Updated December 19, 2019

Acorns Review: Is It Good?

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Acorns automatically invests your spare change, so you can invest without thinking. It's great for novice investors, but there are downsides. Read on.

Acorns

Overall Score

3.7

Annual Fee

3.0

Minimum Deposit

5.0

Customer Service

3.0
5-point scale (the higher, the better)

Pros and Cons

  • No minimum investment
  • Invest with spare change
  • Free for college students
  • Fees are high for small balances
  • No tax benefits
  • Limited investment options

Bottom Line

Investment app that automatically invests your spare change. Good for young investors to get into the habit

Acorns is an app-based investment vehicle that works by rounding up your spending. You link as many credit cards as you want to your account, and the round-ups accumulate.

Once your round-ups total $5, the money is withdrawn from your linked checking account and invested. All you have to do is link your credit cards and checking account, and choose a portfolio - Acorns does the rest.

Keep reading to see if this investment option is a viable choice for you.

Shortcut: If you are really eager to start investing with little money, Acorns is one of our recommended investing apps.

They have no minimum balance and it's free for college students. It's a great choice for beginners and the app is very easy to use.

Who Is Acorns Best For?

Ideally, Acorns is for the novice investor - the person who doesn't understand the market or just doesn't have the time to figure it out.

Because it's mostly an app-based program, it's geared toward millennials, but anyone can use it.

Acorns is best for:

  • College students who are ready to save for the future

  • Young adults with no 401(k) or retirement account.

  • People who want to be able to save and invest money passively.

  • Potential investors with little time or patience to manage their investments.

  • Those who just can't make saving a regular part of their life.

See Current Offer >>

Taking a closer look at Acorns, they truly target college-aged students or those who otherwise might not invest until they start their career. On the Acorns app, you'll notice that the language is very simple, making investing easy for novice investors.

If you're new to investing but want to start, check out the Acorns app.

When You Sign Up: Acorns will ask you a few questions to create your personal Investor Profile. After giving some info about your age, investment goals, timeline, risk tolerance, and employment status, Acorns determines your ideal portfolio. To create an Acorns account, you'll also need your:
  • Email address
  • Online banking login
  • Physical address
  • Social Security Number
  • Estimated net worth

How Does Acorns Work?

Acorns works by automatically rounding up your daily purchases on linked credit and debit cards and investing the spare change. There's no minimum to open, and investing starts as soon as you accumulate $5. It automatically builds a diversified portfolio of ETFs across 7 asset classes and rebalances it for you to keep you on track.

While getting started with Acorns is fairly easy, there are a few specific terms you should be familiar with:

Round-Ups: The change between your purchase and the next dollar. Acorns rounds up each purchase on your linked debit or credit card and invests it automatically.

Acorns lets you retroactively add Round-Ups to your account from purchases you made before signing up. This makes it easier to hit that $5 threshold and start investing.

Found Money: Extra money added to your Acorns account by shopping with Acorns partners. The list of partners changes frequently, with more being added regularly.

Acorns Invest: Acorns' main offering, also sometimes called Acorns Core. This is their micro-investing account that allows you to invest with your spare change (aka, the Round-Ups).

Acorns Later: Acorns' own individual retirement account (IRA). For your first $1 million in the Acorns Later account, the fee is $1/mo. After that, it's $100 for every million dollars.

Acorns Spend: Acorns' new checking account & debit card that saves and invest for you with every purchase, no manual account linking necessary.

Acorns Gift Cards: Acorns' new gift card offering. Choose your gift amount and the recipient will have that amount automatically deposited and invested when they sign up for Acorns.

Grow: Acorns' educational finance blog, which you can access from the app or the Acorns website. They regularly publish new articles on saving, investing, earning, spending, and borrowing.

How does Acorns make money? Acorns makes money through its monthly fee and outside funding. Acorn's monthly fee is $1 - $3 (free for college students), depending on what accounts you have. As of May 2018, Acorns has over 3.5 million users.

We'll explain more below. But first, let's highlight the current Acorns promotions.

CURRENT PROMOTIONS


    Acorns

    Acorns Spend: Checking Account

    The only checking account with a debit card that saves, invests and earns for you.

What Are the Fees?

The Acorns monthly fee ranges from $1 - $3:

  • $1/mo for Acorns Invest, the automated investing account
  • $2/mo for Acorns Invest + the Acorns Later IRA
  • $3/mo for the two above, plus Acorns Spend checking account and debit card

There are no transaction or withdrawal fees for Acorns.

For college students, Acorns Invest is free.

To qualify as a college student, you must mark your employment as "student" and use your college email address (.edu) to register for your Acorns account.

    Acorns

    $0/Month on Acorns Core for Students

    College students get to use Acorns Core product without paying the $1/month fee. To enroll, you must have a valid .edu e-mail address as your primary e-mail adress and you must set your employment status to student.

Is Acorns worth it? Acorns fees are worth it for college students who can use it for free. For everyone else, Acorns fees can be high if you keep a small balance. Acorns basic service costs $1/month, so a balance of $5 would cost 20% in fees. But if you struggle with investing or saving money, read on to learn why Acorns might still be a good option.

How's the App?

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A majority of the work you do with Acorns will take place on the app, although they do have a web-based app that you can use as well.

The Acorns app is very user-friendly and perfect for new investors. When you log in, you'll notice that the app is organized in terms of Past, Present, and Potential.

Present
This tab lets your view the current value of your Invest account, plus your Later and Spend accounts, if you have them. You can make quick changes to your Round-Ups, recurring deposits, and view active offers from Acorns' Found Money partners.

Think of the Present tab as a quick snapshot of the overall health and status of your Acorns accounts.

Acorns gives you the ability to multiply your Round-Ups. In Round-Ups settings, you can opt to have your Round-Ups multiplied 2X, 3X or even 10X. Not ready to put that much in your account? You can also choose to round up to the nearest $0.75, $0.50, $0.25, or turn off Round-Ups completely.

Past
Here you can see an in-depth breakdown of your previous Round-Ups, deposits, Found Money earned, and more. If you've earned money from referrals or dividends, those will also be visible in the Past tab. Use this feature to keep tabs on how quickly you accumulate each $5 investment minimum and adjust as necessary.

Potential
This is where you can view the projected value of your account based on your current investments. If you don't like the projection you see, you can select "Change Your Potential" and alter your recurring investments to boost your account value.

Grow
Expand your knowledge of investing and saving with educational section. Catch up on investing news and learn what to expect from the stock market in the upcoming week. This is also where you'll find Acorns' FAQs.

Is Acorns safe? The SIPC (Securities Investor Protection Corporation) insures Acorns investments up to $500,000, including up to $250,000 for cash balances. However, this insurance does not protect your investment account from market losses. Acorns also uses SSL encryption and bank-level security. They do not store your bank login credentials and they use multi-factor authentication to protect your account.

Sign-up for Acorns to start investing your spare change.

Acorns Portfolios

When you sign up, Acorns recommends the best portfolio for you based on your personal info and goals. You can accept the recommendation or choose your own.

Your investments through Acorns are based on the modern portfolio theory, or MPT. In general, MPT considers diversification to be more important than individual security selection. So, Acorns will build you a diversified portfolio by investing in seven asset classes:

  • Large Company Stocks
  • Small Company Stocks
  • Emerging Markets
  • Developed Markets
  • Government Bonds
  • Corporate Bonds
  • Real Estate

Acorns offers portfolios that range from aggressive to conservative. The more aggressive your portfolio, the more money that gets invested in stocks. Conservative portfolios invest more heavily in bonds. Here's a breakdown of the percentages:

StocksBondsReal Estate
Aggressive90%0%10%
Moderately Aggressive72%20%8%
Moderate54%40%6%
Moderately Conservative36%60%4%
Conservative18%80%2%

Is Acorns a good investment? Acorns costs $15/year if your portfolio is less than $5000. If it's worth more, it costs 0.275% of your balance/year, even though the download is free. But Acorns is not great for people who want privacy, as it requires a lot of personal details from each user.

Reasons We Like Acorns

© CreditDonkey

  • You don't need a minimum investment to open an account. This can often be a barrier for new investors, as they only have a little money to invest. Acorns doesn't require a minimum to open the investment account, but you'll need a total of $5 spare change saved to start investing.

  • It takes the complexity out of investing. Investing can be extremely complicated, making some people avoid it altogether. With Acorns' automated tools and hands-off investment practices, it's easy to start investing without knowing a thing about ETFs, stocks, bonds, or real estate.

  • The savings are automatic. Sometimes the hardest part of saving is actually doing it. If you always find things to do with your money other than invest it, the automation of Acorns may be advantageous to you. It's similar to payroll deductions to add to your 401(k). The money is out of sight and out of mind, helping you to reach your investment goals without a second thought.

    Wondering if Acorns is a safe place to keep your spare change? Acorns Invest and Later accounts are protected up to $500,000. Your Acorns Spend account is also insured up to $250,000. Invest with Acorns today and watch your money grow.

  • Plenty of options for customization. Acorns understands that investing is not a one-size-fits-all experience. That's why you can multiply your Round-Ups, apply them to only specific purchases or turn Round-Ups off altogether. Want to turn back the clock on your investing? Acorns also lets you retroactively add Round-Ups from purchases you made before signing up.

  • You can set up an IRA using your spare change. Starting up an IRA can be costly. Many brokers require a minimum deposit for IRAs, which is usually even higher than standard taxable accounts. Acorns makes it simple to set up an IRA with your spare change. While it won't make you strike it rich quickly, it gets the ball rolling.

    Did you know: Acorns also offers Acorns Later. Acorns Later is a Traditional IRA that is funded with your pre-tax income. This is great for anyone looking to minimize taxable income for the current year. You will pay taxes when you withdrawal the funds.

  • There is no fee for withdrawing funds. You can withdraw your funds from your Acorns account at any time and at no charge. However, it can take between 3-6 business days to receive the funds in your bank account. The SEC requires a 2-day waiting period after selling an investment, and Acorns sometimes enforces a 5-day waiting period to prevent any fraudulent activity on your investment account.

    How to get money out of Acorns: Sign in, click "Invest for your future," click "Core Investment Account," click "Withdraw" and enter the amount you want to withdraw.

  • You can invest with "found money". Acorns partners with many big companies, like Apple, Macy's and Nike, that contribute towards your Acorns deposits when you shop with them. On average, you can expect between 1-2% of the purchase price in rewards. Keep in mind that the Found Money rewards may take between 60 and 120 days to get deposited into your Acorns account.

    Tip: You can link as many credit cards as you want to Acorns. Use a cashback credit card so you get even more out of your purchase. You can double-dip with credit card cashback rewards AND investment contributions from Acorn's partners.

  • You can set up recurring deposits. If spare change deposits are not enough for you, setting up recurring investments is simple in the Acorns app. You can choose to set up weekly or monthly deposits from a bank account that take place automatically to enhance your investments.

To start, sign up for Acorns.

Reasons You May Want to Look Elsewhere

  • The fees can be high if you keep a small balance. Even though $1 a month or $12 per year doesn't sound like a lot, if you look at it as a percentage of your investment, it's a hefty fee. If you stick with the $5 minimum investment that first month, it will cost you 20% to use Acorns. Compare that to Betterment, another robo-advisor, that charges 0.25% of the assets under management for accounts under $100,000, and Acorns looks very expensive.

    You're not going to get a lot of returns on just spare change. And the monthly fee can minimize any potential returns.

    Remember that your returns depend on the market. If you don't have much and you don't like risk, consider putting your money in a high yield savings account instead. You're guaranteed interest, and many have no monthly fee or account minimums.

  • There are no tax benefits. Acorns does not offer tax loss harvesting or any type of tax assistance, for that matter. The only tax advice you will receive from them is the 1099 they send you in the mail at tax time (if your account activity warranted a 1099).

  • Your investment options are limited. Acorns investing options are limited. You'll only have approximately 7 asset classes to choose from. Some investing services spread the asset allocation over 10+ classes. If having a higher number of asset classes is important to you, look into Betterment or other options.

How It Compares

Acorns vs Stash: Acorns and Stash are similar in the fact that they both allow you to start investing with just $5, and they have the same fee structure. Unlike an Acorns account, though, Stash does not invest for you. They offer recommended "themes," but you must do the actual investing yourself.

 

Acorns

Stash

 

Benefits and Features

Stock TradingPart of service fee. Free for college students for 4 years. No add-on trading fees.
Annual FeeFree for college students; $1/mo for Acorns; $2/mo for Acorns + Acorns Later; $3/mo for Acorns + Acorns Later + Acorns SpendSTASH Beginner ($1/mo)
STASH Growth ($3/mo)
STASH+ ($9/mo)
Phone Support
Yes
Yes - normal business hours, plus Sat & Sun 11a-5p ET
Assets Under Management
$1 Billion
$530 Million
BankingAcorns Spend checking account comes with a debit card and has no minimum balance requirement, no overdraft fees, and unlimited free or fee-reimbursed ATMs nationwide. $3/mo for Acorns + Acorns Later + Acorns Spend.
Yes
SEP IRA Accounts
Yes
No
 Visit SiteLearn More

Acorns: Pricing information from published website as of 07/11/2019.

Stash: Pricing information from published website as of 08/14/2019

Acorns vs Betterment: Acorns and Betterment are both robo-advisors, but the similarities end there. Betterment is better geared towards actual retirement savings than saving your spare change. It's for the investor who is serious about their investments and wants a hands-off approach with the robo-advisor side of it.

 

Acorns

Betterment Promotions

 

Benefits and Features

Stock TradingPart of service fee. Free for college students for 4 years. No add-on trading fees. 
Savings
No
Annual FeeFree for college students; $1/mo for Acorns; $2/mo for Acorns + Acorns Later; $3/mo for Acorns + Acorns Later + Acorns Spend0.25% for accounts under $100,000; 0.40% for accounts $100,000+
Human Advisors
No
Yes
Assets Under Management
$1 Billion
$14 Billion
Tax Loss Harvesting
No
Yes
BankingAcorns Spend checking account comes with a debit card and has no minimum balance requirement, no overdraft fees, and unlimited free or fee-reimbursed ATMs nationwide. $3/mo for Acorns + Acorns Later + Acorns Spend. 
401k Plans
No
Yes
Trust Accounts
No
Yes
 Visit SiteVisit Site

Acorns: Pricing information from published website as of 07/11/2019.

Betterment: Pricing information from published website as of 04/04/2018

Acorns vs Robinhood: Acorns is geared towards auto-investing for youngsters, while Robinhood is more for those who can select their own investments. The unique thing about Robinhood is that it charges no commissions to trade stocks. So it's good for beginners who want to try investing without losing a bunch of money to monthly fees. But it doesn't do the investing for you. Learn more in our full Robinhood app review.

 

Acorns

Robinhood Promo

Stock TradingPart of service fee. Free for college students for 4 years. No add-on trading fees.
$0
BankingAcorns Spend checking account comes with a debit card and has no minimum balance requirement, no overdraft fees, and unlimited free or fee-reimbursed ATMs nationwide. $3/mo for Acorns + Acorns Later + Acorns Spend.
No
 Visit SiteLearn More

Acorns: Pricing information from published website as of 07/11/2019.

Robinhood: Pricing information from published websites as of 1/29/2020.

Acorns vs Digit: Acorns and Digit are similar in the fact that they are both savings vehicles. Where Digit differs, though, is it does not invest your money; instead, it saves it in a savings account. Digit does this automatically after evaluating your income and spending habits to determine how much you can save on a regular basis. There is no investment component of their service, though.

Bottom Line

Should you invest with the Acorns app? The answer really depends on your situation. Should you rely on it as your primary investment account for retirement? You probably shouldn't. Your spare change isn't going to get you very far.

But, if you are the type of person who just doesn't save or who doesn't understand investing, it can be a great way to get started or a great supplement to what you already have going. Why not do something with that spare change, right? It can give you a nice little supplement to your income if you use the service long enough for there to be a return on your small investment.

Disclaimer: Opinions expressed here are author's alone. Please support CreditDonkey on our mission to help you make savvy decisions. Our free online service 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.

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