Many people have the misconception that one needs big money to start investing. However, to start investing in mutual funds (MFs), you need as low as Rs 500 for starting a monthly SIP (systematic investment plan).
Not only that, some micro investment schemes even allow you to round up the spare changes returned while purchasing things.
“Micro-investing is exactly what you’d think it is – the investment of micro amounts of money. Most people are likely to choose to invest small amounts every day, rather than investing a large amount in one go – simply because it pinches less. This is what makes micro-investing a more appealing and accessible way to invest,” said Satyajeet Kunjeer, Founder, Deciml.
One of the ways of micro investing is round-up investing that allows you to invest the spare change from your online transactions.
For example, you take a cab to your friend’s place and pay Rs 195 for it online. Using a round-up investment app – like Deciml – would automatically round up this spent amount to the nearest 10 (or a multiple of 10, whichever you choose), which in this case is Rs 200, and invests the spare change of Rs 5 on your behalf instantly.
With most of India’s youth transacting digitally, they can end up making significant investments through round-up investing in one day alone through big and small expenses.
“An average user on Deciml is currently investing around Rs 1,200 or more per month simply through roundups. Over and above that, Deciml also lets you set up daily automatic investments of as little as Rs 10, so that your money is consistently growing,” said Kunjeer.
But where would the money be invested?
“Investment options are fixed income and mutual funds, we’ve categorised this into three buckets – a low risk which is a debt fund, mid risk which is a hybrid fund, and high risk which are small and mid-cap funds,” said Kunjeer.
The spare change amounts (as little as Re 1) are primarily invested in a liquid fund and get switched to the users’ desired MF scheme once the money hits the fund requirement of Rs 100 – Rs 500. This way the app users’ spare change continues to earn some amount of returns in a secured manner.
“The users can choose to simply continue investing in the liquid fund as well. The fixed return fund enables our users to directly invest as little as Re 1,” said Kunjeer.
Kunjeer explains how and where the money collected through Deciml are actually invested:
Deciml offers 3 ways in which people can invest their spare change –
This is a method of investing where your online transactions get rounded up and the digital spare change is invested. So, for example, you renewed your Netflix subscription for Rs 199. This transaction will be automatically rounded up to the next 10 (or a multiple of 10, whatever you choose) which in this case is Rs 200, and instantly invest the spare change of Re 1. With Deciml, the investments are instant, and we truly invest as little as Re 1.
We realised that when you’re a young professional who’s just started earning, an SIP can be intimidating. Imagine you get Rs 20,000 in your account on the 5th, and immediately Rs 3,000 gets deducted for your SIP on the 6th – it really pinches. But if you just change this to investing Rs 100 a day (which is very easily spent in a day, in any case) – you effectively still invest Rs 3,000 at the end of the month. But it doesn’t pinch so much. You can set up Daily Deposits on Deciml of as little as Rs 10, and as large an amount as you like.
The liberty of investing a little more whenever you want, to help inculcate the idea that rather than leaving around any bonus money or focusing on spending it, it’s always a better idea to invest it (no matter how small it may be).