You may have already heard of Acorns as a way to put your spare change to good use by automatically depositing it into an investment account. The concept of Acorns is simple – to make investing accessible to anyone. So, how does Acorn app work exactly? Moreover, is it really possible to make money using Acorns? Find out in this article below.
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Acorns is a micro-investing app that allows you to invest your spare change in a diversified ETF portfolio. You can choose from five portfolios that have different levels of risk: conservative; moderately conservative; moderate; moderately aggressive and aggressive. Acorns technology will recommend a portfolio based on your answers to a set of questions about your life and approach to risk.
When you make an everyday purchase, Acorns will “Round-Up” the amount to the nearest dollar and put your change aside, ready for investing. Let’s say for example that you buy a Grande Caffe Latte from Starbucks for $3.65. Acorns would round up your purchase to $4.00, setting aside the difference of $0.35 so you can invest it. When your spare change “savings” reaches $5 or more, it will be invested into your chosen investment account.
Other ways to invest with Acorns
As well as Round-Ups, you can set up recurring investments to automate deposits or just add funds to your account as and when you want.
You can invite your friends to try Acorns, and if they sign up, both you and your friend will get a $5 reward which is invested into your Acorns account (after your friend makes their initial investment).
Acorns also provides a feature called “Found Money” where you can shop at more than 200 top brands and in return, they’ll automatically invest in your Acorns account.
It almost sounds too good to be true to think that you can make money by investing your spare change. Well, according to the many reviews in the app stores, it is possible. With that said, some users have lost money too. That’s to be expected really, as all investments carry a certain amount of risk meaning that they can lose value as well as make a profit.
Acorns seems to be a popular app with as many as 4 million people now using it. In the App Store, Acorns scores (4.7 / 5) having received more than 285K ratings in total. On Google Play, the app scores (4.3 / 5) with over 47K ratings.
One recent reviewer on Google Play said that he’s earning more than 10% on his investments and dividends and that he’d experienced nine months of hassle-free investing just from Round-Ups.
Another happy user reported how the app grew on them over time. Initially, the returns were small, but the more they invested and forgot about it, the more their returns increased. On the App Store, there are more glowing reviews with one individual saying that Acorns had become a great partner to help them grow financially.
Some users haven’t made money as yet though – one guy mentioned in his review that after many months of investing, he’d gained $0.02 after monthly fees. Someone else stated that even though he loved the app and had suggested it to everyone he knows, he’d had lost $11 overall. As well as investment losses, some negative reviews report technical glitches and poor customer service.
The basic-level version of the app costs $1 per month unless you’re a student, in which case it’s free. If you want to take advantage of Acorns and Acorns Later (a retirement account), it’ll cost you $2 per month.
The top tier service is $3 per month and includes Acorns, Acorns Later and Acorns Spend which is a dedicated checking account. If your investment account reaches $1 million, the price increases to $100 per month per million dollars.
Acorns appears to be a good app to use if you’re new to investing, or if you don’t have much money to play around with, at least in the beginning. By making use of “Round-Ups, you may be able to invest without even noticing too much!
However, there are other several other investment apps around that you might prefer – check out these below for starters:
- Betterment – this app provides a hands-off approach to investing. It’s a robo-advisor that has no minimum balance requirement and is relatively inexpensive – its basic “Digital” plan has an annual fee of 0.25% of the assets managed.
- WiseBanyan – this is another robo-advisor that offers an automated investment service, but with no asset management fees. You can get started investing with just $1 to open an account. WiseBanyan makes money by charging for add-on products instead. Read more about the differences between Betterment vs WiseBanyan.
- Personal Capital – this is a digital wealth manager that offers a comprehensive investment service via a tax-efficient ETF portfolio. It’s best suited for people with at least $100K to invest. Read more about Personal Capital vs Wealthfront here.
Before you choose an investment app, make sure to compare prices, investment account types and whether or not there is a minimum balance requirement, as these factors may influence your decision.
*The above information is correct at the time of publishing. Please note that this article shouldn’t be taken as financial advice.