Do you struggle with saving money? Have you heard of Acorns? It’s a mobile app that helps you save and invest your spare change. In this review, we’ll discuss what Acorns is, how it works, its pros and cons, and whether it’s worth trying out.
What is Acorns?
Acorns is a spare-change investing app that rounds up your purchases to the nearest dollar and invests the difference for you automatically. For example, if you buy a coffee for $2.50, Acorns will round up to $3 and invest the extra 50 cents for you.
How Does Acorns Work?
After you sign up (it’s free), you connect your bank account or credit/debit card to your Acorns account. Whenever you make a purchase, Acorns rounds up to the nearest dollar and invests the difference in your chosen portfolio, which ranges from conservative to aggressive.
Acorns Pricing
There are three Acorns pricing tiers: Lite, Personal, and Family.
- Lite: $1/month for a taxable investment account
- Personal: $3/month for a taxable investment account, Individual Retirement account (IRA), and checking account
- Family: $5/month for all Personal features plus investment accounts for kids
Pros of Acorns
- Easy to use – Acorns is user-friendly and effortless to set up
- Automatic savings – You don’t need to remember to transfer money manually, Acorns does it for you
- Low barrier to entry – You can start investing with just a few cents, making it accessible for most people
- Multiple portfolios to choose from – Depending on your risk tolerance, you can select conservative or aggressive portfolios
- Found Money – Acorns partners with companies, such as Airbnb and Dunkin Donuts, and invests money in your Acorns account when you make purchases with their partners
Cons of Acorns
- Higher fees compared to competitors – Acorns fees range from $1 to $5 per month, which can add up compared to other investment apps
- Limited investment options – Your money can only be invested in one of five prebuilt portfolios, limiting your control over how your money is invested
- Low returns – Due to the small amounts invested, your returns may be lower compared to a regular investment account
Is Acorns Worth Trying?
If you’re looking for an easy and automatic way to save and invest, Acorns might be worth trying out. However, if you’re an experienced investor or want more control over how your money is invested, Acorns might not be the best option for you. Ultimately, it depends on your financial goals and preferences.
FAQs
1. Is Acorns safe to use?
Yes, Acorns uses bank-level security and encryption to protect your personal and financial information. Additionally, they are a registered investment advisor with the Securities and Exchange Commission (SEC).
2. Can I withdraw money from my Acorns account?
Yes, you can withdraw your money from your Acorns account at any time without any fees. However, it may take 3-6 business days for the funds to show up in your bank account.
3. Can I choose my own investments with Acorns?
No, Acorns only offers five prebuilt portfolios to choose from. However, you can select the portfolio that aligns best with your risk tolerance and financial goals.
4. Is there a minimum balance required to use Acorns?
No, there is no minimum balance required to use Acorns. You can start investing with just a few cents.
5. What happens if my linked account goes into overdraft?
If your linked account goes into overdraft, Acorns will not withdraw any funds from your linked account until it has a positive balance again. However, you may be subject to overdraft fees from your bank.
6. Can I use Acorns outside of the United States?
No, Acorns is only available to U.S. residents with a U.S. bank account or credit/debit card.
7. How long does it take to set up an Acorns account?
Setting up an Acorns account only takes a few minutes. You simply need to provide your personal information, link a bank account or credit/debit card, and select your portfolio.
8. Does Acorns offer an IRA?
Yes, Acorns offers a traditional or Roth Individual Retirement Account (IRA) for Personal and Family account holders.
9. Can I use Acorns for joint accounts?
No, Acorns does not currently offer joint accounts. Each account is for an individual only.
10. Does Acorns offer financial advice?
Yes, Acorns offers personalized financial advice through their partner company, Acorns Later. They also offer educational content and a newsletter to keep you informed about your investments.
Final Thoughts
Acorns is an innovative way to save and invest your spare change. It’s user-friendly, has multiple portfolios to choose from, and automates your savings. However, its fees and limited investment options might not make it the best option for experienced investors. That being said, it’s worth checking out if you’re looking for an easy way to start investing.
