Updated April 6, 2021

The Best Way to Invest $100

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$100 may not seem like much, but you can make it grow into more. Here are 10 clever ways to turn $100 into a better future.

© CreditDonkey

Think $100 will get you nowhere? Not necessarily.

You need the right attitude or $100 will just be... a few dinners. Don't think of it just as a set number. Think of it as the start to something bigger. Smart investments can help turn your $100 into a brighter future. You have to start somewhere.

Your time frame makes a huge difference in how you should invest.

It all starts with intention. If you are like most, you look at each dollar as a finite resource. You probably use it to pay bills. If not, you spend it. What about investing?

The stock market isn't the only way to invest. Here are 10 smart ways to invest your $100, including some less common ideas.

PRO TIP: If you are eager to start investing in stocks, one of our recommended choices is Ally Invest. You can start to invest with $0 account minimum. It's a great choice for beginners and the app is very easy to use.

Got more to invest? Here are smart ways to invest $1,000 and $10,000.

How would you start investing $100?

But Wait! Before You Start Investing

© CreditDonkey

You should be somewhat financially secure before you invest. This means having two things - an emergency fund and no credit card debt.

Create an emergency fund. Start here before all else. You need money stocked away for a rainy day. You don't know when an emergency will occur. Ideally, you should have 3-6 months of expenses socked away in case you lose your job.

How much do you have saved for emergencies?

Look for a savings account offering high interest. This will help your money to grow. Compound interest means that your interest will earn interest, so your savings will grow even faster.

Tip: The national average interest rate for a typical savings account is 0.05% (as of Nov 12, 2020). Online bank accounts such as the CIT Bank can pay over 7x more. Plus, they have a low minimum deposit, and no monthly fee. You can grow your money while building an emergency fund.

Get out of debt. High credit card interest rates take away from your investments. Look at it this way. You pay a 15-20% interest rate on your credit card. Chances are you won't find an investment with that type of return. Invest in getting rid of your debt first, then focus on investments.

Tip: If you have decent credit, consider balance transfer credit cards. You can get out of debt faster because you will get a period of time to pay off your existing debt interest-free. Use our balance transfer calculator to estimate just how much you can save on interest.

If you're already in good shape on these two items, then it's time to start investing.

How and Where to Invest $100

Once you have your financial situation squared away, the fun begins. You can start investing. Here are our top 10 ways to invest $100.

  1. Automate with robo-advisors
    If you're a beginner and not sure how to invest on your own, consider a robo advisor.

    Robo-advisors provide online automated investing services. Some have no account minimum. You enter your goals and your risk tolerance and a computer algorithm does the rest. It selects investments for you based on your inputs.

    You can even invest your spare change. Link your credit and debit cards to Acorns to round each of your purchases to the nearest dollar.

  2. Invest in Dividend Stocks.
    Stable companies that perform well on a regular basis often offer dividends to their stockholders. Even if you only buy one stock, if it's a dividend stock, you can re-invest the dividends and buy more stock. This way you increase your portfolio without depleting your bank account.

    You can purchase dividend stocks with no trading fees with brokerages such as Ally Invest or M1 Finance.

  3. Invest in Certificate of Deposits.
    CDs are a good choice when you want a guaranteed return on your money. You can pick terms from a few months to 5 or 10 years. Usually, the longer the term, the higher the return.

    Online banks, like CIT Bank, are known for offering great deals. That's because they don't need to maintain physical locations. In return, they pass along savings to customers with a higher interest rate. Read our comprehensive list of short term investments ideas.

  4. Lend to others
    We aren't talking about lending your brother $100. We are talking about peer-to-peer lending. Companies like Lending Club and Prosper offer automated programs for you to invest as little as $25. You can lend your $100 to 4 different people. This helps diversify your risk and bring you a higher rate of return. P2P lending is often faster than traditional bank lending. It also offers a low cost way for borrowers to get the money they need.

    Lending Club and Prosper offer ratings for each borrower, so you can somewhat get an idea of your risk. The platform does all of the work. You just sit back and make the profits.

  5. Invest in your own personal development
    This is absolutely a form of investment with the potential for a great rate of return. Taking classes and learning new skills can improve your earning power. Your $100 could turn into something much larger with the right strategy.

    Update your resume: Studies have shown that a professionally written resume can make you:

    • 38% more likely to be contacted by recruiters.
    • 31% more likely to land an interview.
    • 40% more likely to land a job.

    Consider this: The average length of a job search is 40 weeks. For every day you're unemployed, you're missing out on each day's pay you aren't earning over a five-day work week. Studies have found that a professionally written resume is guaranteed to get you more interviews to land the job you want, faster. Even if this shortens your job search by just a day or two, you've made your money back, and then some. Think of it as an investment in your earning power.

    Amanda Augustine, career advice expert for TopResume

    Here are some ways you can invest $100 in yourself:

    • Take online courses: Learn or sharpen a skill with professional Udemy courses, webinars, or workshops. They can help you improve in your current job or get you started on a side job.

    • Find a mentor: Is there a businessman you look up to? Or does your favorite web expert offer one-on-one coaching sessions via Skype? Getting advice from someone who has "done it" is one of the best things you can do to find a direction.

    • Buy a pair of good exercise shoes: It's important to invest in your health. Even if your daily exercise is power walking around your neighborhood, it gives you more energy and makes you feel better about yourself.

  6. Invest in ETFs
    Mutual funds usually aren't an option with just $100. They often require much larger initial investments. Enter ETFs. ETFs are professionally managed funds of up to hundreds of securities, so you instantly get diversification with one investment.

    A great place to start is Stash. You can start investing in ETFs with any amount you want. Stash makes it possible to purchase fractions of ETFs, which is how you can invest with $5 or less. They pool ETFS by category, making it easier for you to decide where to invest your money.


    Sign Up and Get $5

    • Sign up, add at least $5 to your account and get a $5 bonus.
    • Invest with fractional shares
    • Get portfolio recommendations

    What are ETFs? ETFs trade on the stock exchange, just like regular stocks. However, they are comprised of more than one stock, bond, futures, or foreign asset. They allow you to invest in an entire market, such as the S&P 500 with one single fund. You can trade them as often as you want throughout the day. This is unlike mutual funds, which only trade once the market has closed for the day.

  7. Index funds
    Index funds follow a specific market index. For example, the S&P 500 index fund invests in the largest 500 companies in America. Brokerages like Fidelity and Charles Schwab don't have a minimum investment requirement for index funds. Take your $100 and invest in a variety of stocks.

  8. Buy individual stocks
    Thanks to fractional shares, you can now buy a tiny piece of a stock, instead of having to buy a full share. So instead of needing $3000 to buy Amazon stock, you can buy a small piece with just a few bucks.

    Discount brokerages like Robinhood and Stash let you invest in stocks starting with just $1.

  9. Buy books
    This doesn't mean your steamy beach read. We mean self-help books, whether it's to learn a new skill or to change your habits or mindset. Most often, the biggest obstacle to success is yourself. Any book that will help you change your ways could benefit you down the road.

    Here are a few of our book suggestions. Invest your $100 into these if you don't know where to start.

    • Think and Grow Rich by Napoleon Hill. Though 80 years old, this is still one of the best books about success ever written. How you think affects what you can do in life. Unlock the power of your mind and learn how to make a rich life.

    • Rich Dad Poor Dad by Robert T. Kiyosaki. This story of two dads - one traditional and one forward-thinking - teaches you how seeing money in another way can lead to a different future.

    • How to Win Friends and Influence People by Dale Carnegie. Part of being successful in life is having people skills. This book teaches you how to win over people so you can get anything you want.

    • Total Money Makeover by Dave Ramsey. Carrying debt reduces your chances of ever striking it rich. In this book, Dave Ramsey tells it like it is. He helps you understand the importance of living the life you can afford, not striving to keep up with the Joneses.

  10. Plan for retirement
    $100 won't get you far in retirement, but if you are still young, that $100 could be much more in 20 years. It's always a good idea to invest in your employer's 401(k), especially if your employer matches contributions. Most employers withdraw the money right from your paycheck each pay period. You set the amount and your employer handles the rest.

    Don't have a 401(k)? You can open a Roth IRA and invest your money yourself. Note: there are income limits on who can contribute to a Roth IRA versus a Traditional IRA. This changes each year.

    M1 Finance

    Fee-Free IRAs

    • Maximize retirement savings
    • Pick own stocks and funds
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  11. Save for college
    $100 won't even buy your kid a college textbook these days, but it's a start. Anything will help reduce the student debt down the road. Set up a 529 College Savings Plan and start saving now. As a bonus, you get the tax savings, which furthers the return on your investment.

  12. Start a business
    You don't need much to start a business today. And you don't even need much specialized skills. Get creative. Make yourself look professional by getting a pack of business cards for as low as just $10. There are many small businesses you can start for as little as $100. Whether you work the business full-time or operate it as a side hustle, it can help you bring in money.

    Not sure where to start? Here are some ideas:

    • Prefer to work with your hands? Use $100 and buy some cleaning products and clean busy neighbors' houses.

    • Like animals? Become a pet sitter. All you need is the gas money it takes to drive to the pet owner's house.

    • Are you computer minded? Set up a blog for less than $100, which gives you an opportunity for affiliate marketing.

    • Good at helping others? Become a virtual assistant/personal concierge. All you need is a phone, computer, internet, and perhaps some work software.

    • Are you artistic? Many people are looking for handmade cards and invitations. Invest in some supplies and you can be a calligrapher or watercolor artist.

  13. Sell for a profit
    Flipping isn't just for houses. You can flip products too. If you have a seasoned eye for hot items at estate sales or on Craigslist, go for it. Take your $100 and buy those items. Turn around and sell them for a profit and you have an instant return. This is a great side hustle gig as it doesn't take a lot of time and has very little overhead. You can do this in your free time, while still making your full-time income.

What the Experts Say

As part of our series on investing, CreditDonkey asked a panel of industry experts to answer some of readers' most pressing questions. Here's what they had to say:

Can You Invest and Make Money Daily?

If you're looking to make money daily from investing, first understand that these will be limited to low-risk investments. They can provide steady returns, but your earnings won't be very high.

The higher the risk, the more you can lose money. Stocks go up and down a lot and there will be periods that you lose instead of gain. So if you don't want any risk of losing, then look for safe investments.

These types of investments can help maintain your principal while earning a little extra:

  • Treasury securities
    These are issued by the US Treasury. They're essentially loans to the government to help pay for capital projects. You're paid back a fixed interest rate over a set period. There are several Treasury securities products, ranging from terms of a few days to 30 years.

  • Money market funds
    Money market funds are a type of extremely conservative mutual fund. The goal is to maintain a stable value, while paying out dividends to investors. You can withdraw at any time with no penalty.

  • High yield savings
    A high yield savings account will offer interest to help grow your money. As long as you have money in there, you'll earn interest daily.

Don't get too caught up on trying to make money everyday. Instead, focus on developing a good long-term investment strategy. These low-risk investments won't build you wealth. For higher returns, you'll still need to make stocks as part of your strategy. It's normal for stocks to rise and fall, but historically, it will always go up if you invest for the long term.

How $100 Can Add Up to Big Money

With compound interest, you earn interest on the $100 you save plus the interest that the money earns. If you consistently save and invest, it can add up to a large amount over time.

Our calculator below illustrates how compound interest can help make you rich. Interest Rate A is set to the average savings account interest rate of 0.05%.[1] Interest Rate B is set to 9.20%, which is the average stock market return over the past 140 years.[2]

Compound Interest Calculator

Are Penny Stocks a Good Investment?

Penny stocks are stocks trading for under $5 a share. They're offered by small companies and are usually traded on the over-the-counter (OTC) market and not listed on major exchanges.

You may think with $100, you can buy a ton of shares. But penny stocks can be very risky. Because they are from new companies, you don't know their history. They're not required to be transparent about their financials. The business could be struggling or near bankruptcy.

Plus, penny stocks are difficult to sell. They're not traded frequently, so you could be stuck with it if there are no buyers.

Instead of spending $100 on penny stocks, instead, invest in trusted companies with fractional shares (on brokerages like Robinhood or M1 Finance). This allows you to invest in your favorite companies even if you don't have enough money for a full share. For example, you can invest $5 each in 20 companies.

Other Bad Investments to Avoid

These types of "investments" will not only NOT make you rich, but risk losing your hard-earned money.

  • Pyramid schemes: This scheme operates on the model that you are paid when you recruit more members into the program. It's just impossible for everyone to keep on making money down the pyramid. So if you are asked to pay to join a company and to recruit more members, beware of a pyramid scheme.

  • Get rich quick schemes: You know the ones. Often, these will promise you high returns for little risk, while you get to work from home. Nope, you just know it's too good to be true.

  • Gambling: Don't throw that hundred away at a table in Vegas. Haven't you heard that the house always wins?

  • Powerball: You probably shouldn't blow your $100 on lottery tickets as your odds of winning are only 1 in 292.2 million. But, if you are looking for a little fun, maybe you'll get lucky and hit a few numbers.

Bottom Line: Determine Your Intentions

What do you see in that $100? Do you:

  • Invest it in your emergency fund?
  • Invest it in your debt to help your financial situation?
  • Want to see it grow, such as in an investment?
  • Want to invest it in yourself to help yourself grow?

This takes some soul searching. Figure out where you are in life.

Do you have 6 months of your expenses stocked away? If not, create an emergency fund. Do you have credit card debt? If you do, get out of debt.

If your finances are in good shape, then let's start building wealth.

The most important factor is that you start now. It doesn't matter that you only have $100. It will turn into more soon. If you don't start, though, your money never has the chance to grow. Make smart decisions now and reap the rewards in the future. One day you'll be glad you invested that $100 bill.


Write to Kim P at feedback@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.

Paid non-client endorsement. See Apple App Store and Google Play reviews. View important disclosures. Investment advisory services offered by Stash Investments LLC, an SEC-registered investment adviser. This material has been distributed for informational and educational purposes only, and is not intended as investment, legal, accounting, or tax advice. Investing involves risk.

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How would you start investing $100?
24% Open a high yield savings account
19% Download a micro investing app
19% Invest in stocks with fractional shares
11% Invest automatically with a robo-advisor
6% Diversify with index funds
2% Invest in personal development
3% Invest in a Worthy bond
5% Invest in a CD
8% Lend to others with P2P lending
2% Contribute to an employer-sponsored retirement plan.
Source: CreditDonkey. Totals may not add to 100% due to rounding.
How much do you have saved for emergencies?
37% No emergency savings
20% Less than 3 months
20% 3 to 6 months
22% More than 6 months
Source: CreditDonkey. Totals may not add to 100% due to rounding.
How do you plan to invest $100?
32% Start an emergency fund
32% Invest automatically with a robo-advisor
20% Invest in individual stocks
11% Invest in an ETF or mutual fund
2% Invest in your personal development
2% Open an IRA
Source: CreditDonkey. Totals may not add to 100% due to rounding.

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