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Acorns Review: A Hands-On Look at This Investing App
Acorns is an automated investing app designed to make it easier to save money and invest it. We know investing can seem scary — especially when you’re brand new to it. But Acorns rounds up everyday purchases to the nearest dollar and invests the spare change in a diversified portfolio. That allows newer or more hands-off investors to grow their money in a way that works for them. This Acorns review will explore its features, fees, investment strategy and how it compares to other platforms.
Our verdict: It’s best for beginners who want a simple, automated investing solution, but fees can add up for users with small balances.
One of the biggest draws of the app is that it does some of the work for you. As you make purchases with a debit or credit card that you have linked to the app, it will round up the change then invest it automatically. You can also set up recurring investments, helping you stay consistent with your portfolio. Acorns is ideal for beginners looking for a hands-off investing approach or those who need a little help with saving.
Types of Acorns accounts available include:
The app has several features that would appeal to a wide range of investors. There are also multiple accounts to choose from. Here are some of those features and accounts at a glance:
Unlike some other investing apps, Acorns is not free to use. The fees can add up if you’re looking to keep a small balance. Here’s what investing with the app would cost.
Acorns Pricing Tiers
How Fees Impact Small Balances
Acorns takes some of the work and pressure off your investing journey, but there are some drawbacks to it.
Pros:
Cons:
Acorns invests in low-cost Exchange-Traded Funds (ETFs) that cover multiple asset classes. It uses Modern Portfolio Theory (MPT) to balance risk and reward. MPT is basically the idea that diversifying your portfolio can boost your returns without a ton of risk. So it’s a way for investors who aren’t ready to get risky to still reap the maximum benefits possible.
Expected Returns
Risk Management
It has plenty of desirable features, but how does it compare to other similar apps?
Acorns vs. Robinhood
Acorns vs. Stash
Acorns vs. Betterment
Acorns vs. Competitors
Acorns could be right for you if you are a new investor looking for a simple way to get started and appreciate a set-it-and-forget-it investing approach. It’s also great for people who struggle to save money on their own.
However, not everyone is cool with relinquishing some control over their investments. If you want a little more control over your portfolio and lower fees, it might be good to look elsewhere.
All-in-all, we give this app a solid 4 out of 5 stars. Acorns is definitely worth a shot for you if you’re on the hunt for an investing app that’s hassle free, automated and doesn’t require any active stock trading. That makes it excellent for beginners or people who just don’t have a lot of extra time to dedicate to managing their portfolios.
However, if you know you like to be a hands-on investor or you’re looking for lower fees for small accounts, there are better options out there.
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