Investing can often feel like an insurmountable task. Between trying to figure out which investments to buy, how much to buy, and when to sell, it can all feel overwhelming. That’s where the Acorns app comes in. Acorns takes the guesswork out of investing by using the spare change from your purchases to invest in a diversified portfolio of stocks and bonds.
What Is Acorns and How Does It Work?
Acorns is a mobile app that allows you to invest your spare change. Every time you make a purchase, Acorns rounds up the total to the nearest dollar and invests the difference in an ETF portfolio of your choice.
For example, if you make a purchase for $3.50, Acorns will round up the purchase to $4.00 and invest 50 cents in your portfolio. Over time, these small investments can add up and help you grow your portfolio.
Acorns offers five different portfolios to choose from, each with varying levels of risk and potential return. Once you choose a portfolio, Acorns takes care of the investing for you.
What Are the Pros of Using Acorns?
1. It Makes Investing Easy
Investing can be intimidating, but Acorns makes it easy by doing the work for you. You don’t have to research, buy, or sell any investments. Acorns takes care of it all.
2. It Uses Spare Change
Many people struggle to find extra money to invest each month. Acorns solves this problem by using the spare change from your purchases to invest. You won’t even notice the small amounts of money going to your portfolio.
3. It Offers Automatic Rebalancing
Acorns automatically rebalances your portfolio as the market changes, ensuring that your investments remain aligned with your goals.
4. It Provides Educational Content
Acorns provides educational content to help you learn about investing. The app even has a “Grow” section that offers tips and strategies to help you maximize your investments.
5. It Offers a Found Money Program
Acorns has a Found Money program that offers cashback rewards for shopping with partner brands. The rewards are automatically invested in your portfolio, helping it grow even faster.
What Are the Cons of Using Acorns?
1. It Charges Fees
Acorns charges a monthly fee of $1, $2, or $3 depending on the account level you choose. While the fees may seem small, they can add up over time.
2. It Has Limited Investment Options
Acorns only offers ETF portfolios, which may not be ideal for all investors. If you’re looking for specific stocks or bonds to invest in, Acorns may not be the best choice.
3. It Requires a Bank Account
In order to use Acorns, you need to link a bank account. If you’re uncomfortable giving your bank account information to an app, Acorns may not be for you.
Who Should Use Acorns?
Acorns is a great choice for beginner investors who want to dip their toes into the world of investing without feeling overwhelmed. It’s also a good option for those who struggle to find extra money to invest each month.
If you’re an experienced investor looking for specific investments or investment strategies, Acorns may not be the best choice.
Is Acorns Safe?
Yes, Acorns is safe to use. The app uses bank-level security and encryption to protect your personal and financial information. In addition, Acorns is registered with the Securities and Exchange Commission (SEC) and is a member of the Financial Industry Regulatory Authority (FINRA).
Conclusion: Should You Use Acorns?
Acorns is a great choice for beginner investors who want an easy and hands-off way to invest their spare change. With five different portfolio options and automatic rebalancing, Acorns takes care of the hard work of investing for you.
However, if you’re an experienced investor or are looking for specific investment options or strategies, you may want to look elsewhere.
FAQs
1. Is investing with Acorns a good way to save for retirement?
While using Acorns can be a good way to save for retirement, it’s important to remember that your investments can go up or down in value. It’s always a good idea to diversify your investments and speak with a financial advisor to ensure that you’re on track for retirement.
2. Can I choose my own investments with Acorns?
No, Acorns only offers ETF portfolios. If you’re looking for more specific investments, you may want to look at other investment options.
3. How much does Acorns cost?
Acorns charges a monthly fee of $1, $2, or $3 depending on the account level you choose.
4. Is the Found Money program worth it?
The Found Money program can be a good way to earn cashback rewards on your purchases, which are automatically invested in your portfolio. However, it’s important to make sure that you’re not overspending just to earn more rewards.
5. How long does it take to see results with Acorns?
Results with Acorns can vary depending on market conditions and your investment portfolio. It’s important to remember that investing is a long-term strategy and that you may not see immediate results.
