In today’s fast-paced world, investing can seem overwhelming and complex. However, Acorns, a popular robo-advisor, aims to simplify the investment process by offering automated investing solutions. With its innovative approach and user-friendly app, Acorns has gained over 8 million members. In this comprehensive review, we will delve into the features, pricing, and overall user experience of Acorns to help you determine if it’s the right investment platform for you.
Overview of Acorns
What is Acorns?
Acorns is a robo-advisor that revolutionizes investing by automatically investing users’ spare change. Originally founded as a platform for rounding up purchases and investing small amounts, Acorns has evolved into a full-featured investment platform. It offers a range of account types, including individual investment accounts, retirement accounts, and custodial accounts for minors.
How Does Acorns Work?
Acorns simplifies the investment process by linking users’ financial accounts, such as credit and debit cards, to their Acorns app. Every time a purchase is made, Acorns rounds up the amount to the nearest dollar and invests the difference. Additionally, users can set up recurring deposits or invest lump sums to further grow their investment portfolio.
Emphasis on Automation
One of the standout features of Acorns is its emphasis on automation. The platform’s “round-up” investment style automatically invests spare change, making it effortless for users to contribute to their investment accounts. Acorns also offers automatic portfolio rebalancing, ensuring that your investments stay aligned with your desired asset allocation.
Features and Benefits
Easy-to-Use App
Acorns boasts an intuitive and user-friendly app, making it accessible for investors of all experience levels. The app has received high ratings on both the Google Play Store and the App Store, with users praising its simplicity and functionality.
Diversified Portfolio Options
Acorns offers five pre-built portfolio options, designed to match different risk tolerances and investment goals. These portfolios are expertly crafted and include a mix of stocks, bonds, and other assets. Whether you’re a conservative investor or seeking more aggressive growth, Acorns has a portfolio to suit your needs.
Straightforward Pricing
Unlike many other robo-advisors, Acorns charges a flat monthly fee instead of a percentage-based fee. The pricing tiers include Acorns Personal, Acorns Personal Plus, and Acorns Premium, with fees ranging from $3 to $9 per month. This straightforward pricing structure makes it easy for users to understand the cost of their investment.
Checking Account Integration
Acorns offers a linked checking account, known as Acorns Checking, to its members. This account comes with a range of benefits, including a debit card, no-fee ATM withdrawals, mobile check deposits, and no overdraft fees. Having a checking account integrated with your investment account can simplify your financial management.
Additional Perks
Acorns provides members with various additional perks to enhance their investment experience. Through the Acorns Earn program, users can earn investment cash by making purchases with partner companies. Acorns also offers premium educational services, emergency fund capabilities, and bonus rewards, depending on the chosen membership tier.
Account Types and Investment Options
Account Types Offered by Acorns
Acorns offers a variety of account types to cater to different investor needs. Individuals can open taxable investment accounts, traditional IRAs, Roth IRAs, and SEP IRAs. Additionally, Acorns provides custodial accounts, known as UGMA/UTMA accounts, allowing parents and guardians to invest on behalf of minors.
Investment Portfolio Options
Acorns offers a range of investment portfolio options to suit different risk tolerances and investment goals. These portfolios are managed by financial experts and comprise a combination of stocks, bonds, and other assets. Acorns also provides an environmentally and socially conscious (ESG) portfolio option for investors who prioritize sustainable investing.
Bitcoin Investment Option
For investors interested in diversifying their portfolios, Acorns offers the option to invest in a Bitcoin-linked ETF. While the allocation to Bitcoin is limited to a maximum of 5%, it provides an opportunity to gain exposure to the cryptocurrency market within a diversified investment portfolio.
Round-Up Feature
The round-up feature is a unique aspect of Acorns that allows users to invest their spare change automatically. Every time a purchase is made using linked financial accounts, Acorns rounds up the transaction to the nearest dollar and invests the difference. This feature enables users to consistently contribute to their investment accounts without even realizing it.
“Found Money” Program
Acorns has partnered with various companies, including popular brands like Airbnb, Google, Apple, and PayPal, to offer the “Found Money” program. When users make purchases with these partner companies, a percentage of the sales is invested directly into their Acorns investment accounts. This program provides an additional way to grow your investments passively.
Pricing and Fees
Acorns Pricing Structure
Acorns has a straightforward pricing structure that consists of three membership tiers: Acorns Personal, Acorns Personal Plus, and Acorns Premium. The monthly fees for these tiers range from $3 to $9, depending on the level of features and benefits offered. It’s important to note that Acorns charges a flat monthly fee, rather than a percentage of assets under management.
Fee Considerations
While Acorns’ flat monthly fee structure simplifies pricing, it may be less favorable for investors with smaller account balances. The $3 fee for Acorns Personal, for example, can represent a significant percentage of a $1,000 investment. However, as the account balance grows, the fee becomes a smaller percentage of the overall investment.
User Experience and Customer Support
Availability and Support
Acorns provides customer support through phone and email channels, seven days a week from 6 a.m. to 7 p.m. PST. While there are no in-person branch locations, the availability of support during extended hours ensures that users can receive assistance when needed.
User Reviews and Ratings
Acorns has received positive reviews from users, particularly praising its ease of use and automated investing features. The app’s high ratings on both the Google Play Store and the App Store are a testament to its user-friendly interface and functionality.
Security and Regulation
Investor Protection
Acorns offers investor protection through the Securities Investor Protection Corporation (SIPC), which provides coverage up to $500,000 for each account type. This protection helps safeguard investors’ assets in the event of the platform’s insolvency or unauthorized activity.
Regulatory Compliance
As a robo-advisor, Acorns operates in compliance with relevant regulations and requirements. Its adherence to regulatory standards ensures that investors can trust the platform with their financial information and investments.
Alternatives to Acorns
Stash Invest
Stash Invest is a robo-advisor that offers similar features to Acorns, including automatic investing, round-ups, and a range of investment portfolio options. However, Stash Invest distinguishes itself by also providing access to individual stocks, ETFs, and cryptocurrencies, making it a more suitable choice for investors seeking a wider range of investment options.
Robinhood
Robinhood is a popular investment platform that allows users to trade stocks, ETFs, options, and cryptocurrencies. While it lacks the automated investing features of Acorns, Robinhood offers greater control and flexibility for investors who want to actively manage their portfolios. It is an ideal choice for those who prefer a self-directed investing approach.
Conclusion
Acorns offers a user-friendly and innovative approach to investing, making it an attractive option for beginners and hands-off investors. Its emphasis on automation, diversified portfolio options, and straightforward pricing structure set it apart from other robo-advisors. While it may not be the best fit for investors seeking extensive customization or access to human financial advisors, Acorns simplifies the investment process and provides a hassle-free way to grow your wealth.
Whether you’re just starting your investment journey or looking for an effortless way to invest spare change, Acorns can help you achieve your financial goals. Consider the features, benefits, and pricing outlined in this review to determine if Acorns is the right investment platform for you.
