The best Robo Advisors for small investors should not only focus on having the lowest minimum deposit, but you should look for a service that also offers low (or no) fees, and account services for smaller investment amounts.
It doesn’t matter if you have huge chunks to invest or if you simply want to start small: if you’re considering a Robo Advisor, you need to make sure that you’re getting the best value for your money. This is even more important when you’re starting out small.
When looking for Robo Advisors that are ideal for people with smaller amounts to invest, we focused on the following key factors:
- Low minimum deposit
- Management fees (low or free for small investments)
- Account services available to lower investment amounts
The Best Robo Advisors for Smaller Investments
If you’re an investor with a lower amount to invest, here are our top choices for the best robo advisors for small investors. All of them get a high score in terms of minimum deposits, low management fees, and comprehensive account services:
Free Automated Investing
When it comes to a free Robo Advisor, it’s hard to ignore M1 Finance. You can use the service with a $0 minimum deposit, but you’ll need to deposit at least $100 to start trading. But still, this is a good deal considering M1 Finance will not charge any trading or transaction fees. In other words, M1 Finance is a free Robo Advisor with zero account minimum and zero fees!
M1 Finance also offers a more convenient way to view your investment portfolios. The service utilizes a unique and customizable pie graph; among the first of its kind in the world of robo advisors. New investors can choose from a variety of pre-made or personalized pie graphs.
You can even choose your own investments for each pie with more than 2,000 ETFs and individual stocks to choose from. M1 Finance is a free hybrid robo advisor that combines automated investing with professional human support.
There’s no doubt about it. M1 Finance is one of the best robo advisors for smaller investments.
Investing on Autopilot
If not for the slightly higher management fees, Wealthsimple is easily one of the best robo advisors for small investors. In fact, you can open a Wealthsimple Basic plan that comes with free dividend reinvestment, automated deposits, and automatic rebalancing with $0 account minimum.
Wealthsimple is also known for their socially-responsible portfolios, tax-loss harvesting, and charging zero fees on transfers. If you have more than $100,000 to invest, Wealthsimple Black comes with lower management fees and dedicated financial planning courtesy of human financial advisors.
Wealthsimple also offers free management for accounts under $10,000 for one year if you use our link. You can start investing for free with no minimum balance required!
Robo-Investing for Millennials
Wealthfront has a low minimum deposit requirement of only $500, and the service will impress in terms of low fees and account services. If you use our link to sign up, you’ll get the first $5,000 managed for free with Wealthfront. The 0.25% fee for higher balances is still low compared to other Robo Advisors.
Regardless of the size of the investment, Wealthfront also offers portfolio rebalancing and daily tax loss harvesting. It’s a sterling choice for lower investment amounts since you’ll pay exactly zero management fees if your balance is below $5,000.
Wealthfront is fully-automated and easy to use, even for newbie investors. It offers individual and joint taxable accounts including rollover IRAs, SEP, and Roth. Each portfolio receives automated rebalancing, automatic reinvestment, and tax loss harvesting. But if you’re a newbie with $100,000 to invest, Wealthfront will activate the Risk Parity feature. This comes with stock-level and daily tax loss harvesting to increase your chances of a higher return in your investments.
Minimum Deposits and Additional Account Charges
If you’re thinking about starting small, the first thing you need to consider is the minimum deposit required by the Robo Advisor. If you don’t meet the required minimum deposit, then you’ll be unable to open an account. Hence, you won’t be able to use the service.
There are Robo Advisors that require a minimum deposit, and the amount can range from a few hundred to tens of thousands of dollars. In order to find the best service for you, you’ll definitely need to consider this.
But all hope is not lost. The good news is that there are Robo Advisors with no minimum deposit requirements, and is thus ideal for small investors. However, the service might add additional account charges if the required monthly contribution to the investment account is not met.
Account Services Available
When you’re trying to make the most out of a comparatively small investment amount, the management fees and charges are not the only things you should be concerned about. More often than not, Robo Advisors with the cheapest rates also tend to come with fewer features or account services.
If you’re an investor with a lower amount to invest, you need to choose a Robo Advisor that offers bread-and-butter services such as portfolio rebalancing and dividend reinvestment. Some more advanced features such as tax loss harvesting and the ability to trade individual securities are often only available for larger account balances. We took all of these into account in our recommendations on this page, however you should look into which services you really need before signing up.
The level of management fees applied is always an important issue to consider, and it becomes even more so when your total investment amount is at a lower level. That means you need to look carefully at how these management fees are charged before signing up.
Most Robo Advisors charge management fees as a percentage of the total investment amount, so it’s ideal to find a Robo Advisor with a low percentage rate. There are also those that charge a fixed monthly or annual fee (rather than being based as a percentage) and this could work out to be cheaper in the long run, but is usually best for larger investors.
Some services only begin charging a fee once you hit a certain level of account balance. This is ideal for smaller investment amounts, since you can begin investing in a robo advisor for no fee at all. We highlighted some of these services on this page.