Turn your everyday change into an investment through a diversified portfolio round-up financial service.
Raiz Invest (previously Acorns Australia) is a financial services provider that helps people invest their money through a simplified process that is connected to everyday life. It offers a unique way of investing in shares and fixed income securities by allocating it's virtual spare change to this micro-investing tool.
Raiz says it's passionate about making it simple to invest from a young age, without having to save for years to acquire the necessary lump sum amounts.
Why should I invest with Raiz?
There are many companies that make it possible to start investing from a young age without needing big lump sums. But, it's not every day that you find a product that does this by saving and investing your spare change. Raiz will automatically save and invest your spare change into the mix of Exchange Traded Funds (ETF's) quoted on the Australian Securities Exchange (ASX) that you choose according to your own preference in portfolio's and risk tolerance. Not only will the app invest your spare change, but it can also invest lump sums and recurring weekly or monthly amounts that you select.
What are some of the benefits of using Raiz?
Three investing methods
You can use three different methods to invest money when using Raiz. The first is a key benefit of using this app and is called Round-Ups. This approach invests the change of your daily purchases. Secondly, is the Recurring approach, where you can set daily, weekly, or monthly amounts that will allocate money to your investments on a recurring basis. Thirdly, you can use lump sums to boost your investments with bigger, once-off, capital amounts.
Choose from six diversified portfolios constructed by industry experts with inspiration from Nobel-prize winning economist, Dr. Harry Markowitz. These portfolios consist of a mix of ETFs quoted on the ASX, and are constructed to reach targets that speak to different financial goals and circumstances.
It’s a micro-investing platform
This type of platform makes it easy for everyday people to turn their everyday purchases into an investment tool. You can use this financial service for a small fee compared to bigger and more extensive platforms that charge high fees for features you may not even use.
Raiz stores all your information on a remote server with bank-level security and data encryption. Your information won't be stored on your device and your funds are insured against fraudulent and criminal activity including cyber-crimes. Online accounts are protected by SSL encryption and multi-factor account authentication processes.
For accounts under AUD$5,000, there will be no account fee and only a maintenance fee of AUD$1.25 per month. If your balance is equal to or exceeds AUD$5,000, you will pay not pay a maintenance fee for the month but an account fee of 0.275% p.a for that month.
You can withdraw and deposit money as you wish
There are no limits to a number of withdrawals and deposits you can make, and no fees for making them.
You can take advantage of fractional investing
One of the most powerful benefits of Acorns Australia is that you can allocate fractional interests in ETF Units to individual investors. This allows you open a Raiz account and invest in your personally selected, diversified portfolio, with only AUD$5.00.
Invest for your kids
You can use the Raiz Kids feature within the app to allocate money towards an investment account for your kid/s. You can select what percentage of your top ups you'd like to be allocated to this account, or you can split your contributions evenly between several kids that you may have account for.Back to top
How does it work?
As mentioned above, Raiz a is a micro-investing tool. Its process is comprehensively explained on their website, but below is a simplified explanation after you have created an account with Raiz (explained further on in the article):
1. Allocate money
You will need to allocate money to your account using one of the three methods detailed above in the article. The unique benefit of Raiz is that you can allocate your change from daily purchases to your account and it will be invested automatically. Round-ups mean that your transactions are rounded up to the nearest dollar and the actual change you would have had is now allocated to your account and will be invested.
2. Choose your portfolio
There are six diversified portfolios available that consist of a mix of ETFs quoted on the ASX. These portfolios are based on your appetite towards risk, and include: Conservative, Moderately Conservative, Moderate, Moderately Aggressive, Aggressive and Emerald. The Emerald portfolio is Raiz's ethical investment option.
3. Invest your spare change
Raiz has a unique algorithm that works to keep the funds in your account within the specified range allocated to the portfolio you choose. It balances the ETF's despite market fluctuations but requires you to agree to the automated procedure of rebalancing your account by re-investing the ETF's automatically. Any activity within your account, like withdrawals or deposits, will start corresponding transactions that work to automatically rebalance your account so that it stays within the target range of your chosen portfolio.
4. Withdraw or deposit at will
You can set your methods for investing money and also at any time withdraw or deposit money to add to your account.Back to top
What fees will you pay to use the service?
The financial service offers a flat fee for usage. For accounts under AUD$5,000, there will be no account fee and only a maintenance fee of AUD$1.25. If your balance is equal to or exceeds AUD$5,000, you will pay not pay a maintenance fee for the month but an account fee of 0.275% p.a for that month.
As with any financial service, it is advised to study the fee structure (there is a comprehensive overview on the Raiz website, under Product Disclosure Statement) to know the fees you can expect, for example, a dishonour fee.
What support can you expect from Raiz?
The financial service offers dedicated support through email and will get back to you within 1-2 business days. You can also contact the team through Twitter.Back to top
What are the pros and cons of using Raiz for my next trade?
- Unique method of capturing funds through rounding up purchases you already make
- Invest in ETFs, which provide instant diversification
- Handy mobile app that you can access on-the-go
- Flat-fee structure
- Banking level security
- If you're investing large amounts, the fees may be higher than if you were to invest in ETFs directly via an alternative brokerage platform
- The usual investment risks still apply
This all sounds great, how do I get started?
- Visit the Raiz website or download the Raiz app and register for the service
- Fill out your basic personal details and create passwords
- Link your debit or credit card for the Round-up feature
- Connect or create the funding account that will invest your allocated money
- Tell the financial service more about yourself for a better user experience