Saving money these days can be a struggle. You might have come up with a great savings plan, but then life happens and you end up using the cash to fix a tire or replace that pipe in the bathroom. If only there was an easier way of saving money.

Lucky for us, there is. What if I told you that there is an app that will invest your change and turn it into something bigger over time? Are you interested? Let’s have a look.



What Is Acorns?

acorns review mobile

Acorns is a smart-savings app that helps you save your change. You pay a small fee each month, depending on which plan you have. Little by little, you end up with more.

The app has been praised by many journalists and investors for being easy and innovative. It has taken the old-savings method of collecting extra change—and given it a modern twist. In May 2018, this popular app had gathered around 3.5 million users.


About Acorns

Acorns truly is a family business. Launched in late August 2014, and created by Jeff Cruttenden and his father Walter, the app quickly became a success.

Jeff Cruttenden is a proud millennial—and Acorns reflects that by providing such a simple yet intelligent way of saving money. The whole process is automatic, so even the person who isn’t good at saving is able to benefit.


How Does It Work?

Acorns is taking the old-school piggy bank to a whole new level. When you sign up with Acorns, you receive a credit card or debit card. Whenever you purchase something, Acorns will round it up and put the change into investments.

For example, if you purchase your favorite coffee and it costs $3.65—Acorns will round it up to $4. Putting $0.35 into your investments.

Your money is automatically invested in—what Acorns calls—smart portfolios. There are five types of portfolio available.

Acorns is built to be ‘mobile-first’, meaning, it was created to be used from a smartphone or tablet. This makes it even easier for people to keep up with their investments and savings when they are on the go.


Portfolios

The smart portfolios on Acorns are shown on a scale ranging from conservative to aggressive, in terms of how the stocks are divided. Most consist of a mix between stocks and bonds.

Stocks pay dividends to the investor, but this only happens if the company or corporation declares a dividend.

Bonds are similar to a long-term debt that the corporation promises to pay back by a set date. Therefore, putting money into bonds is seen as a safer avenue.

Where they differ is the percentage between the stocks and bonds. Here is a breakdown to help you understand:


  • Conservative: 20 percent stocks and 80 percent bonds.
  • Moderately Conservative: 40 percent stocks and 60 percent bonds.
  • Moderate: 60 percent stocks and 40 percent bonds.
  • Moderately Aggressive: 80 percent stocks and 20 percent bonds.
  • Aggressive: 100 percent stocks.

As you can see, the conservative-to-moderate portfolios are balanced between stocks and bonds. Whereas the aggressive portfolios consist of mostly stocks.

The final section of portfolios, labeled as aggressive, are so called due to the higher risk involved. But the gains can be higher as well.


What Are You Investing In?

plants under coins

Where the investments are placed is probably one of the biggest concerns regarding stocks. Acorns is no exception. On the website, you can easily find all the basic information you need about their portfolios.

You will also find essential information about the investments. What you invest in are ETFs—exchange traded funds. These are a combination of stocks and bonds.

The ETFs replicate an asset class or index. These represent different categories and Acorns has six general categories listed:

  • Real estate.
  • Government bonds.
  • Small companies.
  • Large companies.
  • Emerging markets.
  • Corporate bonds.

Acorns uses diversification to make sure you gain the most in the end. Every dollar that is invested is then spread over 7,000 ETFs.

That means you actually invest in a small amount of each stock over different categories. For example, 10 percent in real estate, 6 percent in corporate—and so on.

This all depends on the level of your portfolio. Each portfolio has been put together by two well-known investment companies, Vanguard and BlackRock.


Who Is Vanguard?

Vanguard

Vanguard is an investment firm that started in 1975. Initially it started out with $1.8 million in assets under management. By 2014, it had gone up to a jaw-dropping $3 trillion in assets, with more than 20 million investors across the world.



Who Is BlackRock?

BlackRock

BlackRock is a financial planning and investment management firm. It makes investments on behalf of its clients. This could be anyone, from individuals to large companies.

BlackRock also gives financial advice and provides more insight into what its clients should invest in and how.

In 2017, Acorns hired Christopher Jones, BlackRock’s former co-head of Global Active Equities. Jones took the position as chair of the investment committee at Acorns.


Features

Acorns has several features that not only help you save, but also earn as well. Let’s have a look at these features and see what they’re all about.


Acorns Later

Acorns is not only taking care of your near financial future, it also wants to make sure your golden years are covered.

It does this through Acorns Later. When you get started with your Later account, Acorns will find an individual retirement account (IRA) and a portfolio that suits you. IRAs help you save for your retirement, with tax advantages.

The Later account has an automatic ‘recurring contribution’, which means it sets money aside for you automatically. The cost is $2 per month, and you have to start every investment with $5.


Found Money

What if we told you that you could make money while shopping from your favorite brands? Would you believe us?

Found Money is a smart feature that allows partner brands invest in your account. There are two ways to encourage the brands to invest in you.

The first way is by using the ‘Tap & Get’ offers available in the Acorns app. You simply press the icon to see available offers. You can then purchase the item through your mobile and receive the reward.

The rewards vary, depending on the brand. For example, Nike will invest 5 percent of the purchase into your account, and Samsung will invest 3 percent. On the website, you can easily click on your favorite brands to see their rewards.

Another way for brands to invest in your account is to redeem ‘Simply Spend’ offers. You do this by using the card, linked to your Acorns account, whenever you shop at one of the partner brands.

You will receive your reward 60–120 days after your purchase. Acorns Found Money feature is a true spend-money, get-money opportunity.


Grow Magazine

Grow Magazine is another impressive feature of Acorns. It has a whole website to itself and here you can read about financial news and receive investment advice and tips.

Plus you have access to exclusive financial advice from celebrities—who have also become successful investors. These include Ashton Kutcher and Kevin Durant.


Acorns Spend

With the new Acorns Spend account, you will receive a debit card with your checking account. Acorns claims that it will invest and earn for you. It includes easy access to your deposits as well as free bank-to-bank transfers, along with other advantages.

It also helps you earn more money by adding 10 percent to the rewards received from the Found Money feature. All you have to do is spend money at your favorite stores.

Don’t worry, your checking account is protected up to $250,000 by the Federal Deposit Insurance Corporation (FDIC). Fraud protection and digital card lock are useful additions.

Acorns initially made 100,000 debit cards, which were sold out within four short days. There are no cards available at the moment, but Acorns is working hard to produce more. In the meantime, you can sign up and put your name on the waiting list.



Acorns Review - Get Everyone Involved

Get Everyone Involved

Acorns makes it possible for you to invest in your family and loved ones. You can send a gift card of $25 to anyone you choose with just three steps. Send the gift cards to friends, family or colleagues, and bring them on board at Acorns.


Fees and Prices

Acorns claims to be “as easy as one, two, three”—but is it that simple?

There are three price options that range from $1 a month to $3. Here’s a breakdown of the options and their features for better understanding:


$1 per month: you receive the original micro-investing app which comes with five features:

  • Automated investing, invests your change and reinvests dividends.
  • Smart portfolios, that adapt to the market.
  • Grow Magazine, provides financial advice.
  • Found Money, brands invest in you whenever you shop.
  • Here For You, gives access to over 150 Acorns team members to advise you.

Best thing about this option is that it’s free for college students.


$2 per month: includes all the features from the first account, plus the Acorns Later feature. You will also have access to six other advantages:

  • Easy Acorns Later: get started in just a few clicks.
  • Your IRA: Acorns will find the right IRA and portfolio to fit you.
  • Automatic updates, your investments change to align with retirement goals.
  • Anytime, Anywhere: lets you set aside a little extra cash.
  • Recurring contributions: you can automatically set these.
  • Assisted rollovers: Acorns will help transfer IRAs to your Acorns Later account.


$3 per month: this is the most advanced you will get within Acorns. You will receive all the advantages and features mentioned above, plus Acorns Spend and more:

  • Instantly save and invest: with Real-Time Round-Ups.
  • Ease & Access: allows direct digital deposits and mobile check deposit.
  • Earn more money: 10 percent extra every time you use Found Money.
  • Spend Strategies: easy way to save while you spend.
  • A lot for a Little: you pay no overdraft or minimum-balance fees.
  • Grow Your Knowledge: get full and exclusive access to Grow Magazine.
  • Total Protection: get the right insurance with FDIC.



Acorns Review - Where Acorns Excels

Acorns has many good sides and great features to take advantage of. But where does it really shine?

It uses flat fees, unlike similar sites that charge—for example—$9.99 a month. Up front about its fees, it doesn’t try to hide anything.

As the level one account is free for college students, it’s even easier for them to save while studying. This makes it budget-friendly for all.

Acorns is also innovative and adds new features from time to time—like Found Money and Spend. You never know what it will do next. Grow Magazine provides current news and info on finances.

Both the app and website are easy to navigate and packed with useful information. The fact that it’s an app makes it even better.


Is There Anything Negative?

It’s hard to find anything wrong with Acorns, but that doesn’t mean it’s flawless. Every user has a chance to save and invest money without having to think about it.

However, the one and only downside is there’s not a lot of control on behalf of the investor. With the app doing most of the work, this may not suit people that prefer a firm grip on their investments.


Is It Worth It?

Is Acorns worth it? From what we could gather—yes, it is. You will be very surprised at how quickly the change will add up.

The most crucial aspect is that it is safe. You are basically handing over your personal credit or debit card to the app, which then makes investments on your behalf.

All cards are insured by the FDIC and protected against fraud. With that being said, you can rest at ease.

Summing It Up

Acorns is a robo-advisor with an automated saving tool. It rounds up the price of your purchases and re-invests the change, making money over a period of time.

Not everyone will find it beneficial but we believe most will. Anyone who wants to live a simple, modest life—Acorns supports that.