RAIZ v Spaceship: Which is better value?

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December 30 2021
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Raiz and Spaceship have become the two biggest apps in the micro-investing space, but which offers a better deal for Aussie investors looking for a hands-off savings strategy?

As micro-investing has become more mainstream, two major names have dominated the field for Australians looking to start their wealth creation journey.

Raiz and Spaceship have become the two biggest brands playing in the micro-investing space, but which offers a better deal for Aussie investors looking for a hands-off savings strategy?

What is Raiz?

Launched under the name Acorns back in 2016, Raiz’s biggest claim to fame was mainstreaming the idea of round-up savings. Both fellow fintechs and big banks have embraced this feature in the years since.

In addition to helping users save money through regular lump sums, Raiz users can connect their other bank accounts. Whenever you spend money via a connected account, the app then rounds that transaction up to the nearest dollar and then transfers that extra amount into your investment account.

Available on both iOS and Android, the Raiz boasts more than 500,000 active customers and $1 billion in funds under management.

Practically, the company operates as a managed investment fund.

Member funds are pooled and then invested as per a thematic portfolio of exchange-traded funds. The app offers six different portfolios of varying risk profiles, including an ESG-friendly Emerald Portfolio and a bitcoin-laced Sapphire Portfolio.

Any dividends earned from your investment are automatically reinvested. Raiz is as set-and-forget as these things come, and that’s a big part of its appeal.

What is Spaceship?

Spaceship is less pitched as a tool for helping you save money and more a gateway drug to the world of investing for those who aren’t super familiar with it but nevertheless keen to put money into companies investing in the future.

Like Raiz, Spaceship operates as a managed fund with an integrated smartphone app. Investors pool their money into the fund and then reap the financial benefits associated with their fractional share of it.

As it only launched in April 2018, Spaceship has a slightly smaller footprint than Raiz. It currently boasts more than 200,000 users, with more than $1 billion in funds under management.

Where Raiz has expanded into home loans and superannuation, Spaceship has remained focused on its core product. For some, that simplicity may prove appealing.

Which is better value?

For most users, the most important detail that separates Raiz from Spaceship is the difference in fee structure.

For Spaceship, customers with a balance of more than $100 face a $2.50 management fee each month. This flat fee structure replaced the previously complex percentage-based one earlier this year.

For Raiz, your fees scale with the number of funds in your account. If your account holds $15,000 or less, you’ll be charged $3.50 a month in fees. So if your balance was $5,000 for the year, you’d be charged $42.

However, this changes once your Raiz balance exceeds $15,000. Instead of the standard fee, you get charged 0.28 per cent a year in fees. For example, if you had $20,000 invested for the year, you’d be charged $55 in fees.

On the other hand, Raiz accounts with a custom portfolio are charged a higher $4.50 per month.

Once the funds in an account surpass $20,000, the same 0.28 per cent fee as other accounts applies.

About the author

Fergus is a journalist for Momentum Media's nestegg and Smart Property Investment. He likes to write about money, markets, how innovation is changing the financial landscape and how younger consumers can achieve their goals in unpredictable times.

About the author

Fergus is a journalist for Momentum Media's nestegg and Smart Property Investment. He likes to write about money, markets, how innovation is changing the financial landscape and how younger consumers can achieve their goals in unpredictable times.

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