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For those just getting started on their investment journey, entering the stock market can be a daunting process. But a number of fintech investment apps have beginner-friendly features such as no account minimum, training resources, and simplified interfaces that can make the transition to investing much less daunting. Many newcomers can choose Acorns, which have many of these features.
Acorns is an app designed specifically for beginners who want to get their feet wet in the stock market. It provides access to its robo-advisor platform, tax-deductible IRAs for retirement plus a checking account. Its main micro-investment feature allows budding investors to start small by investing the extra money from their daily purchases.
For example, when you buy a coffee for $ 3.75, Acorns rounds up to the nearest dollar and invests the extra $ 0.25 cents in the market. The idea of microinvestment is that your contributions will increase over time. It is a good strategy for beginners who want to dip their toe in the investment pool before diving all-in.
Below, Select reviews the investment opportunities, features and fees for Acorns to help you decide if this platform is right for you.
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Minimum deposit and balance
Minimum deposits and balance requirements may vary depending on the investment vehicle chosen. No minimum is required to open an account, minimum 5 USD to start investing
Fees may vary depending on the investment vehicle chosen. Monthly plans include: Personal ($ 3 per month) and Family ($ 5 per month)
Diversified ETFs, which include more than 7,000 stocks and bonds
Acorns acts as a robo-advisor, investing your reserve money – and all other contributions you make – in a selection of around 25 inexpensive, diversified ETFs (which include more than 7,000 stocks and bonds). Users can fund their accounts with manual deposits, automatic recurring deposits and Acorns’ Round-Ups®, which are added from the rounded dollar purchases on your associated credit and debit cards when they reach $ 5.
The ETFs are selected for you by Acorns after you have completed a survey on your financial goals, investment timeline and risk tolerance. Factors such as your age, income and net worth are all taken into account when creating your portfolio. ETFs in your Acorns portfolio could include those such as the Vanguard S&P 500 ETF, which reflects the popular S & P500 stock index, or the iShares Core US Aggregate Bond ETF, which provides broad exposure to US investment grade bonds.
However, investors are currently unable to buy or sell individual stocks through Acorns, although the company plans to launch this feature in 2022. If you ever want to break out of the training wheels and start trading on your own, consider a free stock trading platform such as . like Charles Schwab, Vanguard or Robinhood.
In addition to Acorns Invest, a taxable brokerage account, there is also Acorns Later, which allows you to open and manage a traditional IRA, Roth IRA, SEP IRA and / or a 401 (k) Rollover. Acorns Early is offered as an investment account for children.
Acorns stands out for its hand-off managed portfolio and Round-Ups feature that automatically helps you grow your money in the market. Acorns will automatically rebalance your portfolio so you can keep your investments on track. Round-Ups make it easy to put investment on autopilot, and because your contributions can be so small with this tool, it makes investment available to almost anyone.
You can even choose to create an ESG portfolio, which will be composed of ETFs that provide exposure to more sustainable companies.
Acorns also offers a checking account, which has many of the features of a traditional bank account, including direct deposit, mobile check deposit, a debit card and free withdrawals from over 55,000 Allpoint ATMs around the world.
If you’re really set on learning the ropes of the stock market, Acorns offers customized financial knowledge on the go. Its educational resources include a “Money Basics” blog and Grow + CNBC website.
The Acorns app can be downloaded for free in both the App Store (for iOS), where it has 4.7 / 5 stars, and on Google Play (for Android), where it has 4.6 / 5 stars at the time of this article was written. .
- Personal plan for $ 3 per. month, which includes a checking account, investment account and pension account.
- Family plan for $ 5 per. month that includes the three accounts you get with the personal plan, plus additional investment accounts for your kids.
While the app highlights an affordable investment opportunity for beginners, the monthly fee can eat up a large portion of your returns if you only put in a few dollars each month. To truly benefit, you need to create a larger recurring deposit in your Acorns investment account that goes beyond any additional change that gets swept up.
Investment platforms like Robinhood and charge no stock trading fees or a monthly fee to maintain a basic account, but they do not have a robo-advisory service. SoFi offers its own robo advisor through its SoFi Automated Investing service and does not charge any administration fees, plus, you can also open a cash administration account with them free of charge.
For those who want to invest their money but do not know where to start, Acorns is an accessible platform for beginners. It has a simple interface and a micro-investment feature that gets started every time you make a purchase. Plus, your investments will be safe in cheap, diversified funds.
If you are looking for something a little smaller at the entry level, consider a robo-advisor like Betterment. It is a solid choice for those who still want to be hand-off with their investments, although more advanced investors have the opportunity to customize through flexible portfolios.
Disclosure: NBCUniversal and Comcast are investors in Acorns.
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Editorial note: Opinions, analyzes, reviews or recommendations expressed in this article are solely those of the Select editorial staff and have not been reviewed, endorsed or otherwise endorsed by any third party.