So what are micro-investment apps and what do they do? Your micro-investment app quietly sneaks pennies away. Those pennies secretly grow into pounds.
Every time you fill up your car, buy some yoghurt or pay your rent, a small amount of cash is added to your savings account. Your micro-investment app quietly sneaks pennies away.
That’s basically how micro-investment apps work. It's a simple system. You could think of it as an automated online piggy bank with unique features.
It’s especially useful for people who have a hard time-saving. Or for people who are strapped for cash. Just remember that no app will replace having a clear purpose.
| Provider | Score | Details |
|---|---|---|
| 1. Moneybox | ★★★★★ | Learn more |
| 2. Wealthify | ★★★★★ | Learn more |
| 3. Nutmeg | ★★★★★ | Learn more |
| 4. Moneyfarm | ★★★★★ | Learn more |
At a Glance, pros and cons
There are many reasons to use a micro-investment app. But remember that there is no substitute for having a big picture – a clear purpose.
People with a clear purpose tend to do all of the right things without even trying; for instance, men who start a family naturally find that they are more ambitious to work longer hours or to develop more skills so that they can make a better living.
That said, if you’re looking for a top-line overview of the advantages and disadvantages of micro-investment apps, this is the section for you.
Pros
✅ Automatic, simple. You can sit back and let the app do its work. For instance, for every purchase, you can tell the app to round it up to the nearest pound and put that money into an investment pool.
✅ Way to start. This is a simple and low-risk way to encourage yourself to have a consistent habit of investing.
✅ Makes the stock market easier. The stock market is like a cornucopia of options. Rather than being overwhelmed as a new investor, you get straightforward entry points such as ETFs which basket the most popular selections.
✅ Use simply to save. Not everyone is convinced of the investment power of micro-investment apps. However, it’s hard to argue that they are crafty and cunning at squirrelling away extra cash right from under your nose, for a rainy day.
Cons
❌️ Small. With the dwindling power of the British pound, inflation and the tiny nature of investment apps, this is probably a strategy for having emergency cash rather than retirement.
❌️ You need a clear purpose. Having all of the materials necessary to make a car doesn’t make a car. Similarly, your investment path will become clear once you have a reason, such as starting a new family. Then everything will come together.
❌️ ROI is questionable. Several reports suggest that these kinds of apps are best for saving than actually making significant returns on the markets.
Top micro-investing apps: Overview
Acorns, which is the most popular micro-investment app in Northern America, isn’t available to British people. So we’ve listed the top Acorns equivalent apps which essentially give you the same functionality.
1. Moneybox
Minimum for investment: £1
Android & iOS
2. Wealthify
Minimum for investment: £1
(0.22% annually, fixed transaction rate is 0.7%)
Android & iOS
3. Nutmeg
Minimum for investment: varies by plan
Android & iOS
4. Moneyfarm
Minimum for investment: varies by plan
Android & iOS
Best micro-investment apps – reviews
Without further ado. Here are the top four micro-investing apps. Each is available on the UK market. Once again, while they are not specialist micro-investing apps like Acorns, they are the closest Acorns alternative on the UK market.
1. Moneybox – Best micro-investment app and Acorns equivalent
Have you scoured the Internet, wondering why there isn’t an investment tool on the UK market that is specifically designed for micro-investing?
Let’s give you a bit of the backstory behind this. The first reason behind it is that PayPal invested more than £20M in the Acorns platform half a decade ago.
Indeed, Acorns managed to get twice as much for their total investment from other venture capitalists. And that is the reason why Acorns is perhaps the biggest micro-investment platform in the US.
PayPal recognised a strong potential in Acorns. They thought it was very useful to specifically have a way to “exploit” daily spending habits. Users were able to portion off extra pennies, or in this case cents.
Users were then also able to automatically get these invested into small investment pools. For example, a £4.80 purchase of two cheese sandwiches would automatically send the extra 20p into your Acorns app.
While the British micro-investment (MV) market still hasn’t reached the specific size that is available in North America, many savings and investment apps have added MV features to their pre-existing offerings.
So while you won’t find many apps that specifically do only MV, you will find many that have the same features. Other MV firms, for example, Robinhood, are making efforts to penetrate the European market.
Also, for our dear readers, the chances are you’re of the age 34 down to 18. This is the majority of millennials who use Acorns. Moneybox follows a similar system. You are charged a very small amount per month to use accounts, which can be as little as 1 pound. This only increases once your account reaches over a certain amount of investment size.
As with Acorns, Moneybox uses a mobile-friendly approach. And the general focus of MV is to track the most well-performing indices such as the S&P. The objective is to outperform them according to how much risk users allow on their accounts. Here are the following features you can expect when using envy apps like Moneybox:
☑️ Scores for the level of your portfolio diversity – this is a way to track the scope of your assets span across industries, various instruments, the amount of risk and more.
☑️ Invest automatically – the whole point of money investment apps is a convenient way to have some kind of investment going on. Even if it’s just a tenner each week.
☑️ Automatically do rounding up – this is one of the most popular features of envy apps. Every purchase is rounded up to the nearest pound. The rest is automatically siphoned into your investment account
☑️ Advisories – these extra features range from retirement options, family planning, and financial planners
Keep in mind that these apps can generally be used for saving in a small way or investing in a small way. So if you would prefer to just accrue extra savings, Moneybox is probably a suitable micro-investing app.
And the most convenient investment vehicle is ETFs. These are baskets of different securities that are automatically balanced to stand a fair chance of either holding value or increasing the value of your investment. Other options include:
- Crypto: we have seen a ton of changes happen with cryptocurrencies. So this offers an aggressive way to invest small amounts of money into the likes of bitcoin, dogecoin, ethereum and others.
- Gold: this option is offered for a fiver per month. And it also offers market reports and other analytics to help guide your decisions and track automated investments.
- Options: this offers an incremental way to begin holding positions on securities, regardless of the direction of the market.
- Stocks & bonds: invest in traditional stocks and once as well as other classes of assets.
Overall, CompareBanks’ research suggests that the top British contender to Acorns, as well as Stash and Robinhood, is the Moneybox app. Although it isn’t specifically an MV platform, it has all of the same features. And it is confirmed to do running up to the nearest pound, something that we cannot guarantee for the other entries in this guide.
Pros
✔️ Confirmed to do rounding up to the nearest pound
✔️ Automatically micro-invest
✔️ Gold MV for a fiver a month
✔️ Top acorns equivalent for the UK
Cons
❌ Not explicitly an MV app
2. Wealthify – Top MV app an alternative to acorns
With a little research into this and it doesn’t seem that Wealthify offers the automatic ability to round up purchases to the nearest pound.
In fact, this may be the same for every other entry in this guide. This is why we’ve taken the time to look for the best acorns equivalent apps on the UK market.
If Moneybox doesn’t quite do it for you, you still get a lot of cool features with Wealthify.
As we really outlined above, and as with even Moneybox, we probably don’t necessarily think of this as a true micro-investment tool. Nonetheless, you can pretty much use it for MV purposes. But keep in mind that this will need more of your time, most likely.
Similar to northern America’s Robinhood investment portal, it’s pretty powerful. So you need to be quite wary about how much cash you’re pumping into it over time.
The main feature is that you can choose how much you want to invest per asset or industry. Specify your objectives and set parameters. There aren’t any fees to withdraw money. But you will be charged roughly 0.22% annually. The fixed rate is 0.7% for transactions.
There are a few extra MV-relevant ways you can use this savings and investment app:
- Put aside extra savings for your family and offspring
- Access investments funds and stocks and shares ISAs
- Use without having investment experience
- Set your risk tolerance parameters to inform your portfolio
- Track the progress of your fonts for your app or browser
- Strong privacy policies and encryption
Overall, Wealthify does a lot of things. They have a few powerful micro-investing features. You can also use it as a normal savings account, or pump more money into it for retirement and pensions.
All in all, it offers you a place where you can track how your money is being invested, as well as combine this with pensions and investments. It’s all in a single hub that can be tweaked from your browser or app.
They have a straightforward approach to pricing. If you want management, this will be charged at 0.6% annually. And there is a good level of diversification for securities across global markets, that you can configure according to your specific risk tolerance levels.
Pros
✔️ Award-winning platform
✔️ Offers junior ISAs and more
✔️ Use for savings as well as investment
✔️ Useful MV-relevant features
Cons
❌ Does not seem to offer running up to the nearest pound
❌ Not specifically for MV use
3. Nutmeg – Top passive micro-investing app
The Nutmeg app markets itself as a “smarter way to invest”.
They seem to have a good track record of reviews supporting the ability to give users a decent ROI on investments. Have a look at the following screenshot as evidence – we clipped it from Trustpilot (TP). That said, its total score was 3.9/5, though we generally treat TP with a large pinch of salt.
You will be interested in this app particularly if you are an iOS user. Apple Store Nutmeg reviews are much higher than with TP. They scored 4.8 stars with lots of ratings. Based on this, they are a strong competitor to Moneybox. And they are number 186 in Finance. Moneybox is much higher up in the rankings.
To get started, simply download the app, and tell it how much you want to invest. Next, set your risk tolerance. After this, the Nutmeg app and perhaps its team will curate an investment portfolio for you. You’ll be able to navigate this in a clean interface. Nutmeg also advertises itself as the largest ‘digital wealth manager’ in Britain.
Keep in mind: nutmeg operates much more similarly to Moneyfarm. So we wouldn’t necessarily consider it a top Acorns equivalent.
MV apps such as Acorns, Stash as well as Moneybox (but much less with Moneybox) I designed to help you micro-invest with as much passivity as possible. You primarily take charge of configuring your plan.
And you can also adjust as needed, and more. But Nutmeg takes much more of a fully automated approach. The negative to this is that there is less ability to steer your portfolio to uniquely suit you.
There is some limited ability to adjust your MV strategy. For instance, you’re able to track your investments. However, the bulk of the management of your portfolio will be led by Nutmeg – its app and its team of operators and developers.
The company claims that it will give you guidance on assets. You will also have access to different plans such as Junior ISAs, pension plans and stocks and shares ISAs.
Nonetheless, once you are ready to go, there’s a good deal of adjustability with moving around your funds whenever you want. For instance, you can transfer your money to ISA accounts. You can also set up recurring standing orders from your bank.
Pros
✔️ Open an account with just £1
✔️ Top MV app an alternative to Acorns
✔️ Use for savings as well as investment
✔️ Useful MV-relevant features
Cons
❌ Not as well rated as a Moneybox
❌ Less flexibility than Acorns
4. Moneyfarm – Less well-known alternative to Acorns
Keep in mind that your average online banking app today – the likes of Monzo Bank and Starling Bank – usually offers the ability to do this (rounding up).
Once again, we’re really hard-pressed to find genuine MV apps for the British market.
So with chosen contenders that offer traditional investment offerings, as well as extra features for UK users that make them top micro-investment apps to some degree or the other. If you work with them sensibly, you can generally get the same functionality.
Moneybox reaches the number one spot because it seems to be the only option that generally offers running up to the nearest pound. Keep in mind that your average online banking app today usually offers the ability to do this.
So if you are willing to get a banking app, you can connect it to your investment up and have the same system just a little bit more complicated.
On Moneyfarm: we’ve seen reviews claiming to have gained 30% ROI over two years. It’s not the crazy returns you can see with things like crypto in its heyday. However, it does seem like a sensible way to grow savings over time.
That said, there have been reviews that had the opposite result. But the majority of these issues may have been to do with transactional and user interface problems.
So overall, Moneyfarm is an interesting way to build a money pot. Nobody will get ROI. And some will have losses. But it could be worth a gambit.
Pros
✔️ Use for savings as well as investment
✔️ Useful MV-relevant features
✔️ Only £1 to set up
✔️ Connect to your bank
Cons
❌ Mixed reviews
❌ No roundups
Top micro-investing apps – Buyer’s Guide
This section covers some of the essential aspects of how micro-investing works. This makes it a useful section for those who are curious about getting the most out of their app.
MV apps explained
“MV” apps have become a new trend in the investment world.
Today, everybody is so distracted by their phones and everything else that it’s very simple to find yourself overspending on a daily basis. It could be for a new subscription to Patreon, a new audiobook or a new product on Amazon.
Or because you have a habit of buying McDonald’s on the way home, or Nando’s four times a week… These extra expenses can eventually snowball into debt. Then you find yourself cancelling your Netflix subscription.
Micro-investing gives you a way to earn every time you spend a little extra for your latte on your morning commute. This is why PayPal invested in Acorns; they saw a good opportunity in hacking the consumer lifestyle that most of us habitually embody.
You can use the app to convert poor spending habits into new wells of investment… These pools can grow into new means – every time you spend on your debit card, or by standing order.
But you’re probably wondering how effective this trickle-down approach really makes in the long run. To explore, let’s get deeper into the advantages and disadvantages, ways that MV apps function, and why this investment form is trending particularly among millennials.
How MV apps work
Micro-investing apps are not the same as regular savings accounts. The main reason is that they automatically invest money for you into financial securities. For instance, shares and bonds, ETFs, options, crypto and more. In some cases, these MV apps will charge you a certain commission for each trade until your account funds reach a specific amount.
Three of the most popular micro-investment apps are Stash, Acorns and Robinhood. Each of these is particularly popular with millennials – indeed, up to 50% of millennial investors have tried out investing apps such as Robinhood. However, 33% roughly of Gen-X investors have done the same. And just 5% of baby-boomer investors.
We also noticed that there is a considerable amount of crossover between MV and micro-saving offerings. In short, you can use it to invest or to save. It’s down to you however you choose to centrally use your app. Your debit card is linked to the app. This lets you make transfers instantly.
Wherever you find into your envy account is directly used for investment – although this is probably not a retirement strategy, you can think of it as a savings approach with decent ROI terms of interest potentially from investment too.
MV apps for retirement? 🛩️
If MV apps are at the centre of your retirement plan, you’re probably in a bad spot.
Micro-investment apps are particularly well-adapted to users who want to start small. For example, creating the habit of doing investments. The best way to use MVs is to simplify and ‘hack’ saving. For example, rounding up an iTunes purchase by 30p and having automatically added to your savings well.
Also keep in mind that the more risk you take on, the greater the chance of volatility in your portfolio. And it will depend on what app you use. Some stock trading apps offer more diversification than others. For instance, Robinhood and Stash only permit users to invest in individual stocks or ETFs – this limits your ability to get significant appreciation.
Top micro-investing app: The Verdict
Overall, MV apps double up as saving tools. Some say that the issue with using MVs for investment is that you already starting off with small pools of capital using traditional trading and even crypto. However, small pools of capital grow with time.
Let’s say that you manage to save £100 in a month. That is a bit over £1000 in one year. Suppose you were able to gain 30% ROI in this over the next year. This would mean that you manage to save £1000 and make another £300 on it. And if you managed to save another grand that time, this would leave you with perhaps £2500 accrued.
The main thing is to have a purpose for your MV app and the discipline to leave it alone. It may come in handy when you have a golden opportunity in the future.
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