I started investing in 2018 with $200 in a brokerage account. Back then, fractional shares weren’t widely available, so I bought cheap stocks or waited until I’d saved enough for something I actually wanted. That barrier is gone now—you can invest $1, $5, or $20 instead of thousands.
But starting small doesn’t mean starting free. Fees matter more on small balances, and the difference between a $0 commission platform and a $0.99/month subscription compounds over years in ways most comparisons skip over.
Quick verdict:
- Fidelity is the best choice for beginners who want a full-service broker with zero fees and room to scale
- Robinhood is the best choice for mobile-first investors who want simplicity and fractional shares of stocks and crypto
- Acorns is the best choice for hands-off beginners willing to pay for automation—but only if your balance exceeds $500
At a glance
| Feature | Fidelity | Robinhood | Acorns |
|---|---|---|---|
| Account fees | $0 | $0 (free tier); $4.99–$9.99/mo (premium) | $0.99/mo (Core), $4.99/mo (Gold) |
| Account minimum | $0 | $0 | $0 |
| Fractional shares | Yes (stocks & ETFs) | Yes (stocks & crypto) | Yes (ETFs only, auto-invested) |
| Asset selection | Stocks, ETFs, mutual funds, bonds, options | Stocks, ETFs, crypto, options | Pre-selected ETF portfolios |
| Dividend reinvestment | Yes (automatic) | Yes (stocks only) | Yes (automatic) |
| Tax-loss harvesting | No (manual only) | No | Yes (Core plan) |
| SIPC protection | Yes (up to $500k) | Yes for stocks; No for crypto | Yes (up to $500k) |
| Best for | Beginners who want flexibility and zero fees | Mobile-first users comfortable picking stocks | Passive investors with $500+ balances |
| Biggest weakness | Interface can overwhelm first-timers | Limited research tools | Fees eat 24% of a $50 balance annually |
Fidelity — best for beginners who want a full-service broker
Fidelity eliminated account minimums and added fractional share trading to compete with newer apps. You get stocks, ETFs, mutual funds, bonds, and options—all with $0 commission on stocks and ETFs. The platform has been around since 1946, built for people who might start with $50 and eventually have tens of thousands in the same account.
The fractional share feature works like this: buy $10 worth of a stock that costs $150 per share, and you’ll own 0.067 shares. Dividends are paid proportionally, and dividend reinvestment (DRIP) automatically buys more fractional shares with those dividends. The SEC confirms fractional shares carry the same rights and risks as full shares—if the stock drops 20%, your 0.067 shares drop 20%.
The interface is more complex than mobile-first apps because it supports a wider range of account types and investment products. If you’re only buying a few ETFs on the mobile app, that complexity doesn’t matter. If you’re easily overwhelmed by options, it can feel like overkill.
Strengths:
- No account fees, no commission, no subscription—you only pay what you invest
- Full access to mutual funds and bonds that mobile-first apps don’t offer
- Strong research tools and educational resources built in
- SIPC protection up to $500,000 for securities and cash
Weaknesses:
- Interface designed for experienced investors; beginners may find it cluttered
- No automatic tax-loss harvesting (you can do it manually)
Best for: Beginners who want a single platform they won’t outgrow, or anyone who wants access to mutual funds and bonds alongside stocks and ETFs.
how to set up a brokerage account
Robinhood — best for mobile-first stock pickers
Robinhood built its reputation on commission-free trading and a mobile-first design. The app is deliberately minimal—no dense research tools or mutual fund screeners. You get fractional shares for stocks and ETFs, a simple buy interface, and the option to add crypto to the same account.
What I appreciate about Robinhood: the app doesn’t upsell you on individual stocks. It’s neutral in that way—you search, you buy, you hold. The downside is thin research tools. If you’re deciding what to buy, Robinhood won’t help much beyond showing trending stocks, which isn’t a strategy I’d recommend.
One critical detail: SIPC protection covers stocks and cash up to $500,000, but not cryptocurrency holdings. Your crypto is custodied by Robinhood Crypto, LLC, which is separate from the brokerage. If Robinhood Crypto fails, you’re an unsecured creditor. For stocks and ETFs, you’re protected.
Strengths:
- Clean, beginner-friendly mobile interface
- Fractional shares for stocks and crypto in one account
- No fees unless you choose a premium subscription
Weaknesses:
- Crypto holdings lack SIPC protection (stocks and cash are covered)
- Limited research and educational resources compared to Fidelity
- No tax-loss harvesting tools
Best for: Beginners who are comfortable on their phone, want to pick individual stocks or ETFs, and don’t need extensive research support.
should beginners invest in individual stocks or etfs
Acorns — best for hands-off automated investing (if your balance exceeds $500)
Acorns works differently. You answer a few questions about your goals and risk tolerance, and Acorns builds an ETF portfolio for you. The signature feature is “roundups”—the app links to your debit or credit card and rounds each purchase to the nearest dollar, then invests the spare change. Buy $3.40 of coffee, and $0.60 goes into your investment account.
This is fractional share investing in the background. You’re not buying fractional shares of individual stocks; you’re buying fractional shares of the ETFs in your auto-generated portfolio. Dividends reinvest automatically, and the whole system runs without your input once set up.
Acorns includes tax-loss harvesting on the Core plan—it automatically sells losing positions to offset taxable gains and replaces them with similar ETFs to maintain your allocation. This can reduce your tax bill, but it also creates complexity at tax time if you’re not prepared for it.
The trade-off is the monthly fee. Acorns charges $0.99/month (Core) or $4.99/month (Gold). On a $50 balance, $0.99/month equals nearly 24% of your starting balance annually—devastating. As your balance grows, that percentage drops. On a $500 balance, it’s 2.4% annually. On a $1,000 balance, it’s 1.2%. But if you’re starting with $20 and adding $10/month, the fee is consuming most of your early returns.
Strengths:
- Fully automated—no need to pick stocks or time purchases
- Roundup feature makes investing feel passive
- Tax-loss harvesting included on Core plan
- Good for people who won’t invest unless it’s automatic
Weaknesses:
- Monthly fee is a high percentage on small balances
- No ability to pick individual stocks or ETFs—you’re locked into Acorns’ portfolio models
- Roundups create frequent taxable events; year-end 1099 can be complex
Best for: Beginners who want a set-it-and-forget-it approach and have at least $500 to invest, or plan to reach that within a few months.
how dividend reinvestment works
What fees actually cost you over time
Most comparisons mention that Acorns charges $0.99/month and Fidelity charges $0, then move on. That glosses over what the fee actually costs you over time.
Here’s what $25/month looks like across one year and five years on each platform, assuming 7% annual returns (a conservative estimate for a diversified stock ETF):
Investing $25/month for 1 year:
- Fidelity (zero fees): $300 contributed, ~$11 in gains = $311 total
- Acorns ($0.99/mo fee): $300 contributed, ~$11 in gains, $12 in fees = $299 total (a loss)
Investing $25/month for 5 years:
- Fidelity (zero fees): $1,500 contributed, ~$77 in gains = $1,577 total
- Acorns ($0.99/mo fee): $1,500 contributed, ~$77 in gains, $60 in fees = $1,517 total (78% of your gains consumed by fees)
Now $50/month:
Investing $50/month for 1 year:
- Fidelity (zero fees): $600 contributed, ~$22 in gains = $622 total
- Acorns ($0.99/mo fee): $600 contributed, ~$22 in gains, $12 in fees = $610 total (55% of your gains consumed by fees)
Investing $50/month for 5 years:
- Fidelity (zero fees): $3,000 contributed, ~$154 in gains = $3,154 total
- Acorns ($0.99/mo fee): $3,000 contributed, ~$154 in gains, $60 in fees = $3,094 total (39% of your gains consumed by fees)
These numbers assume you’re only using the Core plan ($0.99/mo). The Gold plan at $4.99/mo would consume nearly all gains at $25/month and turn profitable returns into losses for the first few years.
This doesn’t mean Acorns is a bad choice. It means the fee structure only makes sense if you value the automation enough to pay for it, and you’re investing amounts where the fee becomes a smaller percentage of your balance. At $100/month or $200/month, the fee becomes negligible. At $25/month, it’s decision-critical.
Fidelity and Robinhood charge $0, so 100% of your contributions and 100% of your market gains stay in your account. That’s the baseline.
What realistic growth looks like for small amounts
Micro investing apps make it easy to start, but they don’t accelerate returns. The market returns what the market returns—historically around 8–10% annually for diversified stock ETFs, though past performance doesn’t guarantee future results and individual years vary wildly.
Here’s what $50/month actually becomes over time, assuming 7% annual returns:
After 1 year:
- Contributed: $600
- Estimated gains: ~$22
- Total: ~$622
After 5 years:
- Contributed: $3,000
- Estimated gains: ~$154
- Total: ~$3,154
After 10 years:
- Contributed: $6,000
- Estimated gains: ~$2,590
- Total: ~$8,590
These are pre-tax estimates. The IRS requires you to report dividend income and capital gains, even on small amounts, and taxes will reduce your net returns depending on your bracket and whether you hold investments for more than a year.
The point: $50/month for five years doesn’t turn into $20,000. It turns into $3,154, and most of that is money you put in yourself. That’s still meaningful—$154 in gains is $154 you didn’t have—but it’s not life-changing wealth. The value of starting small is building the habit and learning how markets work with real money on the line, not getting rich quick.
Tax efficiency and reporting complexity
Tax-loss harvesting can improve your after-tax returns by 0.5–1% annually in volatile markets. Acorns includes it automatically on the Core plan: when an ETF in your portfolio drops, Acorns sells it to realize the loss (which offsets taxable gains), then buys a similar ETF to maintain your allocation. This is legal and widely used by wealthier investors through services like Wealthfront and Betterment.
The downside is complexity. Each sale and purchase creates a taxable event, and your year-end 1099 will show dozens or hundreds of transactions if roundups are active. If you’re filing taxes yourself, this can be overwhelming. Most tax software imports 1099s automatically, but it’s still more to track than a simple buy-and-hold account.
Fidelity and Robinhood don’t offer automatic tax-loss harvesting. You can do it manually if you understand wash-sale rules (don’t buy the same security within 30 days of selling it at a loss), but most beginners won’t. This means you’re paying taxes on all gains and dividends without offsetting losses.
For small accounts, the tax impact is minimal—$154 in gains at a 15% capital gains rate is $23 in taxes. But over time, tax-loss harvesting can save you hundreds or thousands, depending on your balance and how volatile your holdings are.
FINRA recommends understanding the tax implications of any investment before you buy, especially for accounts with frequent trading activity like roundup investing.
How we compared these
I used each platform’s official pricing pages and support documentation to verify account minimums, fee structures, and fractional share availability as of July 2026. I did not open new accounts or test onboarding flows for this comparison—these assessments are based on published features, user-reported experiences, and prior personal use of Fidelity and Robinhood.
I focused on three platforms instead of listing every fractional share app because the choice for beginners comes down to three models: traditional broker (Fidelity), mobile-first stock picker (Robinhood), or automated roundup investor (Acorns). Other platforms—Schwab, Vanguard, Public.com—fit into these categories with slight variations, but the core trade-offs remain the same.
I did not test performance or returns because the apps don’t control returns—the market does. A $50 investment in the same ETF will perform identically across platforms, minus fee differences.
Fee impact calculations assume 7% annual returns and monthly contributions with no withdrawals. Your actual returns will vary based on market conditions, asset allocation, and timing.
FAQ
Can you invest $1 in stocks?
Yes. Fidelity, Robinhood, and Acorns all allow fractional share purchases, so you can invest any dollar amount above their minimum threshold (often $1–$5 depending on the stock price and platform). You’ll own a fraction of one share, and dividends and capital gains are calculated proportionally.
Do micro investing apps have fees for fractional shares?
Fidelity and Robinhood charge $0 commission on fractional share trades—the same as full shares. Acorns doesn’t charge per-trade fees, but it charges a monthly subscription ($0.99 or $4.99) that applies whether you trade or not. The fractional shares themselves don’t add cost, but platform fees vary.
Are fractional shares risky?
Fractional shares carry the same market risk as full shares. If you own 0.1 shares of a stock and that stock drops 20%, your position drops 20%. The fractional structure doesn’t reduce volatility or protect against losses. All investing involves risk, including the potential loss of principal.
Can you make money micro investing?
You can see returns consistent with the broader market—historically around 8–10% annually for diversified stock ETFs, though past performance doesn’t guarantee future results. A $100 investment that grows at 7% annually becomes $107 after one year (before taxes and fees). Micro investing apps don’t amplify returns; they just lower the entry barrier. This is not financial advice—consult a financial professional about your specific situation.
Do I have to pay taxes on dividends from fractional shares?
Yes. Dividend income is taxable in the year you receive it, even if it’s $0.50. Most platforms will send you a 1099-DIV if your dividend income exceeds $10 in a year, but you’re required to report all dividend income regardless of amount. If you’re reinvesting dividends automatically, each reinvestment creates a taxable event and adjusts your cost basis. Tax laws vary by jurisdiction, so keep records and consult a tax professional if you’re unsure how to report it.
tax implications of investing for beginners
Does Acorns’ roundup feature create more taxable events?
Yes. Each roundup triggers a purchase of fractional ETF shares, and each purchase is a separate tax lot. When Acorns sells shares (for withdrawals or tax-loss harvesting), it sells specific lots, and each sale is a taxable event. This can result in dozens or hundreds of transactions on your year-end 1099. Most tax software handles this automatically, but it’s more complex than a simple buy-and-hold account.
What’s the minimum to open a brokerage account in 2026?
Most major brokers—Fidelity, Schwab, Vanguard, Robinhood—have eliminated account minimums. You can open an account with $0 and fund it when you’re ready. Some specialty accounts (margin accounts, certain mutual funds) may still have minimums, but standard brokerage accounts for stocks and ETFs are widely available with no minimum balance requirement. The Consumer Financial Protection Bureau recommends comparing account features and fees before choosing a platform.
how much money do you need to start investing
Final recommendation: If you’re starting with less than $100 and want to pick your own stocks or ETFs, Robinhood or Fidelity make sense depending on whether you prioritize mobile simplicity (Robinhood) or a full-service platform you won’t outgrow (Fidelity). If you want investing to happen automatically and you’re investing at least $50/month (ideally $100+), Acorns works—but at $25/month or less, the fees consume too much of your early gains.
All three platforms lower the barrier to entry. None of them lower the risk. Stocks go down. ETFs go down. Fractional shares don’t change that. Start small if you want, but understand what you’re buying and what can happen to it.
This is not financial advice. I’m explaining how these platforms work and what the trade-offs are, not telling you where to put your money. If you’re unsure whether investing makes sense for your situation, talk to a financial advisor or start with the SEC’s investor education resources at investor.gov.
For a deeper comparison of low-cost brokerage platforms across the Advantix network, see best brokerage apps 2026.