Is Acorns Worth It? Acorns Review: Pros & Cons
If you are wondering if Acorns is worth it, then the answer is a big YES.
Acorns is a tool that allows you to save and invest your spare changes. The app rounds up your purchases up to the nearest dollar and puts the spare change into the stock market for you. Acorns can help you save without even thinking about it.
Acorns invests the money for you, allowing you to grow your savings without you studying stock prices or trades. The app is $ 1 a month, and you’ll get a $ 5 bonus when you sign up.
The company attracts millennials and those who are new to the investing world. If you don’t have a lot of money to save for retirement, Acorns is the best place to start.
After all, the company’s goal is to encourage people to start investing early no matter how little money they have. In sum, Acorns is worth it.
If you’re still wondering if Acorns is worth it, talk to a financial advisor who may guide you to the right direction.
Acorns Review: Is It Worth Your Time & Money?
Acorns is a micro-investing platform that allows its members to invest regularly by saving their spare change. This service is called “Acorns Invest.”
The company also provides two other services. One, Acorns Later, enables members to create and fund an IRA. The other provides members with a checking account with a debit card to spend money.
However, these services charge a monthly fee of $ 1, $ 3 and $ 5 (see more in detail below), which might let you wonder Is Acorns worth it?
The investment app tracks your debit and credit card purchases and round them up to the nearest dollar, then takes the difference and puts it aside for investing in exchange-traded funds (ETFs).
The ETFs are a combination of stocks and bonds. These ETFs replicate an asset class or index like the S&P 500. Once you sign up with Acorns, you will tell them your financial situation. With that information, Acorns will recommend a mix of ETFs and create a portfolio for you.
For example, if you spend $ 5.55 at the grocery store, 45 cents get dropped into your Acorns account. And Acorns invests it for you. The idea is that you will not miss this spare change and because the investment is automatic, it adds up fast.
So, is Acorns worth it? Download the free app now. Once downloaded, you will pick your investment portfolio based on your age, income level and goals. Acorns will take care of the rest for you.
That means you won’t have to pick and choose individual investments.
Acorns will only charge $ 1 for their service. Once you have over $ 5000, they will charge you 0.25% of your balance every year.
The company also provides other services. One service allows its members to create a retirement account (an IRA) through the platform. it’s called “Acorns Later.”
Acorns will recommend an IRA that is right for you. Then, they will update it regularly to match your goals. Get started now and join more that 250,000 Acorn Later investors.
Another service Acorns provides is a checking account with a debit card. The account provides members free bank-to-bank transfers. There is no overdraft or minimum balance fees and unlimited free or fee-reimbursed ATMs nationwide.
Additionally, you receive total protection on your account. It is an FDIC-insured checking account all the way to $ 250,000 plus fraud protection and all-digital card lock.
Another app to consider is Stash: Stash helps teach beginner investors how to build their own portfolios out of ETFs and individual stocks. Stash lets you start with as little as $ 5 investment. It takes two minutes to sign up, plus Stash will give you a $ 5 sign-up bonus.
Is Acorns Worth It?
Acorns is worth it if you are a millennial or new to investing, or those who may not have a lot of money to invest.
Acorns appeals to millennials (those who were born between 1981 and 1996) and new beginner investors.
They appeal to these groups simply because most of them live paycheck-to-paycheck and struggle to pay day-to-day living expenses, let alone have large capital to put toward their retirement.
Other companies that focus heavily on millennial investors are Stash and M1Finance.
Even if you’re not a millennial, Acorns is worth the try. It can help you learn more about savings, compounding growth and long term returns.
A common misconception about investing is that you need a big chunk of money to start investing. This myth has prevented many from trying. In reality, you can get started with investing with very little money.
In other words, no amount of money is too small when it comes to investing – even if it’s only $ 5. That’s why Acorns has been popular among beginner investors.
Is Acorns Worth it ?: Pros & Cons of Investing with Acorns:
1) Automatically invests spare change.
One of the reasons Acorns is worth it is that it allows you to automate your investing. You may lack the discipline and willpower to put aside a certain amount every month.
With Acorns, you can just ‘set and forget.’ Acorns does the job for you and round up your purchases to the nearest dollar and put aside the savings.
2) Invest your money in low-cost ETFs
Every dollar you invest with Acorns is diversified over 7,000 stocks and bonds. Once the spare change hits $ 5, Acorns will invest it for you into ETFs.
While you’re not going to get rich investing in ETFs, it’s a great way to start investing. Acorns charges $ 1 a month for balances under $ 1million. You will also get a $ 5 bonus when you sign up through GrowthRapidly.
3) Invest as little as $ 5 into the stock market
You might be thinking, how is it possible to start investing in the stock market with only $ 5? But that is quite possible.
So, if you feel like your options are limited because you don’t make enough money, think again. Invest your spare change with Acorns. The Acorns app is $ 1 a month for balances under $ 1 million, and you’ll even get a $ 5 bonus when you sign up.
However, Acorns is not without its limitations.
1) small investment portfolio.
The idea of rounding up purchases to the nearest dollar and use that spare change to invest in ETFs sounds like a good strategy. The reason is because it allows you to stick to your goal and save regularly without thinking about it.
However, investing that tiny amount, ie, 45 cents here and 50 cents there, will not be enough for long-term financial goals.
Let’s say you are 2 years old and use round ups that average $ 1 a day. That will result in $ 30 monthly contributions. Let’s say you receive an 8% return on your investment, by the time you’re 45, you’ll barely have $ 20,000. While that number is not bad for just collecting coins, it’s simply not enough for retirement.
So, Acorns can be worth it in the right situations, but it doesn’t always make sense. If you’re not a novice investor, it may be a better idea to use alternative investments such as mutual funds, in order to achieve the results you desire.
2) high fee on small account balance.
One of the cons of investing with Acorns is that the fees can be high, especially if your account is small. Acorns charge you $ 1 per month if you only choose the ‘Acorns invest’ option.
When you choose the Invest and Acorns Later options, it is $ 2 a month. When you choose all three options, it is 3 $ dollars per month. These monthly charges can eat away your portfolio, and you might be left wondering “Is Acorns worth it?”
The Bottom Line
So is Acorns worth it? After reading this article, it is fair to conclude that Acorns is worth it. Acorns allows you to invest in ETFs at low to no cost. It will round up your purchases and invest the spare change into the stock market for you.
The app is $ 1 a month, and you’ll get a $ 5 bonus when you sign up. Because young investors with little experience may need guidance with long-term and short-term financial planning, it is worthwhile to invest with Acorns. However, investing only wit Acorns is not enough if you have a lot of money to invest.
Put Your Money to Work
Managing your money effectively starts with careful planning. With SmartAsset, you can get matched up with three advisors who can empower you to make smart financial decisions. SmartAsset also helps take the mystery out of retirement planning by answering some of the most commonly asked questions in a simple, personalized way. Learn more about how SmartAsset can help you find your match advisor and get started now.