Micro-investing is the practice of investing very small amounts of money — often just spare change — into diversified investment portfolios. In Australia, micro-investing apps like Raiz and Spaceship have made it possible to start investing with as little as $1–$5, removing the barrier of needing a large lump sum before you can begin.
The Core Concept
Traditional investing typically requires:
- Accumulating a meaningful lump sum (often $2,000–$5,000+)
- Opening a brokerage account (more complex for beginners)
- Choosing individual ETFs or shares
Micro-investing platforms remove these barriers:
- Start with $1–$50
- A smartphone app handles everything
- Pre-built diversified portfolios — no choosing required
- Automated, set-and-forget investing
How Micro-Investing Is Different from Traditional Investing
| Feature | Micro-investing | Traditional brokerage |
|---|---|---|
| Minimum investment | $1–$50 | Typically $500–$2,000 |
| Portfolio choice | Pre-built (5–8 options) | Full universe of shares and ETFs |
| Automation | Round-ups, auto contributions | Manual orders |
| Fee structure | Flat monthly + % of assets | Per-transaction brokerage |
| Ownership | Units in managed portfolio | Direct ETF/share ownership |
| Complexity | Very low | Low–medium |
What Does Micro-Investing Actually Invest In?
Micro-investing platforms don’t invest in individual shares — they invest in portfolios of exchange-traded funds (ETFs) or managed funds that hold hundreds or thousands of underlying assets.
For example, a “moderate” Raiz portfolio might hold:
- Australian shares ETF
- International shares ETF
- Emerging markets ETF
- Australian bonds ETF
- Property ETF
- Gold ETF
- Cash
The platform manages the allocation and rebalancing — you simply choose a risk level (e.g., conservative, moderate, aggressive).
The Round-Up Feature Explained
Round-up investing is a core feature of platforms like Raiz:
- You link a bank card or account
- Every purchase is rounded up to the nearest dollar (or $2, $5, or $10 — your choice)
- The difference is collected and invested when it reaches a threshold
Example: You spend $3.40 on a coffee. Rounded up to $4.00 — $0.60 is queued for investment. Across 30 daily transactions per month, you might automatically invest $15–$40 without consciously making a decision.
Who Is Micro-Investing Suited To?
Micro-investing works well for:
- Beginners who want to start without complexity
- Young investors building the habit of regular investing
- People with irregular income who can’t commit to large fixed contributions
- Investors who struggle to save and benefit from automation
Micro-investing is less suitable for:
- Larger balances (flat monthly fees are proportionally very expensive on small amounts)
- Investors who want control over exactly what they hold
- Tax optimisation (limited flexibility compared to direct ETF investing)
Micro-Investing vs Saving
A key question for beginners: should you micro-invest or save in a high-interest savings account?
- High-interest savings accounts (Macquarie, ING, Ubank): ~4.5–5.2% p.a. (2025–26 rates), capital guaranteed
- Micro-investing: expected long-term return ~5–9% p.a. depending on portfolio, but returns can be negative in any given year
For money you might need within 1–2 years, a savings account is typically more appropriate. Micro-investing is best for money you can leave invested for 3–5+ years.
Related Articles
- How Micro-Investing Works Australia
- Micro-Investing for Beginners Australia
- Raiz Review Australia
- Spaceship Review Australia
- Micro-Investing hub
Frequently Asked Questions
Is micro-investing safe in Australia? Micro-investing platforms that operate in Australia are regulated by ASIC. Raiz and Spaceship are Australian Financial Services Licence (AFSL) holders. Your money is invested in diversified portfolios, not held as cash — so investment values can fall, but the platforms themselves are regulated entities. Like all investments, micro-investing returns are not guaranteed.
Can you lose money with micro-investing? Yes — your portfolio value can fall if markets decline. Micro-investing platforms invest in share and bond markets, which fluctuate. Over short periods (less than 3 years), you may see negative returns. Over longer periods (5–10+ years), diversified portfolios have historically generated positive returns — though past performance is not a reliable indicator of future performance.
Is micro-investing worth it in Australia? Micro-investing is worth it as a starting point for building the investment habit. It is most valuable for people who otherwise wouldn’t invest at all. However, as your balance grows, the flat monthly fees become proportionally smaller — and eventually it may make sense to transition to a low-cost brokerage account (SelfWealth, Pearler) for more control and lower relative fees.
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.