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Have you ever thought how good it would be if you had an opportunity to invest in stocks as rich people do?
Chances are low you knew it was possible to start investing with as low as just $1. Yes, you’ve heard it right!
Most people think they need hundreds of thousands of dollars as an initial investment. However, a lot of modern companies, including Acorns offer you a micro-investing opportunity.
I personally think that micro-investing is the best opportunity the financial markets has given us.
As you are on this page, you’re probably looking for ways to invest your money without breaking the bank.
Whether you’re investing for your retirement or for your kids’ future, I got your back. In this article, I will cover all the necessary information about how to start micro-investing and review Acorns as one of the reputable companies in the field.
Acorns Summary
Acorns invests your spare change as little as $5 and annual returns of your investments can reach up to 7%. However, there is a flat fee of $1 per month for accounts of less than $5,000 and 0.25% fee annually for accounts larger than $5,000
Pros
- Invests spare change automatically
- $5 sign up bonus
- $5 Min account investment
- Average of 7.5% return on your investments
Cons
- Small portfolio – 5 ETFs
- High account transfer fees – $50/ETF
Is Acorns Legit?
Acorns is legit and safe to use as it is regulated by the Securities & Exchange Commission (SEC). SEC protects investors and helps them to make informed decisions and invest with confidence by providing information about investing companies.
Acorns is also a member of the Financial Industry Regulatory Authority (FINRA), which ensures investors the legitimacy of the company activities.
Best Investment Apps
Acorns
$5 minimum account investment with $1 monthly fee
Invests spare change automatically
Earn up to 5% cash back with a rewards checking account
Stash
Start investing with as little as $5
Buy fractional shares of stocks in companies like Amazon or Apple
Only $1 monthly fee (for accounts under $5,000) or 0.25% annual fee for accounts over 5k
BlockFi
High yield (8.6%) on your cryptocurrency deposits
No minimum withdrawal requirements & no monthly fees
Gemini-insured wallets – $200 million in custody insurance
How Does Acorns Work?
Acorns is well known for its Round-Up investing system. It virtually takes your spare change and turns it into investments automatically. Every time you make a purchase with your linked credit or debit card, Acorns rounds up to the nearest dollar and micro-invests the change.
Here’s how it works:
You bought lunch for $10.25. Acorns will round this purchase up to $11 and deposit the change of 75 cents into your investment account.
Acorns builds up a portfolio for you and diversifies your investments across 7,000 stocks and bonds.
Acorns Sign Up Bonus
You will get a $5 Sign Up Bonus when you use our invite link for registration.
What is Acorns Sign-Up Process?
1: Create your account here.
2: Fill out your legal and personal information.
3: Get verified – the verification process usually takes 24-48 hours.
To open any of Acorns Accounts, you must comply to the following requirements:
- Be a US citizen
- Have a valid Social Security Number
- Have at least one linked and eligible personal checking account
- Not already have an Acorns account linked to your Social Security Number
How to Make Money with Acorns?
Round-Up: Investing Spare Change
Once you link your debit or credit card to Acorns, you can opt-in for Round-Up investments. This allows you to invest your spare change automatically from your everyday purchases. Once you use an Acorn-linked card while you shop, Acorns will virtually round up your purchases to the nearest dollar and invest that change into your account. For example, if you bought groceries for $26.35 Acorns will round it up to $27. It will then automatically invest the change of $0.65 into your account.
Overall, you could expect an average of 7.5% return on your investments, as Acorns suggests.
Acorns Found Money
You will earn cash-backs when you use your Acorns linked debit or credit card at any of Acorns partnered companies. Acorns partners with more than 350 companies, including Walmart, Sephora, Nike, AirBnB and others. Every time you shop at any of the select retailers, that retailer will invest a predetermined amount into your Acorns investing account.
Here are some of Acorns Found Money examples:
- Walmart: 1% of the purchase (up to $40 per month)
- Bed, Bath & Beyond: 2% of the purchase
- AirBnB: 1.8% of the booking fee
- Blue Apron: $30 for new customers
- T-Mobile: $30 for new service members
- ToysRUs: 2% of the purchase
- GAP: 3% of the purchase
- Uber: $15 when new drivers sign up
- Sephora: 3% of the purchase (up to $40 per month)
Credit Cards with Rewards Points
You will get up to 10% bonus investments when you shop with Acorns tungsten metal debit card.
Acorns Key Takeaways
Account Minimum
An account minimum of $5 is required to start investing.
Account Management Fees
Acorns offer 3 monthly membership tiers: Lite, Personal and Family.
- Lite: $1/month, includes a taxable investment account.
- Personal: $3/month, adds on individual retirement and checking accounts.
- Family: $5/month, includes everything in lower tiers, plus Acorns Early, which allows you to invest on your kid’s behalf. Kids can gain access to their investment account when they come to age.
Investment Expense Ratios
Exchange-traded fund expense ratios range from 0.03% to 0.18%.
Account Fees (annual, transfer, closing)
Acorns charges $50 per ETF to transfer investments to another broker and close your Acorns account.
Accounts Supported
- Spend includes an online checking account and a debit card, allowing you to save, invest and earn while you spend.
- Invest allows you to set automatic investments of your spare change any time or on a recurring basis. Acorns automatically rebalances your portfolio and diversifies your investments across 7,000 stocks and bonds to stay in your target allocation.
- Later is a retirement account, letting you automatically invest for retirement by setting recurring contributions. Choosing the retirement account is easy as Acorns recommends the right plan for you based on your goals, employment and income during sign-up.
- Early allows you to open an investment account for your kids and invest on their behalf. Once your kids come to an age, they will be able to gain access to their investment account.
Tools
Acorn’s Potential tool lets you see how your total investments will grow over time by adjusting the investment dollar amount.
Customer Support Options
Acorns offer 24/7 phone and chat support, with a response time of up to 48 hours. However, you will find answers to most of your questions on Acorns website.
How to Withdraw Money from Acorns?
You can request withdrawal of your money using Acorns iOS and Android apps or the web app following the instructions below:
- Sign in to your account
- Select the applicable account (Invest or Later)
- Choose the ‘Withdraw’ option
- Enter the amount you want to withdraw
- Click the ‘Withdraw’ button and confirm
What are the Acorns Pros & Cons?
Pros
- Automated approach helps you save time by setting your contributions to automatic.
- Found Money lets you build an investment portfolio when you shop with Acorns linked debit or credit card. Select retailers will contribute to your investment account in a form of a cash-back.
- Educational content makes the website best for new investors, as it defines key terms using clear language.
- Investing for kids allows you to not only save but invest for your kids’ future. Once your kid comes to age, they will gain ownership of their investment account and use their money.
Cons
- Small portfolio: Your investment choices are limited to just five ETF portfolios.
- High account transfer fees: Acorns charges $50 per ETF if you decide to move your investments to another provider. At this rate, transferring 5 ETFs would cost you $250, while most other providers would charge you only $75. However, you can avoid this fee if you sell your investments and transfer your cash to your bank account.
Is Acorns Worth it?
If you’re looking to start investing, Acorns is definitely a good place to start.
The automatic Round-Ups and Found Money make investing and saving easy, exciting and profitable. These features allow you to micro-invest each time you make your everyday purchases.
Since Acorns offers IRA accounts, there’s no better place to start your investing journey.
Acorns is a good start if you want to start investing with a low amount without affecting your lifestyle. An average of 7.5% return on your investments makes trying Acorns out worth it.
Acorns Alternatives
Acorns vs Stash
Stash is a robust alternative to Acorns. Acorns builds an investment portfolio for you rather than letting you choose bundles by yourself. However, Acorns has a limited portfolio, including just 5 ETFs, while Stash offers a larger portfolio consisting of 100 stocks and ETFs. So whether you choose Acorns or Stash, depends whether you prefer the company to build a smaller portfolio for you or be able to build a larger portfolio by yourself.
Also, if you’re looking to open an investment account for your kids, Acorns is a more profitable option as Acorns Family plan costs $5 per month. Meanwhile, Stash offers a custodial account in the Stash+ plan, which costs $9 per month.
Stash Summary
- Start investing with as little as $5
- Buy fractional shares of stocks in companies like Amazon or Apple
- Set automatic deposits on either a weekly or monthly basis into your account
- Only $1 monthly fee (for accounts under $5,000) or 0.25% annual fee for accounts over 5k
Acorns vs Robinhood
Robinhood is another great alternative to Acorns. However, Robinhood is best for frequent and more advanced traders, while Acorns is easy to use for beginner investors.
Acorns vs Betterment
Betterment is one of the best alternatives to Acorns. The choice between the two will depend on your previous experience and financial goals. Acorns is better for people just starting their investment journey and need guidance and a little nudge to contribute more. On the other hand, Betterment is good for advanced investors who already have experience and manage their risks by themselves.
Betterment Summary
- Transparent portfolios
- No account minimum and low fees
- Quick and easy account setup
- Perfect for young investors
FAQ
Acorns offers 3 monthly membership tiers – Lite, Personal and Family.
Lite: $1/month, includes a taxable investment account.
Personal: $3/month, adds on individual retirement and checking accounts.
Family: $5/month, includes everything in lower tiers, plus Acorns Early, which allows you to invest on your kid’s behalf. Kids can gain access to their investment account when they come to age.
Acorns is definitely a good investment as it has a very low monthly membership fee related to what it offers. Acorns makes investing easy, exciting and profitable especially for beginner investors.
As an investment app, Acorns can actually make you money. So yes, you will earn money not only from your investments but also from cash-backs when using an Acorns card.