Investing is a key pillar on the path to long-term financial goals. While consumers have many choices, apps like Acorns helps people invest in various assets and grow their money. While you can choose from many investing apps, An Acorns account has several features that make the app special. This Acorns review will detail how the app works and help you decide if it’s the right choice for you.
What is Acorns
Across is an investing and banking app that lets users spread their money across various investments and funds. Across allows users to choose from expert-built portfolios that generate respectable returns while reducing the amount of time you spend looking at your portfolio. Acorns has over 10 million customers who have invested over $15 billion through the app.
How Does Investing Work with Acorns?
Investors can choose from many expert-managed funds. These funds allow you to achieve returns similar to the market while not doing as much market research. Acorns recently opened up the opportunity for investors to buy individual stocks if they don’t want to rely on expert-managed funds. Individual securities offer additional diversification with funds. You will have to use the Custom Portfolios feature to invest in your favorite companies.
Who Is Acorns Best For?
Acorns checks a lot of boxes for consumers who want to grow their portfolios. The app lets you invest in your favorite companies and also decide if you want a professional to manage your portfolio instead. Acorns’ expert-managed funds are similar to ETFs. They offer broad diversification and have a few clear goals for the fund’s performance and how it aims to balance risk, cash flow, and other important details.
What Does Acorns Offer?
Acorns offers several products and resources that can strengthen your finances. These are some of the key perks.
Acorns Invest
Across gives investors exposure to highly-rated ETFs and the ability to buy shares of individual companies. Acorns ETFs tend to have lower costs and better portfolio diversification. Many of these funds contain a mixture of stocks and bonds.
Acorns offers a free calculator that helps consumers see how their money can grow over time. You can input your initial deposit, contribution amount, frequency of contributions, the number of years, and the average annual return. For instance, if an investor starts with $10,000 and continues to invest $100 per month over 20 years with an annualized 7% return, the investor ends up with $92,480. According to the Acorns calculator, $34,000 comes from contributions, and $58,480 comes from investment returns. Having this calculator can help people assess how much they should contribute to their portfolios each month.
Acorns Later
Acorns Later lets you invest funds for your retirement portfolio. You can open an IRA and enjoy the tax benefits that come with the account. You can set recurring investments, such as $5 per day. Investors can adjust the contribution amount and the frequency within the Acorns app. These accounts are SIPC-insured up to $500,000. This insurance policy does not protect investors from market risks and volatility. However, it protects investors in the unlikely event Acorns becomes bankrupt. It’s very similar to the FDIC insurance you would expect from any bank. You can sign up for this account in minutes and choose a Roth, traditional, or SEP IRA.
Acorns Early
Acorns Early allows parents to invest in their children’s future. Making monthly contributions to a UTMA or a UGMA account gives your child more flexibility about how the funds get used. While educational accounts are more restrictive, UTMA and UGMA funds can be used for any purpose once your child receives the funds when they become an adult. Each state has different rules about when children can access this money, but the age ranges from 18-25 years old.
Acorns Earn
Acorns Earn helps people earn money when they buy goods and services from qualifying companies. This part of the Acorns app can also introduce you to new job opportunities. Consumers can browse through over 15,000 offers from top brands. Since Acorns Earn was introduced in 2016, Acorns Earn customers have earned and invested over $30 million. The rewards will be invested within 60-120 days of placing an order.
Acorns Checking and Visa™ Debit Card
This debit card allows you to automatically invest a portion of every paycheck. You can also earn bonus investments from thousands of top brands if you use the Acorns debit card for your purchases. You can even set up your checking account so that a fixed percentage of every payment automatically gets invested. When most of the investing happens automatically, it’s easier for investors to make progress toward their long-term financial goals.
Acorns Features
Acorns has several features that help it stand out from the competition. These are some of the company’s top perks.
Online Banking
Acorns isn’t just an investing app. You can open bank accounts within the Acorns app that automatically save and invest your money. You control the settings and how your money gets saved and invested. Enjoy fee-free transactions at over 55,000 ATMs within the network. You can also get paid up to two days early with direct deposits. Quicker payouts allow you to invest your money sooner.
Acorns has many of the features consumers have come to expect from online banks, such as mobile check deposits, digital checks, and other perks. These accounts are insured by the FDIC up to $250,000. Acorns bank accounts have built-in fraud protection, an all-digital card lock, and 256-bit data encryption.
Sustainable ESG Portfolios
Investors who want to put their money into ESG initiatives may want to consider Acorns’ Sustainable ESG Portfolios. These funds give investors exposure to companies that do a relatively good job at the core pillars of ESG: environment, social, and governance. Fund managers will stay on top of the portfolios and do all of the work for you.
Bitcoin ETF
Buying Bitcoin is complex. You will have to remember your private key so you can get into your crypto wallet. You will have to put this digital wallet in cold storage when you want to make it less vulnerable to hackers. It’s far more complicated to own crypto than stocks, but Acorns makes it simple. Investors can buy Bitcoin-linked ETFs, which help investors diversify their portfolios. Acorns can allocate up to 5% of your investments towards a Bitcoin ETF, but the percentages are up to you.
Real-Time Round-Ups®
Acorns’ round-up feature allows consumers to turn every purchase into an opportunity to grow their portfolios. This feature rounds every purchase to the nearest dollar and puts the remaining cents into an investment account. For instance, if you spend $28.25 on a purchase, the purchase gets rounded up to $29. Then, the remaining $0.75 goes into an investment account. While $0.75 isn’t much, the round-up feature can result in hundreds of invested dollars per year, depending on how much spare change you accumulate.
Get Paid Early
Acorns allows you to get paid up to two days early through direct deposit. That means you will have the extra funds to grow your investments or cover living expenses. You will become less reliant on payday loans or other methods of short-term financing through this feature. It’s a common perk among many online banks and financial institutions.
Smart Deposit
Smart Deposits allow you to invest a percentage of every paycheck into your Acorns investment accounts. Automating your investments with Smart Deposit allows you to spend less time in your banking and investing accounts. It’s nice to know that these vital transactions happen in the background and move you closer to your long-term financial goals.
Earn Bonus Investments
Bonus Investments allow you to turn your purchases into opportunities to grow your portfolio. Over 15,000 brands participate in this rewards program, which is similar to cashback rewards. The key difference is that you receive bonus investments instead of cashback.
Acorns Learn
The best investors continue to learn. They read articles, watch videos, listen to podcasts, and talk about investing with some of their friends. Acorns makes it easy to expand your knowledge and discover different ways to achieve your financial goals via Acorns Learn.
Acorns has many educational resources that help consumers learn more about money and plan their finances. You can read an article each day to master finances within a year. You can also watch videos and receive tips from expert investors through Acorns Learn.
Acorns Plans and Pricing
Acorns has several plans with different pricing tiers. These are the choices if you want to get started with Acorns.
Acorns Personal
This plan costs $3/mo and gives investors access to investing tools and expert-managed portfolios. You can access Round-Ups and build your retirement savings with an IRA. This account also has many banking features, such as the 55,000 ATM network, no overdraft fees, and a checking account that saves and invests for you. You even get to enjoy Acorns Earns, which connects you with over 15,000 partners and can help you find a job. Acorns Learning is another perk included in this plan.
Acorns Personal Plus
Acorns Personal Plus costs $5/mo and includes the same resources as Acorns Personal. These are the plan’s additional features:
- Set up an emergency fund
- Acorns matches bonus investments (up to 25%)
- Participate in live Q&A sessions with investing experts
Acorns Premium
Acorns Premium is the most expensive account. It costs $9/mo and includes all of the features from the prior accounts. However, an Acorns Premium account has these additional resources:
- Investment account for kids
- Customize your portfolio and pick individual stocks instead of relying on funds
- Bonus investment gets matched up to 50% instead of up to 25%
- Access education courses
- Banking for kids
- $10,000 life insurance policy for eligible customers
Pros of Using Acorns for Investing
Acorns has several advantages that make it a top pick among investing and banking apps. These are some of the top benefits to keep in mind.
- Investing and banking in one place: You don’t have to access multiple dashboards or remember various passwords. You can access everything you need from one place.
- Access to expert-managed portfolios: Not everyone wants to manage a portfolio of individual stocks. You would have to stay on top of the market and make decisions about your holdings. Acorns does this for you with their experts and funds.
- Automatically save and invest your money: The more automatic features you have in place, the more you can rest easy knowing that your portfolio is growing. It’s possible to forget to make investments along the way, but automatic actions ensure your portfolio continues to grow.
- The ability to buy Bitcoin: Not every investor wants to buy Bitcoin, but there is strong demand for the asset. It trades like a hybrid of gold and growth stocks.
- Round-up your purchases: Use every purchase as an opportunity to grow your stock portfolio. You can also use round-ups to acquire more crypto.
- Over 55,000 fee-free ATMs: Acorns is an online bank, so you can’t find local branches. The app makes up for this with over 55,000 ATMs that are in their network. Many of these ATMs are located in readily accessible public spaces and stores.
- The ability to invest in IRAs and your children’s futures: Individual retirement accounts have tax advantages. Acorns lets you choose from traditional, Roth, and SEP IRAs. You can also invest in your child’s future with the app. Creating investment accounts for your children can help them make key purchases sooner in their lives.
Cons of Acorns Using Acorns for Investing
Although Acorns offers many advantages, it is important to keep the app’s disadvantages in mind as well. These are some of the things to consider before getting started.
- Monthly subscriptions: You will have to subscribe to a monthly plan, which ranges from $3-$9 per month, depending on the plan. The lowest subscription plan may not give you everything that you need, depending on what type of experience you want to have within the app.
- You can only buy individual stocks with the highest tier plan: Some investors prefer to buy individual stocks instead of funds, while others like a combination of both. Many brokers let you do this for free, but Acorns requires a $9/mo subscription for this same privilege.
- Child investment accounts: If you want to invest in an account for your child, you must select the highest-tier plan. Most brokerage firms will help you set UTMA and UGMA accounts for free.
Is Acorns Worth It?
Acorns requires a monthly payment for each of their plans. It is easier to absorb the monthly payment if you have a large portfolio. However, if you only have a $100 portfolio, the Acorns monthly payments can quickly erode your funds. You have to pay $9/mo to invest in individual stocks, while other brokerage accounts let you do it for free. Acorns is better for investors with larger accounts where a 1% gain can comfortably offset the monthly subscription payments.
How to Start Investing with Acorns
Acorns makes it easy to get started and grow your oak. You can visit the Acorns website to create your account. Acorns will walk you through the process and let you know what information you have to provide. Acorns asks for basic information like your name and email.
