10/02/2024 | 4 Comments

It is an established notion that investing is only for those who have substantial amounts of money in their bank or those who have financial backups to bear losses. However, it is not true at all as anyone who has a decent earning can enter the world of investing. So, even if you are on a tight budget or don’t have surplus funds, you can start investing. But how would you do that?

Read on and understand how you can begin investing with minimal surplus. In this article, we will be exploring low-budget investment options or strategies for those who wish to grow their wealth but have limited financial resources. These low-budget investments would certainly help you kickstart your investment journey in the right manner.

Top Low-Budget Investments For Investing On a Tight Budget

Peer-to-Peer Lending
One of the most popular low-budget investment options, peer-to-peer lending (P2P lending) has gained immense popularity in the last couple of years. Here lending platforms connect borrowers with investors and allow investors to earn interest by lending money to individuals or businesses. P2P platforms like 13Karat usually have lower barriers to entry in comparison to traditional lending institutions. This is what makes them accessible to investors who wish to invest with limited funds.

Though peer-to-peer lending can provide higher returns when compared to traditional savings accounts or bonds, it is also important you understand the risks associated with it. These risks may include the potential for borrower default. But worry not, by diversifying your investments across multiple loans, you can reduce some of these risks and earn great returns on your investment.


One of the great investment strategies for limited funds is micro-investing. This concept of micro-investing has certainly revolutionised the way people invest today. With these platforms, individuals can now invest small amounts of money into diversified portfolios of stocks, bonds, or exchange-traded funds (ETFs).

There are several applications that allow you to round up your purchases to the nearest sum and then automatically invest the spared amount or change for you. So, it means the app is investing small amounts regularly on your behalf. Doesn’t that sound great? This approach has made investing on a tight budget easier. Now if you keep investing over time, these small contributions would grow into a significant amount one day.

Dividend Reinvestment Plans (DRIPs)

If you are looking for investing with minimal surplus, then you can also go with Dividend Reinvestment Plans (DRIPs). These plans offer you an excellent way to grow your investment portfolio even if you have minimal funds to begin with.

With DRIPs, you can reinvest your dividends which you have earned from stocks back into additional shares of the same stock. This often comes with little to no fees and hence, anyone can have this approach. This investment strategy enables you to compound your returns over time. Hence, DRIPs are considered one of the best low-budget investment options.

Exchange-Traded Funds (ETFs)

If you are already into the world of investing, then you must know about exchange-traded funds (ETFs). These are investment funds that trade on stock exchanges like individual stocks. You can consider them as they offer diversification at a low cost and this makes them an attractive option for investors who have limited funds.

With the help of ETFs, you can invest in a broad market index or a specific sector with minimal funds. This would provide you with exposure to a diversified portfolio of assets without the need for a significant upfront investment.

Direct Stock Purchase Plans (DSPPs)

Direct stock purchase plans, or DSPPs, allow you to buy shares of a company’s stock directly from the company without the involvement of traditional brokerage firms. There are several companies in the market that offer these plans with low minimum investment requirements.

More often than not, DSPPs allow you to purchase shares at a discounted price or with no fees and this provides you with an affordable way to start investing in individual stocks. So, get going now and start your investment journey right away.

High-Yield Savings Accounts

High Yield Investments

If nothing mentioned above works out for you, then you also go with high-yield savings accounts. Though these are not traditional investment options, high-yield savings accounts offer you a safe way to earn a modest return on your cash reserves.

These accounts would offer higher interest rates compared to traditional savings accounts and this is why your money can grow more quickly over time. Having said that, it is to be noted that the returns may not be as high as other investment options. However, these high-yield savings accounts certainly provide a low-risk option for you with limited funds.