For most of us, the piggy-bank or the humble ‘gullak’ are the earliest memories of savings at a young age. From carefully-retained ‘chillar’ on an errand-run to ‘money for sweets’ that relatives lovingly thrusted in our fists during Diwali, the piggy-bank was trusted with a pool of money to be broken after the passage of a significant amount of time. We were encouraged to put money way into it often — small denominations of cash that we wouldn’t miss — that would culminate into a big enough sum for future indulgences. After all, that’s what all investments are for anyway, right?

But can you really make money by stashing away spare change? The simple answer is yes. Let us tell you how!

What is Micro-investing?

Now the gullak has grown up and assumed a more adolescent name — it’s called micro-investing or round-up investing. And unlike its childhood counterpart, idle money set-aside in micro-investing platforms can earn you money. Let’s take you through a more formal definition for better understanding:

‘The process of saving, depositing, and investing modest amounts of money into an investment account is called “micro-investing.” Small amounts of cash may have a better opportunity to grow in an investing account than they would if they were stashed away under the mattress! As much as you’d like to keep it for an end of month beer-run or an unforeseen party, it is not the most productive use of your money!’

Another benefit is that traditional investments have restrictions like trading fees and the requirement of accounts with minimum balance, which can be avoided by micro-investing platforms.

Now I know what you’re thinking — all this is great, but how does micro-investing actually work? And will it work for me?

How Does Micro-Investing Work?

Micro-investing platforms work in a variety of ways. Some demand a modest initial payment, while others connect to your bank account and begin investing with little amounts of money rounded off from different activities, such as grocery shopping or purchasing a smoothie. It’s like investing your pocket-change every time you get into a cab!

Where Do Micro-investing Platforms Invest Your Money?

Back in the day when complicated words like ‘micro-investing’ had not yet been thought of, the gullak that held a far-off resemblance to a farm-pig was the family go-to-place for left-over chillar.

Today, mobile applications can help you pool in your spare change, bit by bit, and invest in a credible mutual fund with a proven track-record of beating benchmark indices.

If I Start Micro-Investing, How Will It Work?

Let’s pretend that Person X has signed up on Deciml, and authorized the app to auto-invest on their behalf every time they spend digitally.

Now, X buys a coffee for ₹ 127 every morning. Their bank account gets debited by 130 when their card is swiped in the machine. The additional 3 is automatically put into their
investing account. The amount is tiny, but the frequent payments add up to a significant amount over time. You get the idea, right!

The aim is to round up purchases to the closest ten or hundred rupee and invest the leftover change in a diverse portfolio of exchange-traded funds or mutual funds over time. Making regular monthly contributions through round-up investing apps like Deciml can help you stick to an achievable investment plan and avoid trying to time the market, which is a technique that even the most seasoned investor can’t help falling prey to.

How is Micro-Investing Beneficial for You?

Let’s compare, shall we?

Traditional investments like FDs, RDs, lumpsum investments in Mutual Funds or Shares –

• Impose specific requirements like a minimum-deposit amount, or fixed tenure,
• Require you to maintain sufficient balance in your bank account around investment dates,
• Expect a higher degree of commitment from someone who lives on pocket money, stipend or has recently secured their first
  job.

Micro-investing on the other hand

• Helps to inculcate saving habits by starting small,
• Enhances convenience through tech-enabled platforms,
• Improves accessibility, since it does not require a strong cash balance to start or keep up with,
• Is comparatively user-friendly,
• Enables automatic investment, thus eliminating constant decision-making from your end.

Last, but not the least, these round-up investment platforms make investing so simple that it goes hand in hand with our lifestyle, reminding us fondly of our childhood gullak- every time you spend some money, you should make it a point to save some. So go on and test the waters. Participate in the financial markets one coffee or beer at a time!

Learn more about Deciml, the micro-investing app that let’s you invest as little as ₹ 1 every time you spend.