How to start investing with just $5 using micro-investing apps

Investing can feel like a big, intimidating commitment. You might think you need a pile of cash or a Wall Street background just to get started. But what if you could start growing your money with just a few dollars? When micro-investing, you invest small amounts, even spare change, so you can dip your toes into the market without jumping all in.

Micro-investing is exactly what it sounds like. Instead of needing a large amount of upfront capital, you can invest small amounts of money, which makes the stock market feel more accessible if you're just starting out or on a limited budget. The idea is that tiny, consistent contributions can add up, giving your money the potential to really grow over time.

You have options when wanting to begin micro-investing, whether that's through an app that puts your spare change into the market, a card that automatically gives you stock-back rewards on purchases or through a brokerage that offers fractional shares. With fractional share investing, you buy a portion of a single share of stock instead of having to buy the full share.

Charles Schwab's Stock Slices program offers investors the ability to purchase a fractional share of any stock listed in the S&P 500 — from a single slice (fractional share) up to 30 — for as little as $5 each. Fractional shares at Schwab are traded commission-free online, similar to regular stocks. Through this feature, investors can own a small part of a big-name company with only $5, $10, $20 or however much they feel comfortable investing.

Then there are micro-investing apps that roll over your spare change from everyday purchases into the market, so you're investing while going about your day. You can usually find fractional shares available on these platforms, too.

Acorns' Round-Ups feature links to your credit and/or debit cards and automatically rounds up your purchases to the nearest dollar, then invests that change into the market. You can even choose to boost the round-ups and multiply the spare change amount by 2X, 3X or 10X.

Stash offers Stock Round-Ups, which automatically invest spare change from qualifying purchases made with Stash's very own debit card, the Stock-Back® Debit Mastercard. Cardholders can also earn stock back (sort of like with cash-back credit cards) in the companies they purchase from.

Let's say you micro-invest $5 each day, whether that's through spare change and/or fractional shares. That's an investment of about $150 a month. Assuming an average annual return of 6%, compounded daily, that grows to a balance of approximately $1,860 over the course of a year. After five years, it's around $10,500; after 10 years, nearly $25,000 and after 20 years, almost $70,000.

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