Micro-investing apps like Acorns have taken over the traditional thinking of – Investing only relates to wealthy individuals or financial experts. This has resulted in boosting confidence in small investors that they too can invest with as little as $5 or even lower.
However, everything comes with a price and in this reference, the industry has seen several small-scale investment apps be shut down suddenly due to a lack of funds, safety or regulatory issues.
Therefore, it becomes even more important to check out the legitimacy of such apps. In this series, we are familiarising you with one of the most widely used micro-investing apps – Acorns.
In this comprehensive Acorns Review, we will assess the platform’s safety, regulations, product offerings, and fees to determine whether it is worth investing with.
Pros & Cons Of Acorns
Pros
- Low Barrier to Entry: Acorns doesn’t require a minimum deposit to open an account, which makes it accessible to a wider range of people who might not have a lot of money to invest. This is great for beginners who are just starting out with investing.
- Easy and Convenient Savings: The platform works by rounding up your purchases to the nearest dollar and automatically invests the spare change into an ETF portfolio. Therefore, provides an easy and convenient way to save and invest.
- Personalised Portfolios: Acorns Investing allows investors to go through a questionnaire part to determine their investment goals and risk tolerance, and then creates a personalised portfolio for them based on those factors.
Cons
- High Monthly Fees: The platform charges a monthly fee that can range from $1 to $5, depending on the service you choose. So, if you’re only investing a small amount of money, this fee can be considered quite high.
- Limited Investment Options: Acorns invests your money in a portfolio of ETFs, giving you narrower control over specific investments. If you’re looking for more customization or want to invest in specific companies or industries, you may need to look for another investment platform.
Is Acorns Safe?
Yes, Acorns can be considered safe in terms of regulatory approvals and licenses. It offers investment advisory services through Acorns Advisers, LLC, an investment firm registered under SEC laws.
Meanwhile, it also offers brokerage services under its other entity- Acorns Securities, LLC, which is registered as a broker-dealer under SEC laws and a member of FINRA/SIPC.
In terms of safety, the platforms employ SSL encryption, Instant account alerts, multi-factor authentication, automatic logouts, and ID verification.
And for clients’ funds’ safety, there are insurance schemes under its membership of SIPC and FIDC, which covers securities of its members up to $500,000 (including $250,000 for claims for cash) and $250,000 per depositor respectively.
Overall, the platform seems a safe haven for investors due to its heavy regulations. But it’s not always what it seems. We are saying so because of Acorns’ consistently declining user base.
Background and Reputation
Despite being an SEC-registered platform, Acorns doesn’t seem to have built a good reputation. While exploring the web, we found several Acorns’ complaints of its users being scammed.
Some of its users have even mentioned that Acorns stole my money on Trustpilot. A platform user has claimed that she got scammed out of $121.
Scrolling down further, we found several other complaints indicating referral scams, bad customer support experience and sudden shutting of users’ accounts for 72 hours.
Acorns Mobile App
Acorns app works as an investment and robo-advisor service provider offering investing, brokerage and advanced banking services all in one place.
The user’s personalised dashboard available on the Acorns app gives direct access to portfolio balance, recent transactions, and investment performance.
The UI design of both web-based and mobile apps is quite easy with a navigational menu available on the screen.
At the same time, it also offers easy access to the user’s current portfolio allocation and investment options, including ETFs and individual stocks.
Users can easily adjust their investment preferences and view performance charts to track their progress over time. The overall functionality and interface of the Acorns app impressed us to a greater extent.
Web Platform
Similar to the mobile version, the Acorns website/web-based platform has a clean and modern UI interface.
The main dashboard provides direct access to the user’s portfolio balance and investment performance, and a dedicated section to view transactions and account settings.
Through the navigation menu, users can view their investment portfolios, deposit funds, and access account settings.
Tools and Features
The range of tools and features available on the platform is not as comprehensive as other micro-investing apps. However, there is a Banking service option available that is exceptional in the industry.
To have an in-depth look at the platform’s extended features & services, we have breakdown the services, tools and features through our detailed Acorns Review.
Education Resources
There is a dedicated educational tool category, namely Learning. The section includes comprehensive blogs and guides related to Investing, Retiring, Saving, Borrowing, Earning and Planning.
It also includes videos and experts’ tips on investing and wealth management. Overall, the educational resources are good enough for beginners.
Research Tools
The list of research tools isn’t that long for Acorns users. There is an Interest Compound Calculator, which allows investors to get a good idea of how their money could grow over time with compound interest.
Additionally, there’s a robo-advisor tool that uses algorithms and computerized models to manage and optimize an investor’s investment portfolio.
Fees and Pricing
The Acorns pricing starts with two subscription tiers: Family and Personal Plan. There is a flat monthly account management fee that starts from $3 to $5, depending on the subscription plan.
For the personal plan, the subscription starts from $3 per month and $36 a year. And it starts from $5 per month and $60 annually for the Family plan.
The portfolio’s expense ratios range from 0.05% to 0.18%. However, the platform charges a flat fee of $35 per ETF for transferring investments to other platforms. However, there is no charge for selling investments and transferring cash into a bank account.
The fees can be considered reasonable for high-volume investors but can be relatively higher for those with smaller balances.
Investment Products
During our investigation for Acorns Review, we found there is no dearth of investment options available on the platform. And the good part is that you don’t need a big investment amount; it’s all possible with $5 a day, week or even a month.
You can easily and conveniently invest in expert-built, diversified smart portfolios of Bitcoin-linked ETFs, ESGs and spare change from each purchase. Below is a breakdown of the platform’s services &investment options –
Invest
If we say Acorns Invest is the core product of the platform, it would be not wrong at all. The service allows users to invest their spare change automatically by rounding up their everyday purchases. These spare changes the invested in a diversified portfolio of ETFs.
Later
Acorns Later can be understood as an individual retirement account (IRA) offering investors to save for retirement with tax benefits. There are two options available to choose between a traditional IRA or a Roth IRA.
Earn
Acorns Earn program gives platform users to earn extra money for completing simple online tasks or shopping at participating retailers. The cashback rewards are automatically invested in your Acorns account.
Early
Acorns Early is a custodial account for children’s future. The account allows parents to invest a little every time for their child’s future. It provides a tax-advantaged way to save for expenses like education and is available to Acorns customers with a Family subscription.
Bits Of Bitcoin
Acorns Investing allows small investors to invest in Bitcoin through its Bits of Bitcoin product. It allows you to round up your purchases and invest the difference in Bitcoin.
Sustainable ESG Portfolios
Apart from other Investing products, there is an option for socially responsible investment portfolios. This plan focuses on investing in companies that have positive environmental, social, and governance (ESG) characteristics. These portfolios allow you to invest in companies that align with your values and beliefs.
Bank
As Acorns constantly say it is not a bank; however, it still offers limited banking services to its customers through its partnership with Lincoln Savings Bank or nbkc bank.
Through its banking services, it also offers a VISA debit card to its users, with access to 55,000+ fee-free ATMs.
Additionally, it rounds up your spare change to the nearest dollar and invests it into your Acorns Invest, Later, or Early account.
Acorns Account Opening Procedure
The Acorns’ sign-up process is quite simple, with only a few steps involved. Here’s a step-by-step process for investors just starting out with the platform –
- Download the Acorns app or sign up through the web app.
- Provide a valid email address and your online banking login information to link your accounts and use Round-Ups.
- Now, enter your residential address and Social Security Number or ITIN.
- Fill out the general profile information such as financial goals, occupation, and earnings.
- Upload a photo of your government-issued ID or other documentation for identity verification.
After completing these steps, your account will be reviewed and typically approved within one business day. If you experience any issues, you can reach out to Acorns Support for assistance.
Funding Acorns Checking Account
Acorns Checking account can be funded through four methods including direct deposit, recurring deposit, one-time deposit, and mobile check deposit.
To set up direct deposit, here are the steps to be followed:
- Firstly, link their payroll provider directly by accessing the ‘Checking’ tab in the Acorns app.
- Click on the gear icon to access settings, selecting ‘Link with a payroll provider.’
- Follow the steps to connect with their employer/payroll provider for automatic direct deposit setup.
Withdraw Funds From Acorns Invest Account
The steps involved in making a withdrawal include:
- First, you need to sign in to your account and select the ‘Invest’ tab.
- Next, choose the ‘Withdraw’ option, enter the amount you want to withdraw, and select the bank you want the funds to come from.
- Review your withdrawal request and confirm the transaction.
- Keep in mind that withdrawal processing times may vary, and certain fees and restrictions may apply.
Acorns Customer Service
The Acorns customer support is good to some extent, but it falls short in offering dedicated phone support. Additionally, there is no e-mail support available.
You can reach out to the Acorns Help Center in case of any queries. There is a comprehensive set of FAQs & ‘Get Started’ articles available.
The lackness of robust customer service channels can be counted among the platform’s biggest drawbacks. We were really distressed with the customer support services.
Conclusion and Recommendations
Overall, concluding this detailed Acorns Review, we found the platform to be user-centric and a good place to enter the investing world for beginners.
The minimum deposit requirements are quite lower, with investing possibly as little as $5. Additionally, the product selection is diverse, covering plans for Family and retirement.
However, as with every investment service provider, Acorns has some odds that can’t be ignored. Firstly, the platform has declining user ratings with some of them even calling it a scam. And secondly, the investments are limited to ETFs, so it can’t be concluded as a complete Investing platform.
So for investors taking safety and portfolio diversification at the top of their priorities, the platform is not worth considering. Instead, you can check out a more reliable platform like Equiity. The platform is well-regulated and offers a diverse range of Investing and trading options, with round-the-clock support.
FAQs
Can Acorn Be Trusted?
Yes, Acorns can be trusted. The platform is a legitimate financial services company that is regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Does Acorns Actually Make You Money?
Acorns invests your money in a diversified portfolio of ETFs, which have the potential to earn returns over time. However, the amount of money you make will depend on various factors, including the amount you invest, the performance of the markets, and the fees charged by Acorns.
Is Acorn App A Pyramid Scheme?
No, Acorns is not a pyramid scheme. A pyramid scheme is a fraudulent business model that relies on recruiting new members to generate revenue, while Acorns is a legitimate financial services company that offers a robo-advisor platform for investing.
What Is The Downside To Acorns?
One downside to using Acorns is that it charges a monthly fee, which can eat into your investment returns. Additionally, Acorns’ investment portfolio is relatively conservative, which may limit your potential for higher returns.
Why Acorns Is A Bad Idea?
Acorns may not be the best investment option for everyone. Some reasons why it may not be a good fit for some investors include its relatively high fees, conservative investment strategy, and limited investment options.
Has Anyone Made Money On Acorns?
Yes, many people have made money on Acorns. However, the amount of money you make will depend on various factors, including the amount you invest, the performance of the markets, and the fees charged by Acorns.
Is Acorns Worth It?
Whether or not Acorns is worth it will depend on your investment goals, risk tolerance, and financial situation. Some users may find the app helpful for automating their investment contributions, while others may prefer to manage their investments on their own.
Is Acorn A Real Company?
Yes, Acorns is a real company that was founded in 2012 by Jeff Cruttenden and Walter Cruttenden. It is headquartered in Irvine, California, and is regulated by the SEC and FINRA.
Is Robinhood Or Acorns Better?
Both Robinhood and Acorns offer unique investment platforms with their own pros and cons. Robinhood allows users to trade stocks and ETFs for free, while Acorns offers a more hands-off investment approach that automatically invests your spare change.
Can I Withdraw My Acorns Money?
Yes, you can withdraw your Acorns money at any time. However, it may take several days for the funds to appear in your bank account, and you may be subject to certain fees.
Is Acorns Worth It For Beginners?
Acorns may be a good investment option for beginners who want to start investing but may not have a lot of money to invest or may not be confident in their investment knowledge. Acorns automates the investment process, making it easy for beginners to start investing
How Do Acorns Make Money?
Acorns makes money by charging a monthly subscription fee for its investment management services. The platform also generates revenue through referral fees and interest income on users’ account balances.
Did Acorns Get Hacked?
There have been no reports of Acorns being hacked or experiencing any data breaches. The platform employs bank-level security measures to protect user information.
Is Acorns A Bank?
Acorns is not a bank. However, it partners with several banks like Lincoln Savings Bank or nbkc bank to offer advanced banking services.
Can I Stop Investing In Acorns?
Yes, you can pause or cancel your recurring investments at any time. If you want to close your account entirely, you can do so by contacting customer support.
Can I Cancel Acorns?
Yes, you can cancel your Acorns account at any time by contacting customer support. Note that any investments you’ve made will still be subject to the usual market fluctuations until you sell them.
What Are The Fees For Acorns Over $5000?
For Acorns Core and Acorns Later accounts, the fee is $1 per month for account balances of $0-$1 million. For Acorns Spend accounts, there are no fees for account balances over $5000.
Is Acorns A Broker?
Acorns is not a broker, but rather an investment advisory service. Acorns Invest accounts are advised by Acorns Advisers, LLC, an SEC-registered investment advisor.
Can I Use My Acorns Debit Card Anywhere?
Yes, you can use your Acorns debit card anywhere that accepts Visa. The card is issued by Lincoln Savings Bank, which is a member of the Federal Deposit Insurance Corporation (FDIC).
