Acorns Review: Core, Later and Spend

Updated on June 10, 2019
KCO profile image

I bring you reviews of the latest services with an eye for budget and practicality.

Acorns Review

Is Acorns a good investment app? It’s a low fee investment option that can be a great gateway to investing.

Read to find out if Acorns is right for you. Learn about the different services they offer and which one could be right for you.

What Do You Think of Acorns?

3 out of 5 stars from 2 ratings of Acorns Core

Pros

  • Automatic Round-Ups
  • Automatically Balanced (Robo-Advisor) Portfolios
  • Flat Rate Fees
  • Low Minimums ($5)
  • Easy Sign Up

Automatic Round-Ups

Acorns is known as the app that invests your "spare change". They do this by rounding up your card transactions to the nearest dollar and investing that round-up amount.

Automatically Balanced (Robo-advisor) Portfolios

Since stocks and bonds tend to grow at different rates an unmanaged portfolio will gradually become heavier in stocks, exposing you to more risk than you originally intended. Active investors will go in and balance their portfolios manually.

But Acorns will do this for you. You don't have to remember and you don't even have to know which funds to invest in. They'll do it all for you.

Flat Rate Fees

Other robo-advisors like Betterment and Wealthfront charge a percentage for management. Acorns just charges $1/month. This is a pretty great deal if you have a large (above $5,000) account balance.

Low Minimums

The minimum balance to start investing with Acorns is just $5! Most funds have minimums in the $2,000-$10,000 range so this is huge for anyone who doesn't have a big lump sum to invest.

Easy Sign-Up

Also, they make signing up and investing your first $5 incredibly easy. Sign up at Acorns and they'll help you select a portfolio. Then link a bank account and invest your first $5! You can link a card to monitor for round-ups and watch your investment grow.

Cons

  • Limited Fund Selection
  • Flat Rate Fees

Limited Fund Selection

If you're someone who likes to choose the funds they invest in, Acorns is not the place for you. Robo-advisors help you select an asset allocation based on your risk tolerance and then

Acorns has a smaller fund selection than even Wealthfront and Betterment.

Flat Rate Fees

Flat rate fees can also be a con! With a small balance you're better off with another robo-advisor that charges a 0.25% fee. The $12 a year Acorns charges will overpower any return you're likely to have on less than $500 invested.

One of Acorns portfolios.
One of Acorns portfolios. | Source

Can You Make Money with Acorns?

I have an Acorns Core account myself (read what that means below). I've seen some good returns when the market is up. If you had more money invested you could absolutely make a lot of money with Acorns. It's only limited by how much you can contribute to your account and how the market performs.

I review the service but a review is not all you need. You need to know whether Acorns is right for you. Which might not be the case depending on your financial situation and goals. Even the best investment company isn't a good choice for you if they don't fit your needs.

So I make recommendations that are contingent on your life situation. You'll need to think about your finances before you decide which version of Acorns to use.

Acorns now offers three tiers of services. They have various fees and different applications so let’s compare them:

Acorns Core (Brokerage)

  • Service: Core is Acorn’s original “round-up” or “pocket change” investment account.
  • Fee: $1 per month.
  • Good for: Anyone who doesn’t have a lot to invest right away or is new to investing.

Details

Acorn Core gives you a brokerage account, which means the money will be invested in the stock market. The term "brokerage" is often used to distinguish from tax-advantaged accounts like 401ks or traditional IRAs, whose gains are not taxed.

When you withdraw money from a brokerage account you will have to pay tax on the gains. So you're taxed (usually 15%) on the amount your account balance rises when you take out the money.

The Bottom Line

As long as you understand the basics of risk, taxes and fees Acorns can be a good option for first-time investors. Realize that the fees aren't great until you have a balance of at least $5,000.

What best describes your investments?

See results

Acorns Later (IRA)

Overview

  • Service: Acorns Core plus access to an IRA.
  • Fee: $2 per month.
  • Recommended for: Someone looking to supplement a healthy retirement savings rate with round-ups or

You can open an IRA through Acorns for $1 more a month. Then you can put your round-ups there and/or add in a recurring investment amount.

Just like the Core account, the fees are competitive for established accounts above about $5,000.

But be careful: Relying on round ups only will not get you enough to retire. As a general rule you need to save 10-15% of your income each year in order to retire. It's unlikely you'll contribute more than $1,000 in a year through round-ups.

The Bottom Line

Acorns Later can be a smart choice to supplement retirement savings.

Investment returns on Acorns account.
Investment returns on Acorns account. | Source

Acorns Spend (Debit Card and Checking)

Overview

  • Service: Acorns Core and Later (IRA) plus a checking account and debit card.
  • Fee: $3 per month.
  • Good for: Someone already using Acorns Core and Later who decides they don’t want free checking.

Unless there’s something I’m missing here Acorns Spend isn’t worth it. You can get free checking with a debit card at your local credit union or Fidelity or almost anywhere else.

$1.00 per month might not sound like much. But you're using an app based on investing literally pennies at a time so saving where you can must be important to you.

Found Money “Cash Back”

How It Works

Certain companies give you “cash back” when you shop through Acorns. At first I thought this meant Acorns I would earn cash back from purchases made on your linked cards. That would be a nice boost to the cash back I already get from credit card companies.

But that’s not the case. You have to make online purchases through the Acorn “Found Money” portal. It’s similar to Ebates or Dosh.

Found Money Review

Found Money isn’t something to get super excited about and I expect most users won’t use it.

The percentages are pretty low (1%-5%). There are only a few major retailers like Walmart or Macy’s. The others are obscure or only good on certain deals. If you’re lucky (or a big brand shopper) your next big purchase might match up to one of these deals. But it requires that a) you remember to use it and b) you complete the purchase during that online session.

It's nice that it's offered but I don't count it as a big perk.

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

© 2019 Katy Medium

Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, toughnickel.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://toughnickel.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)
    ClickscoThis is a data management platform studying reader behavior (Privacy Policy)