Updated October 4, 2020

Acorns Review: Is It Good?

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Acorns automatically invests your spare change. But can it help make you money? Find out if this app is safe and legit.

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
  • Cash-back program
  • 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 was the original spare change robo-advisor. You link up your credit and debit cards and Acorns will automatically round-up your purchases and invest the difference.

Since then, Acorns has expanded their services to become an all-in-one financial wellness app. In addition to investing spare change, you can open a checking account, save for retirement, and even invest for your children.

Acorns cost $1 - $5 per month, depending on which features you choose. Is it worth it? Keep reading for the full review.

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. It's a great choice for beginners and the app is very easy to use.

Who Is Acorns Best For?

Acorns is perfect for new investors or those who don't have the time to figure out the stock market.

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

Acorns is best for:

  • 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.

Small steps add up. If you're ready to finally save and invest your money, visit Acorns to get started. And don't miss the $10 bonus when you sign up.

Screenshot of Acorns

Taking a closer look at Acorns, they truly target young adults 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.

How does Acorns make money? Acorns makes money through its monthly fee and outside funding. Acorn's monthly fee is $1 - $5, depending on what accounts you have. As of March 2020, Acorns has over 6.8 million users.

How Does Acorns Work?

Acorns is an investing app that automatically invests your spare change. Each charge to your bank account is rounded up to the next dollar (Acorns calls these "round-ups") and put in a diversified portfolio. If you buy lunch for $5.25, Acorns rounds it up to $6 and invests the difference (75 cents).

Here's what you can expect when you sign up for Acorns:

  1. To start your account, choose a password and provide your:
    • Email address
    • Online banking login
    • Physical address
    • Social Security Number
    • Estimated net worth

  2. Then, link any credit or debit cards you want to earn "round-ups" with. (As many or as few as you want).

  3. Next, Acorns asks about your age, investment goals, timeline, and risk tolerance to determine your ideal portfolio.

  4. Based on your info and the Modern Portfolio Theory (more on this later), Acorns suggests your perfect portfolio.

  5. To jumpstart your account, you can then add an initial investment as little as $5+.

  6. Finally, customize your account by adjusting your round-ups and setting up recurring deposits to grow your investments more quickly.

How to close your account: If you want to close your Acorns account, click on "cancel subscription" in your settings and follow the process. Acorns will liquidate your funds and return them to your linked checking account in 3-6 business days.

Compare Acorns

Acorns Features

Let's take a closer look at all the services Acorns offers.

Acorns Invest

This is Acorns' main offering, also sometimes called Acorns Core. This is their micro-investing account that allows you to invest with your spare change. The Acorns Invest account is a taxable account.

You can open the account with $0. But you need at least $5 to start investing. You can jumpstart your account with a $5 deposit, or wait for your purchase round-ups to reach $5.

Every dollar is invested into a diversified portfolio containing over 7,000 stocks & bonds. Acorns will automatically rebalance your portfolio and reinvest dividends.

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.

Acorns Later

Acorns Later allows you to save for your later years with an individual retirement account (IRA). Acorns offers Traditional and Roth IRAs, as well as SEP IRAs (for self-employed individuals).

Acorns will automatically adjust your investment portfolio over time. As you get closer go retirement age, your portfolio will shift towards more conservative investments.

You can start investing in an IRA with a $5 minimum investment. Note that IRA accounts don't support round-ups. You can set up recurring contributions.

Acorns Later is included in the Personal plan for $3 per month.

Acorns Spend

This is Acorns' checking account, so you can have your banking and investing under the same app. It comes with a cool tungsten metal debit card.

It has all the typical features of a checking account including direct deposit, mobile check deposits, and online bill pay. You get access to 55,000+ fee-free ATMs around the world. In addition, there are no overdraft fees.

This account is FDIC insured up to $250,000, so you you can trust that your money will be safe.

Acorns Spend is included in the Personal plan for $3 per month.

Acorns Earn (Found Money)

One really unique feature is the Found Money program. Acorns gives you the chance to earn extra money when you shop with Acorns' 350+ retailer partners.

All you have to do is shop with a credit or debit card linked to your Acorns account. Instead of cash back, the retailer will contribute a percentage of your purchase into your investment account.

The list of partners changes frequently, with more being added regularly.

Acorns Early

Give your children a head start in investing by setting up UTMA/UGMA custodial investment accounts for them. You can start investing for you kids with $5. The account will be in your child's name.

You can withdraw from an Early account at any time without penalty. But the funds must be used to benefit the child.

Acorns Early is available in the Family plan for $5 per month. You can set up accounts for multiple kids at no additional cost.

CURRENT PROMOTIONS

What Are the Fees?

The Acorns monthly fee ranges from $1 - $5:

  • Acorns Lite: $1/mo. This includes Acorns Invest, the automated investing account.

  • Acorns Personal: $3/mo. Includes Acorns Invest + Acorns Later IRA + Acorns Spend checking account and debit card.

  • Acorns Family: $5/mo. Everything above plus Acorns Early. You can add investment accounts for all your kids.

There are no transaction or withdrawal fees for Acorns.

Acorns can be a good way to help handle your money if you're uncomfortable with investing. But if you want to learn how to invest on your own, try a no-fee option instead.

An app like Robinhood can help you learn the ropes. Plus, you won't have to pay any monthly commission fees or account maintenance fees.

Is Acorns worth it? 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?

© CreditDonkey

You'll manage your Acorns account mostly from the app, though you can access all the same features on their desktop website, too.

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.

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? For just $1 a month, Acorns can be a great way to help beginners get started in investing. But to really get more out of it, you'd have to put in larger deposits. Acorns may also 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.

  • Plenty of options for customization. Acorns lets you fully customize your "round-ups", giving you more control over how quickly (or slowly) they accumulate. You can have round-ups applied only to specific purchases, or turn them off altogether. Acorns even lets you retroactively claim 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 withdraw 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.

      Acorns

      Acorns Found Money

      • Earn as you shop with Found Money partners
      • Automatically invests cash back to your Acorns Core account
      • Brands include Chevron, Nike, Walmart and more

    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.

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 both start at $1 per month for a basic taxable account. Unlike an Acorns account, though, Stash does not invest for you and has no minimum required investment. They guide you to choose investments based on your goals and risk level, but you must do the actual investing yourself.

 AcornsStash
 Visit SiteVisit Site
 

Acorns

Stash

 

Benefits and Features

Stock TradingPart of service fee. No add-on trading fees.
Annual Fee$1/mo for Acorns Lite (taxable account only)
$3/mo for Acorns Personal (includes IRA and checking account)
$5/mo for Acorns Family (includes investment accounts for kids)
STASH 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
$1.2 Billion
$530 Million
Banking$3/mo for Acorns + Acorns Later + Acorns Spend checking. Free debit card, no minimum balance, no overdraft fees, and unlimited free or fee-reimbursed ATMs nationwide.All users get a cash account with a debit card. No minimum balance, no overdraft fees, and free ATM access at 19,000+ ATMS.
SEP IRA Accounts
Yes
No
 Visit SiteVisit Site

Acorns: Pricing information from published website as of 09/28/2020.

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.

 AcornsBetterment
 Visit SiteVisit Site
 

Acorns

Betterment Promotions

 

Benefits and Features

Stock TradingPart of service fee. No add-on trading fees. 
Savings
No
Annual Fee$1/mo for Acorns Lite (taxable account only)
$3/mo for Acorns Personal (includes IRA and checking account)
$5/mo for Acorns Family (includes investment accounts for kids)
0.25% for accounts under $100,000; 0.40% for accounts $100,000+
Checking
Yes
No-Fee Checking
Human Advisors
No
Yes ($100k minimum)
Assets Under Management
$1.2 Billion
$14 Billion
Tax Loss Harvesting
No
Yes
Banking$3/mo for Acorns + Acorns Later + Acorns Spend checking. Free debit card, no minimum balance, no overdraft fees, and unlimited free or fee-reimbursed ATMs nationwide. 
401k Plans
No
Yes
Trust Accounts
No
Yes
 Visit SiteVisit Site

Acorns: Pricing information from published website as of 09/28/2020.

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

Acorns vs Robinhood: Acorns is perfect for beginners and "hands-off" investors, while Robinhood is better for those who want a more active role in choosing their investments. And although they offer more customization, Robinhood's trading is completely commission-free. Learn more in our full Robinhood app review.

 AcornsRobinhood
 Visit SiteVisit Site
 

Acorns

Robinhood Promo

Stock TradingPart of service fee. No add-on trading fees.
$0
Annual Fee$1/mo for Acorns Lite (taxable account only)
$3/mo for Acorns Personal (includes IRA and checking account)
$5/mo for Acorns Family (includes investment accounts for kids)
All trades are commission-free. No platform fees.
Phone Support
Yes
No
Banking$3/mo for Acorns + Acorns Later + Acorns Spend checking. Free debit card, no minimum balance, no overdraft fees, and unlimited free or fee-reimbursed ATMs nationwide.
Coming soon
IRA Accounts
Yes
No
 Visit SiteVisit Site

Acorns: Pricing information from published website as of 09/28/2020.

Robinhood: Pricing information from published websites as of 04/18/2020.

Acorns vs Digit: Acorns and Digit are similar in the fact that they are both savings vehicles. Where Digit differs, though, 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.

 AcornsDigit
 Visit SiteVisit Site
 

Acorns

Digit

Stock TradingPart of service fee. No add-on trading fees. 
Savings
No
Yes
Annual Fee$1/mo for Acorns Lite (taxable account only)
$3/mo for Acorns Personal (includes IRA and checking account)
$5/mo for Acorns Family (includes investment accounts for kids)
30 days free; then $5/month
Checking
Yes
No
Phone Support
Yes
No
Banking$3/mo for Acorns + Acorns Later + Acorns Spend checking. Free debit card, no minimum balance, no overdraft fees, and unlimited free or fee-reimbursed ATMs nationwide. 
Taxable Accounts
Yes
No
IRA Accounts
Yes
No
Roth IRA Accounts
Yes
No
SEP IRA Accounts
Yes
No
 Visit SiteVisit Site

Acorns: Pricing information from published website as of 09/28/2020.

Digit: Pricing information from published website as of 07/02/2018

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. You would still need to deposit larger amounts on your own. The monthly fee can also be expensive for smaller balances.

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.

Note: This website 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. You do not have to use our links, but you help support CreditDonkey if you do.

CreditDonkey is a paid Affiliate/partner of Stash. Investment advisory services offered by Stash Investments LLC, an SEC-registered investment adviser. This material has been distributed for informational and educational purposes only, and is not intended as investment, legal, accounting, or tax advice. Investing involves risk.

More from CreditDonkey:


How to Make Your Money Work for You


How to Start Investing in Stocks with Little Money


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