Acorns Review Review: Invest Your Spare Change

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Could you spare a few pennies to build an investment portfolio? If that sounds enticing, might be the perfect platform for you to try your hand at “micro investing”. By signing up for free and connecting Acorns to your chosen credit/debit cards and bank accounts, you can begin “sneaking” investments into your budget by having Acorns round up each purchase you make to the nearest dollar. The spare change will then be deposited into your Acorns investment account. But, does this really offer any sort of financial advantage?

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How Acorns Works

The fee is $1 month if you have less than $5,000 invested. It’s 0.25%/year if you have more than $5,000 in your account. But, it’s free for anyone under 24 attending college.

You can jump start your account by making an initial deposit, and then there are various other ways to get money added:

  • Round Up: You can use the “round up” feature as briefly described above. It will round up purchases made on all of your connected accounts and put the spare change into your Acorns profile.
  • “Found” Money: “Found money” might be named a bit misleadingly, but this feature means that select retailers will actually invest a bit into your Acorns portfolio when you make a purchase with them using a linked bank account or card. It’d be better to call this “bonus money” or even consider it as a kind of “cashback” advantage.

Acorns is praised for having a good amount of educational material built right in, and the interface is super easy to use. The company is still rather young, but it is reputable and–over time–you could expect to see a small growth in money if you let it sit and do its thing.

But, that’s where the cons come in.

Keep Risk in Mind

As an investment platform, Acorns should be used for money you won’t need for at least a few years. If you are looking for a short-term place to park some money, you should consider a high-interest savings account. Plenty of banks now offer a “round up” feature that allows the spare change of purchases to be automatically put away, and a savings account also offers a few other advantages:

  1. With a savings account, 100% of your deposits are safe (except for the risk of inflation, of course).
  2. Interest will be deposited on a monthly basis with most banks, and it will continuously compound.
  3. Your money is instantly available to transfer out, typically with no fee–unlike Acorns where you have to sell your shares and pay a transaction fee.

Now, if you’re interested in something that you can just sit and forget, Acorns might be a good start to a small investment portfolio, but don’t expect it to fund your retirement. Most of all, don’t go messing with it or removing money from your profile unless you’re shutting down your account. You’ll get the best performance by letting it do its thing.

Last Updated: December 31, 2017

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