Blossom App Review; Does it really help your savings grow?

Blossom App is a micro-investment fixed investment app allowing users to invest in bonds. It is more risky than saving in a bank, but gives greater returns. Read on for my full Blossom App review..

Verdict: The Blossom App is a great way to get started with fixed income investing, and offers great returns!

Introduction

Blossom App started during the pandemic in 2021, when co-founder Gaby Rosenberg was working on her finances and realised that there were no fixed investment opportunities for young women as they generally required large investments for a long period of time. This gave her the idea of starting BlossomApp which is a micro-investment fixed income investment app with an affordable minimum investment and the ability to withdraw funds at any time.

There is an attractive and functional app as well as an easy to use website that can be accessed by users. It is easy to set up direct debits for recurring payments or PayID for immediate investments.

BlossomApp has continued to grow, and there are many benefits in investing through Blossom, so let’s take a look at the features, the pros and cons and whether it’s worth your time and money.

CaptainFI is not a Financial Advisor and the information below is factual review information, not financial advice. This website is reader-supported, which means we may be paid by advertising on the site, or when you visit links to partner or featured sites. For more information please read my Privacy Policy, Terms of Use, and Financial Disclaimer.

What is the Blossom App?

BlossomApp is a fintech startup which has its headquarters in Sydney, where its co-founders Gaby and Ali Rosenberg live. It is a micro investment fixed income investment app.

Initially, the app primarily targeted young women, but after two years BlossomApp is being used by a wide variety of people. 

“You’ve never been able to save like this before. By harnessing the power of technology and fixed income investing we are able to give everyday people a new choice when it comes to savings.”

blossomapp.com

How does it work?

Users can buy units in a fixed investment fund with earnings paid daily. Blossom aims at a 5.95% per annum return.  This is a higher interest rate than you would get from a bank, but it is also a little more risky. On the other hand, it is a lot less risky than buying shares or cryptocurrency. When you make an account with Blossom, you are buying a share in a unit trust. 

Their portfolio is a mix of cash, semi-government, government bonds, and mortgage-backed securities. The minimum amount that you can invest is just $5. Earnings are calculated daily, and you can easily see the increase on the homepage of the app. You can withdraw your money at any time, but Blossom is not a bank, so it may take a day or two.

Is it an investing App?

Although BlossomApp is an investing app it could more easily be called a savings app which allows users to invest in fixed income investments and receive interest.  Users transfer money to BlossomApp and that money buys units in a fixed investment fund. Returns on investment are added each day.

For an overview of the BlossomApp company, read Australian FinTech company profile #157 – Blossom App. 

What is a fixed income fund?

A fixed investment fund is one where you invest your money for a fixed period of time and earn money which is usually paid at the maturity date. A term deposit is a kind of fixed income investing. The money that you invest, which is called the principal, does not change in value.

A fixed income fund allows you to buy a unit in a larger fund. Because of the way the fund works, there isn’t the same maturity date that a fixed investment has. This means that it is easier to access your money. 

“Until now, the fixed income market was not for everyone. It was impossible to access, impossible to afford and impossibly complex. Blossom is leveling the playing field and bringing fixed income opportunities to everyone.”

blossomapp.com/about-us

How much does it cost?

You don’t have to pay anything when you sign up for BlossomApp. There aren’t any transaction fees, sign up fees or withdrawal fees either. The money that you use to fund the BlossomApp goes directly to your account without any deductions.

What is the interest rate on the Blossom app?

At the time of writing, Blossom clearly states that they are aiming for a return of 5.95% per year. They do this through their Threshold Management agreement. When the Blossom Fund makes more than 5.95%, the extra money will be paid to BlossomApp and they can save it for times when Blossom makes less than the target amount.

There are other ways that they can guarantee the returns. If you want to know more, you can read the Blossom App PDS.

Who owns the Blossom App?

Sisters, Gaby and Ali Rosenberg are the co-founders of the Blossom app which started in June 2021. Gaby had an interest in fixed income investment, but realised that for many people the amount that would need to be invested was too high. Not only that, with most fixed investments, you have to keep your investment for long periods of time to make any returns.

While there are a number of micro-investment apps available in Australia, there are none that give access to fixed income assets. According to an article in Canberra Times, Gaby is using BlossomApp herself, and it is always good to know that the creators of a product use it themselves.

What is Auto Grow?

Auto-grow is a system of rounding up your electronic payments and adding them to your investment. Every time you buy something using your card, Blossom will round the amount up to the dollar amount you choose and invest it in your auto-grow account.

You can choose to round up to $1, $2, $5, or $10. You can also choose to multiply the amount you invest by 1, 2, 3, 4, 5, or 10 times. They wait until you have accrued $5, $10, or $20 and then once a week, on Wednesday, they transfer it to your investment account.

You have complete freedom to choose how much you want to invest in your auto-grow account and you don’t have to have one if you don’t want it.

Does Blossom operate under an AFSL?

Gleneagle Asset Management Limited is the Responsible Entity of the Fund and BlossomApp is a Corporate Authorised Representative. In order to legally provide a financial product in Australia,  BlossomApp must have an AFS Licence.

For more information about Australian Financial Services Licences, see What is an AFS licence? | ASIC

Advantages of using the Blossom App 

• You do not need to invest a lot of money. You can start with a minimum of $5.
• You do not have to leave your money with BlossomApp for a fixed amount of time. Your interest is calculated daily and you can withdraw your money whenever you like.
• Blossom App has a referral programme. If you get someone to invest at least $20 in BlossomApp using your link, you will both get an additional $10. You can do this a maximum of 20 times.
• The app is very well-designed and allows easy access to your investments. It is easy to transfer money using either direct debit or PayID. You can also set up regular payments with direct debit.
• It is very motivating to see the interest added to your investment every day.
• The app has a compound interest calculator that allows you to see how much money you could potentially get from your investment over a 20 year period.
• You know that you are not doing harm when you invest with BlossomApp. BlossomApp only makes ethical investments, and does not invest in fossil fuels. They also plant a tree for every new account. In fact, it won Finder Green Awards 2023 – Recognising sustainable companies  Green Investment App of the Year.
• You can create savings goals with BlossomApp.  On the Savings Goal page,  you will see a graphic of a plant with a flower that blossoms as your savings get closer to your goal. This can be very motivating for some.
• Blossom’s blog has several helpful, informative articles about investing and personal finance topics.

Disadvantages of using the Blossom App

• Their customer service is not very attentive. When I tried to add funds using both the website and the app, I was unable to do it at first as the code didn’t arrive. I tried to email the Blossom App to find out what the problem was. They never replied, but I was able to do it in the end. It took a few days and I ended up reinstalling the app. I still don’t know if that is what fixed the problem, and I never heard from customer service.
• You can only use one bank account with Blossom. I signed up with one bank account, but that’s not the bank account that I use for my daily transactions. If I had known earlier that I couldn’t link another bank account, I would probably not have used it. It makes it hard for me to use the auto-grow feature, since I don’t want to have to buy my daily coffee with the bank account that I used for the original investment.
• When you make a deposit with a bank, you know that up to $250,000 is guaranteed, and no matter what happens you will get your money back. This is not true for your investment with Blossom. It is also not CHESS sponsored, so if anything goes wrong, it is possible that you will lose all your money.
• You do not have immediate access to your money the way you would if you had a normal bank account. It takes one business day for a withdrawal to go through, so if you make a withdrawal on the weekend, it may take a few days before you receive your money.

FAQs about the Blossom App:

How does Blossom make money?

The Blossom Fund is an investment fund which makes returns on its investment. 5.95% (at the time of writing) is paid to customers. The next 1% goes to cover expenses. After that, any excess returns are paid into a fund that can be used to pay the 5.95% that Blossom pays to its users if the investment fund makes returns that are lower than the target.

Is there a minimum investment?

There is a minimum investment of just $5. The maximum investment amount is $10 million. Anyone can invest with BlossomApp.

Can I close my Blossom account at any time?

You can withdraw your money at any time, by making a transfer request. It is easy to work out what you need to do to transfer your money. You can transfer all or part of the money you have invested. Unlike making a deposit, it is not possible to make an instant withdrawal into a savings account. You will have to wait at least a day.

 While you can easily transfer out all of your money, it is not clear whether you can close your account at the same time. You may have to write an email to customer service to completely delete your account.

How risky is it to use Blossom?

Blossom is more risky than a bank, but less risky than investing in the share market. There are always some risks when you invest your money. Nevertheless, Blossom has been around since June 2021 and has good reviews on TrustPilot.

For more about bonds and about BlossomApp, see How to Invest in Bonds – Getting Started – Fixed Income News Australia.

In 2021, BlossomApp was managing $3.5 million in funds and in January, 2023, it had grown to $36 million. It is no longer just being used by young women. Read how their client base is growing beyond Millennials in this Business News Australia article.

Conclusion

BlossomApp is a micro-investment app that allows everyday people to invest in bonds by providing a way to buy units in a fixed investment fund. It offers returns of 5.95% per annum, which is higher than anything offered by the banks. Co-founders Gaby and Ali Rosenberg started BlossomApp to allow young women a chance to invest, but BlossomApp now attracts a wide range of users.

The app and the website are very easy to use and it doesn’t take much time to set up an account.  With a small minimum investment of only $5 and the ability to withdraw your funds at any time, it is well worth considering BlossomApp if you want to increase your savings.

Financial Disclaimer

Financial Disclaimer: CaptainFI is NOT a financial advisor and does not hold an AFSL. This is not financial Advice!

I am not a financial adviser and I do not hold an Australian Financial Services Licence (AFSL). In this article, I am giving you factual, balanced information without judgment or bias, to the best of my ability. I am not giving you any general or personal financial advice about what you should do with your investments. Just because I do something with my money (or use a particular service or platform) doesn’t mean it is automatically appropriate for your personal circumstances. I do not recommend nor endorse any financial or investment product, and my usage or opinion of any product should not be interpreted as an endorsement, advertisement, or intent to influence.

I can only provide factual information based on my journey to Financial Independence, and that is provided for general informational and entertainment purposes only. I make no guarantee about the performance of any product, and although I strive to keep the information accurate and updated as it changes, I make no guarantee about the correctness of reviews or information posted.

Remember – you always need to do your own independent research and due diligence before making any transaction. This includes reading and analysing Product Disclosure Statements, Terms and Conditions, Service Arrangement and Fee Structures. It is always smart to compare products and discuss them, but ultimately you need to take responsibility for your use of any particular product and make sure it suits your personal circumstances. If you need help and would like to obtain personal financial advice about which investment options or platforms may be right for you, please talk to a licensed financial adviser or AFSL holder – you can take the first steps to find a financial advisor by reading this interview, or by visiting the ASIC financial adviser register and searching in your area.

For more information please read my Privacy Policy, Terms of Use, and Financial Disclaimer.