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What is change investing? What are the pros and cons of change investing?

Written by - Marisha Bhatt

August 1, 2022 7 minutes

When it comes to saving, every person knows the importance of saving and investing as well as why it is better to begin at the earliest. However, when it comes to actually doing it, we often see unnecessary procrastination. The most common reason given to not start saving and investing is a lack of sufficient funds or overthinking about where and how to invest. Well technically speaking, no specific amount of money is enough for investing at the same time not less to start investing. Channeling this viewpoint, there is a new concept of change investing that is creating quite a buzz, especially in the younger generation of today, and encouraging them to start their investments with low amounts that are usually considered spare change.  

Let us understand the concept of change investing and the pros and cons of the same. 

What is change investing and how does it work?

Change investing is a relatively new concept in India and is based on the micro-investing format. Change investing is based on the advanced technologies offered by new-age fintech apps. It is ideal for the millennials or the young generation of the country that rely heavily on digital payments for their daily transactions (UPI or credit cards, debit cards, or net banking).

Under this investment strategy, the apps allow the user to fix an amount which is known as a round-off amount to the closest next Rs. 10, Rs. 20 or Rs. 50 and so on. When the user spends on various aspects through the app, the differential round-off amount gets added till it reaches the target amount of investment (for example, Rs. 100, Rs. 500, or Rs. 1,000). 

Once it reaches the target minimum investment amount needed for investment in the selected asset class (for example, most mutual funds require a minimum investment of Rs. 500), the available options of investment are open to the user. The app then nudges them to invest in their selected asset class and gradually build an investment portfolio based on their risk-return profile. Some of the popular apps in this category in India are Niyo, Appreciate, and Jar. 

What are the benefits of change investing?

Change investing is gaining popularity in the country among the young generation due to its dynamic investment nature and other benefits. Some of the key benefits of change investing are given below.

  1. Improvement in the habit to save

The change investing inculcates the habit to save from the very start. The concept of change investing is based on the piggy banks that almost every one of us had in our childhood. The spare change that would be collected in the small piggy bank used to give immense pleasure and satisfaction of saving money and using it for our small needs. Change investing also focuses on this habit of building on spare change while spending through the apps and investing the accumulated amount in selected assets.

  1. Every penny counts 

The concept of change investing reinforces the idea of making every penny count. Most often we set a target amount and wait for it to accumulate and then invest in lucrative investments. However, we forget that investing can be started at any point and with amounts as low as Rs. 500. Therefore, change investing further reinforces the idea of investing among people.

  1. Retirement planning at the earliest 

When one starts earning is ideally the time that they should start retirement planning. This allows them to have the maximum advantage of compounding till the time of retirement and thereby accumulating sufficient savings to sustain at such time. Retirement planning at the earliest will also cost less rather than starting at a later point in life when a person is closer to the retirement age.

  1. Safety of investment

Change investing is done through the new age fintech apps and the key feature offered by them is the security of investment. Some apps invest in digital gold while some invest in selected mutual funds. The investment is kept safe just like investing directly in these target investment options and can be redeemed whenever required. 

What are the limitations of change investing?

While there are many advantages of change investing, this investment format also has its own limitations. Some of the key limitations in change investing are discussed below.

  1. Lack of awareness

The change investing concept is quite new for the Indian markets. Hence, there is a general lack of awareness regarding the same. Not many investors even know of this concept let alone invest through it. This is one of the major hindrances in attracting more investors and defeats the purpose of inculcating savings habits among millennials.

  1. Lack of choice in selecting investment class or asset

Most apps offering change investing offer pre-selected investment options that are standard for every investor on their platform. For example, the Jar app offers investment in digital gold only, hence, an investor that wants to invest in mutual funds through change investing needs to shift to an altogether new app which can be cumbersome. This can be a deterring factor that can drive away potential investors as there is no diversity in the choice of investment. 

  1. Lack of substantial wealth creation 

Change investing although revolutionizing is not apt for wealth creation. Investors cannot solely depend on this format of investing to build their fortunes and meet their financial goals. They will require the traditional mode of investing in stocks and mutual funds along with other asset classes to meet get sufficient financial backing. 

  1. Others (liquidity issues in US Stocks, high exit charges, etc.)

Since the concept of change investing is new to the country and the world in general, there are many issues that are faced by the investors. Some of these issues include liquidity issues, especially in the case of investment in US stocks where exiting the investment at a short notice can be difficult. Another issue faced by the investors is high exit charges as well as the need to make the selected app the primary banking solution. Such issues further push the investors away from this concept thereby defeating the purpose of eventually attracting the majority of millennial consumers. 


The concept of change investing although new in the country has many takers already. The young generation prefers making online payments for all their needs from groceries, medical expenses, splurging, etc. The concept of investing along with spending is quite attractive as there is gives the satisfaction of investing along with the money being spent. This concept is here to stay and needs further improvement to fine-tune it and make it further suitable to a larger investor class. 


What are the popular change investing apps in India?

The popular change investing apps in India are Jar, Appreciate, and Niyo.

What is the nearest round-off offered by the apps in change investing?

The nearest round-off offered by the apps in change investing ranges from Rs. 10, Rs. 20, and Rs. 50, etc.

 Does the investor need to change their primary banking to the selected change investing app under this investment?

Yes. Apps like Niyo require the investor to shift their primary bank to the app and carry out all their basic banking needs through it under the change investing format.

Can change investing alone be sufficient in wealth creation?

 No. Change investing is a new concept in India and is gradually gaining popularity but for wealth creation, investors also need to focus on the traditional investment options available today and have a holistic approach to meet their target goals.

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