Micro-investing lets you begin to invest with ease

29. August 2018

Micro-investing lets you begin to invest with ease

The start of LHV Youth Bank added a unique saving solution to the selection of services offered by LHV, i.e. micro-investing, which can also be used by other LHV clients in addition to young people.

As of this week, LHV’s popular Growth Account has received some important updates. For example, micro-investing is a solution associated with the Growth Account, which allows you to grow your investment portfolio considerably and conveniently with each debit card payment that you make. Secondly, a slew of new funds – the main focus of which is on future-shaping megatrends – were added to the current fund selection in the Growth Account.

The Growth Account is intended for people who would like to begin investing with small sums and to diversify their risks while investing automatically. The Growth Account allows one to start investing with one euro and to do so in low cost index funds. By doing so, it is possible to keep service fees under control. Through the Growth Account it is possible to place money in 38 bond or equity funds in different regions, in companies of different sizes. To help simplify your selection, it is possible to more easily filter the funds beforehand on the lhv.ee/en/growthaccount page.

To promote the knowledgeable organisation of saving and money matters among young people, LHV offers a Growth Account without administrative fees to users who are up to 25 years of age (included), within the framework of the Youth Bank.

To use the micro-investing option you must conclude an investment services agreement and then a Growth Account agreement. This can be done conveniently within the LHV Internet Bank under ‘Information and Settings’ -> ‘Contracts’ -> ‘Growth Account’. The micro-investing service can be activated in the LHV Internet Bank. The amount of the investment can be chosen with either limited or unlimited rounding – this determines how big the investment sum is, which is calculated on the basis of each debit card payment. To make an investment all you have to do is use your LHV debit card when paying, and know that each payment is also accompanied by an automatic investment that is transferred to your Growth Account.

The sum collected via micro-investments is invested once per week, on Wednesday evening, in the fund designated by the client. In terms of Growth Account fund selection, clients have tended to prefer the broad based indexes S&P 500 (SXR8) and Stoxx Europe 600 (EXSA). With the updating of the service, LHV added funds which track global megatrends to the selection available to investors. For example, it is now possible to bet on the performance of robotics companies, the healthcare sector, companies offering sustainable development or cryptocurrencies. Review the updated selection of funds: lhv.ee/en/growthaccount.

There are two rules for calculating the amount of the micro-investment:

  • In the case of the unlimited option, the sum of the card payment will be rounded to the next whole number.
    For example: you pay EUR 9.20 with your card. The next whole number is EUR 10.
    The difference between EUR 10 and EUR 9.20 is EUR 0.80 – this is the sum of the micro-investment, which will be transferred to your Growth Account.
  • In the case of the limited amount, a difference will be made between payments of less than EUR 10 and greater than EUR 10. If you prefer the limited option, this means the application of the 10% rule, i.e. in the case of payments under EUR 10, 10% of the sum paid will be taken as a micro-investment.
    For example: you pay EUR 1.20 with your card. Ten per cent of this amount is EUR 0.12 – this is the amount of the micro-investment that will be made.
    In the case of card payments over EUR 10, the sum will still be rounded to the next whole number, i.e. the micro-investment will be made in the same way as in the case of the limited option.

The calculation of the micro-investment can be changed at any time in the Internet Bank. Micro-investing takes place with all of the debit cards used by the client. Activating the service is free of charge to everyone.

See also: lhv.ee/youthbank

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