Updated February 2, 2021

Acorns Review: Is It Good?

Read more about Acorns
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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

The two biggest investing myths holding people back:

  1. You need to be rich
  2. You need to be a finance expert

Truth is, you can start investing with a few dollars. And you don't need to know stock market lingo.

Many beginners on a small budget are fans of Acorns. This micro investing app lets you get started with spare change. It's completely hands-off and requires no work on your end. You can open a checking account, save for retirement, and even invest for your children.

But there are some fees and other drawbacks to watch out for. Find out if it's worth your hard-earned money below.

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. It's a great way for young adults with no 401(k) or retirement account to save and invest money passively.

Acorns is best for:

  • Hands-off investors
  • People who struggle to save
  • Custodial accounts for kids

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

Acorns truly aims to make investing accessible. If you're new to investing but want to start, check out all of the app's features below.

What's the catch? Since Acorns charges a flat management fee of $1 - $5 per month, the catch is that this could be high if you only have a little bit of money in the account. If you're only relying on investing spare change, your investments won't grow that fast.

How Does Acorns Work?

Acorns automatically invests your spare change. This is called their Round-Ups feature. Whenever you make a purchase with your linked card, Acorns rounds up the transaction to the next dollar. That change is put in a diversified portfolio.

If you buy lunch for $5.25, Acorns rounds it up to $6 and invests the difference (75 cents). Round-Ups help your account grow steadily as you go about your daily life.

You also have a Round-Ups Multiplier option. Instead of just rounding up to the next dollar, you can multiply the spare change by 2x, 3x, or 10x. You'll grow your investments a lot faster this way.

Acorns also supports daily, weekly, or monthly recurring deposits. Or, you can manually transfer a lump sum to your account starting with just $5.

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.

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

What's your ideal investing style?

1. Acorns Invest

The Acorns Invest account is a taxable account that lets you invest your spare change. You can open the account with $0. And you need just $5 to start investing.

No need to pick and choose your own stocks. This account lets you invest in a diversified portfolio of over 7,000 stocks and bonds. Plus, 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.

If you're looking for a more robust alternative, check out Betterment. The app includes smart tools and goals that will help you grow your money faster.

2. Acorns Later

If you want an easy way to save for your golden years, Acorns Later lets you automate it. You can invest in Traditional, Roth, or SEP IRAs starting with just $5.

Over the years, Acorns will change with you. As you get closer to retirement age, your portfolio will shift toward more conservative investments.

IRA accounts don't support round-ups. But you can set up recurring contributions and save automatically.

Acorns

Acorns Later: IRA Account

The easiest way to save for retirement.

3. Acorns Spend

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

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. Plus, there are no overdraft fees.

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

Acorns

Acorns Spend: Checking Account

Get a checking account that saves, earns and invests for you.

Acorns

Acorns Spend: $75 Bonus

Expires 12/31/2021
  • Setup Acorns Spend as your direct deposit method with your employer
  • Receive 2 direct deposits of at least $250 / deposit
  • $75 bonus will be deposited into your Acorns account within 45 days

4. Acorns Earn (Found Money)

This unique feature lets you can earn extra money when you shop.

All you have to do is shop with Acorns' nearly 10,000 partners like Chevron, Nike, or Walmart. The retailer contributes 1-2% of your purchase into your investment account. And there's even a Chrome extension for online shopping.

All this takes no effort on your part. You automatically get cash back when you use your linked card to make a purchase. After 60 to 120 days, the rewards will show up in your account.

The list of partners changes frequently, so you'll get more opportunities to earn.

5. 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. You can set up accounts for multiple kids at no additional cost.

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.

Acorns is hugely popular with millennials but they're not the only investing app out there. Don't forget to browse the latest promotions.

Compare Acorns

Stash

Sign Up and Get $5

  • Sign up, add at least $5 to your account and get a $5 bonus.
  • Invest with fractional shares
  • Get portfolio recommendations
Betterment

Get 1 Month Managed Free

Deposit $15,000 - $99,999 within 45 days and get 1 month managed free

Webull

Webull: Get Started

Compared to other apps, Acorns' fees are super high for small balances. Keep reading to discover if Acorns' returns are worth the cost.

What Are the Fees?

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

  • Acorns Lite ($1/mo.): Includes Acorns Invest

  • Acorns Personal ($3/mo.): Includes Acorns Invest + Acorns Later IRA + Acorns Spend

  • Acorns Family ($5/mo.): Everything above + Acorns Early

There are no transaction or withdrawal fees for Acorns.

Is Acorns worth it? Acorns is one of the best micro investing apps. It is easy to use and has an amazing learning platform for beginner investors. The monthly fee of $1-$5 might be worth it if you have an account with enough money in it.

Of course, you can do all of this on your own for free, if you're a disciplined saver/investor. But most of us aren't. So, if you struggle with investing or saving money, it's probably better to kick Acorns $1-$5 per month to direct your savings. Then you can save without obsessing over every purchase.

If you're looking for a no-fee alternative, check out Robinhood. It offers commission-free trading so you won't have to deal with pesky monthly charges.

Other Features

© CreditDonkey

The Acorns app is very user-friendly. You can switch between Past, Present, and Potential tabs for complete control of your account. Here's what each feature covers:

Present
This tab is a quick snapshot of the overall health of your Acorns accounts. You can view the current value of each account. And you can make quick changes to your Round-Ups, set up recurring deposits, and view active offers from Acorns Earn (formerly known as Found Money) partners.

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

Past
Here, you can see an in-depth breakdown of your past Round-Ups, deposits, Earn, and more. Use this feature to keep tabs on how quickly you accumulate each $5 investment minimum and adjust as necessary.

Screenshot of Acorns

Potential
Here, 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 edit your recurring investments to boost your account value.

Grow
Expand your knowledge of investing and saving with this educational section. Catch up on investing news and learn what to expect from the stock market in the upcoming week.

Is Acorns safe? 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 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.

People love Acorns' 100% automatic, robo-investing service. Now, let's dive deeper into exactly how the app makes you money.

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 Nobel-prize winning modern portfolio theory, or MPT.[2] In general, MPT considers diversification to be more important than individual security selection.

So, Acorns will build you a diversified portfolio of ETFs by investing in six asset classes:

  • Large company stocks
  • Small company stocks
  • Emerging markets
  • Government bonds
  • Corporate bonds
  • Real estate

Acorns' portfolios range from aggressive to conservative. Aggressive portfolios are more heavily invested in stocks. Conservative portfolios invest more heavily in bonds.

Here are examples of what you may find in the different portfolios:[3]

StocksBondsReal Estate
Aggressive90%0%10%
Moderately Aggressive72%20%8%
Moderate54%40%6%
Moderately Conservative36%60%4%
Conservative0%100%0%

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.

What Does Acorns Invest in?

Acorns mostly invests your money in Vanguard and iShares by Blackrock ETFs. Here are just a few of the ETFs that Acorns invests in:[4]

Of course, you can just invest in these ETFs yourself through a DIY brokerage and save the monthly service fee. But if you usually have trouble saving and don't want to manage your own portfolio, Acorn's service may be worth it for just $1 a month.

For sure, Acorns opens up the world of investing to people with little money. But the app isn't ideal for seasoned investors or high-earners. Keep in the mind, the following benefits and drawbacks.

Reasons We Like Acorns

© CreditDonkey

No minimum to open
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 just $5 spare change to start investing.

Acorns

No Minimum Investment

Takes the complexity out of investing
Investing can be extremely complicated, so 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 ways to spend your money rather than invest it, Acorns can automate it for you. The money is out of sight and out of mind so you can reach your investment goals without a second thought.

Plenty of options for customization
Acorns lets you fully customize how quickly your "round-ups" accumulate. You can have round-ups apply only to specific purchases, or turn them off altogether. You can even retroactively claim round-ups from purchases you made before signing up.

Set up an IRA using your spare change
Acorns Later lets you set up an IRA with your spare change. While you won't strike it rich quickly, it gets the ball rolling.

Screenshot of Acorns

No fee for withdrawing funds
You can withdraw your funds from Acorns at any time. However, it can take 3-6 business days to get the funds in your bank 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.

Invest with "Found Money"
When you shop with Acorns partners, like Apple, Macy's and Nike, you can earn money for your investment account. On average, you can expect between 1-2% of the purchase price in rewards. Rewards take 60-120 days to get deposited in your account.

Acorns

Acorns Earn (formerly known as Found Money)

  • Earn as you shop with Acorns Earn 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 to 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.

When is Acorns a Bad Idea?

Here are some reasons Acorns may not be right for you.

If you only rely on spare change
If you only use the spare change roundups, you're not going to be accumulating much. Investing micro amounts will also only get you micro returns. To really build wealth, you'll need also contribute larger amounts regularly.

High fees for small balances
$1 a month or $12 per year doesn't sound like a lot. But the percentage can be steep for small balances. If you only have $5 in your account, that's a 20% monthly fee.

In comparison, Betterment, another robo-advisor, charges 0.25% of the assets under management for accounts under $100,000.

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.

No tax benefits
Acorns does not offer tax loss harvesting or any type of tax assistance, for that matter. Some robo-investing apps, like Wealthfront provide tax loss harvesting for all users.

Limited Investment options
You only have approximately 7 asset classes to choose from. While, some investing services, like Betterment, offer 10+ asset classes.

How It Compares

Acorns vs Stash: Acorns and Stash both start at $1 per month for a basic taxable account. Unlike an Acorns account, Stash does not invest for you and has no minimum requirement. 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.
$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)
STASH Beginner ($1/mo)
STASH Growth ($3/mo)
STASH+ ($9/mo)
Mutual Fund Trading
No
 
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 if you have more than just spare change to put toward retirement. It's for the serious investor who want the help of a robo-advisor.

 AcornsBetterment
 Visit SiteVisit Site
 

Acorns

Betterment Promotions

 

Benefits and Features

Stock TradingPart of service fee. No add-on trading fees. 
Savings
No
Check
Options Trading
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+
Mutual Fund Trading
No
 
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. Robinhood offers more customization, and their 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
Options Trading
No
$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
Goal Tracker
Yes
No
iPhone App
Yes
Yes (4 stars, 3.2m ratings)
Android App
Yes
Yes (1.4 stars, 360k ratings)
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.No service fees for Robinhood Cash Management account. Free debit card with no in-network ATM fees or foreign transaction fees
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.

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

Acorns vs Digit: Acorns and Digit both help you save. Digit, however, 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.

 AcornsDigit
 Visit SiteVisit Site
 

Acorns

Digit

Stock TradingPart of service fee. No add-on trading fees. 
Savings
No
Yes
Options Trading
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)
30 days free; then $5/month
Mutual Fund Trading
No
 
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

What the Experts Say

As part of our series on investing and saving, CreditDonkey asked a panel of industry experts to answer readers' most pressing questions. Here's what they said:

Bottom Line

Should you invest with the Acorns app? The answer really depends on your situation.

Realistically, your spare change isn't going to get you very far. You would still need to deposit larger amounts on your own to change your financial future. Even worse, the monthly fee can also be expensive for smaller balances.

If you're looking for a primary investment account for retirement, Betterment or Wealthfront is a much better alternative.

But, if you are the type of person who struggles to save or invest, it can be a great way to get started with small amounts of money.

Why not do something with that spare change, right? It can give you a nice little boost to your income in the long run.

References

  1. ^ Acorns Pricing, Retrieved 12/22/2020
  2. ^ The Nobel Prize, Prize in Economic Sciences 1990, Retrieved 12/22/2020
  3. ^ Acorns, What's the Difference Between Conservative and Aggressive Investing and Portfolios?, Retrieved 12/22/2020
  4. ^ Acorns, Where Is My Money Invested?, Retrieved 1/4/2021

Donna Tang is the head of purpose and audience at CreditDonkey, a personal finance comparison and reviews website. Write to Donna Tang at donna.tang@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

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.

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