Acorns Review: By Far The Easiest Way To Invest


acorns review investing made easyI am a big fan of keeping things simple. The less complicated things are, the more likely I will keep doing them. Take saving money for example. I could make the effort every couple of days to make transfers to my savings account, but over the long term, this isn’t going to work.

I’ll get busy, I’ll forget and the next thing I know, something happens where I need the money and don’t have enough saved. The solution is to automate my savings.

If you are a college student, click here to see why Acorns will open up doors for you financially.

When it comes to investing, I also automate, thanks to Acorns. This post will review Acorns and show you how you can easily grow your wealth thanks to the power of automation and micro investing.

Acorns Review Summary
  • Ease of Use
  • Account Fees
  • Account Types
  • Features
  • Customer Service


Acorns app makes micro investing simple. They round up your purchases and invest the difference. If you are looking for an effortless way to invest your money, you have to consider using Acorns. You can sign up here and start growing your wealth.


My Acorns Review

What Is Acorns?

As I noted above, Acorns is a micro investing app that automates investing for you. To get started you:

#1. Download the app or sign up online. Clicking on the link will earn you a free $5!
#2. Create an account.
#3. Link your checking account.
#4. Answer a few questions about yourself so they can recommend a portfolio for you.
#5. Watch in amazement as your money grows.

Let’s dive in a little deeper so you can see just how awesome the Acorns app really is.

Once you open your free account, you link your bank account and credit cards to the Acorns app. When you make a purchase, Acorns will round up the purchase to the next whole dollar.

After your round ups total $5 or more, Acorns transfers that amount from your linked checking account to Acorns where the money is invested.

For example, let’s say you spend $5.15 at Starbucks. Acorns will round this purchase up to $6 and note that you have $0.85 in pending round ups. This process will continue until you exceed $5 in pending round ups.

When you hit that $5 or more, you will see a withdraw from your linked checking account from ‘Acorns Investment WEB PMTS’ to your account with Acorns.

From there, your money is invested for you.

If you are on a tight budget and are concerned about Acorns rounding up your purchases, you can elect to review round ups before they happen. In this case, you will log into your account and approve the round ups you want to have made.

In addition to round ups, you also can set daily, weekly, or monthly lump sums to invest. However lump sum contributions are not required to use the service.

Acorns Investing

How does the investing part of Acorns work? They take into account your personal information, such as your age, goals, income, investment horizon and risk to recommend one of their 5 portfolios for you. These portfolios were created with the help of Harry Markowitz, the father of the Modern Portfolio Theory. This is the gold standard of investment research.

You can accept their recommended portfolio or you can choose the portfolio you want to invest in. In order to know if the chosen portfolio is right for you, you need to make sure you have a solid investment plan. This will help you in terms of long term success when investing.

The portfolios that Acorns offers are made up of 6 asset classes, broken out as follows:

  • Large-cap stocks
  • Small-cap stocks
  • Emerging markets stocks
  • Corporate bonds
  • Government bonds
  • Real estate

So right from the start, your invested money is diversified across many asset classes, helping to increase returns and reduce risk. The underlying funds in the portfolios are made up of low-cost ETFs from Pimco, Blackrock, and Vanguard.

Here are the allocations for each portfolio.

For the Acorns Conservative Portfolio, 80% of your investment is in bond funds which makes it the least risky of the portfolios Acorns offers.

acorns conservative portfolio

As a young investor, which is Acorns target, a portfolio this conservative doesn’t make sense if you are investing for the long term. By long term I mean 15 years or more.

But if your goal is to use this money to pay off some student loan debt in a few years when you graduate, then this portfolio could be a good choice.

For the Acorns Moderately Conservative portfolio, 60% of your investment will be in bonds. This portfolio is a little more risky than the Conservative portfolio.

acorns moderately conservative portfolio

Even if you are looking to use the money you save for a short term goal like student loan payback, this portfolio would be a better fit than the Conservative portfolio. Yes it carries a little more risk, but it is worth the return it offers.

Next is the Acorns Moderate portfolio. This is your classic balanced or 60% stock and 40% bond portfolio.

acorns moderate portfolio

For the majority of investors, this one is the sweet spot. You get growth from the large stock holdings but you are also limiting your losses by carrying 40% in bonds.

After that is the Moderately Aggressive portfolio. This portfolio has 80% of your holdings in stocks.

acorns moderately aggressive portfolio

If your investing goal is a long way off, for example you are 25 years old and are saving for a purchase 20 years down the road, this would be the portfolio to choose.

Finally there is the aggressive portfolio. This one is made up of 100% stocks and zero bonds.

acorns aggressive portfolio

For most investors, you would be better off investing in the Moderately Aggressive portfolio. But for those who are immune to risk, then this portfolio can be used.

Acorns Investment Performance

How does the Acorns investment performance stack up? Unfortunately since Acorns is rather new on the scene, it doesn’t have a long history to show you its past performance.

However, the underlying ETF investments that Acorns does use have been around for a while and since we have the allocation of their portfolios, we can backtest them.

So I did just that. I built the Acorn model portfolios in an attempt to create historical Acorns investment performance.

In the graph below, you will see the annual returns per portfolio from 2011 through 2017. They assume the portfolio is rebalanced annually.

acorns investment returns

While the investment performance of the Acorns portfolios looks decent, we need to compare it against something to get a complete understanding of their returns.

So I included the S&P 500 Index with the returns you see above.

As you can see, the S&P 500 outperforms all of the Acorns portfolios. Does this mean that the investment performance and Acorns as a whole are no good?

Not necessarily. For starters, the Conservative, Moderately Conservative, and Moderate portfolios have zero chance of keeping up with the S&P 500 Index let alone outperform it because of the weight of bonds they own.

The closest portfolio that compares to the S&P 500 is the Aggressive portfolio and it comes fairly close to matching the S&P 500 Index. The main reason it trails the S&P 500 Index is because of how poorly international markets performed during this period. For example, in 2017 when international stocks did well, the Acorns aggressive portfolio was right in line with the S&P 500 Index.

Here are the annual returns of all of the portfolios according to my back testing.

acorns investment performance

So the bottom line is that the investment performance of the Acorns portfolios is decent. As long as you invest over the long term, you will see your money grow, which is true with just about any investment.

Acorns Fees

There are 3 fee structures for Acorns:

  • $1 per month until your account reaches $5,000 in value
  • 25% annually once you account exceeds $5,000 in value
  • Free for college students

The great news is that Acorns is free for college students with a valid .edu email address and anyone under 24 years old.

The good news is that a fee of 0.25% annually is very competitive with others in the space.

The bad news is $1 a month until you get to $5,000 could be a lot of money.

For me, I stress out about investment fees. For every dollar you are paying in fees, that is one less dollar that can compound and grow for your benefit over time. So while I love Acorns, I dislike the $1 monthly fee.

After all, on low balance accounts, $1 is a large amount of money. If you only have $10 invested, that is a 10% fee. And you will most likely only have this amount during the first month you are using Acorns.

The key then is to get your Acorns account balance growing as quickly as possible. You can do this by making sure you make a few lump sum investments right away.

At the very least, you can set up a lump sum investment of $5 per week. This will get you to $20 for the month and reduce your fee to 5%. Not great, but better than 10%.

Ideally, you will leave the lump sum investment option turned on so you can continue to quickly reduce the monthly fee you are paying.

But we can’t forget about the round ups. Let’s look at how much you might be able to micro invest through rounding up your purchases.

Below are a few scenarios based on an average round up amount and number of monthly transactions. I am using $0.42 as the average round up amount as this is what my average round up is.

acorns review round up amounts

With 25 monthly transactions you are investing $10.50 per month. Increase this to 100 monthly transactions and you are investing $42 per month.

The goal here isn’t to spend money just to round up. You just want to make sure you are rounding up all of your purchases. To do this, make sure you link all of your credit and debit cards to your Acorns app.

If you link all of your spending accounts and are able to regularly complete some lump sum contributions, you will see the fee you pay as a percentage of your account balance drop dramatically.

Found Money

The Found Money feature is a really cool idea. If you ever shopped through a portal like Ebates, then this will make perfect sense.

All you do is log into your Acorns app account and tap the Found Money icon. There you will see participating retailers and their found money amount. For example, WalMart offers 1% found money.

When I tap the link for WalMart, I am redirected to the WalMart website. I do my online shopping and 1% of my purchase price will be put into my Acorns app by WalMart.

Understand what I am saying here. I am not putting 1% of my money into my Acorns app and Acorns is not rounding up an additional 1%. WalMart is giving me 1% of what I spent and they are putting that amount into my Acorns account.

For example, let’s say I shop at WalMart and spend $100.09 using the Found Money link in my Acorns app.

After the purchase is made, Acorns will round up my total and put $0.91 aside to be transferred and invested in my account. WalMart will put $1 of their money into my Acorns account as well.

How awesome is this?

A few notes about Found Money in order to get retailers to pay you.

  • First, you have to shop through the Found Money link in your Acorns account, otherwise you won’t get the money.
  • Second, there are limits. Some retailers cap the Found Money amount. WalMart caps it at $60 a month. Also, the money doesn’t show in your Acorns app right away. It usually shows up in a few weeks. But you will get an email letting you know you are getting the money and it will show as pending on your Acorns app.

Here is a short list of some of the retailers that take part in Found Money:

  • WalMart
  • Nike
  • Apple
  • iTunes
  • eBay
  • Dollar Shave Club
  • Gamefly
  • Expedia

acorns found money partners

Some retailers will offer a percent of your purchase as Found Money while others will give you a flat dollar amount. Either way, it is free money for you.

For example, my brother-in-law has an Acorns app account and uses Dollar Shave Club. Every month, he gets money from Dollar Shave Club in his Acorns account.

In just over 1 year, his account balance is $1,100. Of this amount, he has only put $50 of lump sums into this account. The rest is round ups, Found Money and market performance.

In the short time I’ve used Acorns, I’ve invested $25 in lump sums. My account balance is closing in on $500. The rest is from round ups, Found Money and market performance.

Advantages To Acorns App

What are the features that I like about Acorns? Here is a short list:

  • Easy to get started. The process to open an account and link a credit card and bank account took me less than 5 minutes.
  • Free investing. If you are under 24 or in college, you can take advantage of Acorns completely free!
  • Lump sum investing. While my account is growing thanks to rounding up, as I noted in the fees summary, low balances make Acorns not the best investment choice. But since I can add lump sum amounts to my Acorns account whenever I want, it makes Acorns a viable option.
  • Easy money movement. Related to the point above, it is simple to move money into or out of my Acorns account.
  • Options For Round Ups. I love the fact that you can choose to review round ups before the money is transferred. If money is tight, this option allows you to still invest without incurring overdraft fees on your bank account.
  • Found Money. Having businesses add money to my account is awesome. I’ve been shopping at WalMart more than before because of this fact. And I have found in doing so, WalMart is cheaper many times compared to Amazon.
  • Grow Magazine.This is an online personal finance site geared toward millennials with advice about student loans, credit card debt, investing, side gigs and other financial topics to help you get the most out of your money. You can also access this magazine on the Acorns app.
  • Rebalancing. Acorns will automatically rebalance your portfolio every quarter making sure you are investing in line with your goals.
  • Gift Cards. Want some additional help growing your investment account? Others can buy gift cards online or in store and you can redeem them in your account.

Drawbacks To Acorns App

Nothing is perfect, so what are some things I don’t like about Acorns?

  • High fees for low balances. The $1 per month fee is huge on small balances. Is this enough of a negative to have me not recommend the app? No because you have the option to invest a lump sum amount.
  • Only taxable accounts. You cannot open an IRA account. But there are plans to change this with Acorns Later. You can be the first to know when this feature is live by clicking here.
  • Found Money. I love this feature but one thing irks me. When I log onto my Acorns account online versus on my phone, not all of the same Found Money retailers are listed. Some are missing. I hope they fix this issue soon.
  • No Tax Loss Harvesting. Many other robo-advisors will tax loss harvest your investments to help you earn a higher return. Unfortunately, Acorns does not do this. You will still have the potential to earn a nice return, but could achieve higher returns with their competitors.

Acorn For College Students

Acorns is the perfect investing app for college students. Here is why. Money is tight and you don’t have a lot to invest. Acorns solves this problem because it is a micro investing app. It will round up your purchases and invest your spare change for you.

Now you might be thinking that rounding up your spare change doesn’t have an impact. But you would be wrong. My brother in law has over $1,000 invested after just 1 year. I have close to $500 in my account after just a few months.

And you can supercharge your savings too by using Found Money. When you shop through Acorns at participating retailers, the retailers will give you bonus money in your account. For example, I just bought flowers for Mother’s Day and earned a $10 bonus in my Acorns account. This is in addition to the round up.

There are countless retailers that participate so by shopping through Acorns, you can quickly build your fortune.

Now, some of you might be thinking that investing now doesn’t matter in the long run. You can start in a few years. While this is true, the sooner you do start, the sooner compound interest can work in your favor.

For example, let’s say you are a freshman and you put $1,000 into your Acorns account each year for the next 4 years and earn 8% annually. By the time you graduate, you have just shy of $5,000! Keep investing $1,000 a year through your round ups and by the time you are 35 years old you have close to $40,000!

Think of the awesome vacation you could take or using that money for a down payment on a house. You can do that by simply investing your spare change.

Right now, you can get $5 from Acorns when you open your account. Click here to get started.

And be sure to read the rest of this post where I go into more detail about Found Money and the other benefits of using Acorns!

Is Acorns App Safe?

The Acorns app is safe. They are registered with FINRA as well as SIPC as most brokers are. At last check, using FINRA Broker Check, there are zero complaints against Acorns.

If you click on this link, you will see a summary security report and you can get more detailed information here as well.

As for your personal information being secure, Acorns uses 256-bit encryption and never stores any of your data on the devices you use.

In addition to the bank level security, Acorns uses these safety features to keep your information protected and private:

  • Two-factor authentication
  • Automatic logout
  • Account alerts for suspicious activity
  • ID verification

The bottom line is you can rest assured knowing that you are safe using Acorns.

Acorns vs. Stash vs. Others

Acorns sounds great but how does it compare to other investment options like Stash and others?

Here is a quick comparison of investment options that are similar to Acorns in that they allow you to invest small amounts of money.

Acorns vs. Stash

Stash is similar to Acorns as it is a micro investing service. But instead of rounding up your purchases, you choose a small amount to invest with Stash each month.

They do also offer a saving feature but it doesn’t work the same way as Acorns does. You can learn more about Stash here.

Acorns vs. Betterment

Betterment is one of the original robo-advisors. Their service works by having you invest money on a regular basis. No rounding up of purchases.

They offer a ton of extras and only charge 0.25% on all balances up to $2 million. You can read my full review or check out their site here.

Acorns vs. Ally Investing

Ally Investing used to be TradeKing, but Ally Bank bought the company in 2017. Ally Investing offers much of the same as Betterment, only with an annual fee of 0.30%. You do need $2,500 to get started with Ally Investing. You can read my review or check out their site to learn more.

Acorns vs. Wealthsimple

Wealthsimple is a new robo-advisor and has many of the same features as Betterment and Ally Investing. The major difference is that Wealthsimple is free for balances under $5,000 and then 0.50% on balances up to $100,000.

You can start investing with Wealthsimple with as little as $1. You can learn more about Wealthsimple here.

Acorns vs. M1 Finance

M1 Finance is a hybrid robo-advisor. You can chose a pre-determined portfolio or make your own. Then you pick an amount to invest each month. From there, M1 will take care of the rest.

The best part about M1 Finance is they don’t charge any fees. You can learn more about M1 Finance here.

Acorns vs. Stockpile

Stockpile was created as an easy way for kids to get started investing. It is similar to Acorns in that it offers micro investing by allowing users to buy fractional shares of stock.

There are zero account fees with Stockpile, but you are charged $0.99 for each stock trade you place.

You can read my review here or check out their site to learn more.

The bottom line is that Stash is the most similar option to Acorns. The main difference is that Acorns uses micro investing by rounding up your purchases as the main way to fund your account whereas Stash has you micro invest through small lump sum investments.

Acorns Review FAQ

I know I covered a lot of information here, but there are still some questions you might have. I’ve created this FAQ list to highlight many of them. As time goes on and I get asked more about Acorns, I’ll update this list.

How much does Acorns cost? Acorns costs $1 per month until your account balance hits $5,000. After this point, you pay 0.25% of your account balance each year.

If you are a college student and you register with Acorns using a valid .edu email address, then Acorns is completely free. Note that it remains free until you graduate from college. After that, you pay the same fee as everyone else.

What is the minimum to open an account? There is no minimum to open an Acorns account. However, your money will not be invested until you reach $5.

Luckily, if you sign up through this link, Acorns will give you $5 for free!

Is Acorns a viable investment option? Yes. As of this writing, Acorns has over 1.3 million customer accounts and manages over $5.45 million dollars. You can see this detailed information here.

Do I have to pay taxes? As with any taxable investment account, you will owe taxes on realized capital gains and dividends. Acorns will provide you with a 1099 after the year end to make filing your taxes easier.

Are dividends reinvested? Yes. Any dividends you earn are reinvested into your account.

Can anyone use Acorns? Right now, it is only available to those in the United States.

Can I change my investment allocation? Yes. Any time you want, you can make your portfolio more or less aggressive.

Can I change my round up amount? Yes. You can choose to round up more than just $1. Just log into the app and change the settings.

Final Thoughts

Now that the Acorns review is over, what is my takeaway? Overall, I love the idea of micro investing and I like Acorns. There are 2 shortcomings to their service that I note.

The first is the lack of retirement accounts, but this isn’t the end of the world. There is nothing wrong with having a taxable account and starting to grow this as soon as possible.

Doing so will allow you to take the money for anything you want, be it a vacation, a house, whatever.

Just imagine how great it would be to invest your spare change freshman year of college and graduate with close to $3,000? How awesome would that be? And you can do that without any work.

The second shortcoming is bigger, the fees. As I showed on low balance accounts, the fee is a killer. But is it enough for me to not recommend Acorns?

At first, it was. But then I got to thinking. The people who Acorns is right for are people who don’t have the money to invest with an investment advisor. Nor are they the people who have a couple hundred dollars to invest with Betterment or Wealthsimple. They are the people who would greatly benefit from micro investing.

And as a result, odds are, these people are probably going to put off investing and possibly never start. So while compared to other investing services the fee Acorns charge is high, it is worth paying if your other option is to not invest at all.

It is related to the story I tell in my post secrets I learned working with a high net worth advisor. One client pointed out he paid us over $10,000 in fees while a client. While this sounds like a lot of money, to him it was worth every penny as he knew if he was investing on his own, he would have sold out of the market during a down turn and never invested again.

So instead of having a few million dollars, he would have had a few thousand.

The point is you have to look at all the benefits of something and not just one negative. Weigh everything out and see if it still makes sense.

When I do this with Acorns, it makes sense for the right people. If you feel it makes sense for you, click here to open your free account and get $5 in the process.

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