Robinhood vs. Acorns [2024]: Which Investing App is Right for You?

The good news is, there are lots of companies out there that can help you make smart choices about investing your money. But the downside is that it can be hard to choose between the best brokerage accounts and best investing apps from all the available choices.

How do you know what makes them different? How do you know which is the better fit for your financial goals?

If you're trying to decide between Robinhood vs. Acorns, this guide can help you make the choice that could better fit your personal finances and money needs.

Robinhood vs. Acorns

Robinhood and Acorns are both designed to simplify the investing process, but they do it in different ways. Acorns helps you build a portfolio of exchange-traded funds based on its recommendations, whereas Robinhood lets you invest in stocks, options, and funds that you choose yourself.

Here are some of the key differences between the two investment apps:

	Robinhood	Acorns
Minimum investment	$1	$5
Management fees	None	$1, $3, or $5
Asset classes	Stocks and funds, options, cryptocurrency	ETFs (including for real estate, government bonds, large companies, emerging markets, small companies, and corporate bond)
Account types available	Taxable accounts; Traditional and Roth IRA	Taxable accounts; Traditional, Roth, and SEP IRA
Features	Free stock share for signing up or referring friends Instant deposits Lists of popular stocks and educational material for investors Robinhood Cash Card	Acorns recommends a mix of ETFs based on your financial goals Round Ups allow you to invest automatically by rounding up your purchase to the nearest dollar
Distributions	Withdraw up to $50,000 per day directly to your bank account	Transfer funds to a linked account or withdraw through an ATM IRA funds may be subject to early distribution penalties if you aren't 59 1/2
Taxes	You're taxed on dividends and on gains when you sell assets	You're taxed on dividends and on gains when you sell assets (except for in an IRA)
Best for...	Investing in stocks or cryptocurrency	Hands-off investors
	Visit Robinhood	Visit Acorns Paid Non-Client Promotion FinanceBuzz doesn’t invest its money with this provider, but they are our referral partner. We get paid by them only if you click to them from our website and take a qualifying action (for example, opening an account.)

How does Robinhood work?

Robinhood is similar to a traditional brokerage firm that allows you to invest in many asset classes, but it tries to be more fun. You could invest in Robinhood with even a small amount of money because you have the option to buy fractional shares. These are partial stock shares, or fractions of shares, so you could own a small piece of companies with a high per-share price, like Apple or Amazon, without having to first save up thousands of dollars.

Robinhood has a lot of investment options, but it doesn't tell you what to invest in. That said, it offers lots of educational material and many curated investment lists that give you suggestions. You could also earn a free stock by signing up or by referring friends, and the Robinhood app is a great full-featured mobile experience that makes stock trading easily accessible and fun.

There are four different types of Robinhood accounts:

• Robinhood brokerage account: Provides a way to invest in U.S. stocks, exchange-traded funds (ETFs), and American Depositary Receipts (ADRs) in a taxable account.
• Robinhood Retirement account: Provides access to IRAs for retirement savings, with an added benefit of earning a 1% match from Robinhood on external deposits into the IRA account, which is not common among other investment apps/brokerages.
• Robinhood margin account: Offers margin investing, where you can borrow money to buy stocks, giving you more purchasing power and flexibility. To use this feature, you need to become a Robinhood Gold member, apply for margin investing, and have at least $2,000 in your account.

• Robinhood crypto account: Allows you to buy, sell, and trade 18 cryptocurrencies. including bitcoin, ether, cardano, and more. You can deposit funds, trade at market prices, or use limit and stop orders. You can store your cryptocurrencies on Robinhood or transfer them to external accounts. Robinhood also supports receiving digital currencies from other platforms.

If you upgrade to Robinhood Gold by paying $5 per month, you'd be eligible for larger limits (up to $50,000). You'll also be able to have a margin account with Robinhood Gold. In addition, you will receive "Level II market data," which is more in-depth information about what investors are bidding for stocks and what people are selling them for.

Read our Robinhood review to learn more.

How does Acorns work?

Acorns Invest is different from Robinhood because it doesn't give you the option to invest in as many different assets. You won't be able to trade stocks or do cryptocurrency trading, and you won't trade options with Acorns either. Instead, you'll answer a few questions and receive recommendations about a mix of ETFs that you'll build your investment portfolio with.

ETFs let you buy a small piece of many assets. A bunch of money is pooled from many investors and used to buy shares of stocks to track a financial index or give you exposure to a particular kind of company. If you buy an ETF that gives you exposure to small caps, for example, you'd be buying a very small ownership stake in a bunch of small companies.

Acorns is one of many online brokers that lets you easily build a portfolio of ETFs, and it also provides a mobile app. But it stands apart because of a feature called Round Ups. This micro-investing app feature lets you round up all your purchases if you use an Acorns debit card. The money is then invested, so you're automatically investing a little bit all the time.

There are also three different tiers for Acorns accounts:

• Lite, which is $1 per month and allows you to invest your spare change with Round Ups.
• Personal, which provides a taxable investment account, as well as a retirement and checking account and a metal debit card. You'll get bonus investments and financial advice with this tier, which costs $3 per month.
• Family, which adds investment accounts for kids to the list and costs $5 monthly. You can learn more about family-oriented features offered by Acorns in our Acorns Early review.

Read our Acorns review for more details about how this brokerage works.

What both investment apps excel at

Both Robinhood and Acorns make investing simple for new investors. They both have great mobile apps and tons of helpful educational content. And neither requires you to have a lot of money to start investing.

4 Important differences between Robinhood and Acorns

1. Investment process

Robinhood requires you to pick your own investments, and you get the chance to choose from many of them, including stocks, ETFs, and cryptocurrency. This requires more effort on your part, and it would be advantageous to have a basic understanding of how to invest money and how to buy cryptocurrency. Yet this hands-on approach also provides potential earning opportunities if you have a higher risk tolerance and take the time to learn to invest.

On the other hand, Acorns does much more of the work for you. After you answer a few questions, they'll recommend a portfolio of ETFs for you to buy.

In addition, Acorns offers options beyond just an investment account. For example, Acorns Spend offers a checking account option that comes with a debit card that helps you invest automatically when you spend money by rounding up your purchases to the nearest dollar and investing your change. 

And whether you choose the Robinhood or Acorns app, it’s important to remember that investing is always a risky proposition, and there are no guarantees when it comes to your earnings.

Get Up to 5.00% APY on Uninvested Cash With This Membership

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Robinhood Benefits

• Earn more interest on your uninvested cash with 5.00% APY (as of April 12, 2024)
• Get up to $50K of your deposits instantly, so you can jump on investment opportunities faster
• Borrow money to increase your buying power with margin investing at 8% (as of Nov. 15, 2023) APY for Gold members

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FinanceBuzz writers and editors score products and companies on a number of objective features as well as our expert editorial assessment. Our partners do not influence our ratings.

Join Robinhood Gold here

2. Account types

Acorns allows you to invest in a Roth IRA, traditional IRA, or SEP IRA, as well as to open accounts for your kids. Robinhood offers its Robinhood Retirement accounts, which are savings accounts for your later years in the form of Roth and traditional IRAs.

3. Cost

Robinhood doesn't charge for a basic account, and you won't pay any commissions for trading. Acorns charges between $1 and $5 per month, depending on your account type.

4. Contribution process

Robinhood requires you to deposit money from your bank or savings account. You'll get instant access to deposited funds.

Acorns allows you to make contributions, but you could also use Round Ups to have money invested automatically for you. Purchases you make will be rounded up to the nearest dollar, and the money will be invested.

Which investment platform should you choose?

You might choose to invest with Robinhood if you want to buy individual stocks, options, or cryptocurrency; if you want to trade on margin; and if you don't mind doing the work to select your own investments.

If you want more guidance and a unique way to invest extra money through Round Ups, you might consider choosing Acorns as long as you don't mind paying a monthly fee. You'll also need to choose Acorns over Robinhood if you want to open a SEP IRA, as Robinhood doesn't offer that option.

Easily Invest With Your Spare Change

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FinanceBuzz writers and editors score products and companies on a number of objective features as well as our expert editorial assessment. Our partners do not influence our ratings.

Acorns Benefits

• Bonus $20 after your first investment
• No surprise fees
• Get started for just $3 per month
• Protected by bank level security

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FinanceBuzz writers and editors score products and companies on a number of objective features as well as our expert editorial assessment. Our partners do not influence our ratings.

Visit Acorns

Paid Non-Client Promotion

FinanceBuzz doesn’t invest its money with this provider, but they are our referral partner. We get paid by them only if you click to them from our website and take a qualifying action (for example, opening an account.)

FAQs

Bottom line

For far too many people, investing money feels complicated and expensive. Fortunately, it doesn't have to be that way. The best investment apps simplify the process and allow you to get started investing with little money. If you prefer a more traditional approach, you might want to investigate our list of the best brokerage accounts.

At the end of the day, both Acorns and Robinhood largely succeed in providing low-cost investing options that are easier for beginners to navigate. But because they work differently and have different pricing, you'll want to consider carefully which is a smarter fit for your needs and financial goals.

FinanceBuzz is not an investment advisor. This content is for informational purposes only, you should not construe any such information as legal, tax, investment, financial, or other advice.

Get Up to 5.00% APY on Uninvested Cash With This Membership

4.2

FinanceBuzz writers and editors score products and companies on a number of objective features as well as our expert editorial assessment. Our partners do not influence our ratings.

Robinhood Benefits

• Earn more interest on your uninvested cash with 5.00% APY (as of April 12, 2024)
• Get up to $50K of your deposits instantly, so you can jump on investment opportunities faster
• Borrow money to increase your buying power with margin investing at 8% (as of Nov. 15, 2023) APY for Gold members

4.2

FinanceBuzz writers and editors score products and companies on a number of objective features as well as our expert editorial assessment. Our partners do not influence our ratings.

Join Robinhood Gold here