When it comes to banking and financial tools, Acorns has a lot to offer. In fact, this particular service includes several unique features. As a prime example, it has a cash-back rewards program when buying from selected retailers. If you’ve hesitated to invest, you’ll feel inspired to start after learning about Acorns.
As a type of robo-advisor, this tool has some distinct perks. Although it has a small investment portfolio and requires a higher fee when maintaining a low balance, it’s still a viable option.
Along with people attending college, Acorns is ideal for individuals who find it hard to save money. In addition, it works great for investors who prefer taking a hands-off approach. This innovative tool works by automatically investing spare change on behalf of the account holder.
How It Works
Acorns takes change from purchases linked to credit and debit cards and places it into an investment portfolio managed by a computer. It also has an option called Acorns Later that helps people prepare for retirement. There’s even an advantage for college students: They don’t pay any management fees. The qualification consists of enrollment in a four-year college and a valid .edu email address.
For non-college students interested in investing with Acorns, they pay only $1 per month on a taxable investment account. If they opt to add an Acorns Later account, the fee increases to just $2. For $3 per month, they can open an Acorns Spend, the tool’s version of a checking account.
- The investment ratios for exchange-traded funds have a 0.10% average
- You won’t pay any fees on accounts (annual, closing and money transfers)
- Acorn’s portfolios are ETFs from as many as 7 asset classes
- Acorns supports individual non-retirement accounts, as well as traditional and Roth IRAs
- For automatic balancing on all accounts, there’s no fee
- You can even use the Potential app to adjust the amount of money invested. That allows you to watch your combined investments grow
Great Financial Planning Tool
Although there’s no live customer service or financial planning support, Acorns is still worth considering. The minimum investment requirement is one area where this is evident. For opening an account, there’s no minimum. Then to start using Acorns to invest, you only need to maintain a $5 balance in one of the five prebuilt portfolios.