Acorns is yet another financial services app that allows you to save and invest from your phone or computer. There has been a lot of growth in this space and apps are doing their best to distinguish themselves from the competition. Acorns offers a lot: robo-advisor, automated savings tool, and cashback rewards program. All of this is in addition to the investing we expect with all of these services. So, how successful is Acorns at providing all this service, and is it a decent value?
With regard to the second question, let’s just get this out of the way. If you are carrying a low balance on Acorns, the fees are going to start to add up. The fee structure is $1/month for a taxable investment account, then $2/month for an IRA, and finally $3/month for checking and retirement accounts. There is no account minimum, thus the fees could begin to take up a larger percent of your balance.
Despite the drawback of these management fees, Acorns has a lot to offer. It is a great platform for a hands-off investor or someone who has previously tried and failed to save. The company advertises that it turns “spare change” into savings. Making this an automated/integrated process with the purchasing you are already doing is an ingenious and unique feature. Link your Acorns account to credit card and voila, your purchases will be rounded up for savings and investment.
The platform provides substantial automation via its robo-advisor functionality. But once you get through some of the included educational modules, then you may want to apply your own decision-making instead of exclusively depending on the AI. You are also not limited to the “rounding up” model of savings. Your Acorns account can be funded through other sources and then the robo-advisor or manual control can be applied to manage those funds as well.
There is also a cash back program called Found Money. This is simply a partnership between Acorns and over 350 retailers such as Nike, Walmart, Sephora, and Warby Parker. When you use your Acorns-linked payment with one of these companies, you get cash deposited in your Acorns account.
If you can keep enough of a balance to offset the fixed management fees, and you are looking for a more hands-off investing and savings experience, Acorns makes an excellent choice.