In the midst of economic decline and financial uncertainties, Australians are seeking alternative avenues to generate passive income. Micro-investing has emerged as a popular solution, with Raiz Investment garnering significant attention. In this comprehensive review, we will explore the functionality of Raiz Investment, shedding light on its features and benefits. Join us as we delve into the world of Raiz Investment and discover how it can help navigate these challenging times.
What is Raiz?
Raiz is an investment application designed for Australians, allowing users to invest even small amounts of funds. Launched in February 2016, Raiz enables users to invest as little as $5 in pre-made portfolios. Similar to platforms like Uber and Airbnb, Raiz connects individuals with spare cash to Exchange Traded Funds (ETFs), which then invest in a diversified range of shares with the aim of generating profit.
Working and Operability of Raiz:
Raiz features a user-friendly interface that simplifies the investment process. Here’s a summary of how Raiz works:
Users have three options to add funds to their Raiz investment account: round-ups, lump-sum deposits, or recurring deposits. Round-ups involve Raiz rounding up transactions and investing the spare change. Lump-sum deposits allow users to invest the available balance in their bank account. Recurring deposits enable fixed amounts to be deposited daily, weekly, or monthly.
Choose a Custom Portfolio:
After depositing funds, users select an investment portfolio. Raiz offers six options, ranging from Moderately Conservative to Aggressive and Emerald. Each portfolio is expertly designed to adapt to different risk levels and investment goals. Users can change their portfolios as desired without incurring extra fees.
What are Raiz ETFs?
ETFs, or Exchange Traded Funds, are financial funds used by Raiz to trade on the stock exchange. These funds can consist of various compositions, such as stocks, bonds, or a combination of both.
Withdrawal and Raiz Investment:
Once funds have generated returns, users can easily withdraw their money without any hidden fees. However, withdrawals may take up to 5 days to process.
While creating an account on Raiz is free, the platform charges certain fees:
Depending on the chosen portfolio, Raiz may charge a monthly fee. For risk-based portfolios or the Emerald Portfolio, a fee of $3.50 is applicable if the account balance is below $15,000. Custom portfolios have a slightly higher fee of $4.50 per month for balances below $20,000, while Sapphire portfolio users pay a flat fee of $3.50, regardless of the account balance.
For account balances exceeding $15,000, Raiz charges a fee of 0.275% per year, prorated monthly. This fee applies to all portfolio types, except for Sapphire portfolios, which incur an additional 0.275% account fee.
ETF Management Fees:
Raiz’s ETFs also charge management fees, collectively totaling 0.04% per year. For example, if the account balance is $50,000, the annual fee would amount to $20.
In an interview with the CEO and Director of Raiz, George Lucas, some questions were asked regarding the platform:
Q1: What are the advantages of using Raiz for self-directed investors?
A: Raiz allows self-directed investors to invest small amounts regularly without impacting their lifestyle. It provides an opportunity to accumulate capital over time.
Q2: How does investing small amounts make a difference?
A: Raiz acts as a digital coin jar, rounding up purchases and investing the spare change. When these small investments generate profits exceeding $5, users can easily withdraw the funds.
Enticing Features of Raiz:
Raiz offers several attractive features for investors, including:
Raiz is ideal for beginners, as it requires a minimal investment amount, starting from $5.
Users can buy fractions of ETFs based on their available portfolio balance.
Raiz emphasizes that regular small investments can accumulate wealth over time. The automatic round-up feature allows users to contribute funds frequently.
Raiz enables unlimited deposits and withdrawals, giving users flexibility and control over their funds.
Raiz vs. Spaceship:
Comparing Raiz to another investment platform called Spaceship, we find:
Raiz offers seven different portfolios, while Spaceship has three.
Raiz charges a monthly fee of $3.50, whereas Spaceship charges $2.50 per month.
Raiz focuses on low-cost investing, while Spaceship provides an easy way to invest in stocks.
Is Raiz Safe?
Raiz holds an Australian Financial Services License, ensuring a level of protection for investors. The platform has also implemented robust security measures to safeguard user information. Overall, Raiz is considered a safe investment platform.
Above was the full Raiz review or explanation of Raiz investment. if you want to learn more about investing, read the free book that is rich dad, poor dad, from our website, and if you are in Australia and looking for tax tables, check out our investment section for the latest tax-related post.