Acorns is one of the first investment apps you’ll find when you search for one.
Starting at only $1/month, Acorns promises easy investing that allows you to “take control of your money.”
But how good is it?
How does it stack against other investment apps?
Is it worth that fee?
Today, I’m going to answer these questions (and more!) in this in-depth Acorns review.
5 Things You Need to Know About Acorns
Here are 5 things everyone should know before they start using Acorns.
1 – Acorns is Great for Beginners
I’ve said it before, and I’ll say it again – getting started is the hardest part of investing.
For non-investment savvy people, parting with hundreds of dollars is painful – even with the promise of big returns. Most people want money now, not far into the future.
That’s why Acorns is great for beginners.
With Acorns, you can start investing for as low as $5!
That’s right, it’s a completely painless way to save up.
You won’t feel this thanks to Acorns’ automatic investing feature.
You can manually put in $5 dollars every once in a while… but who wants to do that?
With Acorns, you can set-up a regular transaction schedule. So, without any distractions to you, Acorns will invest your money automatically.
This completely gets rid of that painful feeling of giving your money away. Since it’s automatic, you can even forget about it.
Where do you invest?
Another problem beginners run into is deciding where to put their money. They have no idea how the market works, and reading reports gives them more questions than answers.
Acorns takes care of this as well.
With Acorns Robo-advisor, where you put your money is completely automated. acorns review
Just give your information and desires – how much you earn, whether you want to invest conservatively or aggressively, how long you want to invest, etc. – and the Robo-advisor will do the rest.
Based on your choices, it will put your money into the best places. With that, you can sit back and relax knowing that your investment will come back bigger after your selected time table.
Don’t want to be left in the dark?
Acorns completely removes the need for you to learn the technical side of investing. But it doesn’t leave you that way.
When you sign up for Acorns, you’ll find a ton of free educational material at your fingertips. You can read articles on their Grow Magazine to get a grasp of exactly how investments work.
You don’t have to. But you can go from investment newbie to expert with all the free information available.
2 – Acorns Saves Your Money in Unconventional Ways
What sets them apart from other investment apps?
Well, one thing that is unique to Acorns is their unconventional ways of saving your money.
A ton of investment apps have automated and educational features, but not everyone has a loose change saving feature.
Through Acorn’s Round-Ups, you can automatically save all your loose change.
How does this work?
Let’s say you buy a drink for $1.70. Using a linked credit or debit card, Acorns will round your bill up to $2 – the extra 30 cents going straight to your investments. acorns review
It may seem small, but when you add up all the payments you make, this will reach quite a significant amount.
And it all happens without you thinking. Unless you meticulously count every single penny you spend, rounding up 30 cents will feel like nothing. Yet in the long run, it will add up to a lot of savings.
And that’s not the only unusual way Acorns saves your money.
Acorns has also partnered up with hundreds of huge companies – think AirBnB, Nike, Barnes and Noble, Walmart, etc. – for their Found Money program.
Instead of giving you cashback like other programs, the Found Money program gives you cash forward. Use your linked card to shop in partner stores, and you’ll notice your investment account receive a boost after 30-60 days.
It may be small. But add up all your payments in partner stores, you’ll find that it’ll invest so much for you. And, once again, it’s all automatic. You never have to think about it.
That’s not all yet.
When you withdraw money with your Acorns Spend debit card (more on how to get one later), you don’t have to pay for atm fees!
If an atm charges you, Acorns will reimburse this at the end of the month. So you can say goodbye to atm fees once and for all. You won’t lose a single cent withdrawing, even from stubborn atm machines.
3 – There are Three Ways to Use Acorns
There’s an Acorns account for everyone. You can choose between Basic, Plus, and Premium accounts, all with their own perks.
With an Acorns Basic account, you get everything I mentioned above (except the debit card) for only $1/month. This small fee is all you need to start building up your savings. acorns review
With the $2/month Plus option, you get all of these plus a retirement account (IRA). This will not only get you saving for your retirement, but you can also enjoy the tax reduction benefits that comes with this.
Finally, the $3/month Premium account will give you all the benefits, an IRA account, and a Checking account (with the metal debit card).
What’s the best option? It all depends on what you need.
If you think spending an extra dollar for the IRA is worth it, then go for it. Want that no-atm-fee metal debit card? Go for the Premium account.
Whatever you choose, Acorns will make it super easy for you to start saving immediately.
Before you open an Acorns account and let it start saving for you though, you need to know a few things…
4 – Acorns Can be Very Expensive
$1, $2, and $3 don’t sound like a lot.
However, it’s important to put things into perspective.
If you put in $100 in your investment account a year, your monthly fees will take up a whopping 12% for Basic, 24% for Plus, and 36% for Premium!
That will completely cut down any money growth you’re making.
Even if you double that and put $200 in a year, the percentages are still ridiculously high. acorns review
For comparison, other investment apps charge you 0.25% of your investment. If you invest $100 a year, you’ll only pay 25 cents as a fee. Contrast that to the $36 for your annual Acorns Premium fee.
That said, Acorn’s fixed fees can be an advantage.
The more money you put in, the smaller the percentage of the fees will become. At a certain point, this percentage will drop below the 0.25% of other apps.
So it’s not all that bad. However, don’t expect to gain much if you don’t put in much. If you rely on the Round-Up and Found Money features, a large sum of your investment will go to fees.
5 – There are Other Great Investment Apps
Acorns is a great investment app for beginners, but it’s not the only one.
Before you jump ship, it’s a good idea to consider your alternatives as well.
Other investment apps such as Wealthfront, Betterment, and Stash all have their own perks.
If you find that Acorns’ monthly fees kill your money, go for Wealthfront’s 0.25% management fee. There are even other investment platforms that have absolutely zero fees. acorns review
If you dislike having no control over where your money goes, Stash lets you choose where you invest. They narrow down your list based on your preferences, but they don’t invest in things unless you say so.
Yes, Acorns is a great investment app for beginners. It’s Round-Up and Found Money are one of a kind. But don’t close the door to your alternatives, because they’re just as good in their own ways.
The Bottom Line
What’s worse? Someone using a bad investment app, or someone not investing at all?
You don’t have to be a genius to know that not investing at all is far worse than using the wrong app.
While Acorns has its flaws, this is a perfect app to get you started in the investment world.
It’s not like Acorns problems are that big either.
If you put in enough money, the only major downside (the fees) won’t have a big effect anymore. So you can enjoy big returns in the future.
And you won’t feel like you’re losing money at all – especially when you turn on the Round-Up feature.
Worth a try? Check out Acorns here. acorns review