Do you want to make a good investment deal? Here are five robo-advisors which will allow you to start investing with $500 or with no minimum investment.
Getting started investing is never easy; not only do you need to choose the best investments for your lifestyle and financial goals, but it is often believed that you need to scrounge up a large minimum cash investment in order to make any substantial investment.
In fact, some online brokerage accounts won’t let you invest in a mutual fund without $2,500. Yet, don’t despair, there are robo-advisors with low minimum investment options.
While traditional investment options and some robo-advisors alike do have rather lofty investment minimums—some as high as $5,000 or more—there is good news. Many robo-advisors are hitting the market with low or no minimum investment dollar amount.
The following 5 robo-advisors are on the shortlist for lowest investment minimums. Some of these robo-advisors do offer additional features for clients with larger investments, but all will allow you to start investing with $500 or less and several with no required entrance fee.
Betterment has absolutely no investment minimum required to start an account. The robo-advisor works on a tiered fee structure with three account options, each with distinct features and management fees.
The Betterment Digital original plan offers a lot of service for 0.25% and zero minimum investment amount.
Here are the three investment tiers: Betterment Digital (0.25% AUM for accounts up to $2,000,000; no management fees for accounts over this amount), Betterment Plus (only for accounts worth over $100,000; 0.40% AUM), and Betterment Premium (only for accounts worth over $250,000; 0.50% AUM). This fee structure gives investors a lot of flexibility.
Like WiseBanyan, Betterment is also goals-focused and has the option for investors to set up and track multiple goals at one time. The digital advisor offers diverse investing options and Betterment now gives access to human financial advisors and automatically rebalances these investments while it manages users’ portfolios.
Although Betterment charges for all of its services, investors who make a referral get free months for themselves and their friends.
Betterment has the most accessible customer service out of these 5 robo-advisors, too: telephone support is available 7 days a week. Clients with larger portfolios can also meet with certified financial planners.
You can start your account at Motif for free, and invest with only a $300 minimum. Motif is a robo-advising platform that offers the DIY investor some structure, while still allowing a lot of flexibility.
A Motif is a collection of investments that are connected under a specific category, either by theme (you might want to invest in alternative energy sources, for example) or by market segments. There are pre-made Motifs available for purchase, but investors can also create their own.
Motif’s fees include a $9.95 commission for Motifs made up of 30 stocks of ETFs. Users can also buy or sell individual stocks and ETFs for $4.95. There are also some automated investment options available for additional monthly fees. If the fees seem a bit high, compensate by making up your own Motifs and receiving royalties when they are purchased!
They’ve also just added a new Motif Impact product which is more in line with your traditional robo-advisor, although with an ability to invest along with your values. Although the minimum investment amount for this offering is $1,000.
Motif offers customer service help during weekdays via phone or text, and via email throughout the week.
3. Personal Capital
Personal Capital has no minimum investment requirement for users to access their free investment tools. Personal Capital analyzes your existing financial investments and makes recommendations. There are paid features as well, which give users access to licensed financial professionals, but they come with a hefty minimum balance of $25,000.
Still, for absolutely no minimum, getting financial recommendations and investment analysis is a pretty sweet deal. Users can also view performance reports and net worth calculations. I, for example, use the free Personal Capital Financial Management Dashboard.
Personal Capital has customer support staff available on weekdays via phone, or via email.
4. M1 Finance
This new fintech digital investment platform is unique in the robo-advisory universe. It’s ideal if you want a bit more control in choosing your investments, but also appreciate the benefits of automatic rebalancing and portfolio management. We like the flexibility, low fees and low minimum of this hybrid model robo-advisor.
The minimum investment amount is only $100 and the first $1,000 is managed for free. After that, you’ll pay only 0.25% for the management of an account valued up to $100,000. When your account value surpasses $100,000 the fee drops to 0.15%.
Here’s how M1 Finance works. You choose all the individual investments for your portfolio – and consider each investment like a piece of pie. So, you might choose a share of Apple stock, a target date mutual fund, a bond ETF and an international mutual fund. You choose the percentage invested in each slice of pie. Or, if you prefer a pre-made pie, M1 Finance offers a variety from which to choose, all categorized according to your risk level. For example, a pre-made conservative pre-made pie includes; Short Term Treasury Bonds, Developed Market Stocks, Small-cap U.S. Stocks, Large-cap U.S. Stocks, Municipal Bonds and Corporate bonds.
All new investments go directly into your desired investments, according to your pre-selected asset allocation. M1 Finance takes care of rebalancing, and all you do is add money to the account.
Phone and email support are available.
WiseBanyan has an investment minimum of $1—less than your morning coffee—and offers their services with no management fees, which also puts them on the list of top robo-advisors with the lowest fees. Nice! WiseBanyan boasts the ability to fund individual retirement accounts, such as Roth, traditional, SEP and rollover IRAs, and is goals-focused, so you will always know how close you are to reaching your financial milestones.
Automatic deposits and rebalancing, multiple goal tracking and automated financial advice come standard with WiseBanyan. The company also offers a $20 sign up bonuses when users refer their friends; this can help cover the .25% AUM fee for optional Wise Harvesting services, if that’s something you want to add.
Clients can contact customer support via email or telephone.
Robo-advisors with low investment minimums takeaway
The secret to good investing is to make use of your most important asset: time. If you have been delaying investing because the upfront investment seems unattainable, you have no more excuses: if you have $500 or less, you can begin investing in any of these 5 robo-advisors with low minimum investments
When choosing your automated digital investment advisor, look under the hood a bit, and consider other factors in addition to choosing the robo with the lowest minimum investment requirement. For more information, check out our robo-advisor comparison chart.
Whether you are a seasoned investor looking to try a new robo-advisor, someone skeptical about robo-advisors in general, or an investing newbie without much money to spend, these robo-advisors will give you the opportunity to get started on your financial goals without breaking the bank.
DISCLAIMER: This article expresses my own ideas and opinions. Any information I have shared are from sources that I believe to be reliable and accurate. I did not receive any financial compensation in writing this post, nor do I own any shares in any company I’ve mentioned. I encourage any reader to do their own diligent research first before making any investment decisions.
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