Acorns Review – Is This Robo-Investing Platform Worth Using?

Acorns – incremental, automated passive investing for the on-the-go investor. The Acorns credit/debit card automatically takes the leftover change from your morning coffee ritual and invests the extra into a diversified ETF portfolio.

Passive investing with Acorns means you own a diversified portfolio with exposure to domestic stocks, international stocks, bonds, REITs, and yes, even Bitcoin. You can select one of several portfolio allocation options that meet your investment goals, such as ESG sustainability products.

A $0 set-up-fee and $5 minimum investment means any budget can start building retirement wealth. With Acorns, you get an Acorns investment account and a checking account with no extra management fee. Android and iOS apps are available.

About Acorns

Acorns – incremental, automated passive investing for the on-the-go investor. The Acorns credit/debit card automatically takes the leftover change from your morning coffee ritual and invests the extra into a diversified ETF portfolio.

Passive investing with Acorns means you own a diversified portfolio with exposure to domestic stocks, international stocks, bonds, REITs, and yes, even Bitcoin. You can select one of several portfolio allocation options that meet your investment goals, such as ESG sustainability products.

A $0 set-up-fee and $5 minimum investment means any budget can start building retirement wealth. With Acorns, you get an Acorns investment account, and a checking or savings account with no extra management fee. Android and iOS apps are available.

Acorns Features

Acorns offers two primary products and two additional services. Acorns Invest and Acorns Bank are the main services, while Acorns Early and Acorns Earn are the extra services. More on these below.

Acorns Invest

Acorns Investing is the primary offering that attracts the majority of consumers. Under Acorns Invest, you get access to two investing services and two investment accounts.

The first investing service is called roundup, which lets you roundup your daily purchases from your Acorns credit and debit cards. The extra change from each purchase is automatically deposited into your investment account. 

If you use the Acorns credit card to buy a coffee that costs $2.25, your purchase will roundup to the nearest dollar charge. This means Acorns will charge your debit card $3 and invest the extra $0.75.

The second investing service is passive management of your investment account. A robo-advisor, or automated computer system, manages and re-allocates assets in your investment account to maximize your returns.

When you open an investing account at Acorns, you can choose between a taxable investment account or an individual retirement account (IRA). Both accounts invest your money into exchange-traded funds (ETFs) matched to your selected risk tolerance and long-term goals. These accounts are for long-term investing only.

Here are a few stand-out details of the Acorns Invest feature:

• Portfolio Management: Automated and rebalanced daily to meet your investing goals.
• Funds: Add money by rounding up, through recurring additions, or as a one-time direct deposit.
• Account Link: Option to connect a primary bank account to your Acorns account.
• IRA Accounts: Access to several different tax-advantaged IRA accounts, including traditional, Roth, and SEP.

Getting started with Acorns Invest is fairly quick and easy. The process takes about 10 minutes and can be done through the app, Android or iOS, or online. You’ll need to provide an address and social security number. At present, Acorns is only available for U.S. citizens.

Let’s take a look below at the signup process and the Acorns portfolio selection and management interface. To create your Acorns personal account, you’ll need to answer seven questions about your finances and goals.

Your answers to these seven questions will determine the structure of your investment portfolio. The portfolio structure takes into account risk appetite and your desired investment “theme” or asset preference.

After this, Acorns provides an overview of your automated portfolio.

You also will see a breakdown of the ETF allocations across six different types and a 5-year returns projection.

Overall, Acorns Invest provides what you would expect from a micro-investing, robo-advisor service. Signup is easy, the interface is intuitive, and consumers can choose from a small selection of asset allocations. The goal here is passive investing – a set-and-forget investment approach to meet your long-term financial goals.

Acorns Bank

Acorns is more than just an investment service, it’s an FDIC-insured digital bank. To use the Acorns Investing service, you’ll need to open an Acorns Bank account. You’ll receive a personal checking account accessed online or through the Acorns app and a debit card.

For those who like to stand out, the Acorns debit card is a weighty, metallic card with a matte green finish. You can even get a custom-engraved signature for added personalization.

As a digital-only bank, deposits, transfers, and mobile checking are all done through the web interface or smartphone app. For withdrawals, Acorns claims over 55,000 fee-free ATMs throughout the U.S.

Acorns Early

Acorns Early was created to give parents tools to help their kids start investing. Using the Acorns family plan subscription, parents can open UTMA/UGMA college savings accounts for each child in the household.

Each college savings account is linked to the parent’s Acorns Bank personal checking account and functions as a standalone investment account.

The features and extras in Acorns Early are geared towards kids, and include a raft of investing educational material and investment advice.

Acorns Earn

The final feature of Acorns is an earnings program integrated into your day-to-day interfaces. Think of this like a rewards and cashback program, similar to what most banks offer.

Acorns has partnered with some big-name companies to offer a range of bonuses, kick-backs, and cash-back options. These include percent-based returns on purchases at major retailers, discounts of streaming services, and cash rewards for purchasing through popular food delivery services, among many others. Acorns also runs frequent cash rewards for signing up friends.

Acorns Pricing

Pricing is straightforward at Acorns. There are two membership tiers: personal at $3 per month and family at $5 per month. Below are what you get per tier:

• Acorns personal subscription ($3/month): one investment account, one checking account, one retirement account, and extras like Acorns Earn.
• Acorns family subscription ($5/month): all items from the personal tier plus access to extra no-cost kid accounts through Acorns Early.

As with robo-advisors who invest in ETFs, you are charged an aggregate expense ratio on your portfolio balance yearly. At Acorns, ETF expense ratios range from about 0.03% to 0.25%, and 0.95% for the Bitcoin ETF (BITO). Your portfolio’s total expense ratio will depend on your risk appetite, portfolio theme, and the ETFs Acorns chooses for you.

While not exactly pricing, an important cost to consider is the extra costs for moving funds out of your Acorns account. If you want to transfer your ETF shares to a different brokerage, that will cost you $50 per ETF.

Acorns Customer Service

Customer service is important, as Acorns functions as both an investment platform and a bank. Acorns Support is an online FAQ that answers basic questions about the service and your account. If you need further help, you can message Acorns through the chat feature, send a message to an Acorns social media account, or contact their customer support phone number.

Like many all-digital banks, you may not get the service quality you expect from a stand-alone bank. Acorns has several less-than-stellar reviews on popular rating sites like Better Business Bureau and Trustpilot. These reviews are not necessarily a deal breaker for the service, but should be considered when making an informed decision on whether to invest your money with Acorns.

How Does Acorns Compare?

Acorns has one main competitor: Stash. Both Stash and Acorns are investment-banking hybrids with an automated portfolio management component. Subscription tiers are comparable across both services. 

Stash, in contrast to Acorns, skips the daily purchase round-up and instead focuses on DIY investors and a more comprehensive family plan which includes life insurance.

Who is Acorns Best For?

Acorns is best for three types of consumers: new investors, parents, and those who want automated help investing.

1. New investors will find the app and online interface intuitive and easy-to-use. Fees are simple. The process of registering, from start to finish, takes less than 10 minutes.
2. Parents, especially those who have investment accounts at larger brokerages, will love the kid-friendly focus of Acorns. For $5 a month, you can have college savings accounts for each child in the household. On top of this, parents get access to educational material and a powerful way to encourage kids to invest.
3. Anyone who struggles to invest could find Acorns a relief. The roundup investing of your daily spare change takes the anxiety away from investing. All you need to do to build an investment portfolio is use your Acorns debit card a few times a week. 

FAQ: Acorns Review

Q: Which ETFs does Acorns keep in my portfolio?

A: Acorns has published this ETF list, current as of our Acorns review 2022.

Q: Is Acorns a good investment?

A: The short answer is: it depends. If your goal is making a reasonable yearly return, the subscription fees can eat into your profits if you have only a few hundred dollars to spend. Investors with more money to invest may prefer other robo-advisors or more sophisticated services.

Q: What are the minimums?

A: Acorns offers a $0 account minimum and a $5 minimum for lump-sum or recurring daily payments.

Final Verdict: Is Acorns Worth It?

Acorns isn’t for everyone. It is best to consider Acorns as a niche service: worth the price if the service meets your specific needs. What are those needs? As mentioned above, Acorns can make sense for new investors, families helping their kids invest, and those who enjoy a hands-off approach to investing. Investors looking for more from their robo-advisor or brokerage services should consider alternatives, like Wealthfront or Betterment.