Best Micro-Investing Apps in Canada

Micro-investing apps are making it easier for everyone to participate in the financial markets and invest without needing a lot of investment knowledge or cash.

Traditional investing involves going to your bank to purchase a mutual fund and/or you participate in your employer’s pension or Group RRSP plan.

On the other hand, confident investors may choose a DIY approach and invest their money using an online brokerage service.

If all you have to spare is a small amount of change, these traditional models may not work for you.

Micro-investing apps are easy to use on the go. You can simply install them on your iPhone or Android device and start investing right away.

The two popular spare change investment apps in Canada are Mylo and Wealthsimple.

In the U.S., the likes of Acorns, Stash, and Robinhood lead the pack. You can read about investing apps for Americans here.

Peer-to-Peer platforms such as Lending Loop and Fundrise offer opportunities to invest in alternative assets  (e.g. loans and real estate) using small amounts.

Best micro-investing apps in canada

What Is Micro Investing?

Micro-investing involves making small and irregular contributions to an investment account in order to purchase fractional shares of ETFs.

A popular strategy is to automatically round-up your transactions and invest the spare change in the stock market.

For example, if you purchase a cup of coffee for $2.25, a micro-investing app rounds up your purchase to $3.00 and deposits the $0.75 into your investment account.

Micro-investing apps won’t make you rich and may not be adequate to plan your retirement savings, however, they can help you save hundreds of dollars easily every year.

This is money you can put towards debt repayment or use to finance a short-term goal e.g. a vacation or down payment on a car.

Best Micro Investing Spare Change Apps

There are two main micro-investing apps available in Canada.

1. Moka (formerly Mylo)

Moka (formerly Mylo) is a Canadian investment app that automatically rounds up your purchases and invests the difference in a portfolio made up of low-cost ETFs.

After you create an account, you need to connect your bank to the app so that whenever you spend using your debit or credit card, the spare change is invested.

Moka invests your money in a diversified portfolio that reflects your risk tolerance and investment needs. They offer TFSA, RRSP, and non-registered accounts.

Fees: Moka charges a $3 per month fee and you enjoy additional perks including cash back offers and fast withdrawals.

Security: They protect your money using 256-bit encryption similar to what banks use. However, your investment account is not insured by the Canadian Investor Protection Fund (CIPF).

For more details, read this Moka review.

Moka

Pros of Moka

  • You can start investing with $5
  • The app allows you to set multiple financial goals and save towards them
  • Socially responsible investing options are available
  • Automatic portfolio rebalancing
  • Easy access to your money with next-day withdrawals
  • You can set up recurring deposits in addition to roundups
  • $5 bonus when you refer a friend
  • The app is positively rated at 4.4/5 on the App Store from more than 10,000 reviewers

Cons of Moka: The $3 monthly fee can add up to become significant for a small portfolio and CIPF protection is not available.

Open an Account to invest with Moka

2. Wealthsimple

Wealthsimple is Canada’s popular online wealth management service. Founded in 2014, they have grown significantly over the years and now have more than $8.4 billion in assets under management.

The Wealthsimple Invest app offers a Roundup feature that rounds up your purchases to the nearest dollar when you pay for anything with your debit or credit card.

Wealthsimple offers access to a variety of account types including RRSP, TFSA, RESP, RRIF, LIRA, joint, and business non-registered investment accounts.

They automatically create a portfolio that matches your risk profile and investment needs…anywhere from a conservative to a growth portfolio.

Fees: There is no additional cost to use Wealthsimple Roundup. Generally, you pay a 0.4% – 0.5% management fee per year depending on your account size.

In addition to the roundup feature, Wealthsimple also offers the following to clients who are interested:

Overflow: You can determine how much money you want to keep in your bank account. Excess amounts are automatically invested.

Socially responsible investing: Invest in a portfolio that considers environmental and social impacts.

Halal investing: Adherents of the Islamic Faith can invest in a shariah-compliant portfolio that complies with Islamic Law.

When you open a new Wealthsimple account here, you receive a $75 cash bonus.

Pros of Wealthsimple Invest

  • Low management fee compared to mutual funds
  • Free financial advice
  • Automatic rebalancing, deposits, and dividend re-investing
  • Access to Wealthsimple Cash, a no-fee, high-interest hybrid account
  • Access to Wealthsimple Trade, a commission-free stock trading app
  • A versatile app with 4.5/5 rating from more than 4,000 reviews
  • Bank-level encryption and two-factor authentication to protect your account
  • Your account is protected by CIPF up to $1,000,000

What To Look For in a Spare Change App

Fees: Take a look at the monthly fees and find out what proportion of your investment goes to fees. For example, if all you end up investing is $20 a month and you pay $3 in fees, your management fee is a whopping 15%. Don’t forget the direct fees that go to ETF providers.

Returns: Look at the historical returns for the funds and how they compare to other players in the industry. Note that historical returns do not guarantee future returns. Also, consider the risk-return relationship.

Minimum Account Deposit: The whole idea behind micro-investing is the ability to invest small amounts. The two apps in this post allow you to start investing with as little as $5.

Related reading

Who Should Use Micro-investing Apps?

Seasoned investors can opt for a discount brokerage account and take the driver’s seat when it comes to their investment account. However, they need to understand the financial markets and be ready to do research (e.g. understand dividends) and rebalance their portfolios when needed.

Micro-investing apps work well for people who cannot afford to invest large sums of money. They offer a painless way to invest without depriving yourself or breaking the bank.

They can also be awesome for developing good financial habits and getting out of debt.

Micro-investing apps are the electronic 21st-century version of piggy banks. Beginner investors can use them to get a feel for the financial markets and get in the habit of paying themselves first.

Is Micro Investing Worth It?

It is unlikely you will attain millionaire status using micro-investing.

It is great as a starting point, however, if you are ever going to retire rich… or retire at all, you will need to up your investing game.

As your finances improve, invest even more money using a DIY approach, the services of a robo-advisor, or your bank.

Some of the secrets to successful investing are:

  • Invest regularly using the right assets and starting as early as possible in order to maximize compound interest.
  • Cut your investment fees
  • Invest with a long-term mentality
  • Maximize your tax-sheltered accounts
  • Rebalance your portfolio as needed
  • Keep things simple

Invest With Wealthsimple and get a $75 Cash Bonus.

Invest With Moka and get a $5 bonus.

Best Micro-Investing Apps in Canada
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Author

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Enoch Omololu

Enoch Omololu is a personal finance expert and a veterinarian. He has a master’s degree in Finance and Investment Management from the University of Aberdeen Business School (Scotland) and has completed several courses and certificates in finance, including the Canadian Securities Course. He also has an MSc. in Agricultural Economics from the University of Manitoba and a Doctor of Veterinary Medicine degree from the University of Ibadan. Enoch has a passion for helping others win with their personal finances and has been writing about money matters for over a decade. His writing has been featured or quoted in the Toronto Star, The Globe and Mail, MSN Money, Financial Post, Winnipeg Free Press, CPA Canada, Credit Canada, Wealthsimple, and many other personal finance publications.

His top investment tools include Wealthsimple and Questrade. He earns cash back on purchases using KOHO and monitors his credit score for free using Borrowell.

2 thoughts on “Best Micro-Investing Apps in Canada”

  1. Hello Enoch,

    Thanks for the great article.

    Just to add to your comments. Mylo stopped offering their basic $1 plan as it is planned to be grand fathered. All new users are registered with advantage plan by default.

    Only upon contacting the customer service team, users will be downgraded to basic plan.

    Reply
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