Best Robo-Advisors for Millennials and Those Without Much Cash
Getting started investing is never easy; not only do you need to choose the best investments for your lifestyle and financial goals, but many believe that you need to scrounge up a large minimum cash investment to invest.
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.
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 $100 or less and several with no required entrance fee.
Minimum investment: None
Betterment has absolutely no investment minimum required to start an account, of course in reality, you’ll need a few bucks to begin. The robo-advisor works on a tiered fee structure with two account options, Betterment Digital and Betterment Premium, each with distinct features and management fees.
The Betterment Digital original plan offers a lot of service for .25% and zero minimum investment amount. (.15% fees for all assets valued at more than $2 million.)
- Personalized financial advice – how much to invest, recommended asset allocation and more.
- Low-cost, globally diversified investment portfolios.
- Automatic rebalancing to keep your asset allocation in line with your preferences.
- Advanced tax-saving strategies including tax-loss harvesting and asset location.
- Synch with all external accounts.
- 7 day per week customer service.
- Texting with financial advisors.
For investors who want a combined digital and human financial management approach. Betterment Premium requires $100,000 minimum investment amount and chages a .40% management fee. (.30% fees for all assets valued at more than $2 million.)
This tier offers all of the digital benefits plus unlimited access to financial advisors.
Betterment a la carte Financial Planning Packages
Betterment offers financial advice packages. The programs are designed for specific investor’s goals. The Getting Started package is great for newbies who want a quick assessment of their account. The Financial Checkup package is designed for a thorough investment portfolio review. The College Planning package is for parents who want help navigating the college planning (and payment) process. And the two remaining packages, marriage planning and retirement planning are as their names suggest.
The one-time fees for these add-ons range from $199 to$299.
Although Betterment charges for all of its services, investors who make a referral get free months for themselves and their friends.
Betterment recently launched cash management options with a high yield savings account.
3. M1 Finance
Minimum investment: $100
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 platform doesn’t charge any management fees.
Here’s how M1 Finance works. You choose all of 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.
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.
M1 Finance also offers M1 Spend cash management and a high yield savings account like Betterment.
M1 Borrow enables users to borrow money at very low interest rates.
Phone and email support is available.
5. SoFi Invest
Minimum investment: $1
SoFi Invest is the investing vertical at the SoFi company. Best known for lending the company offers an excellent robo-advisor, do-it-yourself investment platform, and financial advisors for all.
The SoFi Invest category includes:
- Crypto Investing – Cryptocurrency trading platform.
- Stock Bits – Free stock market investing, similar to Robinhood and M1 Finance.
- Active Investing – This SoFi stock and fund investing platform allows you to buy shares of stock or even partial shares and get started investing on your own, for free.
- IPOs – Access to competitive initial public offering shares of new companies.
- Automated Investing – The SoFi robo-advisor invests your money in diversified exchange traded funds, or ETFs and manages it for you.
- SoFi ETFs – SoFi offers four ETFs: SoFi Select 500 (SFY), SoFi Next 500 (SFYX), SoFi 50 (SFYF) and SoFi Gig Economy (GIGE).
SoFi is a great choice for investors seeking to consolidate loans, begin investing, and speak with investment and career advisors.
Finally, SoFi does not charge investment management fees and offers commission-free stock and ETF trading.
Minimum investment: None
Billed as a robo-advisor for women, Ellevest is a top hybrid investment manager for anyone. With low-fee subscription pricing and access to financial and career advisors, there’s a lot to like about Ellevest. The platform offers a broadly diversified investment portfolio with low-fee exchange traded funds.
Ellevest features include:
- Unique investment projections that account for taxes, fees, and inflation.
- Goals based investment management.
- Ellevest offers tax-minimization strategies along with regular rebalancing.
- Email, text, and phone support is available.
- Impact investing available.
- Banking and cash management services.
- Four membership levels range in services with monthly fees from $1 to $9 per month.
With no minimum investment amount, career and financial advisors, and low fees, both men and women can benefit from the Ellevest platform.
5. Ally Invest Cash-Enhanced Managed Portfolios
Minimum investment: $100
Ally Invest robo-advisor just lowered their minimum investment amount to $100 and slashed their account management fee to zero (as long as you agree to holding 30% of your portfolio in a high yield cash account). If you prefer less cash in our portfolio, the management fee is still a reasonable .30% of assets under management.
Ally Invest Managed Portfolios is distinct in its investment fund offerings. The Ally robo-advisor offers excellent diversification with just nine funds. We like the addition of three market cap stock funds; large, medium and small cap ETFs. Additionally, their bond ETF offerings are outstanding with access to mortgage backed bonds and a global bond ETF in addition to the typical fixed funds.
One of the features we like is the asset allocation slider available when choosing your risk level and portfolio allocation. It allows you to see your portfolio allocations at various risk levels.
Ally Invest Managed Portfolios now offers tax-optimized portfolios. This is beneficial for taxable accounts and may reduce taxes and maximize returns.
Ally Invest mobile app gives you account access on the go and easy sign up.
Additionally, as part of the Ally Banking family, investors have access to Ally Bank, lending, high yield cash accounts, and Ally Invest brokerage account investing. Open an Ally Invest brokerage account and you’re elibible for up to $3,000 cash back (offer is presently available, but may close in the future).
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.
Personal Disclosure; I have an account with M1 Finance.
*Disclosure: Please note that this article may contain affiliate links which means that – at zero cost to you – I might earn a commission if you sign up or buy through the affiliate link. That said, I never recommend anything I don’t believe is valuable.
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