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Acorns | Brokerage Review

Acorns | Brokerage Review

Brief History

Acorns is a micro-investing brokerage company originally founded by Walter and Jeff Cruttenden, and launched on August 26, 2014, with the goal of making investing accessible to everyone.  Since then Acorns has grown exponentially with 3.7 million users with accounts and the current CEO Noah Kerner has ambitions to increase this number to 100 million! 

Acorns was one of the first brokerage institutions to introduce the concept of micro-investing and rounding up the “spare change“ of debt transactions for investing.  Acorns is targeted toward a millennial audience, in particular, however, their applications’ emphasis on ease of use and limited, but expertly managed investment options make them a great option for anyone interested in starting to invest without having to commit time to learn anything new. 

On May 30, 2018, Acorns branched out into retirement investing and on November 1, 2018, Acorns made it’s entrance into the banking industry as well, starting their own online bank called Acorns Spend. 

Acorns rounds up your debit transaction up to the nearest dollar and invest the difference how you see fit.

Acorns rounds up your debit transaction up to the nearest dollar and invest the difference how you see fit.

Why would you use Acorns? 

Acorns is a great platform to save your spare “change”. Only this “change” is just rounded up from your debit purchases with your linked bank card.  It's the digital equivalent to putting your spare change in a jar after you leave the store. However, with Acorns that change is actually invested and can grow over time. We think Acorns is suited for individuals who have trouble setting aside money for savings. Individuals who use their debit cards for the majority of their day to day transactions may also find Acorns as a convenient way to save. 

Acorns is also one of the few brokerages that does not have a knowledge barrier stopping you from getting started investing.. With Acorns, you just fill out your profile, answer a few questions and pick a risk level and all of your investment are chosen and managed for by industry experts at no additional cost aside from your monthly account fee.

Security (Is my money safe?)

Acorns is operated by Acorns Advisers, LLC, and is registered with the United States Securities and Exchange Commission as an Investment Advisor.  All investments made with Acorns Advisers are insured by the Securities Investor Protection Corporation (SIPC). You can learn more about what SIPC insures here.

Acorns has excellent bank-grade security with all their platforms using 256-bit encryption and physically secured servers for your privacy.  Acorns security is also supplemented by multi-factor authentication, automatic logouts, and ID verification help prevent unauthorized access.

Expenses & Fees

Acorns definitely isn’t the best brokerage in terms of fees and expenses, but they are on the cheaper end and much more forthright than traditional brokerages with no hidden fees.

Acorns pricing is very straightforward at just $1 per month for the core taxable investment account and $2 per month for both the taxable account and the retirement IRA account.  It is also worth noting that Acorns offers FREE accounts to college students in the spirit of supporting the up-and-coming!

Pros

  • Free Accounts for college students

  • Fees are at most $2 a month

  • No prior investment knowledge required

  • Extremely user-friendly web and mobile interface

  • No minimum investment needed to open an account

  • Round-Ups: The ability to save by Acorns rounding your debit transactions to the nearest dollar is a pretty neat feature to save passively.

  • No upkeep after setup, Acorns is an almost completely passive way to save and grow your money.

Cons

  • Extremely limited investment options

  • Extremely limited control over investments

  • The fee is relatively high with low account values

  • No tax benefits

Conclusion | Our thoughts

Here at Budget Geek, we believe in making finance easy, and Acorns does an excellent job at taking all the hard work out investing and making it easy and approachable to people who might not be financially savvy.  Overall Acorns is an amazing way to get started investing without the hassle of having to learn a whole lot. We believe the main downside to Acorn is its lack of flexibility for investors who will otherwise grow out of it and eventually want a platform that offers more control over investments and more investment options.  If you decided you liked this review and you’d be interested in trying out Acorns, you can support us by signing up with this link. Full disclosure, it is an affiliate link, however, this review is our real and honest opinion of this product.

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