Updated January 29, 2023

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.

Think $100 isn't enough to earn big returns? You may be surprised.

Don't think of $100 as just a number. Think of it as the start to something bigger. Smart investments can help turn your $100 into a brighter future.

After all, you have to start somewhere.

The stock market isn't the only way to invest. Here are 14 smart ways to invest your $100, including some unique ideas you might not know.

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

Try to be financially secure before you invest. This means having two things - an emergency fund and no credit card debt. Here's what you can do:

1. Create your emergency fund. Start here first. Ideally, you should have 3-6 months of expenses saved up for emergencies.

Look for a savings account offering high interest. Your money will earn compound interest, so your savings can grow even faster.

Tip: The average national interest rate for a savings account is 0.45%. Online bank accounts, like those at CIT Bank, can pay up to 5.00%. Plus, they usually have no monthly fee and a low minimum deposit, making it a great spot for your emergency fund.

2. Pay down your debt. Credit card debt will eat away at your investments. Credit cards charge 15-20% in interest, and it's unlikely that you'll find an investment with returns that high.

If you have decent credit, consider a balance transfer credit card. Try using a balance transfer calculator to see just how much you can save on interest.

If you're already in good shape with these two things, 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 14 ways to invest $100.

InvestmentAverage Potential ReturnRisk Level
Robo Advisors2.91%-6.10%[1]Mid
Dividend Stocks1% - 2%[2]Mid
Certificate of Deposits0.15%-1.21%[3]Low
P2P Lending5.7%[4]High
High-Yield Savings Accounts0.15%-5%[5]Low
Index Funds10% to 12%[7]Mid
Stocks/Fractional Shares9.20%[8]High
Cryptocurrency5+%[9]Very high

1. Automate Investing with Robo Advisors

If you're new to investing, consider using a robo advisor.

Robo-advisors provide automated investing services. Some have no account minimum. You enter your goals and your risk tolerance. Then, an algorithm picks 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.

Pros & Cons of Robo Advisors

  • Ideal for beginners
  • Lower fees + minimum balances
  • Easy to get started
  • No advanced tools, usually
  • Can't personalize your investments

2. Earn with Dividend Stocks

Stable companies that perform well on a regular basis can offer dividends to their stockholders. And with a dividend stock, you can reinvest the dividends to 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.

Pros & Cons of Dividend Stocks

  • Ideal for beginners
  • Passive dividend income stream
  • Fund your investments
  • Returns can be modest
  • Risk of dividend reductions

3. Invest in a Certificate of Deposit

CDs are a good choice when you want a guaranteed return on your money. You can pick a term of just 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 branches. In return, they pass along savings to customers with a higher interest rate.

Looking to use your returns sooner? Read our comprehensive list of short-term investment ideas to get started.

Pros & Cons of CDs

  • Very low-risk
  • Returns are predictable
  • Good selection of accounts and terms
  • Low returns
  • Limited liquidity
  • Inflation risk

4. Lend your money to borrowers

We aren't talking about lending your brother $100. This is peer-to-peer lending. Companies like Prosper and Kiva offer automated programs for you to invest as little as $25.

If you lend your $100 to 4 different people, you'll diversify your risk and earn a higher rate of return.

P2P lending is also often faster than traditional bank lending. Plus, Prosper, Kiva, Happy Money and Upstart offer ratings for each borrower, so you can get an idea of their risk.

These platforms do all of the work. You just sit back and make the profits.

Pros & Cons of P2P Lending

  • Higher returns
  • Diversification if you lend to multiple people
  • Easy to do completely online
  • Risk of loan default
  • Some loans aren't secured

5. Open a high-yield-savings account

Rates are pretty low right now, but it's still worth it to open a high-yield savings account. Once the Fed raises its rate again, you'll be in a position to earn more.

For example, the same $10,000 balance with 2.00% APY would return $200 in a year. That's a nice chunk of change.

Look for a high yield savings account with a low minimum opening deposit and balance requirement. You'll also want to consider the fees they're charging so any returns are worth your time.

Pros & Cons of High Yield Savings

  • Higher interest
  • Low opening deposits
  • Fewer fees
  • Rates dependent on the Fed
  • Difficult to deposit cash

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.

What are ETFs? ETFs trade on the stock exchange, just like regular stocks. However, they are composed 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 as often as you want throughout the day, unlike mutual funds, which only trade once the market has closed for the day.

Pros & Cons of ETFs

  • Tax advantages
  • Helps diversify investments
  • Less volatile
  • Some ETFs less diverse

7. Try 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.

Pros & Cons of Index Funds

  • Diversification
  • Low fees
  • Tax advantages
  • May be volatile
  • No downside protection

8. Buy individual stocks or fractional shares

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.

Pros & Cons of Stocks

  • Easy to buy and sell
  • Stay ahead of inflation
  • Access your money quickly
  • Low buy-in
  • Can be volatile
  • Takes time to research
  • No guarantee of returns

9. Dabble in Cryptocurrency

It's never too late to get into crypto. And getting started can be surprisingly easy for beginners.

Research a coin you want to buy (Bitcoin and Ethereum are two popular examples) and buy your desired amount on an exchange.

From there, you'll want to consider a crypto wallet to keep it safe. You can even track your investments with a portfolio tracker.

Remember: Cryptocurrency tends to be extremely volatile, so understand the risks before going in. You can always put just a portion of your $100 in crypto and the rest in something else.

Pros & Cons Cryptocurrency

  • Blockchain tech has huge potential
  • Some platforms very beginner-friendly
  • High potential returns
  • Extremely volatile
  • High risk of loss
  • Security concerns

10. Secure your 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.

Pros & Cons of Retirement Accounts

  • Money grows tax-free
  • Employer matching
  • Safety for retirement
  • Pay taxes upfront
  • Max contributions can be low

11. Invest in your 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. Here are a few ways to invest in yourself:

  • Take online courses: Learn a new skill or develop one you already have with online courses, webinars, or workshops. Check out sites like Udemy or Skillshare to get started.

    You might even develop skills to earn a second income.

  • Find a mentor: Your favorite business guru might offer one-on-one coaching sessions via Zoom. 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.

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

12. Jumpstart a college fund

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.

Pros & Cons of a 529 Plan

  • Tax advantages
  • Fairly low maintenance
  • Flexible benefits
  • Some withdrawals penalized
  • Fees can be high

13. Start your dream business

You don't need much to start a business today. $100 can help pay for your website hosting, a pro-designed business logo, or a subscription to platforms like Shopify.

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 to 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.
  • Love to write? Set up a blog for less than $100, which gives you an opportunity for affiliate marketing.
  • Want to help others? Become a virtual assistant/personal concierge. All you need is a phone, computer, and internet.
  • Are you artistic? Many people enjoy handmade cards and invitations. Invest in some supplies or design software to get started.

14. Flip sought-after items for a profit

Flipping isn't just for houses. You can flip items too. If you have a seasoned eye for hot items at estate sales or on Craigslist, go for it.

Turn around and sell them for a profit and you have an instant return.

While it does require a little more work, this is a great side hustle gig and has very little overhead. You can do this in your free time, while still earning money from your day job.

These items are particularly great for flipping:

  • Furniture: Do some research to identify collectors' pieces or noteworthy features that hold their value.
  • Exercise equipment: Try flipping around January to capitalize on those trying to get in shape for a New Year's Resolution.
  • Musical instruments: Know what to look for to ensure the instrument is in good working condition.
  • Power tools: New power tools can be very expensive, which makes your flipped tools even more attractive to buyers.

Not keen on selling via Craigslist? There are a ton of other selling apps that make it easy to flip your finds. Check our list of top selling apps to find the right one for you.

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.

  • Worthy bonds
    Worthy allows you to invest in bonds to growing American businesses. You can cash out at any time.

  • 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 0.13%.[10] Interest Rate B is set to 9.20%, which is the average stock market return over the past 140 years.[8]

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.


  1. ^ The Robo Report. The Robo Report & The Robo Ranking, Retrieved 1/20/2023
  2. ^ Nasdaq Data Link. S&P 500 Dividend Yield, Retrieved 1/16/2022
  3. ^ FDIC. National Rates and Rate Caps as of January 17, 2023, Retrieved 01/20/2023
  4. ^ Prosper. Invest in personal loans, Retrieved 1/20/2023
  5. ^ CreditDonkey. "Best High Yield Savings Accounts", Retrieved 09/10/2022
  6. ^ State Street Global Advisors. "SPDR® S&P 500® ETF Trust", Retrieved 1/16/2022
  7. ^ NYU Stern. "Historical Returns on Stocks, Bonds and Bills: 1928-2021", Retrieved 1/16/2022
  8. ^ S&P Global Market Intelligence
  9. ^ Cointelegraph. "The Holy Grail for crypto traders: Consistent average returns over 5%", Retrieved 1/16/2022
  10. ^ FDIC. National Rates and Rate Caps as of August 15, 2022, Retrieved 9/10/2022

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