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That’s the driving force behind BestRoboAdvisors.org. We’ll give you comprehensive reviews on the best Robo Advisors in the market, which will hopefully make it easier for you to choose the best service.
We’ve been looking for Robo Advisors which are ideal for people with less than $15,000 to invest, but that’s only the tip of the iceberg. In order to fully justify our choices, we focused on the following key factors:
- Minimum deposit and account charges
- Management fees
- Account services available to lower investment amounts
The Best Robo-Advisors for Lower Investment Amounts
If you’re an investor with less than $15,000 to invest, here are two very different but equally attractive Robo Advisors that rate well in terms of deposit minimums, management fees and account services.
Wealthfront has a very low minimum deposit requirement. It’s only $500, and the service will definitely impress in terms of management fees and account services. Wealthfront has no management fees for account balances of less than $10,000 (or $15,000 if you use our link!), and the 0.25% fee for higher balances is still the lowest compared to other Robo Advisors. Regardless of the size of the investment, Wealthfront also offers portfolio rebalancing and daily tax loss harvesting. A great choice for lower investment amounts since you’ll pay exactly zero management fees!
Motif Investing is a slightly different kind of Robo Advisor because investors are given the opportunity to invest in what the company calls ‘Motifs’. Motifs are collections of ETFs which you can build or categorize by yourself, or you can simply choose from a wide array of pre-selected Motifs. There is no minimum deposit to open an account, and if you want to trade then the minimum is only $250. Motif Investing charges a flat fee of $9.95 to any investment amount in a single Motif, which we think is beneficial to investors with less than $15,000 to invest.
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 will 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, you will definitely need to consider this fact.
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 investors both big and small. However, the service might add additional account charges if the required monthly contribution to the investment account is not met.
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 (and at what level) before deciding to sign up.
Many Robo Advisors charge management fees as a percentage of the total investment amount. In such a case, it would be ideal to find a Robo Advisor with a low percentage rate. Small investors should also look into services with sliding scale management fees, which only charge fees when you reach a certain investment amount. There are also those that charge a flat level fee (rather than being based as a percentage) and this could work out to be cheaper in the long run.
Account Services Available
When you’re trying to make the most out of a comparatively smaller investment amount, 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 less than $15,000 to invest, you need to choose a Robo Advisor that offers bread-and-butter services such as portfolio rebalancing and dividend reinvestment. You also need to determine if additional features (such as tax loss harvesting and the ability to trade individual securities) are available for your investment account. However, you need to keep in mind that such additional features are usually reserved for accounts with larger balances.