Acorns App Review: A Helpful Platform for New Investors

10 min read. Updated December 29, 2023.

Taking the first step into investing may seem daunting. However, some FinTech investment apps are designed with beginners in mind. Many newcomers choose the Acorns app which offers a variety of features, products, and free learning resources.

Acorns is a mobile and web-based app that aims to help you save for the future by rounding off your purchases and investing the difference in low-cost ETFs. The company has been around since 2012 and currently has more than $3 billion in assets under management.

With over 10 million sign-ups, it is certainly proving to be a popular solution for your investment portfolio. Backed by world-class investors, board members, and advisors (including two Nobel Prize-winning economists), they surely have the best in class at the helm!

In addition to the traditional Acorns Investing account, you can also open custodial accounts for your children (Acorns Early), whilst managing your retirement account (Acorns Later) - all linked to your Acorns checking account.

This Acorns app review reveals if it offers the right tools to start investing and deep dive into all its offerings. We also share some screenshots to give you a sneak peek of these investing accounts.

Image Credit: Chartr

The banner ads and some links in this blog post are affiliate links. If you click on a link and join, I may receive a referral commission at no extra cost to you. All opinions remain my own and each company featured is individually selected.

 

What is Acorns?

Acorns is a micro-investing app. One of its key features is how easily it helps you save and invest, by using the spare change from your everyday purchases.

Just bought a coffee for $3.25. Great, you've actually spent $4 because $0.75 has been automatically invested for you by the round-up feature.

Once you open an Acorns personal account, you will be recommended an investment portfolio based on your financial goals; set up the rounding to the nearest dollar, and you're done!

At $3 (Personal) or $5 per month (Family), the Acorns fees are reasonable - we like that too.

Lastly, we share their long-term investing philosophy of building a diversified portfolio. If you have no time to study it but would like to start investing in the stock market, then an Acorns Invest account would do the job.

Acorns is one of 37 ideas in our Guide to The Best Passive Income Investments.

How does an Acorns account work?

Even though micro-saving remains the biggest drive behind Acorns, it does far more than invest your spare change round-ups.

Once you've linked credit cards and bank accounts, their system understands your spending patterns and Acorns rounds up each sale to the nearest dollar. Once you've accumulated $5 worth of spare change, this gets automatically invested in one of their expert-built ETF portfolios made of a diversified mix of stocks and bonds - becoming an investor doesn't get much easier than this!

There are a few ways you can use Acorns:

• The Acorns app is available for free on iOS and Android. You'll need to connect your bank account with this app before you can invest, but it's easy to do so.

• The Acorns website lets you set up an investment account and add funds through debit or credit card payments, or wire transfers.

• A smart account through the Acorns Checking Accounts, which functions as both an investment vehicle and checking account with no monthly fee (feature included in the Acorns Personal and Acorns Family tiers), no account minimum, and no overdraft fees

 

Is Acorns investment account worth it?

If you've read Top 5 Reasons to Start Investing Today, you understand that the earlier you start investing, the better your chances of high returns are - thanks to the power of compounding.

Acorns Invest is particularly suited to those who are committed to saving and investing for their future, but perhaps don't know where to start. With its approachable platform, you’ll slowly build your personal plan with a reasonable investing timeline.

Dwayne Johnson X Acorns: Introducing the limited edition Mighty Oak debit card.

If you have limited finances, then just open an account and test the round-up feature without changing your spending habits. Every little transaction creates spare change which is rounded to the nearest dollar. Once it reaches $5, it gets invested in your chosen Acorns portfolio - automatically. It is an excellent option to start with a low account minimum and a simple structure.

If you can afford to commit more money, you will have the possibility to set up automated direct deposit to grow your investment accounts - and your net worth - faster. Either way, you are in control.

 

What is the downside to Acorns?

Acorns is not worth the subscription fee if you need a thorough investment analysis and personal trade decisions. Whilst they invest in solid index funds, this is not an online brokers (cash management accounts).

Whilst there are five different Acorns Core portfolios and four Acorns ESG portfolios, they are all composed of exchange-traded funds (ETFs). As great as ETFs are for diversification, this means that you cannot pick and choose individual companies on the stock market to invest in. Instead, you go with the robo advisors' suggestion based on your risk profile.

Investors who prefer to build their share selection themselves will feel restricted by this. Although those with a higher risk tolerance would want to allocate some money to their Bitcoin-linked ETF.

Other robo advisors offer advanced tools or tax loss harvesting for example; these are not available on the Acorns app.

Acorns has a monthly fee for its brokerage account, which may be costly for small accounts.

Experience the Empower difference

For people looking to get access to free financial tools and more customization in their stock market investment, consider Empower (ex Personal Capital).

With the help of their robust technology and financial advisors' expertise, they give you a clear path to your financial goals to deliver truly personalized portfolio options to build wealth. No robos. Just human advisors who listen. Get started today with THIS simple portfolio tracking for free.

Is Acorns a good way to make money?

Overall, Acorns offers a great way to invest with little income and build good financial habits. Acorns is suited to anyone who wants to invest but hasn't started yet. It also supports the creation or expansion of your existing pension account.

With Acorns Earn, you can get bonus investments by shopping at thousands of top brands; either through the app or your desktop (Chrome and Safari browser extensions).

Interestingly, you can also find millions of part-time and remote jobs through the app. The aim here is to earn more to save & invest more.

Acorns is a financial wellness system that helps you save and invest for the long term. You can get started today with a $20 bonus investment!

Is Acorns safe?

Acorns is not a bank. However, the funds in their checking accounts are FDIC-insured for up to $250,000. It aims to offer bank-level security with secure servers, fraud protection, 256-bit data encryption, and an all-digital card lock.

Is Acorns trustworthy? Acorns legit and safe and uses a third-party custodian and processor.

The Federal Deposit Insurance Corporation (FDIC) protects bank deposits of up to $250,000 per depositor. All FDIC insurances are backed by the full faith and credit of the government of the United States of America, giving you peace of mind that your money is protected.

How to invest small amounts in stocks, and bonds? Learn recurring investment methods, and more educational content in our fractional shares blog post.

 

Which Acorns accounts are available?

There are three account types, in addition to their banking offering:

Taxable brokerage account (Acorns Invest)

This is the starting point for most users when opening an account with Acorns, where your spare change round-ups are invested. Once you've chosen your core portfolio (they will recommend one based on your initial answers), the rest is automated.

You're investing as you shop. Check back on your investment occasionally, you'd be surprised how small round-ups accumulate; you're creating your own "found money"! Open an account today and get a $20 bonus investment!

You can easily boost your investment account with the following features:

1. Automatic Recurring Investments: You can set up recurring deposits to grow your investment accounts faster.

2. Automatic Portfolio Rebalancing: This helps you stay on track with your long-term goals by having your base portfolio automatically rebalance.

3. Automatic Dividend Reinvesting: Some of your investments will pay dividends. If you are starting small, these would be small too. It is recommended to maximize your returns by reinvesting your dividends, instead of withdrawing them.

Acorns Early account

As this is included in the family plan, parents or guardians can open a custodial investment account for each of their children; which works similarly to the adult's account.

As we cover in the eBook How To Achieve Your Financial Independence, teaching your kids about money can be fun while giving them vital financial lessons. Acorns makes it as easy as possible with these features:

1. Acorns Early is a UTMA UGMA custodial account (Uniform Transfer to Minors Act / Uniform Gift to Minors Act). This means that the funds can be used in various ways to directly benefit the child. Unlike 529 plans, which solely aim at saving toward education expenses, UTMA UGMA accounts offer more flexibility. While both investment accounts come with potential tax advantages, they vary; visit irs.gov for more info. 

2. Smart deposit: You can automatically invest a piece of your paycheck into your child's account. Pick how much to invest, starting at 1%, and change it at any time.

3. Gift tool: Share a link and allow family and friends to easily contribute to your child's account.

The earlier you begin, the more time that money has a chance to grow. If you can afford it, do not miss the opportunity to give your little ones great found money when they reach adulthood.

All you need is the child’s name, date of birth, and social security number. Get a free digital copy of their children's book “Grow Your Oak” when you open an account.

Acorns Later account

As with the other Acorns accounts, you can begin saving for your retirement with just $5. By answering a few simple questions, you will get a recommendation on whether you should open a Roth IRA, Traditional IRA, or SEP IRA account that aligns with your long-term goals. 

You can then set up automatic recurring deposits. Acorns Later portfolios are designed to maximize growth potential and are automatically selected based on your age and timeline to retirement. As you age, your portfolio will adjust accordingly. Acorns lets you save for retirement weekly or monthly.

Acorns Checking account

Included with the monthly fee, the Acorns checking account works well with the investment account, all from the same app. Key benefits include no hidden fees, account minimum balance fees, or overdraft fees.

You also get a personalized, heavy metal, laser-engraved Acorns Visa debit card. Banking with Acorns unlocks everything you need to save and invest successfully:

1. Acorns Spend: using their debit card, your spare change gets invested in real-time, so it has even more time to grow. You can also get bonus investments from top brands when you shop their offers and swipe your debit card with Acorns spend.

2. Direct deposit: If you want to make full use of what Acorns offers, the easiest option is to connect directly to your employer or payroll provider.

3. Online banking capabilities you expect: mobile check deposits, digital checks, check to send, and free transfers.

4. Emergency Fund: automatically set aside a portion of your income from the checking account. Everyone should aim to have one. More on this in How Much Cash Should I Have On Hand?

Acorns investment portfolios: what's available?

There are five Acorns Core portfolios, ranging from conservative to aggressive, and four Acorns ESG portfolios. Acorns Core vs. ESG?

Each portfolio is composed of exchange-traded funds. An ETF is made of broad holdings of stocks and/or bonds. Depending on your portfolio, you’re invested in a mix of companies, markets, and asset classes such as:

• Large, medium, and small company stocks

• International stocks & emerging markets

• Government bonds

• Reals Estate

If you choose the conservative portfolio, you will be invested in bonds only (no stocks). While ETFs can be beneficial for diversification, fees are associated with holding these, known as expense ratios. Please read each prospectus carefully before investing.

Options for ESG

You can invest only in companies rated for their positive impact on Environment, Social, and Governance issues.

These socially responsible investing ETFs give you access to companies with sustainable investment strategies. Acorns uses iShares to construct ESG portfolios.

However, the criteria required to qualify may limit the types and number of investment opportunities available. As a result, the portfolio may underperform others that do not have an ESG focus.

Bits of Bitcoin ETF

In 2022, Acorns introduced a Bitcoin-linked ETF; up to 5% of your portfolio can be allocated to it.

Please note that the ProShares Bitcoin Strategy (BITO) invests in Bitcoin futures, not directly in Bitcoin. However, this new Acorns product may be an effective option for gaining indirect exposure to Bitcoin within your entire portfolio.

Invest in Bits of Bitcoin with Acorns, plus get a $15 bonus investment!

 

What is the best Acorns portfolio?

Acorns offers a variety of different products to suit any investment budget. Generally, choosing what to invest in depends on your risk tolerance and time horizon.

When registering, answer the questions as accurately as possible so that the robo advisors suggest the most appropriate portfolio for your investing goals.

Acorns does not recommend changing portfolios often, due to our overall passive investment strategy and the potential tax consequences of selling securities in your account. You do have the ability to override the recommendation provided in the app. As a reminder, changing portfolios may cause a taxable event, check with your tax professional for potential impact specific to your situation.

 

How much does Acorns cost?

For $3 per month, you can have the Personal Acorns account with a taxable brokerage account, checking account, and retirement account.

For $5 a month, an Acorns Family account includes child custody accounts as well as all features on the Personal accounts tier.

Both plans include Acorns Earn to get up to 30% bonus investments from 450+ in-app partner brands.

Easily save and invest with Acorns, plus get a $20 bonus investment!

 

How do I create an Acorns account?

Creating an investing account with Acorns is simple; get your investment portfolio ready in a few minutes:

1. Visit the Acorns website using a web browser on your computer or smartphone;

2. Look for the "Get Started" or "Sign Up" button;

3. Choose your account type: Personal tier, Family tier (investment accounts for kids), or Retirement accounts;

4. Provide your email. Make sure it is a valid email address that you have access to as you will need it for account verification and communication;

5. Create a password. Choose a strong and secure password for your investment platforms. Make sure it includes a combination of letters, numbers, and special characters. The password should be unique and not used for any other online accounts;

6. Complete the registration process. Follow the prompts on the registration page to provide any additional information required, such as your name, date of birth, and social security number (for verification purposes). Acorns needs this information to comply with financial regulations;

7. Connect your account. To start investing and saving money with Acorns, you will need to link a bank account. This allows for the automated investing feature to round up your purchases to the next dollar and invest it (even with a few dollars);

8. Select your investment preferences for your recurring contributions (from your linked payment method). Acorns will ask you a series of questions to determine your investment funds, risk tolerance, and time horizon. This information helps Acorns invests robo advisor recommend a suitable portfolio for you;

9. Review and confirm. Before finalizing your account setup, carefully check the information you have provided. Make sure everything is accurate and up to date;

10. Verify your email. Acorns customer support will send you an email to verify your account.

11. Set up your Acorns app (optional): If you want to manage your investments on your smartphone, download the Acorns app from the App Store (iOS) or Google Play Store (Android). Sign in to the app using your Acorns account credentials.

 

Acorn app review conclusion: great for hands-off investors

Acorns is a great way to save money with its round-up feature and invest without the hassle of managing your portfolio thanks to robo advisors. Setting up Acorns is quick and easy, and you don’t need prior knowledge about investing or finance. Your funds are protected by FDIC insurance.

This amazing micro-investment app offers enough portfolios to meet the requirements of many investors and is very easy to navigate. Most investors will have found money management easier with Acorns.

If you are interested in Acorns, give it a try with one linked account and see if it suits you. As I always say, never go ''all-in'' with any financial institution. Once you get familiar with the app's features, you can gradually increase your investments in the platform. Happy investing!

 

No Financial Advice. This acorns.com reviews does not provide financial advice and has been prepared without taking into account any person’s investment style, financial situation, risk level, or tax strategy. New investors or those looking for tax assistance should consult financial advisors.

 

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