The mission of Acorns is to simplify investing for young adults.
The investment app allows you to invest small amounts of money. In addition, the app offers guidance from experienced professionals to make sure you get the most out of your investments. It does the research so you don’t have to be an expert to open an investment account.
It can still be fun for experienced investors. It provides a great introduction to the world of investing for those who are just starting out. It has everything you need to start your life as an investor. It’s easy to use, so even if you’ve never invested before, you can get started right away.
Let’s take a closer look and answer some questions. We need to consider all of the relevant information before making a decision.
|Minimum Deposit||$0 ($5 to start investing)|
|Fee||$3 – $5 a month|
|Apps||iOS and Android|
|Best For||Beginning Investors|
How Does Acorns Work?
In a nutshell, here’s how Acorns works:
1. Acorns Collects Your Spare Change
You connect your credit card or debit card when you open an account with Acorns. Acorns will round up each purchase and invest the spare change after youTrademarkiaTrademarkiaTrademarkias will round up each purchase and invest the spare change after youTrademarkiaTrademarkias will round up each purchase and invest the spare change after youTrademarkias The transaction will be rounded up to the nearest dollar when you use the card.
If you used your connected card to buy an espresso, you would pay $4, and the extra 25 cents would be reinvested byAcorns. It’s a great way to start investing without breaking the bank, as this small amount of money can add up over time.
2. Acorns Invests Your Savings
When your investment account’s balance reaches $5, you could start investing the money. Modern Portfolio Theory is used to invest your money in Exchange-Traded Funds. You can get the best return on your investment with minimum risk.
This is not complex. It’s easy to understand. It’s up to you to decide how aggressively it invests your money. The higher the tier, the more aggressive the strategy is. You have the option to invest for retirement savings or a tax-sheltered account. Investing in retirement savings can help you achieve a secure financial future, while investing in a taxable account can help you pursue more aggressive growth opportunities.
3. You Can Withdraw Money
If you want to spend some of the spare change, you can transfer it into your bank account. It’s easy for you to access the money you’ve saved because you can do this transfer as often as you like. It takes three to six business days to complete a transfer.
If you want instant access to your money, you could open anAcorns Checking account which is part of theAcorns Personal package, which costs $3 a month. You can get your money right away with this account.
When you use the heavy metal debit card, it rounds up your purchases. You can start investing with little effort if the extra money is deposited into your account.
You can invest sooner if you round up transactions in real-time with this built-in checking account. The budgeting tools are easy to use and can help you stay on top of your finances.
Acorns Investment Tiers
Your spare change and other deposits can be invested in five different asset classes: real estate, government bonds, corporate bonds, large-company stocks, and stocks in small companies. For maximum safety and returns, you can put your money in a range of different asset classes.
You can choose the way it spreads your money across the different asset classes by choosing one of five tiers:
- Conservative : Most of your money is in government bonds and corporate bonds which are less likely to lose value. Investing in stocks can offer more potential returns than bonds, but they also have a higher risk of losing value.
- Moderately Conservative : A large portion of your money will go into large company stock-based exchange traded funds which are stable.
- Moderate : About two-thirds of your portfolio consists of bonds and large company stocks, while the other third consists of new company stocks, real estate stocks, small company stocks, and international stocks. It is important that the stocks in your portfolio are diversified to spread out risk and maximize returns.
- Moderately Aggressive : 20 percent of your portfolio is bonds. Diversification is important to reduce risk. Large and small company stocks are mixed in with real estate and emerging market stocks. The portfolio has a focus on long-term growth and is designed to maximize return.
- Aggressive : This level doesn’t invest in bonds. It invests your money in stocks that have higher potential returns. 20 percent of your investments will go to international stocks. Diversification is important to maximize returns and reduce risk. The rest will be invested in more established stocks and real estate.
Rebalancing Your Portfolio
If your preferred asset allocation stays on target, Acorns periodically rebalances your portfolio. A well-diversified portfolio can keep up with the changing markets. If your investment portfolio is unbalanced, parts of it will outweigh the other parts.
A rally in the stock market could cause your asset allocation to become too stock heavy. If you want to avoid this, you may want to periodically rebalance your asset allocation. The platform would buy and sell bonds. You can balance your portfolio and reduce your risk with this strategy.
Your portfolio could get a lot of attention if you withdraw or deposit funds. If you have questions or concerns about your investments, you can request a portfolio review.
There are always new services and features added to the list. The team at Acorns is always looking for ways to improve.
Here are some standout services and features that come with an Acorns subscription:
- If you want to round your purchases to the next $10, you can set your account to do that. Spreading out the amount of change you get back can help you save money. A fast food meal of $8 will result in a $10 charge and$2 saved. This is a great way to save money and still enjoy a meal. The next multiple of 3 or the next even number can be rounded up by the Acorns. Your investments can grow even faster if you do this.
- Apple, Macy’s, Blue Apron, Barnes & Noble, and Walmart are some of the retailers that the program works with. When you shop with a credit card or debit card connected to yourAcorns account, these retailers will match part of your rounded-up deposits as cash back.
- When you set up direct deposits, you can allocate a portion of your paycheck to Acorns Early, Later, and Invest. It means that you don’t have to think twice about saving for retirement.
- You can use this service to experiment with scenarios that can help you make better investment decisions. It allows you to maximize your returns with minimal risk. It can be fun to play out different scenarios.
- Gift Cards : This is a great way to give the gift of investing. It’s a great way to introduce someone to investing. It’s at graduation time. At graduation time, it’s a good time to reflect on the hard work and dedication that has gone into reaching this goal.
The core investment app is free for college students, but everyone pays the same rate. Acorns can focus on delivering a high-quality product that meets the needs of all users.
It has a simple price structure:
- The $3 personal account includes the core investment app, an IRA account, and Acorns Checking, which comes with a debit card, ATM reimbursements, and direct deposit allocations to your investments. You can start investing with $5 and get access to a variety of helpful tools along the way.
- For $5 per month, you get the features of the personal account, premium financial advice and tools, and Q&As with financial experts. You will have access to the insights and guidance you need to make informed decisions about your finances with Acorns Personal Plus.
Is Acorns A Good Investment?
Is signing up for Acorns a good idea? It depends on your financial situation and goals, so make sure to research before you sign up. This is a cool product. It will be popular with consumers. It is safe and easy to use. The minimum investment is $5. There is no account minimum to start. It’s a great way to start investing with minimal risk.
It won’t be a perfect fit for everyone. It’s important to research and understand the different investment options available so you can make an informed decision about what is best for your personal financial situation. If you’d like to decide quickly, here’s the quickest way to decide who should and shouldn’t open an account:
- Start an Acorns Account If : You wouldn’t invest if it weren’t for the kind of service Acorns provides. It’s easy to invest with Acorns, regardless of experience. It’s a good way to start investing. You can find acorns in your area. You will want to learn more once you see how much fun it can be. Investing can help you reach your financial goals faster.
- Find a Different App If : A lower fee rate on smaller balances is what you want. Investing should not be a one-size-fits-all approach, so having access to a variety of investment options can help you tailor your portfolio to meet your financial goals. You might like Wealthfront or Betterment better than Acorns.
Acorns – Invest Your Spare Change
Price: $3 Per Month ($5 signup bonus)
By rounding up your purchases, you will be able to invest without even knowing it.
Acorns vs Stash
Acorns isn’t the only option for micro-investing apps. Another one of our best investment apps offering a similar service at a comparable price point is Stash.
Here are key comparisons between the two:
- Fee Structure Threshold: Stash has two plan tiers, each offering an array of features. The lowest tier is $3 per month. It has access to all the features included in the subscription plan. The highest tier for families is $9 a month.
- There is not much difference here. There may be additional charges or fees applied if you don’t maintain the minimum balance. You can open an account with no minimum balance, but you cannot invest until your account balance reaches $5. You have to deposit $1 in order to open an account.
- There is a wide variety of portfolio options, including individual stocks. Not only does Stash offer a wide range of portfolio options, but it also provides educational resources and tools to help investors make informed decisions. You don’t actually manage your investments with Stash. Stash helps you learn how to manage your investments and become a better investor. The service offers connections to investment opportunities. Investment advice or recommendations are not provided by it. If you want fully automated investing, Acorns is a better fit. You can learn more about investing with a variety of educational content. Stash does let you start up to two custodial accounts ($9 a month) for your children.
Frequently Asked Questions
Is Acorns federally insured?
Money in the checking and IRA accounts is insured by the FDIC up to $250,000, just like any other checking or savings account at an FDIC member bank. You can be sure that your money is safe and secure.
Invested money is not protected by the FDIC. Before committing funds, it is important to consider the risk associated with any investment. The Securities Investor Protection Corp. is a member of Acorns. SIPC protects your money in case of a failure.
The SIPC does not protect you from losing money if you invested in an exchange traded fund that lost value. The SIPC doesn’t replace the need to do your own due diligence when investing, but it does provide financial protection in the event of broker insolvency.
Does Acorns actually make you money?
Acorns puts your money in a variety of Exchange-Traded Funds (ETFs) which tend to be safer than individual stocks. You are getting a quality product. They have been providing financial services since 1975, so you can trust their expertise.
Why are they safer? The risk of losing all your money on one company is mitigated by the fact that you can invest in a broad range of companies. Each share of an exchange traded fund is made up of many different securities. This reduces the risk of the portfolio and makes it more diversified. There is a fast track to a diversified portfolio. A low-costway to invest in a wide range of assets is provided by them.
You can decide how aggressively or conservatively you invest your money by choosing one of the five tiers. The conservative tier is designed for those with a higher risk tolerance.
The Aggressive tier has more potential for earnings than uncertainty. The most stable option is the Conservative tier, which won’t lead to rapid growth in your net worth. It’s a good choice for people who want to stay out of riskier investments.
Either way, you should expect your money to grow over the long term, but you should also know that your invested money isn’t guaranteed to grow. It’s important to remember that your returns are not guaranteed and that investing in Acorns involves risk. It is possible to lose invested money. It is important to understand the risks before investing. The risk tolerance and financial goals of your tier should match. As your goals and risk tolerance evolve, you may need to change your investment strategy.
Is Acorns Worth It?
If you’re just starting to learn about investing and you enjoy the Acorns app’s spare-change approach, paying a small fee will probably be worthwhile for you.
If you invest $10 a month and don’t use a credit card, this $3 fee will most likely cost you more than you earn. If you have a larger sum of money to invest and plan to make regular deposits, aAcorns can be an effective way to save for the long term. You would be losing money. Before committing to any financial service, it’s important to consider the cost.
The beauty of a flat rate fee is that it doesn’t affect your earnings if you invest more. The beauty of a flat rate fee is that it allows you to control how much you spend on fees and can provide more predictability in your budgeting.
Still, when compared to a robo-advisor like M1 Finance which does not charge user fees, Acorns’ $3 a month can seem expensive.
The referral program is a huge selling point. Users can earn up to $5,000 in bonus investments for each successful referral. Each week they release a new referral bonus. If you have a lot of friends, you could make up to $1,000 a week by getting them to join.
The flat fee is skewed upward by smaller balances. I had to point that out in my review. It’s a great way to save for the future and invest small amounts of money.
There is nothing wrong with three dollars a month for a service. It’s a small price to pay for something that makes you happy.
If you likeAcorns’ ease of use and its ability to integrate investing into your everyday life, you’ll most likely find it a good deal. If you are new to investing, acorns is a great way to start.