Acorns Investment Review: Is Acorns Worth it?

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Is Acorns worth it? Is it a good investing app to download and start? We’ve put together an in-depth guide on the Acorns investing app, including my personal experience with it. And yes, I can honestly say it is worth it!

Acorns is a micro-investing app designed to make investing simple and easy for beginners.

It is also an app that helps you save money by automating it. By rounding up your spare change from everyday purchases, the platform helps you start saving and investing without feeling overwhelmed. You can start investing even with small account balances.

This innovative approach to investing has grabbed attention and praise for its user-friendly interface, automatic savings features, and risk-appropriate portfolio options.

However, it’s important to weigh the pros and cons of Acorns to determine if it’s the right fit for your financial goals. In this Acorns review, you will learn everything you need to know.

Acorns investement review — Photo by PiggyBank on Unsplash

What is Acorns Investing?

Overview of Acorns App

Acorns is an investing app designed to help you start investing with minimal effort. In addition, it also helps you save money.

By connecting your bank checking account, the app tracks your spending and rounds up transactions to the nearest dollar.

It then moves that money into your Acorns saving account where it invests that “spare change” into a diversified portfolio based on your preferences and financial goals.

You can also set your Acorns personal account to withdraw a set amount of money from your bank account daily, weekly or monthly and add it to your Acorns accounts. These recurring deposits can help your account grow even more.

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Acorns as a Robo-Advisor

As a robo-advisor, Acorns creates and manages your investment portfolio using algorithms and automation.

You are asked a series of questions when you sign up, so the app can determine your risk tolerance and investment goals. Based on this data, Acorns will build a customized portfolio that aligns with your goals.

So basically you are still driving how risky or not risky the investments are. If you want to be more conservative with your investments, you just let the Acorns app know that. It will invest your money accordingly.

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Micro-Investing and Spare Change

One of the great things about Acorns is that you don’t have to have a bunch of extra money laying around in order to invest.

Acorns’ micro-investing approach makes it easy for you to start investing even if you don’t have a significant amount of money to deposit initially. It does all the work for you with your linked checking account.

By rounding up your everyday transactions, the app accumulates small amounts of money that are invested in your portfolio. It moves these small amounts from your checking account into your acorns invest account.

This “spare change” method allows you to gradually build up your investments and get comfortable with the idea of investing in the market. Plus, since it is a robo-advisors app, you don’t have to make the actual purchasing choices.

My Experience with Acorns

acorns investment review 2023 — Image source

My Acorns investment review is that I’ve been using the Acorns App for several years now and highly recommend it. First of all, it makes it easier to contribute money each month to a savings account.

It can be hard to make sure you set aside money to put in savings. But with the Acorns app, it is automatic, so you basically can’t mess that up!

Once you link it to your bank’s debit card, it will automatically round up any purchases you make to the next dollar, and take that spare change and save it for you.

But, it is even better than a regular savings account because it pushes that spare change to an investment account. So, not only are you saving money every week, you are investing that money. And that means you can turn it into more money!

And, since Acorns allows you to choose what risk level you want, you can be as conservative as you want. That way, you can make sure the money in your Acorns account will grow at least a little. Or, you can choose to be a little braver and make your money grow more quickly.

My official Acorns review is that it has been easy for me to use, has automated my savings and investing, and I think Acorns is worth it!

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Acorns Investment Portfolios

Investment Options

With Acorns, you have access to a variety of investment options that include stocks, bonds, and other asset classes.

By using a passive investment strategy, Acorns helps you grow your wealth without needing to make constant adjustments to your portfolio. This approach is ideal for new investors looking for simplicity and ease of management.

You don’t have to spend time studying or even worrying about what to buy or not to buy. Acorns makes it easy for you by doing the work in investment accounts.

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Diversification and Risk Tolerance

An essential aspect of any investment strategy is diversification, and Acorns provides this through its carefully constructed portfolios.

These portfolios adhere to your risk tolerance, so that your investments match your goals and overall comfort level.

Whether you are a conservative or an aggressive investor, Acorns offers a mix of assets to help you achieve long-term growth. You choose how your investment funds are allocated.

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ETFs and Expense Ratios

The funds in Acorns investment portfolios primarily consist of low-cost index ETFs from reputable providers such as Vanguard.

These ETFs represent various asset classes, including domestic and international stocks, bonds, and even more specialized investments like a Bitcoin-linked ETF. This diverse selection gives you broad market exposure, which can contribute to the stability of your investments over time.

One advantage of investing in ETFs is their low expense ratios compared to other investment products. Lower expense ratios result in lower overall fees. Which, in turn, means more of your money goes to actual investments.

With Acorns, the ETFs included in the portfolios often have expense ratios well below industry averages, ensuring that your investments remain as cost-effective as possible.

To summarize, Acorns offers an accessible and diversified investment solution that caters to various risk tolerances. And, it still lets you invest even with smaller account balances.

By investing in low-cost ETFs from respected providers, you can start making money from investments without risking too much.

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Account Types and Features

Acorns Core, Later, and Spend

Acorns offers a variety of investment accounts designed to meet different goals.

The Acorns Core account is a basic investment account that helps you invest your spare change through its round-up feature. You simply link your bank debit card to Acorns and it does the rest!

This account offers you the choice of investment accounts and portfolios such as conservative, moderate, moderately aggressive, and aggressive.

Acorns Later is tailored for retirement planning, providing Traditional IRA, Roth IRA, and SEP IRA options based on your needs. By contributing to Acorns Later, which is essentially a retirement account, you can work towards a more secured retirement.

Meanwhile, Acorns Spend is an Acorns checking account that includes a debit card for daily use. This account offers various features such as:

No minimum balance requirements for your checking account
Cash back on your purchases
Efficient money management with the Acorns app

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Acorns Early and Family Plan

For those looking to invest on behalf of a child, Acorns offers Acorns Early, which are custodial accounts under UGMA/UTMA regulations.

These accounts allow you to create an investment plan for your child’s future. This makes it super easy to start a college account for your kids while they are still young.

The Family Plan combines Acorns Core, Later, and Spend accounts along with Acorns Early, making it the most comprehensive option for families who want to manage their finances in one place.

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Retirement and IRAs

As mentioned earlier, Acorns provides retirement-focused investment options through Acorns Later. You can choose between the following types of IRAs:

Traditional IRA: Allows you to contribute pre-tax income, so your contributions may be tax-deductible. Taxes are deferred until you withdraw the funds during retirement.
Roth IRA: Contributions are made off your post-tax income, meaning you won’t receive a tax deduction upfront, but your withdrawals during retirement are tax-free.
SEP IRA: A retirement plan designed for self-employed individuals and small business owners. Contributions are tax-deductible, and taxes are deferred until retirement.

Keep in mind that for each of these IRAs, there are specific contribution limits and rules that apply. Be sure to consult a financial advisor or do your research to determine the best option for your circumstances.

Acorns Fees and Costs

Membership Tiers and Pricing

You do have to pay management fees to use Acorns. The program offers three membership tiers, each with a monthly subscription fee:

Lite – $1/month: Provides basic savings, investing, and earned money features.
Personal – $3/month: Adds an individual retirement account (IRA), checking account, and recurring investments.
Family – $5/month: Extends all the benefits of the Personal tier and adds Acorns Early, which allows you to open custodial accounts for your children.

Management and Account Fees

Despite its straightforward subscription models, there are some management and account fees you should be aware of within each tier.

Lite

Acorns invests your spare change, and the $1/month fee may seem reasonable, but it can accumulate as a high percentage if your investment balance starts low.

For example, with just $100 invested, a $1 monthly fee amounts to a significant 12% annual fee. Ensure that over time, your positions grow to optimize your Acorns fees. Of course, you are also getting the added benefit of Acorns automating your savings for you with its round up feature.

Personal

For $3/month, you receive access to an IRA and checking accounts. However, keep in mind that this tier also requires you to maintain higher account balances to mitigate the impact of fees on your investments.

Family

The Family tier, at $5/month, could be of value for those looking to set up custodial accounts for their children. However, you will have to pay account fees. Make sure your investments grow at a pace that balances the fees, regardless of the tier.

Closing Accounts: Be aware that if you decide to close your investment account, Acorns may charge you a non-negotiable closing fee based on the specific scenario and the tier you belong to.

Keep these fees in mind when considering Acorns as an investment platform. Evaluating the cost structure is important before committing to a financial application. Make sure you understand how fees apply to your specific situation to benefit from the platform.

Extra Features and Benefits of Acorns Investment

Round-Ups and Found Money

Acorns offers Round-Ups, a feature that allows you to invest your spare change automatically.

When you make purchases using a linked credit or debit card, Acorns rounds up the transaction amount to the nearest dollar and invests the difference in your Acorns investment account.

This feature can be a great way to start investing without feeling the pinch of setting aside large lump sums. Plus, if you have a hard time getting yourself to save money, this makes it happen for you automatically.

Acorns Found Money is another unique feature that helps you earn cash back from participating retailers and Acorns partners.

When you shop with companies like Walmart or other Acorns partners, a percentage of your purchase amount is deposited into your Acorns investing account as a cash back reward. This way, you can grow your investment portfolio while shopping at your favorite retailers.

Cash Management and Debit Card Rewards

Acorns also offers cash management options through their Acorns Spend account, which is a checking account that comes with a debit card.

This account has no overdraft fees, no minimum balance requirements, and allows you to withdraw money from more than 55,000 ATMs without incurring fees.

The Acorns debit card also offers a unique rewards program. When you use this card for purchases, you’ll automatically benefit from Round-Ups and Found Money features. This feature helps you accumulate cash back and grow your investments effortlessly.

Partnerships and Retailers

Acorns has partnered with various retailers and investment firms to provide an optimal investing experience for its users.

The platform includes a diverse range of Exchange Traded Funds (ETFs) from world-renowned firms such as BlackRock and Vanguard. These strategic partnerships work together to create diversified portfolios tailored to your risk tolerance and investment goals.

Plus, since Acorns investing is using trusted ETFs, you can trust the app with your money a little more.

By collaborating with different retailers for the Found Money feature, Acorns enables you to earn extra cash for your investment account while shopping at popular stores.

The more partners Acorns adds, the more opportunities you’ll have to grow your investments and maximize your savings.

Acorns Investment Performance and Returns

Historical Returns and Portfolio Performance

When investing with Acorns, your money is allocated in ETFs within diversified portfolios created by experts. This is one thing that makes Acorns investment app such a great choice.

These portfolios will maximize your potential return while minimizing risk. It is important to remember that past performance does not guarantee future results. And, of course if you opt for one of the more aggressive portfolios, your gains will be more.

However, Acorns has generally delivered competitive returns compared to other robo-advisors and investment platforms. So, it is one of the best investment apps and platforms you can choose.

You can track your account performance, including your contributions, returns, and net worth, through the Acorns app.

This allows you to monitor your progress and make any necessary adjustments in your investment strategy.

Additionally, if you have a 401(k) from a previous employer, you can roll it into an Acorns account to take advantage of their professionally managed portfolios.

Tax Strategies and Tax-Loss Harvesting

While Acorns does not currently offer tax-loss harvesting, they do focus on tax-efficient strategies for their portfolios. This includes utilizing ETFs, which are generally more tax-efficient than mutual funds due to their unique structure.

It’s also important for you to consider the potential tax implications of your Acorns portfolio, particularly as it relates to your income and overall financial goals.

For example, if you are in a higher income bracket, you may want to explore other tax-advantaged investment opportunities, like 401(k)s or IRAs, to minimize your tax liability.

On the other hand, if your primary goal is building a long-term investment portfolio, focusing on capital appreciation and returns may be more important than pursuing tax-loss harvesting.

As with any investment strategy, it is important for you to regularly review your portfolio performance and consider your specific financial goals, risk level, and tax situation.

By staying informed and actively managing your Acorns investment account, you can work towards achieving your investment objectives.

Pros and Cons of Acorns

Advantages of Acorns Investing

Acorns is a great platform for those with specific investment goals in mind. One of the platform’s main strengths is that it’s designed for hands-off investors who want a simple and automated investing experience.

Diversified Portfolio: Acorns offers risk-appropriate, low-cost investment portfolio options. These options are built by experts and include exchange-traded funds (ETFs) that provide a diversified investment experience.

This ensures your money is spread across various assets to minimize risk and maximize returns. Plus, they give you the control of choosing how risky or not risky you want to be.

Automatic Savings Features: Acorns’ round-up feature helps you save more by automatically investing your spare change from everyday transactions. This makes it easier for you to build your investment portfolio without noticing the impact on your daily spending.

Ease of Use: Acorns’ easy-to-navigate interface makes it simple for beginners to start investing in a diversified portfolio without feeling overwhelmed.

Customer Support: Acorns offers reliable customer support through Facebook and other channels, ensuring you get help when you need it.

Disadvantages and Concerns

While Acorns offers many advantages for beginner investors, there are some drawbacks to consider.

Fees: One of the main concerns for Acorns’ users is the relatively high fees, particularly when compared to other fintech investing platforms like Robinhood or Vanguard S&P 500 ETF.

Acorns charges a flat rate of $3/month for personal accounts, which can be expensive if you have a small balance. For example, a $100 balance on the Personal tier would result in a 36% management fee, while Betterment by contrast only charges 0.25% per year.

Limited Investment Options: Acorns does not offer the option to invest in individual stocks, small-cap stocks, or other specific investments that you might find on platforms like Robinhood.

Because it is a custodial investment account, it limits your ability to customize your portfolio in your investing account based on your individual preferences. Acorns also does not offer tax loss harvesting.

Returns: Since Acorn portfolios are primarily built around diversified ETFs, your returns may not be as high as those potentially achievable by investing in individual high-growth stocks or other options.

As a result, your returns could be more conservative than other investment strategies. However, this makes the Acorns App a good fit for beginner investors.

In summary, when considering Acorns as an investing platform, be sure to weigh the advantages and disadvantages to determine if it’s the right fit for you.

Acorns Reviews

acorns investment review guide — Photo by Leeloo Thefirst

When it comes to a full Acorns review, you might be wondering how other people rate and review Acorns. According to the Consumer Affairs site, it has a 3.3 out of 5 rating. Not exceptional, but decent. They have had over 10 million people sign up, which is a ton of customers!

There are some general complaints online however regarding poor customer service and slow or poor responses to cancellation requests in particular.

So, they do have some clear issues to correct. Another negative we wanted to include in this Acorns review is that they are not an accredited BBB company as of now.

Alternatives and Competitors to Acorns

Wealthfront and Betterment

Wealthfront and Betterment are two popular robo-advisors that offer a more comprehensive investing experience compared to Acorns.

Both of these platforms provide diversified portfolios, an easy-to-use interface, and automated investment management.

Their fees are generally lower for larger account balances, so they may be more suitable if your investment objectives extend beyond the spare-change-centric approach of Acorns.

Specifically, Wealthfront offers tax-loss harvesting for taxable accounts which can increase after-tax returns.

Betterment, on the other hand, focuses on personalized goal-based planning. Plus, they have an option for upgrading to their premium service for access to CFP professionals’ advice.

Robinhood and SoFi

If you’re interested in active investing or trading individual stocks and ETFs, Robinhood and SoFi might be better alternatives.

Both platforms offer commission-free trades for stocks and ETFs, with Robinhood known for its easy-to-use interface and sleek design. And, SoFi offers a more holistic approach to personal finance, including lending services and mobile check deposit.

Robinhood also gives its users access to options and cryptocurrency trading, expanding the potential investment opportunities available. In comparison, SoFi recently introduced fractional shares and integrated cryptocurrency tradinginto their platform.

How Acorns Compares with Competitors

Fee structure: Acorns invest charges a flat fee for its services, starting at $1 per month for the Lite plan. This can be an attractive option for smaller accounts, but it could become less competitive as your account balance grows.

Competitors like Wealthfront and Betterment charge fees as a percentage of assets under management instead. They do make payment easy by directly withdrawing it from your linked bank account.

Investment approach: Acorns focuses on micro-investing, rounding up your everyday purchases and investing the difference. This makes it an easy and approachable way for beginners to start their investing journey. Wealthfront, Betterment, Robinhood, and SoFi cater to more experienced investors with broader investment options.

Account types: Acorns primarily focuses on taxable accounts and individual retirement accounts. In contrast, Wealthfront and Betterment offer a wider range of account types, including joint accounts and 529 college savings plans. Robinhood and SoFi focus on individual taxable accounts.

To summarize, your choice of investment platform will largely depend on your personal finance goals, available investment options, fees, and account types. Evaluate each platform and determine which one best aligns with your needs.

Can You Actually Make Money from Acorns?

I can personally attest that yes, you can make money from Acorns investing. The money that pushed to my Acorns account has grown for sure. So, it is worth signing up with Acorns investing.

What is the Downside of Acorns?

One of the downsides of Acorns is they do not have a tax strategy. Another downside is that their fees are a little on the high side.

And, if you want to purchase individual stocks instead of ETFs, you will not be able to do so. In addition, there are some online complaints regarding customer service response issues and slowness.

Does Acorns Have a Monthly Fee?

Yes, as we’ve mentioned Acorns does have a monthly fee. The amount of the fee depends on which type of account you opt for. But, the most affordable and basic plan is $1 per month which is debited from your bank account.

Is Acorns Safe?

Our Acorns review 2023 has determined that yes, Acorns is a safe app to use with your checking account. You can easily link it to your debit card and checking account.

Your direct deposit money that is transferred to the Acorns app is safe. But, the riskier choice of portfolio you make, could increase the chance of your money decreasing if the stock market falls. You can choose a more conservative portfolio to keep your money even safer.