...the rise of the internet and mobile apps moved to make investing more accessible. Micro-investing is a term for pulling very small amounts of money into dedicated savings, which can easily be done with an online checking account. The money can either purchase fractions of stock, ETFs, mutual funds, or simply sit there earning interest. The key is that it's generally money that would be spent anyway.
Micro-investing works in two major ways. The first is "rounding" off a purchase. For example, a large coffee costs $4.21. If the card used to purchase it is linked to a micro-investing account, the charge will come out to $5.00. The extra $0.79 cents are rolled into the account where it can grow.
The second way to micro-invest is through automatic transfers. Many millennials are familiar with operating a checking and savings account at the same credit union or bank. Every month, the checking account automatically transfers some amount of money over to savings. Further, the amount is larger than typically seen with rounding but it only happens once a month. The idea is the same, though. The micro-investor slowly takes portions of money they won't miss and puts them where they can grow.
To many millennials, $25 is a good chunk of money. However, it's possible to move it from checking to savings every month without impacting the day-to-day budget too much. Rounding will generally come out to about $25 as well, all without being missed. At the end of 12 months, you've got $300 in your account even before factoring in interest. The key is that micro-investing is a way to save without manually having to consider it, allowing your money to grow over time.