Growing your money doesn't have to be complicated. Micro-investing and fixed term deposits are two of the simpler ways to work towards building wealth, and each provide a unique approach to saving and investing.

Micro-investing lets you squirrel away small amounts into investment portfolios. Fixed term deposits involve parking a chunk of cash for a set time to earn a predictable interest rate. Both aim to help you reach financial goals, but they work differently.

Deciding between the two isn't about finding the "best" option. It's about discovering what fits your financial situation. Whether you're dropping in $20 a week or looking to invest a lump sum, we're here to help you understand these investment paths.

Let’s explore them both.

What is micro-investing?

Micro-investing turns your spare change into potential long-term wealth.

Here's how it works: funds are typically held in an investment account linked to your profile. You’ll also need a linked external debit card or bank account to get started.

Most micro-investing platforms offer:

• Round-ups: Spend $5.50 on coffee? The extra 50 cents gets invested automatically
• Recurring investments: Set up weekly or monthly contributions that suit your budget
• Flexible investment options: Choose from managed funds which track popular investment choices

Micro-investing apps have sought to make investing accessible for anyone. You can usually track your balance in real time and use interactive tools to monitor progress.

The key benefit of micro-investing is its simplicity. You're not locked into big commitments and can withdraw funds when you need to. Start with $5, $10, or whatever feels comfortable. Technology does the heavy lifting, tracking and investing your money while you go about your day.

All you need to begin is a smartphone, a bank account, and a willingness to start small.

What is a fixed term deposit?

A fixed term deposit is a savings product offered by banks.

Here's how it works: you choose the amount to deposit and lock in a lump sum for a set period – called the term. In return, the bank pays you a fixed interest rate. The rate stays the same until the end of the term.

Terms typically range from one month to five years. The longer the term, the higher the rate may be.

Here are some other features of fixed term deposits:

• During the term, you usually can’t withdraw funds without paying a fee or losing some interest.
• Most people open fixed term deposit accounts through their bank or online. Some may also offer a smart deposit feature to help you manage it.
• Fixed term deposits don’t rely on share markets, so they’re often seen as more predictable.

The key benefit of fixed term deposits is certainty. You know what you’ll earn, when you’ll earn it, and when you’ll get your money back.

No apps, no round-ups, no fluctuations – just a fixed return on a set amount over a set time.

Comparing the two: how do they really differ?

Micro-investing and fixed term deposits both aim to help you grow your money – but they do it in different ways. One offers flexibility and market exposure. The other is about locking in a return over a set period.

Here’s how they stack up across the key features.

Access to money

• Micro-investing gives you access to your funds, but not instantly. You’ll usually need to sell your investments first, which can take a few days.
• Fixed term deposits are locked for the full term. You can withdraw early, but as mentioned, you’ll likely lose some interest or pay a fee.

Returns

• Micro-investing returns change with market movements . If markets rise, your investment may grow. If they fall, your balance could drop.
• T erm deposits pay a fixed interest rate. This way, you’ll know exactly how much you’ll earn at the end of the term.

Time horizon

• Micro-investing can suit different timelines. You can invest casually, regularly, or for the long term – it’s flexible.
• Term deposits work on a set schedule. Common terms include 3, 6, or 12 months, though some stretch to 5 years.

Risk and security

• Micro-investing carries systemic risk . Markets can be unpredictable, but many apps use diversified options like managed funds or access to fractional investing into ETFs to help manage it.
• Term deposits are considered relatively low risk. They’re not exposed to market movements, and amounts up to $250,000 are government guaranteed through the Financial Claims Scheme . But remember, all investments come with some level of risk.

Fees

• Micro-investing platforms may charge a monthly fee or a small percentage of your balance. These cover app features and investment management.
• Term deposits generally don’t charge fees – unless you withdraw early.

User experience

• Micro-investing is usually app-based. As such, you can track progress , use interactive tools, and set up auto-investing .
• Term deposits are more hands-off, set up through the bank. You choose the amount, term, and rate, then wait until maturity.

Both options have their place. As we’ve said, the right choice depends on your goals, preferences, and how you feel about taking on risk.

Who might prefer micro-investing?

Micro-investing tends to appeal to investors who want to start small and build up over time. You don’t need a large deposit. It’s often used by people new to investing who want a low-fuss way to grow their money.

Many platforms offer auto-invest and recurring investments, which can help you stay consistent without much effort. Since everything runs through an app, it may suit mobile-first users who like tracking their progress in real time.

If you're working towards specific financial goals – like saving for a house or long-term wealth – micro-investing can provide structure and momentum.

It can also suit people who want access to a range of investments, including ETFs and managed funds, without picking individual stocks.

It won’t be for everyone, but for some, the flexibility and simplicity are a great starting point.

Who might prefer fixed term deposits?

Fixed term deposits may suit people who value certainty. You know the return, the term, and when you’ll get your money back.

They can work well if you're saving for something specific – like a car or a wedding – within a set timeframe.

Some people choose term deposits if they prefer lower risk and want to keep things simple. Because the rate is fixed, you won’t need to check the markets or track your account every day.

You also don’t need to set up an app or manage ongoing investments. It’s a one-time decision – then you wait.

As mentioned, they’re also backed by the government up to a certain limit, which can offer extra peace of mind.

It won’t work for all investors, but if you like a straightforward, low-maintenance option, term deposits may feel more comfortable.

Can you do both?

Yes, you can use both micro-investing and fixed term deposits. You don’t have to pick one over the other. If both options feel useful, you can choose to combine them.

Some investors use term deposits for savings they don’t want to risk – like emergency funds or short-term goals. At the same time, they use micro-investing apps to invest extra change or set up recurring contributions for long-term growth.

Using both may help balance stability, access to money, and growth potential. It depends on your goals and preferences.

Example of using both to invest

Ari is 28, working full-time, and saving for a three-month overseas trip next year. He’s also thinking long-term.

He puts $10,000 into a fixed term deposit for 12 months. That money is for flights, accommodation, and travel insurance. At the same time, Ari uses a micro-investing app to round up his daily purchases. He also sets a $20 weekly auto-invest.

The term deposit helps him stay disciplined with his travel savings – he can’t access it without losing interest. Meanwhile, the micro-investing account is building slowly in the background, giving him exposure to the market.

Ari’s using both tools in different ways. One is low risk and locked in. The other is flexible and long term.

What else should you consider?

Before choosing between micro-investing and fixed term deposits, it’s worth asking a few simple questions. Your answers can help you decide which option fits you best.

Will you need the money soon?

How involved do you want to be?

• Prefer to set and forget ? A term deposit might feel easier
• Like to check progress or make changes? Micro-investing apps let you track and tweak anytime

Do tax implications matter to you?

• Some investment accounts may require potential tax considerations
• You might need to report earnings or capital gains at tax time

Have you done your homework?

• Check the details, fees, and terms before you start
• Make sure you understand how returns, risk, and access work for both options

These questions don’t guarantee a perfect choice, but they can help you decide what matters most for your situation. Going through these questions (and more) with a qualified financial adviser might also help.

Set your own pace

Financial growth looks different for everyone. Your savings and investment approach should reflect your specific circumstances, aspirations, and comfort levels.

Whether you’re building savings, starting to invest, or doing both – either option can play a role.

As mentioned, both micro-investing and fixed term deposits have their place. What you choose depends on how you want to manage your money.

Stay informed and choose the tools that support your financial goals – at your own pace.