Acorns is a popular spare change investment robo-advisor app. If you’re finding it hard to get started investing, check out Acorns to start investing a little at a time.
- 1 What Is Acorns?
- 2 How Does Acorns Round Up Work?
- 3 How Do You Sign Up With Acorns?
- 4 What Kind Of Portfolio Allocations Does Acorns Have?
- 5 Acorns Portfolio Weights
- 6 What Kind Of Accounts Does Acorns Offer?
- 7 Can You Only Put Money In Acorns Via Spare Change Roundups?
- 8 Acorns Found Money Cashback
- 9 The Acorns Spend Card
- 10 What Is Acorns Later?
- 11 How Is Acorns Different Than Other Robo-Advisors?
- 12 How Much Does Acorns Cost?
- 13 Is Acorns Trustworthy?
- 14 When Do I Want To Use Acorns: Long-Term Vs Short-Term Savings
- 15 Acorns Referral Program
- 16 Who Is Acorns Good For?
- 17 Acorns Pros And Cons
- 18 Acorns Found Money Cashback Options
- 19 Acorns Found Money Cashback
What Is Acorns?
Acorns started out as a spare change app that rounds up your purchases and takes that change and puts it in an investment account. It has since expanded to savings accounts with debit cards, IRAs, and brokerage accounts, and a cash back portal that allows you to save even more money.
Acorns doesn’t have any minimums to start investing, so it’s perfect for a beginner or young investor. Acorns makes it easy to start, explains the concept of investing well, and starts your savings off in tiny increments so you don’t even notice you’re saving.
You start off by linking your bank and credit card, so that Acorns can move your spare change roundups into your investment account.
How Does Acorns Round Up Work?
Acorns Round Up works by rounding up your purchases to the nearest dollar and putting that money into your Acorns retirement or brokerage accounts.
For example, let’s say you spend $10.01 on groceries with your rewards credit card. You’ll get 99 cents deposited into your Acorns account through your bank account. Once your roundups reach $5, that money will be transferred to your Acorns account. This is so you don’t have a ton of microtransactions being deposited all the time.
Roundups don’t add up to a ton, so you should consider roundup multipliers, which go up to 10x multipliers. If you choose the 10x multiplier, this means in our example you’d get $9.90 deposited into your account instead of 99 cents. If you make a couple of purchases a month, you can save a decent amount to start off.
How Do You Sign Up With Acorns?
1. Sign Up For Acorns [$5 Bonus]
Go to the Acorns site or by downloading the Acorns app via Google Play or the Apple store.
Once you’re signed up, you’ll create a PIN so you can log in to the account easily.
2. Set Up Your Round-Up Account And Checking Account
Acorns rounds up your credit or debit card transactions, so you’ll start by connecting the bank that issues your credit or debit card. Acorns uses Plaid, a third-party bank app that provides 256-bit encryption and SSL — Acorns doesn’t know your username and password credentials. If your bank is not listed, you can choose the “other” button and sign in manually.
Then you’ll set up a connection to your checking account, so that Acorns can transfer the small round-up amounts to your Acorns investment account.
3. Create Your Acorns Account
Once you set up your bank and credit/debit card details, you’ll create your Acorns account.
Since this is an actual brokerage or IRA account, Acorns needs to know certain information as required by the SEC.
You’ll need to give your name, address, birth date, social security number, f you’re a US citizen, etc. There are also questions the SEC uses to find out if you’re a broker-dealer, a public shareholder which owns more than 10 percent of a company, and if the IRS says you’re subject to backup withholding. You’ll then be asked for basic “Know Your Customer” (KYC) information such as income, net worth, and why you want to invest in order to determine what kind of risk tolerance you have.
What Kind Of Portfolio Allocations Does Acorns Have?
Acorns asks the KYC questions so they can determine what kind of portfolio allocation you should have. Each portfolio has stocks, bonds, and real estate. In general, stocks give higher returns over the long run, but have higher volatility. Bonds give lower returns over the long run, but have lower volatility. Real estate falls in the middle of both those assets.
Modern Portfolio Theory
The closer you get to retirement, the higher you want your allocation of bonds to be. Though bonds may have lower returns, the real risk when you retire is sequence of returns risk. Vice versa, the further you are from retirement, the more room there is for stocks to recover in the long run and earn a higher rate of return — so you’ll want a higher allocation of stocks when you’re younger. Since real estate has higher volatility and returns than bonds, you’ll apply the same kind of logic to real estate as you did to stocks. The difference here is that real estate is less liquid because it takes time to sell a physical property versus instantly to sell stocks — so real estate will have a smaller allocation.
You can pick any portfolio you want, but Acorns uses modern portfolio theory, as created by a Nobel prize winner Harry Markowitz, and later refined by Merton Miller and William Sharpe.
Here are the five different kinds of portfolios Acorns offers:
Acorns Portfolio Weights
|Portfolio||Bond %||Stock %||Real Estate %|
Acorns Portfolio Mixes
You’ll notice that the bond mix is in increments of 20 percent per level, real estate mix is in increments of 2 percent per level, and the stock mix is in increments of 18 percent per level.
The stock investments consist of a mix of large, small, and international large company stocks. The bonds consist of a mix of government and corporate bonds. The real estate is a Vanguard REIT fund.
Here are the ETFs that Acorns invests in:
- Vanguard Small-Cap Index Fund ETF Shares | VB
- iShares iBoxx $ Investment Grade Corporate Bond ETF | LQD
- Vanguard REIT Index Fund ETF Shares | VNQ
- Vanguard 500 Index Fund ETF Shares | VOO
- iShares 1-3 Year Treasury Bond ETF | SHY
- Vanguard Emerging Markets Stock Index Fund ETF Shares | VWO
- Vanguard FTSE Developed Markets Index Fund ETF Shares | VEA
All these funds have extremely low expense ratios, which is great, because those expense ratios compound over time.
Acorns engages in rebalancing, which may cause tax implications for you if you have your money in a brokerage account. If your account is rebalanced in an IRA though, there wouldn’t be any tax consequences.
What Kind Of Accounts Does Acorns Offer?
Acorns offers a brokerage and IRA accounts. The offer a Traditional IRA, Roth IRA, and SEP IRA. Unfortunately, they don’t offer any others, but hopefully will one day soon.
Can You Only Put Money In Acorns Via Spare Change Roundups?
No, there are a lot of other ways to put money into your Acorns account.
You can simply deposit money into your Acorns account any time you want if you want to top up yourrobo-advisor savings.
You can also set up recurring deposits. For example, you can set up a biweekly payment if you want to make a deposit every paycheck.
Acorns Gift Cards
You can also buy gift cards for your friends or family to deposit into Acorns. The minimum for gift cards is $25.
Acorns Found Money Cashback
There are tons of sites that offer cash back for different purposes with different cashback sign up bonuses, but Acorns has its own cashback section as well.
The difference is that Acorns automatically puts your cash back into your investment accounts, so that you don’t have the temptation to spend it. If you want your cash back because you need it, then this option might not be the best for you. However, if you’re ok with investing that cash back easily, this might be an awesome option.
A downside is that Acorn’s Found Money doesn’t have that many retailers. Ebates [$10 bonus] and BeFrugal [$10 Bonus] both have thousands of retailers, while Found Money has 100+ retailers that give it cash back. We’ve listed out the 100+ retailers and its current cashback rates at the bottom of this post due to its length. You can also use Acorn’s Found Money through the web browser extension. Below is the Chrome extension.
The Acorns Spend Card
Acorns recently launched a debit card that you can spend money on and get your roundups immediately transfered.
The Spend card account costs $3 per month though, which is a lot of money considering there are high yield accounts that pay you 2.25 percent! However, with the Acorns Spend account, you don’t need a minimum balance, will get unlimited ATM reimbursements, and don’t get charged overdraft fees.
What Is Acorns Later?
Acorns Later allows you to set up a tax-advantaged retirement account called an IRA. The fee for this type of account is $2 per month, which means that you’d have to have $9,600 in your account to get a 0.25% management fee as most other low-cost robo-advisor have.
The minimum amount of money to start an Acorns Later account is $5.
How Is Acorns Different Than Other Robo-Advisors?
Acorns was built to be mobile-first since they’re heavily targeting millennials by starting them off with small amounts of savings. It only has 5 different kinds of portfolios, while you can customize the portfolio on other robo-advisors such as Ellevest, Betterment, and Wealthfront.
How Much Does Acorns Cost?
Acorns is free for college students and those 24 and under. If you’re a college student, you’ll have to confirm your college attendance before you get the free account by having a .edu account and employment status as a student.
Acorns is $1/month until you reach $1 Million, then it’s 0.25% of your assets in Acorns.
Most Robo-advisors charge 0.25% of your assets, which means Acorns beats Robo-advisor rates once your savings grow to more than $4,800. A 0.25% charge of $4,800 is $1 per month, or $12 per year.
M1 Finance is a completely free robo-advisor, but requires a minimum deposit of $100. Acorns charges only $1 and doesn’t require any minimums to sign up.
For an extra $1/month, you get access to Acorns Later, and an additional $1/month gives you access to Acorns Spend.
Is Acorns Trustworthy?
Acorns is SIPC insured, which means that if the company goes under, the SIPC insures the underlying securities up to $250,000 worth of securities. Keep in mind that this does not mean the SIPC will give you money if the value of your securities goes down.
Acorns currently manages over 2 million accounts and has $1.15 Billion in regulatory assets under management, as shown by their most recent SEC ADV filing.
Lastly, Acorns uses Plaid, a third-party bank app that has 256-bit encryption and SSL, ensuring bank-level security.
When Do I Want To Use Acorns: Long-Term Vs Short-Term Savings
If you’re looking to save for retirement and won’t touch your invested money until retirement, then putting it in Acorns or Acorns Later is a good option.
If you’re looking to save for the short-term, you should consider investing that in a high-yield savings account or Certificate of Deposit (CD). Short-term savings should include something you want to save for and buy in the next 5-7 years. These things can include saving for college (though you should consider a 529 for that), a house, a renovation, etc.
Acorns Referral Program
Acorns gives $5 to the person you’re referring and $5 for you. Use our link to get $5.
Who Is Acorns Good For?
Acorns is good for college students because students don’t have to pay fees. It’s also good for beginner investors who are hesitant to make recurring deposits.
However, it’s relatively expensive for other people. You can get a free high-yield checking and savings account and get paid high interest. M1 Finance is a free robo-advisor, though M1 Finance has a minimum of $100.
Acorns Pros And Cons
The Acorns app has one of the most beautiful app interfaces we’ve seen for a robo-advisor — thought this is because their main market is millennials. The app is simple to use and allows you to squeeze out savings via spare change roundups, with multipliers up to 10x.
The Acorns app is free for college students, which makes it awesome as a starter account.
Acorns is $1/month, which means you’d need to have $4,800 in your account to match the 2nd lowest robo-advisor pricing of 0.25%. If you don’t need the spare change, cashback, or Acorns Spend features, check out M1 Finance for free robo-advisor.
Acorns Later is $2/month for an IRA account, and we have the same feeling about this as normal Acorns for $1/month. Check out M1 finance for a free IRA and start investing for free with a $100 minimum.
Lastly, we’d pass on Acorns Spend for everyone, unless you spend a significant amount of money in brick-and-mortar stores, and instead get a high-yield checking account at 2.25%.
Acorns Found Money Cashback Options
Acorns Found Money Cashback
|Retailer||Found Money Cashback|
|1-800 Flowers||$10 with a purchase|
|123inkjets||2.5% of your purchase|
|23andMe||$5 with a purchase|
|Airbnb||1.8% of your service fee|
|American Eagle||2% of your purchase|
|Apple||1.2% of your purchase|
|Barnes & Noble||2% of your purchase|
|Billshark||$10 when you sign up|
|Birchbox||$10 with purchase of a 6-month or 1-year subscription|
|Blue Apron||$30 when you sign up|
|Boxed||4% of your purchase|
|Build A Bear||3%|
|CAR||4% of your purchase|
|Casper||$75 with purchases over $500|
|CheapOAir||$5 with a purchase|
|Check SuperStore||12.5% of your purchase|
|Choice Hotels||5% of your purchase|
|DirecTV||$25 when you sign up|
|DKNY||4% of your purchase|
|Dollar Shave Club||10% of your purchase|
|Dr. Scholl's||1.5% of your purchase|
|Earnest||$100 when you refinance your student loan|
|Expedia||4% of your purchase|
|Express||2% of your purchase|
|Eyecoic||3% of your purchase|
|FedEx||3% of your purchase|
|Few Moda||5% of your purchase|
|Finish Line||5% of your purchase|
|Forever 21||2% of your purchase|
|Franco Sarto||2% of your purchase|
|Fruit Bouquets||$10 with a purchase|
|FSA Store||2% of your purchase|
|Gift Card Mall||1% of your purchase|
|Gift Cards||1% of your purchase|
|GNC||5% of your purchase|
|Godiva||5% of your purchase|
|GoPro||4% of your purchase|
|Groupon||2% of your purchase|
|Harry&David||5% of your purchase|
|Highlights||2.5% of your purchase|
|Hilton||6% of your purchase|
|Hudson||2% of your purchase|
|Hush Puppies||4% of your purchase|
|JCPenney||1.5% of your purchase|
|Jet||2% of your purchase|
|John Hancock Vitality||$5 when you sign up|
|KAY||3.5% of your purchase|
|Kenneth Cole||1.5% of your purchase|
|L'Occitane||2.5% of your purchase|
|Lands' End||5% of your purchase|
|Laneige||3.5% of your purchase|
|LifeLock||$25 with a new purchase|
|Living Social||4% of your purchase|
|Loog||7.5% of your purchase|
|Lord & Taylor||1.5% of your purchase|
|LoveSac||2% of your purchase|
|Luck Vitamin||1% of your purchase|
|Lucky Brand||Lucky Brand% of your purchase|
|Lumens||4% of your purchase|
|Lyft||$15 when you sign up as a driver|
|Macy's||5% of your purchase|
|Macy’s||5% of your purchase|
|Mattress Firm||4% of your purchase|
|Merrell||4% of your purchase|
|Modern Bathroom||2% of your purchase|
|Murad||5.5% of your purchase|
|MVMT||10% of your purchase|
|New Balance||5% of your purchase|
|Nike||5% of your purchase|
|O'Neill||2.5% of your purchase|
|Omaha Steaks||5% of your purchase|
|One Kings Lane||2.5% of your purchase|
|Orvis||2.5% of your purchase|
|Otter Box||5% of your purchase|
|Park 'N Fly||1.5% of your purchase|
|Personalization||$10 with a purchase|
|PetCareRX||3% of your purchase|
|Reebok||5% of your purchase|
|Saks Fifth Avenue||1.5% of your purchase|
|Saks Off Fifth||1.5% of your purchase|
|Samsung||3% of your purchase|
|Saturdays NYC||2% of your purchase|
|SeatGeek||3% of your purchase|
|Sephora||$3% of your purchase|
|Shoes .com||6% of your purchase|
|shopDisney||1% of your purchase|
|Shu Umera||3% of your purchase|
|Sierra Trading Post||3% of your purchase|
|Sonos||5% of your purchase|
|Springboard||$75 with a purchase|
|Stance||10% of your purchase|
|Stich Fix||$10 with a new purchase|
|Stila||3% of your purchase|
|Stride Rite||1.5% of your purchase|
|Swanson||3.5% of your purchase|
|Tastemade||3% of your purchase|
|TaxAct||7.5% of your purchase|
|Taylor Made||5% of your purchase|
|The Container Store||4% of your purchase|
|The Vitamin Shoppe||5% of your purchase|
|The Wall Street Journal||$5 with a new subscription|
|Tillys||5% of your purchase|
|Tommy Bahamas||5% of your purchase|
|Tours4Fun||1.5% of your purchase|
|Vegas .com||3% of your purchase|
|Vitamin World||2% of your purchase|
|Vitamix||4% of your purchase|
|Walgreens||2% of your purchase|
|Walmart||1% of your purchase|
|Warby Parker||10% of your purchase|
|Winc||$20 with a purchase|
|Wine .com||2.5% of your purchase|
|World Market||4% of your purchase|
|Ylighting||3% of your purchase|
|Yliving||3% of your purchase|
|Zales||3.5% of your purchase|
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