How to invest with little money

Investing with little money doesn’t mean you’re limited in where you can allocate your funds. This guide explains how to invest even if you only have a few pounds to start with.
By:  & 
Updated: Nov 21, 2023

If you only have a small amount of money to invest, you still have many options. There are lots of ways you can invest and with so many investment apps on the market, you can start with just a few pennies. This guide explains the different ways you can invest with little money. 

Nine ways to invest with little money

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When you invest with little money, most investment approaches are based around a passive investment style. This means signing up to an investment platform where you use robo-advisors, ETFs, or trusts to spread your money over as wide an area as possible. Here are nine ways you can invest with little money. 

1. Invest a small amount regularly

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You can begin investing even if you don’t have a lump sum. In fact, it may even be better to invest small amounts of money regularly rather than investing a lump sum in one go. That’s because you can take advantage of dollar cost averaging, a strategy many investors use to combat market fluctuations. 

With dollar cost averaging, you invest a set amount of money at regular intervals, usually monthly or quarterly. Thanks to investment apps like robo-advisors and micro-investing platforms, you can make regular small investments into the stock market, funds, or ETFs automatically and you’ll end up buying more stock when it’s cheap and less when it’s expensive. 

2. Use a high yield savings account

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Savings accounts are an excellent way to earn cash from money sitting in your bank account. While saving money isn’t exactly the same as investing it, high yield accounts provide the easiest way to slowly grow your pot. For many years, interest rates have been notoriously low; however, that has changed in recent times and it is now possible to obtain attractive yields. 

If you’re short on time, have little experience with investing, or want easy access to your money, high yield savings accounts are a top option. Some savings accounts even offer higher rates if you’re willing to lock your money in for a certain amount of time and you can open one with very little money. 

3. Invest your spare change

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A micro-investing app is one of the easiest ways to invest with little money. These apps connect to your bank account and round up your everyday spending to the nearest pound. The app will then automatically invest your spare change into funds, ETFs, or stocks depending on what you want it to do. While you may not earn lots of money using a micro-investing app, they do offer the simplest way to invest with little money.   

4. Take advantage of your company’s pension plan

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If you’re employed, you can use a pension plan offered by your employer to start investing with little money. Most employers contribute to your pension and many let you top up these contributions from each pay cheque. Paying into your pension via your pay cheque usually offers a tax break too. 

You don’t need a lot of money to invest in your company pension plan and your employer may let you choose the amount of your monthly wage you wish to contribute. One thing to remember with pensions is that your money will be tied up until retirement age. 

5. Invest in cheap index tracker ETFs and funds

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Use a tracker ETF or fund to mimic the stock market’s returns while keeping your costs and investment low. Tracker ETFs and funds invest in a wide range of stocks related to a specific index or sector. 

You can find ETFs and funds tracking almost anything, but the most popular are index followers. These simply invest in all the stocks belonging to a specific index, such as the S&P 500 or the FTSE 100.  Most of the biggest ETFs or funds have low fees and let you start investing with little money. 

6. Buy fractional shares

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Buying fractional shares means investing in a company without owning a full share. Many of the world’s biggest companies have share prices out of reach for investors with little money. With fractional shares, you can still invest in these companies without having to spend a large amount of money. 

For example, if you want to invest in a company but its stock price is £300, you can use a top investment app to purchase a fractional share at a much cheaper price. You could buy ½ or even 1/10th of a share for £150 or £30. Fractional shares let you invest in the biggest companies even if you don’t have enough money for a full share. 

7. Use dividend stocks to invest and earn with little money

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Dividend stocks share their profits with investors and are a top way to not only grow your investments but earn income from them. Many dividend-paying stocks have high share prices, but you can buy fractional shares, as explained above, to benefit from them. Dividend stocks are generally well established and less risky than other types of stocks. 

8. Invest in real estate

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Investing in real estate has traditionally required a large amount of capital to start, but these days it is possible even with little money. Real estate investment trusts (REITs) and real estate crowdfunding platforms have lowered the barrier to entry and let you reap the benefits of the housing market without having to invest a large sum. 

REITs work in a similar way to ETFs or funds and are simply a company that owns different types of property. You can buy shares in a REIT the same way you would stocks or shares. Real estate crowdfunding operates similarly. Together with other investors from a crowdfunding platform, you can invest in a single property – this is risker than a REIT, however. 

9. Use a high yield crypto platform

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Some crypto trading platforms pay you daily interest on your savings for simply keeping your money in an account. They are similar to high yield savings accounts from banks, but the interest you earn is significantly higher. 

Platforms such as Nexo pay between 4% – 12% interest on your fiat currency and these rates go much higher if you hold cryptos like Bitcoin or stablecoins like USDT. Crypto yield accounts can be opened with a small amount of money and some even offer sign-up bonuses to help boost your investment. 

How to invest for the short term

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If you’re planning to use your money within the next five years, you will need to consider whether certain investments are right for you. It’s probably best to use a high yield savings account instead of investing in the stock market or funds. The stock market could fall in the short term and if you need your money quickly, you could be left with a loss. A high interest savings account will pay out a fixed sum every month or year and is much safer. 

How to avoid mistakes when investing with little money

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If you’re a beginner and just starting your investing journey, there are a few tips you can follow to avoid mistakes and ultimately losing money. Here are four pointers you can follow to help avoid mistakes when investing little money. 

  • Don’t try to time the market. Don’t focus too much on picking the perfect time to invest. It is nearly impossible to buy at the lowest possible price. An easy solution is to use a dollar cost-averaging method, whereby you invest at regular intervals.
  • Be cautious with your investments. The investment world is filled with shysters looking for a quick buck and preying on new investors. Stay away from promises of ultra-high returns and be careful with who you invest with. 
  • Don’t be greedy. When investing with little money, it can be tempting to try and make fast returns. A slow and steady approach is much safer and will help keep you in the ‘game’ for longer. 
  • Spread your money around. It can be difficult to diversify your investments, especially if you’re starting with little money, but diversification helps spread your risk. An easy way to diversify with a small investment is by using ETFs or funds that cover a wide range of assets. 

What’s the best investment for beginners?

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An ETF or fund is generally the best investment for beginners with little money. To make things even easier, we recommend using one of the best robo advisors or a micro-investing app which uses AI technology to invest in assets most suited to your goals. 

Using an investment app means you can start investing immediately without the worry or pressure of picking your own investments. You can get started with a very small amount and learn investment strategies simultaneously. 


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Is it worth investing with little money?
Can I start investing with as little as £100?
Should I pay off my debts before investing?
What are the best investment strategies for beginners?

Sources & references
Risk disclaimer
Prash Raval
Financial Writer
Prash is a financial writer for Invezz covering FX, the stock market and investing. For over a decade he has traded spot FX full time while... read more.
James Knight
Editor of Education
James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.