Acorns Review by Nerdwallet
Nerdwallet lauded Acorns for its micro savings approach and for making saving and investing seem less intimidating. It also liked the diversified portfolio and no-minimum investment account balances. Its $3-per-month management fees are expensive for small accounts, however. And it lacks features like tax-loss harvesting and a 529 college savings plan that rival fintechs offer.
Getting Started With Nerdwallet
Acorns is an investment app that specializes in micro-investing. Founded on the principle that “from acorns, mighty oaks do grow,” the app rounds up the spare change from purchases made using a linked debit or credit card and invests it in exchange-traded funds (ETFs). It charges a monthly fee between $3 and $9. The app also offers other services, including retirement savings, checking accounts, and investment accounts for children.
The app also allows users to set up automatic recurring investments daily, weekly or monthly. It also provides a feature called Earn, which invests more when you make purchases at select retailers. These investments are invested in a portfolio that includes low-cost iShares ETFs covering large, medium, and small companies and international stocks. The platform also offers a sustainable portfolio that uses ETFs graded according to environmental, social, and governance criteria.
Getting started with Acorns is simple, and there is no minimum balance required. However, the app does require a checking or savings account to link with. It also charges a monthly fee for checking and transaction fees. Despite these costs, the app is still a good option for those looking to save and invest money.
Another competitor of Acorns is Stash, which has a similar investing and saving approach. Stash’s portfolios are built around your answers to questions that determine your risk appetite, and its options range from conservative to aggressive. It also offers a savings account with interest rates and a custodial investment account for kids.
Round-Ups Investing
As the name suggests, Acorns takes the form of an investment app that rounds up small purchases to the nearest dollar and invests the change in exchange-traded funds. This is great for people who might not otherwise have the time or money to make investments on their own. The app also offers cash back through its partnership with more than 450 retailers. Acorns charges a flat monthly fee of between $3 and $9, which is quite low compared to other investment apps.
You can use the Acorns app to link your bank account and credit cards to automatically invest in stocks, ETFs, mutual funds, and other assets. You can even set a daily or weekly investment amount, which is an option to help you achieve your savings goals. However, you should note that the Acorns app is not available with all banks and credit unions.
Depending on the subscription plan you choose, Acorns may charge you extra fees for its services. The Personal tier costs $3/mo, while the Family tier costs $5/mo. Its fees are a little bit higher than those of competitors like Betterment.
The app does not offer tax-loss harvesting, which is a strategy that minimizes taxes on capital gains. It is important to consider the fees you pay for investing before choosing an app. This is because high fees can cut into long-term investment returns and significantly reduce the amount of money you’ll earn in the future.
Taxes
The investment app Acorns rounds up purchases on linked credit or debit cards and sweeps the change into a computer-managed portfolio. This feature gives it an edge over other micro savings apps, which typically charge fees to invest small amounts of money.
It also offers a savings account with no minimum balance that earns 3% APY and 55,000+ fee-free ATMs, as well as customer support that’s available 7 days a week via live chat and phone. Acorn’s checking and savings accounts are insured by the FDIC up to $250,000.
Acorns has a mobile app that makes it easy to monitor your accounts and set up automatic investing on a daily, weekly, or monthly basis. Users can also customize their portfolios and choose a low-cost iShares ETF-based core portfolio or a sustainable portfolio that uses ETFs rated using social, environmental, and governance (SEG) criteria.
The app has no minimum deposit, but investors should keep in mind that the investments will be taxed when they’re sold. Moreover, the Acorns investment app doesn’t offer a tax-loss harvesting strategy, as its competitors do. However, its account management fees are still lower than those of most robo-advisors. It’s also important to note that the service is not a bank, so your funds aren’t protected by the Financial Services Compensation Scheme in the UK.
Fees
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The company’s goal is to help consumers make the best possible decisions about money. It uses data to create recommendations and rankings of products and services. Its rankings are based on factors such as cost, ease of use, and customer support. NerdWallet also publishes research and editorial articles. Its articles provide a wealth of information to help consumers manage their finances.
One of the most popular micro-savings and investing apps is Acorns. This app rounds up purchases on linked debit and credit cards and invests the change in a diversified portfolio of ETFs. It also lets users set recurring or one-time investments. The service is designed to be a modern-day piggy bank and works with a variety of banking and credit card providers.
Unlike its competitors, Acorns charges a flat fee rather than a percentage of assets. This can add up to a substantial sum for investors with small account balances. It also means that the fee can eat into investment returns.
Acorns has five default “smart portfolios” designed by Harry Markowitz, the father of Modern Portfolio Theory. It also offers a women’s portfolio and discounts for sessions with coaches and certified financial planners. Its most expensive tier also includes a checking and savings account, a debit card, and a benefits hub.
