Acorns Review

Written By Jeff Hindenach
Last updated March 27, 2020

Note: We receive a commission for purchases made through the links on this site. Our sponsors, however, do not influence our editorial content in any way.

March 27, 2019

Simple. Thrifty. Living.

In 2016, the innovative investment company Acorns debuted. It provides users with a free mobile application, takes their spare dollars and cents, and invests that money in exchange-traded funds (ETFs). Below is an in-depth report on this company.

Acorns Review

Acorns website

Acorns Review image
  • Best For: Automatic investing, people new to investing and those looking to increase their savings but not necessarily make a great deal of money. You can sign up for Acorns here.
  • Price: Depending on the services, Acorns costs $1, $2 or $3 monthly.
  • Features: You link credit cards and bank accounts to the Acorns app, and it automatically invests small sums of money on occasion. You can choose from among five portfolios, each with a different risk-reward ratio.
  • Other Highlights: The platform will rebalance your portfolio as needed and reinvest your dividends. Plus, Acorns lets you turn off the automatic investing function and make manual investments if you prefer.
  • Customer Service: Acorns doesn’t employ financial advisers, but its staff will answer your questions via phone, email or live chat.

To get started, download the free app or head to the Acorns website for the web-based service. You’ll need to fill out a somewhat lengthy questionnaire to set up your account. Then you’ll have to link a credit card and savings account.

There’s no minimum dollar amount to open an Acorns account, though the program won’t start investing until your account contains $5 or more. Then, as you make purchases, the app will take your “spare change” and invest it. Acorns achieves this through fractional shares investing.

Let’s say that you use your credit card to buy a bagel, and it costs $1.80. As soon as you pay, the Acorns app will automatically take $0.20, rounding up to the nearest dollar, and put it in a linked checking account. From time to time, the app will take that checking account money and invest it.

Now, you might not want the app to automatically take your change. In that case, you can opt for manual investments. Every so often, you can go through your list of recent purchases and select change amounts that you’d like the program to invest.

Moreover, you could set up a recurring investment system. That is, regardless of your payments, you could ask Acorns to invest a certain sum of your money every day, week or month.

Especially appealing, Acorns will automatically rebalance your portfolio according to market conditions, and it will reinvest the dividends you earn as well.

With Acorns, you’ll decide what kind of portfolio you want. The safest investments come with the conservative portfolio; there, most of your money would be in bonds and cash. There are four more categories that offer increasing rewards for increasing risk. The biggest potential payoffs come with the aggressive category, where most of your money would be in equities.

The Acorns app can suggest which of those portfolios would be the best for you given your age, how much money you hope to make and various other factors.

Acorns Stock Market Funds

Acorns exchange-traded funds can include domestic large-cap stocks, international large-cap stocks, small-cap stocks, developed markets stocks and emerging markets stocks.

In the most conservative Acorns portfolio, 18 percent of the investments are stocks; in the most aggressive category, that number is 90 percent. In between, the portfolios are made up of 36 percent, 54 percent and 72 percent stocks.

Acorns Bond Funds

Government and corporate bonds are included among Acorns asset classes. In the most conservative portfolio, 80 percent of the investments are bonds. As the portfolios get more aggressive, bonds constitute 60 percent, 40 percent, 20 percent and none of the investments.

Personal Acorns Portfolio

Acorns supports both Roth IRAs and traditional IRAs.

Acorns Fees

The basic Acorns investment account costs $1 per month.

Acorns Retirement Options

To add an Acorns retirement account, you’ll pay an extra $1 per month. And, for $3 monthly, you get the grand package: an Acorns investment account, a retirement account and a checking account.

Acorns Promotions

College students under the age of 24 can obtain an Acorns investment account for free for a period of four years. To receive this deal, you just have to demonstrate that you have an email address that ends in .edu.

Also, Acorns offers a cash-back incentives program called Found Money. Just use one of your linked payment accounts to buy products or services from an Acorns partner company. Many major corporate names, including Hilton, Amazon and Apple, are among those partners.

Acorns is not a platform for accumulating great wealth. But it is a terrific program for introducing yourself to the world of investing and amassing a respectable pot of savings.

Acorns is best for college students, for people who’ve never invested before and for those who find the idea of investing a little intimidating. It’s also ideal for individuals who lack the time or inclination to figure out where to invest their funds.

Acorns doesn’t make available any investment advisers. However, you can call or email the company to ask questions, and the app features live chatting. Further, the app has a calculator that can predict the returns you’d get from various investment sums. In addition, the Acorns website contains plenty of educational materials on investing.

Acorns is a reliable program that delivers just what it promises. You might consider it to be merely a first step in your lifelong journey of investing. Nevertheless, using this app can be a surprisingly enjoyable experience. It’s like a souped-up, 21st-century version of a piggy bank.

About the Author

Jeff Hindenach

Jeff Hindenach is the co-founder of Simple. Thrifty. Living. He graduated from Bowling Green State University with a Bachelor's Degree in Journalism. He has a long history of financial journalism, with a background writing for newspapers such as the San Jose Mercury News and San Francisco Examiner, as well as writing on personal finance for The Huffington Post, New York Times, Business Insider, CNBC, Newsday and The Street. He believes in giving readers the tools they need to get out of debt.

  • No comments yet. Be the first to get the conversation started. Here's some food for thought:

    Do you have any thoughts?

Submit a Comment

Your email address will not be published. Required fields are marked *