- Easy and automatic investing
- Diversified portfolios
- Educational resources
- Mobile access
- Limited investment options (only option is to choose your risk tolerance)
- Monthly fees can add up ($3 personal fee or $5 family fee is a large percentage low balance accounts)
- Designed for small investors
- Limited customer support
Want a more detailed review of Acorns? Is Acorns Worth It, An Honest Review
What is Acorns and how does it work?
Acorns is an investment app that allows users to invest their spare change from everyday purchases. The app links to your bank account and rounds up each transaction to the nearest dollar, investing the difference into a diversified portfolio of exchange-traded funds (ETFs). For example, if you buy a coffee for $2.50, Acorns will round up to $3.00 and invest the extra $0.50. Users can also set up recurring investments or make one-time deposits. The app charges a monthly fee ranging from $3 or $5, depending on the plan selected.
Pros of using Acorns for investing.
One of the biggest pros of using Acorns for investing is the ease and convenience of the app. It allows users to invest their spare change without even thinking about it, making it a great option for those who want to start investing but may not have a lot of extra money to put towards it. Additionally, the app offers a diversified portfolio of ETFs, which can help minimize risk for investors. Acorns also offers a variety of plans to choose from, including a retirement account option, making it a versatile option for different investment goals.
Cons of using Acorns for investing.
While there are many pros to using Acorns for investing, there are also some cons to consider. One potential downside is the fees associated with the app. While the fees may seem small, they can add up over time and eat into your investment returns. Additionally, the app may not be the best option for more experienced investors who want more control over their investments and portfolio. Finally, the app’s reliance on automated investing may not be suitable for those who prefer a more hands-on approach to investing.
Fees and pricing structure.
One of the biggest considerations when using Acorns for investing is the fees and pricing structure. Acorns charges a monthly fee of $3 for a personal account or $5 for families including accounts for kids. While this may seem small, it can add up over time and eat into your investment returns. Additionally, Acorns charges a management fee of 0.25% per year on accounts with a balance of $5,000 or more. While this fee is lower than many traditional investment advisors, it may still be a consideration for those looking to minimize fees.
Is Acorns right for you?
Deciding whether or not Acorns is the right investment app for you depends on your individual financial goals and preferences. If you are looking for a simple and easy way to invest small amounts of money, Acorns may be a good option. However, if you are looking for more control over your investments or have a larger amount of money to invest, you may want to consider other options with lower fees and more investment choices. It’s important to do your research and compare different investment apps before making a decision.