How Does Acorns Make Money?

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Contributor, Benzinga
March 8, 2022

No business can survive without an influx of funds each year, and it is essential that enough money be brought in to cover the costs associated with running a business. As demonstrated by companies such as Uber Technologies Inc. (NYSE: UBER), a company doesn’t have to be profitable, but it needs cash flow. 

Acorns, founded in 2012, is an American financial technology and services company specializing in microinvesting and robo-investing. 

The company offers valuable services for investors, including investment accounts, online banking and the opportunity to expand customer knowledge further. The company earns its money through its subscription plans and its interchange fees.

How Does Acorns Make Money?

You can open an Acorns account on its app or website by entering your personal details, linking your bank information and setting up your financial goals and allocated risk. Subscription charges and interchange fees generate revenue for the company. 

Subscription revenue: Acorns currently offers two subscription plans: Acorns Personal and Acorns Family. The Acorns Personal subscription plan is $3 per month, while the Acorns Family subscription is $5 per month. It costs $0 to set up an account, but you must use one of the Acorns' subscription plans if you choose to start investing.

According to Young and The Invested, the company reportedly had over 8 million subscribers as of 2020, meaning revenue is between $96 million and $480 million per year from subscription fees alone. 

The services offered by its subscription programs include an online checking account and debit card. An Acorns Personal subscription provides additional services such as Acorns Invest, Acorns Later and Acorns Spend as well as an Acorns checking account. The Acorns Family member plan offers all previous services and its investment account for kids.

Interchange fees: Interchange fees involve money deposited into an Acorns checking account. Acorns uses Visa Inc. (NYSE: V) to process its debit card transactions and receives an interchange fee for any transaction made.

Its fees can vary depending on the type of network used and the transaction that occurs, and its interchange fees cover transaction processing and fraud losses for consumers. Unused funds can also be attributed to the firms' profits. 

Is Acorns Worth the Money?

Acorns is entirely digital, helping people achieve their investment goals without needing to meet in person. 

For those interested in a managed account, different subscription plans are available. Diving into its subscription plans will help understand whether Acorns is worth the money for individual consumers.

Acorns Personal: Acorns Personal costs $3 per month. With this plan, you obtain a metal debit card, bonus investments and financial advice. In addition, customers can open an investment account to put their spare change to the side and grow their knowledge with numerous articles and financial expertise. An added feature of Acorns, its round-ups help you increase your investment portfolio automatically. An individual transaction of a few cents rounded up to the nearest dollar may not necessarily represent a lot of money, but the benefits can be meaningful over time.

Acorns Personal offers retirement accounts that allow individuals to save for the future, gain tax advantages and meet their retirement savings goals

An Acorns Personal checking account provides payment up to two days early from your paycheck, a Smart Deposit feature, 55,000 accessible ATMs and no low-balance or overdraft fees.

Another feature of the company’s rewards program is the Found Money program, which adds bonus cash to your portfolio if you opt to spend money with one of Acorns' partners. The company currently has over 350 partners, including Apple Inc. (NASDAQ: AAPL), Chevron Corp. (NYSE: CVX), Nike Inc. (NYSE: NKE) and Walmart Inc. (NYSE: WMT).

Acorns Family: An Acorns Family plan is the most expensive of the options. At $5 per month, customers can receive all the benefits of a personal project and an investment account for kids.

Its early investment account helps prepare children to set aside money and save for their future from a young age. An account can be opened in under three minutes and can be created for multiple kids at no extra cost. 

A range of benefits includes automatic recurring investments, family financial education, potential tax savings and flexibility among the funds.

Finally, Acorns offers educational content through both its website and app. For example, consumers can benefit from a dictionary of investment terms and concepts, which are explained using simple language.

Acorns accounts help customers, but the benefit comes with a catch. A $3-per-month plan may not sound pricey, but if you only have an account with a few hundred dollars, the cost can develop into a sizable fee over time. A price of $3 per month can come to an unreasonable percentage of your account over the year.

Compare Acorns With Competitors

It’s important to compare Acorns to its competition. Acorns tends to target young and new investors. If you are looking to set up the service but your experience levels are more sophisticated, it may be helpful to check out other providers.

Frequently Asked Questions


Does Acorns actually make you money?


Acorns should not be considered a side hustle or an app that will guarantee that you make money. Instead, it is a tool that should be used to grow the money you already have through consistent saving and investing over time. 


Can you lose money with Acorns?


With any investment, including those at Acorns, you face an element of risk and the potential to lose your money if your investment is unsuccessful.

About Sam Boughedda, Stock Market Analyst

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