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For $1 a month, individuals can invest spare change into their own investment account and join a community of passionate Americans saving for life’s most important goals.

By Joey Shadeck / October 9th, 2018 / Updated: January 25th, 2019

Dislikes
  • The same investments are offered for some investment and IRA accounts. An Acorns account only invests in seven ETFs.
  • $1 a month is a comparatively expensive annual fee for low-value accounts.

Review Sections:

Acorns is an investment app that allows people to invest spare change from debit and credit card purchases. Five different portfolio strategies are offered, ranging from conservative, mostly corporate and government bonds, to aggressive, mostly large and small company stocks. The mantra of acorns is to make investing effortless, easy, and fun for younger generations.

Acorns was founded in 2012 and is VC-backed with $152M in funding. The app targets millennials and younger people who understand investing is important, but don’t have the time or capital to research trading stocks or open an account with a robo advisor.

Acorns is unlike any other investment application. It is so easy and effortless that anyone can do it. With Acorns, people can invest as much or as little as they want, on their time, with the comfort of knowing their money is being held with a SEC-Registered Investment Advisor.

Setting up an Account

Creating an account with Acorns is designed to be quick and painless. Acorns understands its target market is time conscientious, which is why the whole process can be done in less than 10 minutes.

Customers have the option of creating their account with an email and password via mobile app or desktop. They then link their bank and card, provide their legal name, birthday, and SSN, and select their investment strategy. All information is protected with 256-bit encryption.

Acorns is usually able to process account applications on the same day, but it can take up to three days. My account was processed the next day, while a friend I referred had to wait two days.

Acorns account dashboard
Acorns mobile app account dashboard.

Round-Ups and Investment Strategies

When a transaction is made on a linked card the “spare change” is rounded up to the nearest dollar.

When you open an account, Acorns recommends an investment strategy based on your employment status, median net worth, income level, age, and retirement horizon. Investors have the option of changing their strategy at any time in the application process. Acorns currently offers five different strategies: conservative, moderately conservative, moderate, moderately aggressive, and aggressive. Each strategy has a portfolio of various asset classes, ranging from real estate stocks to government bonds.

Acorns moderate portfolio allocation
Acorns moderate portfolio allocation holdings summary.

I will break down the assets in each portfolio later in the review.

After selecting an investment strategy, investors choose their round-ups. Round-ups link your debit or credit card to your Acorns account. When a transaction is made on a linked card the “spare change” is rounded up to the nearest dollar. For example, if I buy a coffee for $2.60 I will essentially be charged $3, with 40 cents going to my Acorns account. The round-ups screen on the app displays recent round-ups and how much they were for.

Acorns round-ups summary
Acorns round-ups summary.

Once customers accumulate $5 in round-ups (or more) Acorns will take the $5 from their bank account and transfer it to their Acorns account.

Customers can also set a monthly investment or a roundup multiplier if they want to invest more or select how much is rounded up on whole dollar transactions. I personally use a 2X multiplier on round-ups with a $50 monthly deposit. So far, I’ve rounded up 68 times for a total of $76 in the few months I’ve used Acorns.

Acorns round-ups settings
Acorns round-ups settings.

Acorns constantly encourages customers to add to their accounts with a one-time investment as well. From personal experience I can say the encouragement, which usually comes in the form of an email, is not annoying and reminds me continuously to invest when I have the money. Acorns allows you to change your email preferences, so you only receive certain notifications, such as Found Money.

After a customer selects a portfolio strategy, round-ups, and contribution frequency, Acorns shows their account potential over time. This feature is a great way to encourage investors who may feel skeptical about investing smaller amounts or rounding up card purchases. Customers can check the performance of their accounts or potential value on both the desktop and mobile app.

Acorns investment portfolio projected value
Acorns investment portfolio projected value.

Found Money

Found Money is really what differentiates Acorns from other investing platforms.

Acorns partners with dozens of businesses to help invest in your account. When you shop with Found Money partners with a linked Acorns account, they will automatically invest in your Acorns account. Companies will invest either a set dollar amount or percentage, with percentage-based investments ranging up to 10%. Most promotions have specific terms and credit your account three to four months after the purchase is made.

Acorns has already partnered with popular businesses such as Amazon, Sam’s Club, Airbnb, Nike, Hulu, Liberty Mutual, NFL, The Wall Street Journal, and Uber. Found Money is a way for customers to get the most out of their Acorns accounts.

Acorns found money
Acorns Found Money offers customers multiple opportunities to earn money.

There are quite a few Found Money offers, for example Nike's 5% invested offer, which are excellent. These types of deal are the ones that help offset any costs associated with Acorns.

It is clear Acorns is partnering with companies that align with its customer base and target market of the younger generations. Found Money is really what differentiates Acorns from other investing platforms.  

Grow Magazine

Grow’s focus is to educate people on saving money and offers how-to guides covering budgeting, career, credit, debit, earning, investing, real estate, saving, spending, and taxes.

Grow Magazine, which is available to everyone (customers or not), contains finance-based articles, news, guides, and interviews. Grow’s focus is to educate people on saving money and offers how-to guides covering budgeting, career, credit, debit, earning, investing, real estate, saving, spending, and taxes.

acorns grow investing education
Acorns Grow investing education articles.

The quality of content is impressive and contributes to Acorn’s mission of helping younger generations invest and gain valuable advice on money and investing.

Acorns Later

For $2 a month, customers will have access to an IRA account, in addition to their investment account.

For $2 a month, customers will have access to an IRA account, in addition to their investment account. Through the signup process, Acorns Later helps customers select an IRA type (Traditional, Roth, SEP) and builds a portfolio that best fits each customer’s needs.

Acorns later get started
Acorns Later welcome.

Acorns Later also includes rebalancing and allocation updates, so investments automatically shift when a customer is approaching retirement. For example, if my investment account is almost all stocks in my 20s, every few years as I slowly approach my retirement age (65), my portfolio will gradually transition to include more bonds.

Acorns Spend

Spend is essentially a debit card that provides an investment and retirement account to go along with it, making it one of a kind.

Spend, a newer product offered by Acorns for $3 a month, is a checking account and debit card with Acorns built in, powered by Visa. With Spend, round-ups happen in real time instead of clients having to wait to accumulate up to $5 in round-ups. Spend also has Found Money built-in, so if a customer’s purchase meets the qualifications, he or she will be able to use their Spend card instead of having to follow a link to receive the Found Money. Since the first batch of cards sold out, I did not get to personally test having one.

Acorns spend debit card
Acorns Spend debit card.

Spend is essentially a debit card that provides an investment and retirement account to go along with it, making it one of a kind. The Spend card does not charge any overdraft fees or minimum balance fees. The card also offers unlimited free or fee-reimbursed ATMs nationwide, another great feature.

Acorns Spend is FDIC-protected up to $250,000.  

Bottom line, Acorns Spend provides customers Acorns + Acorns Later + Acorns Spend for $3 a month, or $36 annually. Acorns Spend is worth the money to some customers since the debit card makes it easier for Found Money, has real-time round-ups, no overdraft fees, and fee-free or reimbursed ATMs nationwide.

Portfolio Holdings

Vanguard and BlackRock iShares are the ETF providers of choice for Acorns.

As I mentioned earlier, Acorns currently has five different portfolio strategies for the standard Acorns account. Each Acorns portfolio assigns different asset class distributions. Each asset class is just one ETF. I have listed the different asset classes and the ETFs they are made up of below.

Acorns portfolio performance summary
Acorns portfolio performance summary.

Pricing

As an investor you need to select the plan that best fits your needs.

The screenshot below shows all pricing information for Acorns.

Acorns pricing breakdown
Acorns pricing comparison.

$12 a year ($1/month) gets you access to Acorns, $24 ($2/month) to Acorns and Acorns Later, and $36 ($3/month) to Acorns, Acorns Later, and Acorns Spend. As an investor you need to select the plan that best fits your needs.

As a robo-advisor, it is important to remember that Acorns offers much more than just buying and selling ETFs. With Acorns, all purchases are automated, your portfolio is automatically rebalanced for you throughout the year, and you are part of large investor community that encourages and celebrates saving.

Although $12 per year is a larger percentage of assets for smaller accounts ($12 is 1% of $1,200), most investors can get more than $12 in Found Money or referrals, or in value from the service and community itself. As examples, each referral is $5 for both you and the person you refer, a $100 purchase at Nike brings in $5 thanks to Nike’s 5% Found Money kickback, and becoming an Uber or Lyft driver would bring in another $25.

View All FeesAcornsBettermentWealthfrontSchwab Intelligent PortfoliosMerrill Edge Guided Investing
Total AuM$804M$11.8 Billion$10 Billion$30.6 BillionNA
Minimum Deposit$0.00$0.00$500.00$5,000.00$5,000.00
Annual Fee - $5,000$1/mo0.25% 0.25%0.00%0.45%
Annual Fee - $25,000$1/mo0.25%0.25%0.00%0.45%
Annual Fee - $100,000$1/mo0.25%0.25%0.00%0.45%
Annual Fee - $1,000,000$1/mo0.25%0.25%0.00%0.45%
Cost 4.5 Stars 4.5 Stars 4.5 Stars 5 Stars 3 Stars

As far as Acorns Later goes, the $2 a month fee is low cost but does add up quickly with lower balance accounts. As a comparison, both Betterment and Wealthfront charge 0.25% per year on the account balance, so for a portfolio less than $10,000 in value, they are a better value on cost alone. Arguably, even beyond a $10,000 portfolio value, the best robo advisors justify their costs by including additional tools and features.

Promotions

If you refer a friend to Acorns you and your friend get $5 invested in your account. Acorns also offers larger sums if you refer a set number of accounts in a set period. Since I opened my account in June I’ve seen two big referral promotions. One offered $1,000 for referring 14 accounts in the month of August, while another offered $500 for referring seven accounts in the first two weeks of September.

Final Thoughts

Acorns is ultimately designed for younger generations who are interested in investing but may not have the capital or know-how to do it by themselves.

Acorns is ultimately designed for younger generations who are interested in investing but may not have the capital or know-how to do it by themselves. Acorns is great because it is inexpensive, encourages and automates good savings habits, simplifies the entire process of wealth building, and sets up young investors for long-term success through ongoing education.

Because of Found Money, Acorns is a viable investment option for all people. Big and small purchases with Found Money companies make it easy to earn a little extra for your investment account, whether you’re buying a new mattress or a pair of shoes.

Acorns is best suited for individuals who:

  • Have less than $10,000 to invest
  • Want to invest money in an investment or retirement account without thinking about it
  • Want to micro-invest
  • Want to passively invest in ETFs
  • Want a debit card that comes with investment and retirement accounts

Even mass-affluent individuals can diversify their portfolio while having access to Found Money, making acorns a seed worth planting for all ages.

Related Guides

Methodology

Reink Media Group (RMG) remains committed to providing transparent and unbiased reviews of various financial services and segments, including Robo-Investment Advisors (“RIA’s”). Although exempt from registration as an investment advisor under the Investment Advisors Act of 1940, 15 U.S.C. §80b-1, et seq, RMG works tirelessly to ensure compliance with all applicable Security and Exchange Commission rules and regulations for entities which perform reviews and/or receive payments for advertising and solicitation. Please be advised that for purposes to this Review, RMG utilized a live account with actual funding which was later closed once the Review’s test period was complete.

References: Trust Profile, SEC CRD# 165926, Company history, Twitter, Facebook, Press Releases, Apple iTunes, Google Play Store.


Joey Shadeck

Reviewed by Joey Shadeck Joey Shadeck is a research analyst at Reink Media Group and contributor to StockBrokers.com.


Ratings Overall

*Acorns was not included in the latest annual review, as a result this data may not be up to date.

Summary

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All pricing data was obtained from a published web site as of 02/18/2019 and is believed to be accurate, but is not guaranteed. The StockBrokers.com staff is constantly working with its online broker representatives to obtain the latest pricing data. If you believe any data listed above is inaccurate, please contact us using the link at the bottom of this page.

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