Review of Acorns Investing App: Pros and Cons

Acorns is an investment app that has gained popularity in recent years. It is designed to help individuals invest their spare change automatically. The app is user-friendly and is an excellent option for those who are new to investing. In this article, we will review Acorns and discuss its features, fees, and investment options.

Acorns is a micro-investing app that allows users to invest in a diversified portfolio of exchange-traded funds (ETFs). The app rounds up each purchase made using a linked credit or debit card to the nearest dollar and invests the difference. For example, if a user buys a cup of coffee for $2.50, Acorns will round up the purchase to $3.00 and invest the remaining $0.50. This feature is known as “Round-Ups,” and it is one of the key features of the app. In addition to Round-Ups, Acorns also offers other investment options, such as recurring investments and one-time investments.

I have been using it for several years now and really like it.  I don’t really notice the round ups and it is a great way to save for investing.

Key Takeaways

• Acorns is a user-friendly investment app that allows users to invest their spare change automatically.
• The app offers a variety of investment options, including Round-Ups, recurring investments, and one-time investments.
• Acorns charges a monthly fee based on the user’s account balance, and its fees are higher than some of its competitors.

Overview of Acorns Investing App

Acorns is an investment app that allows users to invest their spare change from everyday purchases. The app connects to the user’s bank account and automatically rounds up each transaction to the nearest dollar, investing the difference into a portfolio of exchange-traded funds (ETFs).

The app offers three different account types: Lite, Personal, and Family. The Lite account charges a monthly fee of $1 and offers basic investment options. The Personal account charges a monthly fee of $3 and includes additional features such as retirement savings and a checking account with a debit card. The Family account charges a monthly fee of $5 and includes all the features of the Personal account, as well as investment accounts for children.

Acorns also offers a range of investment portfolios, each with a different risk level and asset allocation. Users can choose from conservative, moderate, or aggressive portfolios, or they can customize their own portfolio based on their investment goals and risk tolerance.

Overall, Acorns is a simple and user-friendly investment app that is great for beginners and those looking to invest small amounts of money. While the fees may be higher than some other investment apps, the automatic round-up feature and diversified portfolio options make it a convenient and accessible way to start investing.

How Acorns Works

Acorns is an investment app that allows users to invest their spare change automatically. Here’s how it works:

Account Setup

To get started with Acorns, users need to create an account and link their bank account. Once the account is set up, users can choose their investment strategy, which ranges from conservative to aggressive.

Round-Ups

Acorns’ “Round-Ups” feature is one of its most popular. When users make purchases with a linked credit or debit card, Acorns rounds up the purchase to the nearest dollar and invests the difference. For example, if a user buys a coffee for $2.75, Acorns will round up to $3.00 and invest the extra $0.25.

Recurring Investments

In addition to Round-Ups, users can set up recurring investments. This allows users to invest a set amount of money on a regular basis, such as weekly or monthly. Users can choose the amount they want to invest and the day of the week or month they want the investment to occur.

Found Money

Acorns’ “Found Money” feature allows users to earn cash back on purchases made with a linked card. When users make a purchase from a participating retailer, they can earn a percentage of the purchase price back in the form of an investment into their Acorns account.

Overall, Acorns is a user-friendly app that makes investing accessible to everyone. With its Round-Ups, recurring investments, and Found Money features, users can start investing with as little as $5 and watch their money grow over time.

Investment Portfolio Options

Acorns offers a range of investment portfolio options to cater to the diverse needs of its users. The app’s portfolio options are designed to be simple, easy to use and accessible to all.

Portfolio Types

Acorns offers five portfolio types, each with varying levels of risk and reward. The portfolio types include:

• Conservative
• Moderately Conservative
• Moderate
• Moderately Aggressive
• Aggressive

Users can choose a portfolio type that aligns with their investment goals, risk tolerance and financial situation.

Asset Classes

Acorns invests users’ money in a range of asset classes, including stocks, bonds, real estate and commodities. The app’s investment team selects a mix of asset classes for each portfolio type to optimize returns and minimize risk.

Performance Tracking

Acorns provides users with a clear and transparent view of their investment performance. The app tracks the performance of each portfolio type and displays it in an easy-to-understand format.

Users can also view their investment returns over time and compare them to industry benchmarks. This feature enables users to track their progress towards their investment goals and make informed decisions about their investments.

Overall, Acorns’ investment portfolio options are simple, accessible and well-designed. The app’s diverse range of portfolio types and asset classes, combined with its transparent performance tracking, make it a popular choice for both novice and experienced investors.

Fees and Pricing

Account Tiers

Acorns offers three different account tiers: Lite, Personal, and Family. The Lite account is free and includes basic features such as automatic round-ups and a checking account. The Personal account costs $3 per month and includes additional features such as retirement accounts and the ability to earn bonus investments. The Family account costs $5 per month and includes all the features of the Personal account, plus investment accounts for children.

Fee Structure

Acorns charges a monthly fee for its Personal and Family accounts, but there are no transaction fees or commissions for trades. The fee for the Personal account is $3 per month, while the Family account costs $5 per month. Additionally, there are no fees for withdrawing funds from your account or closing your account.

Acorns also offers a Found Money program, which allows you to earn cash back when you shop with certain retailers. The amount of cash back varies by retailer and can range from 1% to 10% of your purchase. The cash back is automatically invested in your Acorns account.

Overall, Acorns’ fees and pricing are competitive with other investment apps on the market. The Found Money program is a unique feature that can help you earn additional returns on your investments.

Security and Safety

Acorns takes the security and safety of their users’ information and investments seriously. They have implemented various measures to ensure that their platform is secure and reliable.

Encryption and Data Protection

Acorns uses bank-level encryption to protect their users’ data. This means that all data transmitted between their servers and users’ devices is encrypted and cannot be intercepted by third parties. They also use multi-factor authentication to ensure that only authorized users can access their accounts.

In addition, Acorns does not store users’ bank login credentials. Instead, they use a secure third-party service called Plaid to securely connect to users’ bank accounts. This ensures that users’ login credentials are never stored on Acorns’ servers, reducing the risk of data breaches.

SIPC Insurance

Acorns is a member of the Securities Investor Protection Corporation (SIPC), which protects customers of its member broker-dealers up to $500,000 in the event that the broker-dealer fails. This means that if Acorns were to go bankrupt or become insolvent, users’ investments would be protected up to $500,000.

Overall, Acorns’ commitment to security and safety is evident in the measures they have implemented to protect their users’ information and investments.

User Experience

Acorns is an investing app that provides a user-friendly experience for its users. The app is easy to navigate, and users can quickly find the features they need. Here are some key aspects of the user experience:

App Interface

The app interface is clean and modern, with a straightforward design that makes it easy to use. Users can view their portfolios, add or withdraw funds, and make other transactions with just a few taps. The app also offers a variety of educational resources to help users learn more about investing and make informed decisions.

Customer Support

Acorns offers excellent customer support, with a dedicated support team available 24/7 to assist users with any questions or issues they may have. Users can contact support via email or phone, and the response times are typically quick. The app also has a comprehensive FAQ section that covers many common questions and issues.

Accessibility

Acorns is accessible to a wide range of users, with support for both iOS and Android devices. The app is also available in multiple languages, including English, Spanish, and French. Additionally, the app offers a variety of accessibility features, such as voiceover support and the ability to adjust font sizes.

Overall, Acorns provides a user-friendly experience that is accessible to a wide range of users. With a clean and modern interface, excellent customer support, and a variety of accessibility features, the app is an excellent choice for anyone looking to start investing.

Pros and Cons

Advantages

Acorns investing app offers several advantages to its users. Firstly, it is an excellent platform for beginners who want to start investing but don’t have much knowledge about the stock market. The app provides easy-to-understand information and guidance to help users make informed investment decisions.

Secondly, Acorns offers a unique feature called “Round-Ups,” which automatically rounds up the user’s transactions to the nearest dollar and invests the spare change. This feature is an excellent way to save money and invest it without even noticing.

Thirdly, Acorns offers a wide range of investment portfolios, including socially responsible portfolios, which align with the user’s values and beliefs. This feature is an excellent option for users who want to invest in companies that are environmentally and socially responsible.

Disadvantages

While Acorns has many advantages, it also has some disadvantages. Firstly, the app charges a monthly fee, which can be a significant expense for users who have small investment portfolios. Secondly, the app’s investment portfolios are limited and may not be suitable for users who want to invest in specific companies or industries.

Thirdly, Acorns’ investment portfolios are managed by a computer algorithm, which may not be suitable for users who want a more hands-on approach to investing. Additionally, the app’s customer support is only available via email, which can be frustrating for users who need immediate assistance.

Overall, Acorns is an excellent investment app for beginners and users who want to save money and invest in socially responsible portfolios. However, users should be aware of the app’s monthly fees, limited investment portfolios, and reliance on a computer algorithm for investment management.

Comparisons With Other Investment Apps

Acorns is not the only investment app on the market. There are several other apps that offer similar services. Here is a brief comparison of Acorns with some of the popular investment apps:

Robinhood

Robinhood is a popular investment app that offers commission-free trading. Robinhood allows users to buy and sell stocks, ETFs, and options. Unlike Acorns, Robinhood does not offer automatic savings or investment features. Robinhood also does not offer a retirement account option.

Stash

Stash is another investment app that offers automatic savings and investment features. Stash allows users to invest in stocks, ETFs, and bonds. However, Stash charges a monthly fee for their services, while Acorns charges a flat fee based on the account balance.

Betterment

Betterment is an investment app that focuses on retirement accounts. Betterment offers automatic savings and investment features for retirement accounts, such as IRAs and Roth IRAs. Betterment also offers personalized investment advice based on the user’s goals and risk tolerance. However, Betterment charges a higher percentage-based fee compared to Acorns.

Wealthfront

Wealthfront is another investment app that focuses on retirement accounts. Wealthfront offers automatic savings and investment features for retirement accounts, such as IRAs and Roth IRAs. Wealthfront also offers personalized investment advice based on the user’s goals and risk tolerance. However, Wealthfront has a higher account minimum compared to Acorns.

Overall, Acorns offers a unique combination of automatic savings and investment features at a low flat fee. While there are other investment apps on the market, Acorns stands out for its simplicity and affordability.

Success Stories and Testimonials

Acorns investing app has helped many people achieve their financial goals. Here are a few success stories and testimonials from satisfied users.

Testimonial 1

“I have been using Acorns for a year now, and it has been a game-changer for me. I used to struggle with saving money, but Acorns makes it so easy. I love the round-up feature that invests my spare change. It may not seem like much, but it adds up over time. I have already seen significant growth in my portfolio, and I feel more confident about my financial future.”

Testimonial 2

“I was hesitant to start investing, but Acorns made it accessible and straightforward. The app is user-friendly, and the investment portfolios are diverse and well-managed. I appreciate the educational resources available, which have helped me understand investing better. Thanks to Acorns, I am on track to achieve my long-term financial goals.”

Testimonial 3

“Acorns has been a lifesaver for me. I am terrible at budgeting, but with Acorns, I can set up automatic investments and forget about it. I love the Found Money feature, which rewards me with cashback when I shop with Acorns partners. The app has helped me save money and invest it wisely. I highly recommend it to anyone looking to start investing.”

Overall, Acorns has a track record of helping people save money and invest it wisely. These success stories and testimonials are just a few examples of how the app has made a positive impact on people’s financial lives.

Updates and Future Outlook

Acorns investing app has been consistently updating its features and services to provide a better user experience. One of the recent updates is the introduction of “Acorns Early” which is a custodial account for children. This feature allows parents to save for their children’s future by investing in ETFs.

Another update is the “Found Money” program which offers cashback rewards when users make purchases through partnered retailers. This program has been expanded to include more retailers, providing users with more opportunities to earn cashback.

Acorns has also announced plans to introduce a checking account with a debit card, called “Acorns Spend”. This account will have no minimum balance requirements, no overdraft fees, and will offer free ATM withdrawals. The checking account will also be linked to the user’s Acorns investment account, allowing for seamless transfers between the two accounts.

In terms of future outlook, Acorns plans to expand its financial education resources to help users make informed investment decisions. The company also plans to introduce more customization options for portfolios, allowing users to have more control over their investments.

Overall, Acorns has been consistently updating and improving its services to provide a better user experience. With the introduction of new features and plans for future expansion, it is clear that Acorns is committed to providing its users with a comprehensive investment platform.

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Frequently Asked Questions

What are the advantages and disadvantages of using the Acorns app?

Acorns offers a simple and easy-to-use platform for micro-investing, making it an attractive option for beginners. The app also offers a range of features such as automatic round-ups and cash-back rewards. However, the app charges a monthly fee, which may not be ideal for users who are looking to invest small amounts. Additionally, the investment options are limited, and the app may not be suitable for users who want to customize their investment portfolio.

How does the Acorns investment app function for beginners?

Acorns offers a user-friendly interface, making it easy for beginners to navigate and invest. The app allows users to link their bank accounts and credit cards, and automatically invests spare change from everyday purchases. The app also offers educational resources and support to help beginners understand the basics of investing.

Can users trust the security of their investments with the Acorns app?

Acorns takes security very seriously and uses bank-level security measures to protect users’ personal and financial information. The app is also registered with the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA), which ensures that it complies with strict regulatory standards.

What are the potential earnings one can expect from investing with Acorns?

The potential earnings from investing with Acorns depend on various factors such as the amount invested, the investment portfolio, and the market conditions. Acorns offers a range of investment portfolios with varying levels of risk and return, allowing users to choose one that best suits their investment goals.

Are there any fees associated with withdrawing funds from Acorns?

Acorns does not charge any fees for withdrawing funds from the app. However, users may be subject to taxes and penalties if they withdraw funds from a tax-advantaged account such as an IRA before the age of 59 ½.

What are some alternative apps to Acorns for micro-investing?

Some alternative apps to Acorns for micro-investing include Robinhood, Stash, and Betterment. These apps offer similar features such as automatic investing and personalized investment portfolios, but may have different fee structures and investment options.