Micro-investing platforms turn small amounts of money into diversified investment portfolios automatically. Understanding how the mechanics work — round-ups, portfolio construction, fees, and withdrawals — helps you use these platforms effectively.
The Funding Mechanism
Micro-investing platforms fund your investment through three main methods:
1. Round-up investing
Your linked bank card tracks everyday purchases and rounds each transaction up to a set amount:
- Standard: Round up to nearest $1 (e.g., $3.60 → $4.00, investing $0.40)
- Multiplied: Round up then multiply by 2×, 5×, or 10× for faster investing
- When accumulated round-ups reach your threshold (e.g., $5 on Raiz), the platform invests them automatically
2. Scheduled recurring investments
Set a fixed amount to invest automatically:
- Daily, weekly, fortnightly, or monthly
- Deducted automatically from your linked bank account
- No decision-making required — removes emotional barriers
3. Lump sum deposits
Manual one-off deposits of any eligible amount (platform minimums apply — $5 on Raiz, $1 on Spaceship, $50 on CommSec Pocket).
Portfolio Construction — What Happens to Your Money
When you deposit money into a micro-investing platform, it is pooled with other investors’ funds and invested according to the portfolio you selected.
You are not buying individual shares — you are buying units in a managed portfolio. The platform holds the underlying ETFs on your behalf through a custodian structure.
Raiz portfolio structure (example — “Moderately Aggressive”)
- Australian shares ETF (iShares)
- Large global shares ETF (Vanguard)
- Emerging markets ETF (iShares)
- Australian bond ETF (iShares)
- Real estate ETF
- Gold ETF
Spaceship Universe portfolio structure
Spaceship selects companies it believes will shape the future — heavily weighted to global technology:
- Amazon, Apple, Microsoft, Alphabet, Meta, Nvidia, and similar global technology leaders
- Less diversified than a broad index portfolio — higher concentration risk, higher potential volatility
CommSec Pocket ETF structure
Unlike Raiz and Spaceship, CommSec Pocket lets you choose from 7 named ETFs directly:
- IOZ (Australian shares)
- IVV (US shares — S&P 500)
- ETHI (sustainable shares)
- NDQ (NASDAQ-100 — tech)
- IAA (Asia ex-Japan)
- IAF (Australian bonds)
- ISEC (short-term fixed income)
You own units in the actual ETF — more transparent than Raiz/Spaceship custodial arrangements.
The Fee Structure Explained
Understanding fees is critical — high fees can erode small balances quickly.
Raiz fees
- $3.50/month flat fee for balances under $20,000
- 0.275%/year for balances over $20,000
- Raiz Rewards: Some fees offset by cashback from partner retailers
$3.50/month on a $500 balance = 8.4%/year in fees — highly destructive to returns at small balances.
Spaceship fees
- $3/month flat fee for balances under $100,000
- 0.50%/year for the Universe and Earth portfolios above $100,000
- 0% annual fee for the Origin (index) portfolio (historically offered fee-free)
CommSec Pocket fees
- 0.2% per transaction (minimum $2 per trade)
- No monthly fee
- More cost-effective at larger deposit amounts; less so for very small deposits
Automated Rebalancing
Platforms automatically rebalance your portfolio back to target allocations. If Australian shares have grown to represent 30% of the portfolio (above target), the platform will trim this position and buy underweight assets. You don’t need to manage this yourself.
Withdrawals
Withdrawing money from a micro-investing platform:
- Request a withdrawal via the app
- Platform sells units from your portfolio
- Funds deposited to your linked bank account (typically 3–5 business days)
There are no lock-up periods — your money is accessible, though selling investments takes time to settle.
Tax Reporting
Platforms provide an annual tax statement that includes:
- Total distributions received (dividends/income from the underlying ETFs)
- Capital gains or losses on redemptions (if you withdrew)
- These amounts must be included in your tax return
See Tax on Micro-Investing Australia for detail.
Related Articles
- What Is Micro-Investing Australia
- Raiz Review Australia
- Spaceship Review Australia
- Tax on Micro-Investing Australia
- Micro-Investing hub
Frequently Asked Questions
How does round-up investing work in Australia? Round-up investing links to your bank card and automatically rounds up purchases to the nearest dollar (or multiple). The spare change accumulates until it hits a minimum threshold, then is invested into your chosen portfolio. On Raiz, the threshold is $5 — below that, round-ups accumulate in a holding account.
How long does it take for a micro-investing withdrawal to arrive? Most platforms process withdrawals in 2–5 business days. The platform sells your portfolio units, which takes 2 days to settle (T+2 settlement), then transfers cash to your nominated bank account. Urgent access to funds is not a feature of micro-investing — keep emergency cash in a separate savings account.
Are micro-investing platforms insured or guaranteed in Australia? Your funds are not covered by the Australian Government Deposit Guarantee (which covers up to $250,000 per person per authorised deposit-taking institution). Micro-investing platforms are ASIC-regulated managed investment schemes. Your investments may fall in value but you are protected against platform insolvency through custodial arrangements that separate client assets from company assets.
This article provides general financial information only. For advice tailored to your situation, speak with a licensed financial adviser through the ASIC financial advisers register or MoneySmart.