Acorns Review 2020 (Invest Your Spare Change)
In this Acorns app review, I'm going to explore what Acorns is and help you decide if it's right for you!
Acorns is one of the top micro-investing apps, but are the management fees too steep?
Many people find that learning how to invest money in the stock market is a tedious and time-consuming task.
And they decide to avoid stock market investing completely.
Well, Acorns makes investing easy.
How Does Acorns Work?
Acorns uses a feature called round-ups to help you translate your everyday purchases into stock market investments.
By employing this simple investment technique—Acorns was able to grow to over 3,500,000 users in under seven years.
The app is primarily targeting the younger generations (Millennials and Gen Zs) as they spend more time on their mobile devices than anyone else.
The company made its debut in 2012—but did not launch the mobile app until 2014—when Acorns experienced “incredible growth”.
I will now explore the round-up feature in-depth.
How Do Acorns Round-Ups Work?
When connected to your savings or checking account, Acorns will round up any purchases you make to the nearest dollar—and invest the difference.
Acorns will not round-up your purchases automatically, but it's very easy to configure on the app.
For example, if you buy a loaf of bread for $3.10, Acorns will round up to $4 and invest $0.90.
You can specify which transactions you would like to roundup—or set it to automatic and Acorns will roundup every purchase you make with a connected credit or debit card.
Deposit at Will
While it sounds like some sort of military command, deposit at will allows you to invest a lump-sum directly through the app.
Meaning you can contribute to your investment portfolios—without going on a shopping spree!
Now it's time to explore Acorns' investment portfolios!
Acorns Portfolio Options
Once you have signed up for Acorns it will recommend a portfolio based on factors like your age, income and long-term investing goals.
Acorns' portfolios were chosen with the help of Noble prize-winning economist Dr. Harry Markowitz—creator of the Modern Portfolio Theory.
Acorns provides seven index funds to choose from—created by either Vanguard or iShares.
The Acorns app also provides you with five pre-made portfolios to choose from—which are regularly adjusted to maximize returns.
Although Acorns will recommend a certain portfolio for you—you're able to pick any portfolio that you like.
Here are the five pre-made portfolios for you to choose from:
Acorns Found Money
Acorns has a unique feature called “Found Money”.
When you shop with any of the Acorns' Found Money partners—they will contribute a varied amount to your portfolios.
Acorns has over 200 Found Money partners, including big names like Nike, Macy's, Airbnb and Dollar Shave Club.
As they say at Acorns: “Cash forward is the new cash back.”
Acorns Pricing Model
You have three plans to choose from when you invest with Acorns, and they charge between $1-3 a month.
$1/Month – Acorns Core
The $1 a month Acorns Core plan includes the following:
- The roundup investing feature
- A choice of five investment portfolios
- Access to Grow Magazine
- Found Money contributions when using the roundup feature
- Support from their team of over 150 employees.
$2/Month – Acorns Core + Acorns Later
For $2 a month you will get all of the features available to Acorns Core users—with access to Acorns Later.
Users of Acorns Later will be able to open tax-advantaged Individual Retirement Accounts (IRA's).
You can automate contributions to your retirement accounts and start investing with as little as $5!
$3/Month – Acorns Core + Acorns Later + Acorns Spend
For $3 a month you will get access to all features included in the Acorns Core and Acorns Later plans—with access to Acorns Spend.
You will receive a debit card that applies all of the Acorns Core and Acorns Later investing features to every purchase you make—and have your signature engraved on the card!
Acorns' card is made out of a rare metal called tungsten—and is not the typical laminated plastic card that most banks will offer.
Acorns sold out within 4 days of launching their debit card—selling over 100,000 cards!
Also, Acorns Spend accounts are FDIC insured up to $250,000.
Negatives of the Acorns App
It wouldn't be a proper Acorns app review without including some of the downsides.
And there is one major downside to Acorns investing—the monthly fees.
The $1-3 monthly fees can take a decent bite out of your annual returns. Especially if you aren't regularly making lump sum investments or micro-investing through roundups.
For example, if you invest $30 a month and you're paying $3 a month for the app—the fees will be taking a 10% cut out of your monthly contributions.
It's important that you make lump sum deposits into Acorns if you plan to use it for long-term investing—to combat the monthly fees.
Only Available to US Residents
Another downside to this platform is that it's only available to United States residents.
However, you can still invest in this platform if you're from Australia. This version is known as Raiz.
You must also be over the age of 18 and have a valid social security number to invest with Acorns.
Is Acorns Right For You?
I believe Acorns is one of the best micro-investing apps.
Acorns is great for college students—who can setup an Acorns Core account for free with a valid .edu email address.
This app is designed for the passive investor.
Someone who wants to gain exposure to the stock market and starting building wealth, but doesn't have the means to pick their own stocks.
I hope our Acorns app review helped you decide if the app is right for you.