stress of investing, diversify the cost of shares, and even reduce the risks of stock market volatility. Even just contributing small amounts of money with micro-investing can add up over time.

Examples of micro-investing

The beauty of micro-investing is that it adapts to your budget and financial circumstances. Here are a few examples of how it can work in practice:

• Say you create a 50-30-20 budget and determine you can put $50 a month into savings and investments. Since saving and investing serve different purposes, you decide to put $30 a month into a savings account for emergencies and $20 a month into an investment account.
• Imagine you get a raise at work, and it increases your bi-weekly paycheck by $100. You want to put some of that extra money into building your financial future, so you set up your investment app to automatically deposit $50 from every paycheck into your investment account.
• If your investment app offers a bank account with a debit card that rounds up your purchases, you can deposit very small amounts of money daily when you make purchases. For example, say you spend $3.50 on your weekday morning coffee. Your bank account rounds that purchase up to $4.00 and deposits the extra $0.50 into your investment account. That gives you $2.50 a week, or about $10 per month, to put toward micro-investing just from your coffee purchases alone.

The rise of micro-investments

There’s been a huge spike in micro-investment strategies and the use of micro-investing apps, especially among Gen X, Millennial, and younger investors who may not have the money to invest large sums of money. Because micro-investing removes some of the real and perceived barriers to conventional investing, more and more non-traditional investors are gaining access to the market. The additional ease and convenience of mobile-based investment apps has also captured the attention of younger investors, who may find it less intimidating to venture into the stock market with features like robo-advisors and automated investing. In fact, the micro-investing platform market is expected to increase at a compound annual growth rate of 9.6% from 2023 to 2030, increasing value from $19 billion in 2023 to $36.1 billion by the end of 2030.

Benefits of micro-investing

In addition to helping make the idea of investing less intimidating, micro-investing offers some clear benefits:

• It’s accessible to people who don’t have much money to invest at the outset
• It introduces beginning investors to the stock market without a big commitment
• It helps build consistent investing habits
• Micro-investing apps often have lower fees
• Automated investing makes it easier to invest regularly

Disadvantages of micro-investing

As with any type of investing, there can be disadvantages and risks to micro-investing:

• Investing a small amount of money generally means lower returns and dividends
• Even low fees can eat away at your portfolio if you’re investing only $5 to $10 a month
• Micro-investing alone is unlikely to be effective for substantial long-term goals like retirement
• Options for investment accounts that offer fractional shares and investment apps may be more limited

How to start investing small amounts

When you’re ready to dip your toe into investing, it’s relatively easy to get started with micro-investing in a few simple steps:

• First, choose an investment app that offers fractional shares and a low initial minimum investment. Be sure you understand the fees associated with your investment account.
• Apply for an account. You’ll be required to fill out a secure questionnaire with information such as your age, current financial situation, future financial goals, investment horizon for retirement, and risk tolerance.
• Once your investment account is open, link your bank account.
• Decide how much you’d like to invest and on what schedule, and set up automated investing in your investment app.

Start small with Stash

Stash is designed to help you get started investing, and it’s for everyone—from young, inexperienced investors to those who only have a few bucks to spare.

In fact, you can start investing with any dollar amount on Stash*. Plus, Stash can help you learn the ropes about investing as you go.