Most investment or finance services expect their clients to put in vast amounts of money at once. While this has been a widely accepted concept for “big investments, big returns”, not everyone can accommodate such demands. In this case, learning how to invest with Acorns might just be the next big thing.
Whether a student, employee, or entrepreneur, Acorns might just have what one is looking for. That being said, this post is going to dive into the trenches of one of the world’s fastest-growing financial companies. What makes this institution admired by the public? And how are they able to do this?
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What Is Acorns About?
A few things are offered here. Invest your spare change with them. Optional is to set up some recurring deposits there. They also offer checking with a debit card. And also the FDIC insures money up to $250,000 maximum.
Get $5 when you sign up for Acorns today!This is a finance company based in the United States (Irvine, California) that offers a highly convenient and client-centered investment approach. As of 2020, the company held $3 billion in assets with 8.2 million customers. This number grows day-by-day as more investors appreciate their approach.
The Basics: General Acorns Review
Before someone decides to invest with Acorns, it’s vital to understand what it does. This way, it’s easier to weigh whether the company’s system works well in one’s current financial condition or lifestyle. One thing is for sure. Investing here is simple. In fact, the investor’s attention could even be limited, and their income would continue to grow.
So, what approach does this American-based company take that others don’t? They follow two concepts of micro-investing and Robo-investing. Micro-investing refers to depositing or investing small amounts of cash into an investment account. Unlike traditional investing, this method removes overwhelming trading fees and minimum balance requirements that hinder people from obtaining financial goals. Much of the time, services that offer micro-investment have no minimum balance requirements or additional fees. This is the perfect choice for minors or those who wish to diversify their portfolio without breaking the bank.
The next concept Acorns incorporates is “Robo-advising” or “Robo-investing.” Basically, this model has an automated savings tool that is under minimal to almost zero human supervision. The tool is driven by an algorithm that collects data from clients in generating solutions and advice.
Robo-advisors have excellent security features and customizability tailored to the investor’s assets. Acorns didn’t opt for this feature without reason. Robo-advisors result in low fees for investors. Although this can’t give intensive advice as an actual human would, the trustworthy algorithm supports the micro-investing outlook the company also follows.
Who Owns Acorns?
The was begun by Walter and Jeff Cruttenden, and officially launched August 26, 2014. Undoubtedly, the initiative was directed toward making investing straightforward and accessible. This goal was quickly achieved after its launch.
Despite the younger age of Acorns in comparison to other similar companies, its strong foundation for consistent excellence is the recipe that keeps it standing.
Currently, big corporate names such as PayPal, DST Global, and NBCUniversal are proud Acorns investors. Even public figures like Ashton Kutcher, Dwayne Johnson, and Jennifer Lopez trust Acorns as their investment means.
Acorns’ impressive background is acknowledged by top-rated advisors and board members that handle the company. It doesn’t stop there. This financial initiative is also monitored by two Nobel Price winning economists! Credibility-wise, Acorns looks great.
How Does Acorns Work?
Obviously, people can’t invest with Acorns without learning how it works. See, it’s not just a website service. One of its greatest charms is the wide range of features anyone can access easily without paying large sums of money. Investing here means accessing their famous Round-Up option, portfolio re-balancing, earning solutions, and many more features.
Get $5 when you sign up for Acorns today!This portion is going to tackle the fundamental concepts behind their offers.
1. Primary Categories
As stated, the business model followed by Acorns is micro-investing. So investors can expect low fees in accessing their banking services. Acorns round up their investors’ purchases on linked credit or debit cards. Then, they incorporate their algorithm-based system to manage any portfolio. This is the premise behind the “Round-Up” option.
Primary services are divided into three parts or categories. These aims include different targets and budgets for portfolio building.
• Acorns Lite ($1 per month)
For just $1 per month, this one includes an investment account (taxable) that’s perfect for those starting out. Here, the Robo-advisor can automatically gather any loose or spare change from the individual’s buying history. It’s easy, safe, and automated.
The charming aspect of this is how investors can relax knowing their finances are being managed by reliable data without them doing anything. And for just $1 per month, it’s absolutely a steal!
• Acorns Personal ($3 per month)
Unlike the Lite package, this doesn’t end with just a basic account. With a retirement account included with the subscription, Acorns Personal is a handy multitasking option for one’s financial living. This also comes with the Banking feature with no account fees and over 50,000 fee-free ATMs globally.
The Acorns Personal package also allows investors to earn up to 10% bonus with the retirement account that also gives tax advantages. The subscription updates itself regularly. This way, the investor is continuously reminded of their progress and more.
• Acorns Family ($5 per month)
As the name suggests, Acorns Family is an option for parents who wish to open an early investment account for their kids. This option combines Acorns Lite and Acorns Personal, all tied with the Early Investment feature. This can be opened in under 3 minutes, and has zero added costs. Combining an investment, retirement, checking, and early investment account into one, the $5 price tag is a solid deal.
2. The Investment Model
The spectacular investment model gains credit for its immense success over the past years since its launch. The system allows automatic placement of spare change into portfolios regularly or depending on preferences of individuals. The extra changes from personal purchases will then be packed into a portfolio of ETFs (Exchange Traded Funds).
Currently, Acorns has access to more than 7,000 stocks and bonds. Their Robo-advisor manages the goals and current portfolio in creating a system that’s best suited for the individual.
The checking feature also enables someone to save and generate extra cash from purchases. Individuals seem to appreciate good results this system follows, without bombarding them with excessive finance information and pressure. On top of this, thorough articles and guides are present for learning. These further teach clients about how things work.
3. Acorns Round-Ups
This feature is the most prominent offer the company provides. It takes the hassle out of trying to remember to invest money for later on in life.
Basically, whenever an investor purchases through the debit card or any other linked card, the company “rounds up” every transaction. Then, they invest the change or save it, depending on a client’s subscription choice.
It has been found that using this system, the average user may gather more than $30 quickly, for their portfolios in the simplest, most passive way possible.
4. Acorns Checking
Aside from investments, there is an all-digital banking system that acts as a personal checking, investing, and retirement plan. This feature comes with an easy-to-use application that can be downloaded on smartphones. It can monitor every dollar that comes in and out.
Like Round-Ups, choosing Acorns Checking will automatically invest one’s spare change to their portfolios with a hundred percent assurance of having no hidden fees.
5. Acorns Earn Program
The slogan for this feature is “when you earn more, you save and invest more.” Luckily, this is a slogan that the company takes seriously. Upon subscribing, one is eligible to earn fair percentages when shopping. The company is affiliated with brands like Apple, Chevron, Blue Apron, Nike, Old Navy, Hotels.com, Walmart, Sephora, and over 350 more!
The earning program also works by downloading the Acorns Earn Chrome browser extension. Whenever someone successfully invites a friend using their account, both will get $5 of investment rewards and other referral bonuses.
Another way Acorns Earn can aid in income accumulation is from bonus investments. So when an individual finds a job or shops in a store, Acorns gives generous rewards for using their service.
As for bonus investments, the processing usually takes around 60 to 120 days. Another variable affecting this is the partner shop itself and the linked card someone chose for their account.
6. Acorns Early Accounts
Acorns Early Accounts is one of the attributes clients are expected to receive under Acorns Family. Put in simpler terms, this is a custodial account for an investor’s child. It’s a UTMA/UGMA Custodial Account. This means that it can be converted to any kind of benefit in the future.
Simply, the UTMA (Uniform Transfer to Minors Act) and UGMA (Uniform Gift to Minors Act) act as trusts for minors. That’s because minors cannot legally contract to own stocks, bonds, mutual funds and more.
Similar to the rest of the offers, this uses spare change to accumulate and generate money, though for a child. Suppose a parent invests $5 daily over the lifetime of a minor child. The child could end up receiving around $60,000 once they become 18 years old.
Setting up an Acorns Early Account doesn’t necessarily require a parent to sign up. Guardians or any family member can begin one of these for their relative. The requirement for doing so means having the child’s birth name and social security number. Then a child can begin investing before even learning how to walk!
7. Portfolio Options
After signing up, the client’s portfolio is processed. This will provide them with advice, plans, and tips for their investments. The site will then generate five leading portfolio plans the client can choose from.
• Conservative (100 percent Bond investment)
• Moderately Conservative (40 percent Stocks, 60 percent Bonds)
• Moderate (60 percent Stocks, 40 percent Bonds)
• Moderately Aggressive (80 percent Stocks, 20 percent Bonds)
• Aggressive (100 percent Stocks)
The client is also entitled to try out ETFs they want to invest in. Acorns is going to generate the best solution from their algorithm’s findings. This will be based on the investor’s median net worth, age, income, cash flow, and financial goals.
The Acorns app also has index funds presented through iShares and Vanguard. It’s advisable to assess oneself while keeping an open mind on the algorithm’s suggestions. This is the best way to maximize this feature.
Based on all these, it is clear why this company has been the go-to option for many would-be investors and financial literacy enthusiasts.
Choosing to invest here raises awareness over where one’s income is headed toward. With multiple offers and low charges, Acorns makes it extremely easy to take responsibility for financial transactions.
How Does Acorns Found Money Work?
Shopping for basic necessities is an unavoidable aspect of life. The company acknowledged this and so created Acorns Found Money. This program is a built-in app feature that follows a rewards system.
Basically, Acorns has partners. And every time a user purchases something from these store partners, Acorns will reward with actual money to invest.
In the case of some stores, Acorns sometimes rewards users with a percentage of their order. These rewards may be deposited within 90 days.
This is a great feature to save money without doing much. And the list of store partners has doubled over the past years. So, there are lots of options and stores to choose from to maximize one’s experience. This Found Money feature also works when someone uses a referral code from another Acorns individual account.
Is Acorns Worth It?
Now for the big question. Is Acorns worth it? Or at least, does the hype live up to the promise? Realistically, this question can’t be answered with just a simple yes or no. The concept behind choosing to invest with Acorns is subjective, depending on one’s financial goals and condition.
So, below are some of the considerations every prospective investor should take notice of before choosing Acorns and its algorithm-based finance system.
• Time
The main principle behind any investment is time. Waiting is a given in every investment model. But since Acorns follows a different system, it will take more time than usual. So, this isn’t recommended for those who want faster returns. The company pride itself on sustainability at meager costs. Therefore, quick returns aren’t one of its fortes. Have this in mind beforehand.
• Tree Planting
The people working with this company actually plant trees for the Earth’s ecology and care for the environment. That can make working with them quite worthy. If you like caring about Earth, this investment team can be the way to go.
• Trust Issue
Some investors prefer a more “hands-on” approach to manage their assets. This type of investor won’t appreciate the Robo-advisor feature as much. Although the finance company regularly provides tailored reports, investors can’t manually dictate how their funds will be reflected. Acorns is a company that doesn’t stick to the old-school type of investment model.
Again, this isn’t a bad thing. In fact, convenience and accessibility have always been priority for the company. So, individuals are expected to trust the process if they want to try Acorns.
• Small Investments
Unlike other investments such as real estate, this isn’t a platform for massive returns. This is understandable because low investments will result in smaller returns compared to high-dollar investments. This isn’t a bad thing for those who are investing long-term with patience however.
Acorns users won’t get “big gains” after a few months or a year. But this is acceptable since the amount they’re placing down is derived only from their spare change. Plus, they don’t have to manually manage everything, which is very convenient. Small investments are definitely not deal-breakers. In fact, they tend to be more sustainable in the long run!
These are the things to watch out for before choosing to invest with Acorns. Apart from these, Acorns is overall an excellent finance platform. It’s perfect for many financial situations. And the idea that one’s spare change can result in significant returns over a long period is commendable.
Unless one would like fast and high returns with higher risk, this company is definitely worth trying. It has low fees, low stakes, and great space for opportunity, as long as the client is willing to wait.
Is Acorns Safe?
A platform’s regard for safety and security is a must-know. With investment scams rampant, it’s understandable to worry about where money goes after it is placed down. To answer this, the following are the company’s security measurements for those interested to invest with Acorns.
• SSL Encryption
SSL (Secure Sockets Layer) is like adding gates within a website for user protection. This encryption-based protocol is used to guarantee privacy protection and data integrity. Both the application and website are equipped with 256-bit encryption. This assures deep security in the personal and financial information stored within.
• FDIC Insurance
All their deposits are insured up to at least $250,000 by the Federal Deposit Insurance Corporation (FDIC). This applies to those who opt for the Acorns Checking account.
• Protection by SIPC
The Securities Investor Protection Corporation (SIPC) is a non-profit United States corporation created under the Securities Investor Protection Act of 1970. This federally mandated security measurement secures Acorns Invest accounts for up to $500,000.
• Other Security Measures
Other than the rest, Acorns also regularly sends out active account alerts when unusual or malicious activity is detected. This is also why the app is a good step in keeping track of all account activities. Automatic ID verification can also be required before gaining access. The company prides itself on having bank-level security and secure servers. This way, investors can confidently use the platform without worries.
Has Anyone Made Money In Acorns?
With over 9 million customers despite their relatively recent launch, it seems that many investors are satisfied with the company here. So, has anyone actually made any money using Acorns?
In multiple sources such as reviews, online forums, and blog posts, Acorns has a good reputation for being effective and true to its promise. What people appreciate most is the straightforward investment model that doesn’t require big deposits.
An online forum participant added that they didn’t even notice that they were investing, mostly because of how effortless their system makes it be. Again, the program can’t provide instantaneous investment wealth. However, if an investor plans on generating money long-term, Acorns is an excellent tool to do so. Yes, millions of individuals have been able to make money after the required period for their investments to grow. The process isn’t fast, though it definitely is effective.
The Takeaway: Is Acorns Good?
Get $5 when you sign up for Acorns today!There are two concerns many investors have when a digital finance platform is presented – efficiency and security. Efficiency-wise, there are only low fees to begin with. It utilizes a low-risk model that’s great for those just opening their financial journey. The company also offers customizability to adjust things, depending on one’s outlook (conservative or aggressive) within investing.
There are also rewards and benefits for members, that can motivate them to invest more. Not only that, educational materials are available for free to educate people on financial literacy.
Security-wise, Acorns has multiple layers of website encryption, authentication, and verification to ensure safety. They are also inclined with corporations and groups to hand out investment insurance alongside site security. Acorns handles security concerns with utmost professionalism and speedy responsiveness. The mobile application and website are also handy tools to keep track of every movement inside one’s investment accounts.
Acorns cover multiple options with great deals aside from their investment models. Overall, it’s a great beginning point for everyone with or without big sums of money. No wonder it gained so much attention over a short period.
The multi-faced coverage they offer from their retirement plans, family plans, and earning opportunities is extremely helpful. The Robo-advisor feature also takes away the headaches of investing money. It’s passive, easy to navigate, and found to perform incredible. This site can attest that Acorns is one of the best-performing financial platforms today.
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