Picking a stock trading platform is an important decision. The platform you choose influences what types of features and opportunities you can access. Any stock trading platform lets you buy and sell stocks, but there is more to these platforms than the expected features. Robinhood and Acorns are two new stock investing apps that have millions of users. This Robinhood vs. Acorns analysis will help you decide which app is right for you.
- Beginners
What is Robinhood?
Robinhood is an investment app that lets users trade stocks, crypto, options, and ETFs. The company also lets you earn up to 4.65% APY on your cash. You can also get FDIC insurance of up to $2 million with the broker. Robinhood also has an individual retirement account that gives a 1% match and no commission fees.
Pros
- IRA that has a 1% match even if you are self-employed
- Access to various assets like stocks and crypto without trading fees (option trades have fees)
- 4.65% APY on cash
Cons
- No mutual funds or bonds
- Not as many tools for active traders
- A Gold tier subscription fee is required to access some data and research. You can get better information from other brokers without paying for a monthly subscription.
- Prepping for future investing
What is Acorns?
Acorns is an investment and banking app that acts as an all-in-one financial resource. The company has a network of 55,000 ATMs for fee-free withdrawals. Acorns does not have account minimums and sends you a debit card when you open a checking account. Acorns does not have any hidden fees. On the investing side, users can trade stocks and ETFs.
Pros
- Round-up lets you automatically invest change from every purchase
- Great selection of ETFs crafted by the Acorns team
- Banking and investing from one app
Cons
- Limited assets that you can trade – only stocks and ETFs
- $3/mo account management fee for an investment account, IRA, and checking account
- Small accounts can get stuck with high fees.
Why Use Investment Apps?
Investment apps are best used for those looking for a “set it and forget it” approach to investing. Users of investment apps tend to be first-time investment buyers and want simplicity.
Robinhood and Acorns take the trouble and confusion out of investing by placing the control of the process in your hands. Both remove a lot of the confusing vernacular and take a step back, so you can make your investment and check up on its progress at your leisure.
Comparing Robinhood vs. Acorns
Robinhood and Acorns are both established investment apps. These factors will help you decide which one is right for you.
User Interface and Navigation
Robinhood and Acorns both offer seamless user interfaces and navigation. You can comfortably move through these apps and find the information that you are looking for. It’s also easy to place trades.
Investment Options and Account Types
Robinhood gives investors more choices than Acorns. While Acorns has customized ETFs, Robinhood also lets its users buy stocks and ETFs. Robinhood also offers options and crypto, assets you cannot buy on Acorns.
Fee Structures and Costs
Robinhood has lower fees and total costs. You only have to worry about Robinhood fees if you trade options. Stock and crypto trades do not involve any fees. You have to pay a $3/mo maintenance fee to invest in the Acorns app, but that maintenance fee gives you extra features like a checking account. However, if you want to save money when investing and do your banking on a separate app, Robinhood is the better choice.
Performance
Acorns and Robinhood each give you enough flexibility to control your performance. You can decide which assets to put into your portfolio and trade accordingly. Robinhood gives investors more assets to choose from which can help investors achieve higher returns. Options trading can increase returns more than Acorns ETFs, but options trading is also inherently riskier.
Accessibility and User Support
Robinhood and Acorns both have great accessibility, but they also have low ratings for customer support. You can contact customer support and see if you can get in touch with a good representative, but it’s better if you can navigate the apps without much difficulty.
Other Investment App Options
Robinhood and Acorns are both viable options for investors, but they’re not the only investment apps available. Here is a list of additional investment apps that you may want to consider.
Should You Go with Robinhood or Acorns
Robinhood and Acorns both have a lot to offer. While Robinhood lets you choose from more investments, Acorns offers a more laid-back approach that focuses on ETFs across many sectors. While Acorns does not let you buy crypto directly, the company has ETFs that give you exposure to crypto. Investors should assess the pros and cons of these investment apps and compare them with other choices to discover what works for them.
Frequently Asked Questions
Has anyone made money on Acorns?
Investors can make money buying Acorns ETFs and holding onto them for the long-term. Investors should review what is in these ETFs before investing in them.
Can you get rich with Robinhood?
You can get rich with Robinhood, but it takes patience and discipline to build a large portfolio.
Is Acorn better than Robinhood?
About Marc Guberti
Marc Guberti is an investing writer passionate about helping people learn more about money management, investing and finance. He has more than 10 years of writing experience focused on finance and digital marketing. His work has been published in U.S. News & World Report, USA Today, InvestorPlace and other publications.