- Fully automated investing.
- Taxable and retirement accounts offered.
- Banking is available as well.
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Updated March 7, 2024
In a nutshell
Acorns is an investment app that focuses on making investing easy and automated.
- Acorns offers a combination of investing and banking products, though a monthly subscription fee is required for all users.
- As you invest, your funds are automatically allocated to a professionally designed portfolio to align with your investment goals.
Acorns
Acorns
Min. balance to open
$5
Fees
$0 transaction fee.
$3 per month for Acorns Personal; $5 per month for Acorns Personal Plus; $9 per month for Acorns Premium
0.03% to 0.25% expense ratio on most funds and 0.95% for Bitcoin fund.
Pros:
Cons:
- Monthly fees are required for all customers.
- No tax-loss harvesting.
- No human financial advising offered.
Acorns overview
Acorns is an investment app made for beginners, offering a simple way to start investing. Users can set up an account with automated or manual deposits and choose from Acorns’ pre-designed portfolios. The app operates similarly to many robo-advisors, using your financial details and goals to recommend a suitable investment portfolio.
These portfolios consist of low-fee ETFs (exchange-traded funds). While they can be used for short-term investments, they are geared towards long-term financial goals. Acorns is particularly effective for traditional IRA and Roth IRA accounts, where investments typically span many years or even decades.
However, a significant drawback of Acorns is its fee structure. The app offers three plans, priced at $3, $5, or $9 monthly, based on the services you need. The $3 monthly fee is relatively high for accounts with smaller balances. For instance, a $100 account would incur fees of around 12% annually, while a $1,000 account would face a 1.2% fee. Although costs are lower as a percentage for larger accounts, these fees are still considerable for the services provided.
Acorns features and services
Acorns offers a suite of financial services that meet various needs. Here’s a look at the most important features.
Automated investing portfolios
The core feature of Acorns is automated investing. After answering a few questions, Acorns suggests a portfolio, such as a conservative or aggressive portfolio, made up of low-fee ETFs. Whenever you add to your account and as the underlying investments fluctuate over time, Acorns rebalances your investments to stay aligned with your target portfolio.
Recurring investments
Acorns supports several methods to add to your investment portfolio. Those include automatic recurring investments, round-ups when making card-based purchases, and earning from deals with Acorns partners.
Multiple account types
Acorns supports taxable investment accounts and several types of retirement accounts, including self-employed SEP IRAs. IRAs offer an opportunity to save on taxes when investing for retirement
Banking
Acornsfeatures high-yield bank accounts with automated saving and investing features built in. Bank accounts are online-only and backed by FDIC insurance coverage. You can withdraw using AllPoint ATMs for free. The debit card is particularly cool, a metal card made of tungsten.
Family financial accounts
Acorns Early is an investment product for kids, where parents can open UTMA or UGMA accounts in their kids’ names. However, those accounts only come with the $9 per month Premium plan, which adds up to over $100 per year just to have the accounts. Premium also offers bank accounts for kids.
Who Acorns is best for
Acorns is best for beginners to investing who prefer a straightforward, automated approach. It's particularly appealing for those with limited investment knowledge, offering a simple way to grow your wealth through automated investments and spare change round-ups. However, this convenience comes at a relatively high cost.
For cost-conscious individuals, there are alternative investment platforms with lower or no fees, although they might require more active involvement and a better understanding of investing. It's important for investors to balance their comfort with investment management against the fees they're willing to pay, ensuring their choice aligns with both their financial capabilities and investment goals.
Acorns
Acorns
Min. balance to open
$5
Fees
$0 transaction fee.
$3 per month for Acorns Personal; $5 per month for Acorns Personal Plus; $9 per month for Acorns Premium
0.03% to 0.25% expense ratio on most funds and 0.95% for Bitcoin fund.
How Acorns compares
Acorns is part of a competitive industry of automated investment products. While Acorns has been around longer than some alternatives, anyone with price sensitivity may want to shop around for the lowest-cost automated investment platform. Other automated investment accounts are provided by the following reputable companies.
SoFi Invest
SoFi Invest
SoFi Invest
Fees
$0 stock & ETF trades.
0/contract options trades.
1.25% crypto fee.
Min. deposit
$0
SoFi Invest is a completely free investment account, with options to choose your own investments or rely on an automated robo-investor style account. SoFi also offers banking, lending, and other financial products.
Betterment
Betterment Invest
Betterment Invest
Fees
025% to 0.40%
Min. deposit
$10
Betterment is a fully automated robo-advisor. While plans start at $4 per month, you can qualify for a lower 0.25% rate with automated investments or a minimum account balance. For a higher fee, you can get help from a human financial advisor too.
Schwab Intelligent Portfolios
Charles Schwab
Charles Schwab
Fees
$0 stock & ETF trades.
$0.65/contract options trades.
$2.25/contract futures trades.
$0 OneSource mutual fund trades.
Min. deposit
$0
Schwab’s robo-advisingproduct is available at no cost. If you choose the introductory-level plan, you get basically the same service as Acorns for free. It also includes tax-loss harvesting for taxable accounts.
Methodology
Our team looked at product offerings, ease of use, and fees to review Acorns and assess potential alternatives. Everyone’s investment needs and goals are unique, so consider your personal situation when choosing any investment account. When in doubt, consider consulting with a professional investment advisor.
Frequently Asked Questions (FAQs)
Is Acorns Legit?
Acorns is a legitimate investment app that makes investing for long-term goals easy. Accounts are regulated and insured.
Is Acorns good for beginners?
Acorns is an ideal investment app for beginners. You can start using Acorns to invest with little investment knowledge.
Does Acorns charge a monthly fee?
Acorns requires monthly fees of $3, $5, or $9, depending on your accounts.
AP Buyline’s content is created independently of The Associated Press newsroom. Our evaluations and opinions are not influenced by our advertising relationships, but we might earn commissions from our partners’ links in this content. Learn more about our policies and terms here.