Acorns Review [2024]: Good for First-Time Investors

What is Acorns?

Acorns is a micro-investing platform and robo-advisor that launched in August of 2014. The platform has more than 10 million users and targets people with little to no experience investing. It primarily works by rounding up your purchases to the nearest dollar and then investing that spare change into exchange-traded funds (ETFs). In addition to Round-Ups, Acorns offers:

• IRA accounts
• Checking and savings accounts
• Mighty Oak Debit Card
• Educational courses and tools

Pricing and features

Acorns offers three primary memberships: Acorns Bronze, Acorns Silver, and Acorns Gold. Here’s how they compare.

	Acorns Bronze	Acorns Silver	Acorns Gold
Monthly fee	$3	$6	$12
IRA match	None	1%	3%
Individual stocks	N/A	N/A	Around 100 stocks and ETFs
Checking account APY	None	2.57% (as of 12/19/24)	2.57% (as of 12/19/24)
Emergency fund (savings) APY	N/A	4.05% (as of 12/19/24)	4.05% (as of 12/19/24)
Bonus investment match	None	25%	50%
Life insurance policy	N/A	N/A	$10,000 coverage
Kids’ investment tools	None	None	Acorns Early custodial investing account with 1% match
Will and trust setup	N/A	N/A	Included

How does Acorns work?

Round-Ups

The main feature of Acorns is Round-Ups¹ <p>Important Risk Disclosure</p> <p>Acorns Invest is an individual investment account which invests in a portfolio of ETFs (exchange-traded funds) recommended to customers based on their responses to the Acorns investor profile questionnaire.</p> <p>Spare change invested with Round-Ups® is transferred from your linked funding source (checking account) to your Acorns Invest account when activated. Round-Up investments from an external account will be processed when your Pending Round-Ups reach or exceed $5.</p> <p>Investing involves risk, including loss of principal. Please consider, among other important factors, your investment objectives, risk tolerance and Acorns’ pricing before investing. Investment advisory services offered by Acorns Advisers, LLC (Acorns), an SEC-registered investment advisor. Brokerage services are provided to clients of Acorns by Acorns Securities, LLC, an SEC-registered broker-dealer and member <a href="https://www.finra.org/#/">FINRA</a>/<a href="https://www.sipc.org/">SIPC</a>.</p> <p>For additional important risks, disclosures and information, please visit <a href="https://www.acorns.com/terms/">https://www.acorns.com/terms/</a>.</p> . After you link your credit and debit cards, each purchase you make is rounded up to the nearest dollar. That round number is reported to your credit or debit account, while the difference is automatically transferred into your Acorns Invest account (once you’ve accumulated a $5 minimum balance). For example, if a transaction costs $11.63, the total will be rounded to $12, and $0.37 will ultimately be invested.

If you’re feeling motivated, you can also enable whole dollar Round-Ups. So if you make a purchase for an exact dollar amount, like $10, Acorns will invest $1 for you. Another option is to multiply your Round-Ups by 2, 3, or 10 times the amount — so if you spend $25.80 on a new shirt, the $0.20 Round-Up could become $0.40, $0.60, or $2.00 instead.

Recurring investments

In addition to Round-Ups, Acorns lets you invest as little as $5 on a recurring daily, weekly, or monthly basis or at any time. For example, you might choose to invest $50 monthly and then add an extra $200 when your tax return arrives. Funds are transferred from your personal bank account.

Choosing your risk

You can’t change a lot of settings when it comes to your investment portfolio with Acorns, which is different from how other competitor investment platforms work. In fact, all you can change is your risk profile if you’re on the Bronze or Silver plans. Here are the default risk profiles:

• Conservative: 100% bonds
• Moderately conservative: 60% bonds, 40% stocks
• Moderate: 40% bonds, 60% stocks
• Moderately aggressive: 20% bonds, 80% stocks
• Aggressive: 100% stocks

Because I’m an Acorns Bronze member, I can’t choose which specific stocks and bonds I want to invest in. You need to upgrade to the Gold plan to be able to customize your portfolio yourself. Acorns has a list of 22 ETFs it uses in base portfolios like mine, and it automatically assigned me six ETFs when I tried to edit my risk level.

As the market fluctuates and the values of your securities change, Acorns will work to rebalance your portfolio to its designated level of risk. This rebalancing ensures the proper asset allocations within your account, so you’ll be more likely to see your money grow.

This is similar to how many automated investment apps manage portfolios (that is, with an algorithm rather than a person).

Earning bonus investments

With Acorns Earn, you can earn bonus investments when shopping at thousands of different retailers. The list includes Walmart, Apple, Chewy, Nike, and more. It works similarly to cash back you’d earn on a credit card or through a shopping app, where you earn rewards as a percentage of each transaction.

You can browse offers from the app, and when you find one you like, click the “Shop Now” link, and complete your transaction. You’ll see the rewards in your investment account. The feature is also available as a browser extension for Chrome and Safari, which is a lot more convenient to use.

Banking

Acorns offers a base-level checking account for Bronze members that doesn’t come with any notable features. But if you upgrade to a Silver or Gold membership, you can open Mighty Oak Checking accounts with generous APYs on your regular balance and emergency fund savings — right now, you’ll earn 2.57% (as of 12/19/24) and 4.05% (as of 12/19/24), respectively. This is one checking account (issued and FDIC-insured up to $250,000 through Lincoln Savings Bank or nbkc bank) that includes a Mighty Oak debit card and the ability to set funds aside for saving or investing.

This account actually beats the rates from some of the best online banks. For example, SoFi only offers up to 4.00% APY on its savings and 0.50% (as of 12/3/24)APY on its checking² <p>New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Direct Deposits received during the Direct Deposit Bonus Period) <b>OR</b> $300 (with at least $5,000 total Direct Deposits received during the Direct Deposit Bonus Period). Cash bonus will be based on the total amount of Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 1/31/2026. Full terms at <a href="http://sofi.com/banking">sofi.com/banking</a>. SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC.</p> <p>SoFi members with Direct Deposit can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the 4.00% APY for savings (including Vaults). Members without Direct Deposit will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of Dec. 3, 2024. There is no minimum balance requirement. Additional information can be found at <a href="http://www.sofi.com/legal/banking-rate-sheet">http://www.sofi.com/legal/banking-rate-sheet</a></p> . However, SoFi doesn’t charge any monthly fees³ <p>We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at <a href="http://sofi.com/legal/banking-fees/">sofi.com/legal/banking-fees/</a></p> , so it might work out to be a better deal if you’re just in it for the highest interest rates.

IRAs

The Acorns Later account uses the same algorithm to determine an investment mix for your IRA. Based on questions about your age, employment, and income, it recommends a mix of bonds and stocks to maximize your retirement funds. You can choose from Roth, traditional, and SEP IRAs.

While you can set up automatic paycheck deposits into your IRA or recurring investments, the main benefit of this account is the IRA match. Acorns will give you a 1% or 3% bonus if you have a Silver or Gold membership, respectively.

While this is a great deal, it’s extremely similar to Robinhood’s IRA 3% match percentage — and Robinhood is cheaper at just $5 a month.

Who is Acorns right for?

• Brand-new investors
• People who want help saving and investing more
• Investors who need an IRA
• People who want to bank where they invest

If you’re new to the block when it comes to investing and want to test the waters, Acorns is a great place to start. It’s simple enough to use and takes care of the hard work, like choosing stocks and ETFs to buy, for you. You can set your contributions on autopilot thanks to the convenient Round-Up and recurring investment features.

Acorns might also be right for you if you’re looking for a new home for your IRA. It offers up to a 3% match for your contributions. To put that in perspective, if you contribute the annual maximum amount of $7,000, you could earn $210. Even accounting for the $144 you’ll pay in subscription fees throughout the year, you’ll still come out $66 ahead. I haven’t moved my IRA over yet, but I’m thinking about it.

I also love that Acorns offers high APY accounts, but I don’t love that you have to sign up as a Silver or Gold member to get them. That said, the rates are way above average. Sure, you could get these rates at other banks without paying a monthly fee, but you’d have to spread your money out, which could make things confusing if you want your finances in one place.

Who is it not right for?

Acorns won’t be the best choice for you if you’re a seasoned investor with specific stocks and ETFs you want to buy or if you want to trade actively. It’s simply not built for that type of experience. You could upgrade to Acorns Gold, but there are plenty of other brokerages out there — like Robinhood or Betterment — that offer free or low-cost trading without a subscription.

It’s also not a good pick for you if you plan on keeping a low account balance. For example, if you think you’ll only invest $500 in your account, your annual fee might range from 7.2% to 28.8% of your portfolio (depending on your subscription). This is far more expensive than competitors — Betterment charges just a 0.25% annual advisory fee, and SoFi Active Invest⁴ <p><b>INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED •&nbsp;</b><b>MAY LOSE VALUE</b></p> <p>Brokerage and Active investing products offered through SoFi Securities LLC, member FINRA(<a href="https://www.finra.org/">www.finra.org</a>)/SIPC(<a href="https://www.sipc.org/">www.sipc.org</a>).</p> doesn’t have one at all.

How Acorns stacks up with competitors

Acorns vs. Stash

Stash is a micro-investing app similar to Acorns. The most important difference between Acorns and Stash is that Stash lets you choose from over 4,000 stocks and ETFs — far better than Acorns’ selection. It’s also cheaper, with plans that cost $3 and $9 a month.

Another cool feature of Stash is its Stock-Back feature. Any time you shop at a publicly traded company with your Stock-Back® Card⁵ <p>Investment advisory services offered by Stash Investments LLC, an SEC registered investment adviser. Investing involves risk and investments may lose value. Holdings and performance are hypothetical. Stash Banking services provided by Stride Bank, N.A., Member FDIC. The Stash Stock-Back® Debit Mastercard® is issued by Stride Bank pursuant to license from Mastercard International. Mastercard and the circles design are registered trademarks of Mastercard International Incorporated. Any earned stock rewards will be held in your Stash Invest account. Investment products and services provided by Stash Investments LLC, not Stride Bank, and are Not FDIC Insured, Not Bank Guaranteed, and May Lose Value. In order for a user to be eligible for a Stash banking account, they must also have opened a taxable brokerage account on Stash.</p> , you can earn up to 1% in stock from that company. For example, if you make an Amazon purchase, you’ll be rewarded with Amazon stock. And if the company isn’t partnered with Stash, you’ll still get a percentage back as an addition to your investing account.

Overall, Stash is designed for people who want to have more input on where and when they invest. One downside is that there isn’t an equivalent Round-Up feature — instead, you’ll need to manually set auto investments up. Acorns is better for an investor who doesn’t want to think too much about their investing or customize a portfolio.

Acorns vs. Robinhood

Robinhood offers real-time investing in a range of assets, from stocks to cryptocurrencies. There are more than 5,000 stocks available on Robinhood Financial — again, far more than those offered by Acorns.

Unlike Acorns, Robinhood has no monthly fee for its basic account. There are also no fees for opening and maintaining your account or for inactivity. But there is a $100 charge if you transfer your money to another online broker.

And because you have access to fractional shares (small portions of shares of equity in a company), you can invest as little as $1 to get started. There’s also commission-free options trading, and you can buy and sell cryptocurrencies.

Robinhood has a more hands-on approach than many other investment apps. It’s best for people who want to choose their investment opportunities themselves, while Acorns is best for people who want to grow their money without staying actively involved.

FAQs

Bottom line

Tossing spare change into a piggy bank is an excellent way to reach your financial goals — if you’re saving up for a Lego set. But learning how to invest money by putting it somewhere it may actually grow can build wealth for the future.

Acorns’ fees are low, which is one of the reasons it works for new investors who don’t have a lot of capital or the time and energy to choose individual stocks and bonds. It can be especially lucrative for people who make recurring investments and keep their money invested for many years. And if you frequently shop at Acorns’ partners, you’ll probably appreciate this platform.

Acorns isn’t the best brokerage account for everyone, though. It’s limited in its offerings, and chances are, you’ll likely outgrow it over time. While I enjoyed testing out the app again for this review, I probably won’t keep my account open. Personally, I’d rather have more control over my investments — and you might, too, once you build up a sizable portfolio.