If you’re looking into investing in the market, you may be eyeing Acorns, a popular investment application. Take a look at Benzinga’s overview of the platform, including its uses, benefits and drawbacks, before you decide whether it’s right for you.
What is Acorns?
Acorns, an influential fintech company with the commitment to provide everyday Americans with easy access to some of the best investing and money tools around, makes good on its promise to facilitate long-term financial wellness. In addition to offering customary banking and brokerage services, when you make a purchase, Acorns takes the spare change of the purchase, rounds it to the nearest dollar and adds it to your investing account. The amount adds to your investments in your choice of exchange-traded funds (ETFs).
Acorns Fee Structure
Acorns offers 2 separate fee structures. The personal account charges $3 per month and enables Acorns’ signature spare change investment product through Acorns’ Earn partners, currently numbering over 350 entities. You get access to its massive database of financial articles, and you can open a retirement account as well. Other benefits include automatic saving via paycheck allocations, use of 55,000 fee-free ATMs, the absence of low-balance or overdraft fees and the potential to earn 10% bonus investments.
The second plan, a family tier, carries a fee of $5 per month. In addition to the personal account benefit, this plan lets you open savings accounts for your children. Kids’ accounts, called Acorns Early, open the door to a full financial wellness system for your kids, with investment, retirement and checking accounts built in.
How to Use Acorns
Regardless of your stage in life, you can grow financially from Acorns’ many benefits.
- School days: It’s important to begin saving when you’re young, and Acorns can help you do just that. It offers savings accounts for everyone, even if you have high-debt school loans or a low-income job. Your savings accrue over time as you progress through school. Use the round up feature to add to your account, and the interest will compound over time.
- Set it and forget it: The Acorns app takes a set-it-and-forget-it approach to savings. You can make larger, more direct contributions to your account by telling Acorns to take a portion of your monthly payments and automatically put it aside for savings.
- Round-up purchases and boosters: Acorns is most known for a process that it calls “round-ups” where it invests spare charge whenever you use the card linked to the Acorns account.
- Acorns partners: Acorns partners with more than 350 retailers. When you use your Acorns-linked card at participating retailers, the retailer deposits some of the purchase back into your Acorns account, incentivizing you to shop there. Participating retailers include Airbnb Inc. (NASDAQ: ABNB), Barnes & Noble Education Inc. (NYSE: BNED), Expedia Group Inc. (NASDAQ: EXPE), Groupon Inc. (NASDAQ: GRPN), Macy’s Inc. (NYSE: M) and Lyft Inc. (NASDAQ: LYFT).
- Smart deposit: Acorns’ checking account, called Acorns Spend, has a smart deposit ability that lets you deposit a portion of your paycheck into your checking, retirement and investing accounts. It does this seamlessly in the background to make the process as efficient as possible. The Acorns Spend account comes with a Visa debit card that can be used to make purchases and use the app’s round-up feature. Acorns regularly offers promotional deals, depositing funds into your checking account if a certain condition is met, such as 2 or more direct deposits in a month.
Monitor Your Investments
Once you’ve opened an Acorns account, monitoring your progress is pleasant and easy.
Invest easily and hands-off with automatic portfolio rebalancing, giving your money a better chance to grow without having to think a lot about it. Acorns lets you say goodbye to manual rebalancing and hello to smarter investing.
A portfolio is a select combination of investments, often made up of stocks or bonds. In your Acorns portfolio, you complete a form outlining your financial situation and goals. With those answers, Acorns recommends a mix of ETFs that will become your portfolio. ETFs replicate an asset class, sector or index, like the S&P 500 or Dow Jones Industrial Average, that includes more than 7,000 stocks and bonds. The Acorns team of experts rebalances your portfolio for you based on your goals so that you don’t have to.
If sustainable investing interests you, Acorns Sustainable Portfolios consist of funds selected based on its environmental, social and governance (ESG) business practices rating.
Best Investment Apps
In addition to looking at Acorns for your financial needs, consider the following investment apps.
From Acorns Grow Oak Trees
Acorns’ mission is to look after the financial best interests of up-and-coming investors, beginning with the empowering step of micro-investing. Helping people invest in their future isn’t all it’s focused on. Acorns, in partnership with One Tree Planted, plants oak trees across America to create jobs, stabilize the climate and rebuild habitats for biodiversity.
Be sure to check back with Benzinga to learn more about Acorns and to keep tabs on the most up-to-date financial and investing news.
Frequently Asked Questions
Does Acorns actually make you money?
In addition to money you may earn as a return on investment from the ETFs you hold in your Acorns accounts, you receive bonuses and rewards as an account holder. And the round-up feature offers an easy, barely noticeable way to save.The round-ups multiplier is a handy way to increase the amount of funds you are investing from your own spare change. When the round-ups multiplier is enabled, your round-ups will be multiplied by the selected amount (2x, 3x, 10x).
For example, with the round-up feature, if you spend $3.45 on a cup of coffee at a partner retailer, Acorns automatically rounds it up to $4 and puts an extra $0.55 into your Acorns investing account. Acorns recently increased the number of round-ups you can make on a single purchase, allowing round-ups as much as 10 times the initial round-up amount. So instead of just investing $0.55, you’d be investing $5.50 on the coffee transaction.
To be clear, Acorns isn’t actually giving you money; round-up cash in the Acorns Visa debit card comes from your own Acorns checking account. But the feature gives your money the chance to start growing right away.
Is Acorns worth getting?
Acorns represents a fitting opportunity for individuals and families to gain financial knowledge while saving and investing. Since its 2014 launch, it has expanded into educational offerings, banking products, a debit card and an automated retirement account service. Its content partnership with CNBC bolsters its reach and value to consumers everywhere.
About Kathryn Hauer, CFP®
Kathy is an expert in finance (personal, corporate), financial planning, financial literacy, tax preparation and laws, saving and investing, retirement, insurance, careers, college education planning and financing, cannabis, gig economy, forming and running a business, credit and debt issues, blue-collar workers, and military issues. She has a strong interest in crypto, DeFi, FinTech, InsureTech, AgTech.