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I’ve decided to take the leap and sign up with Acorns.
Intimidated to invest? Consider signing up as well.
What is Acorns?
Acorns helps you save & invest spare change from your everyday purchases and invest into a diversified portfolio of stocks and bonds. You can easily get started in minutes: anytime, anywhere.
Acorns is a free mobile app that rounds up your credit and debit card purchases to the nearest dollar, then puts this digital “spare change” in an investment account. You don’t notice it happening as it is automatically done for you on every purchase, making it a hands off approach.
All you need to get started is a bank account and an Internet connection. There is no minimum deposit or balance as well as no restrictions on withdrawals.
It is a great way to get started on investing, as Acorns simplifies the process. They have essentially removed the guesswork from the equation.
By starting small, continually adding and being patient, growth will happen automatically. All it takes is time.
Sound simple enough? Read on 🙂
“People generally associate investing with lots of dollars,” said Jeff Cruttenden, co-founder and CEO of Acorns. “Once [people] find out that you can invest spare change, it’s a really attractive concept.”
Sign up is relatively simple.
You will need to answer multiple questions to create a financial profile and state your investment goals.
Make sure you have your bank and account credentials available. You can link up as many debit and credit cards as you want.
There are five different Acorns investment portfolio options you will choose from, ranging from aggressive to conservative (aggressive, moderate, or conservative). Each one is made up of six exchange-traded funds (ETFs) selected to achieve your portfolio objective. These portfolio options are compiled by a team of investment analysts, mathematicians, and economists in conjunction with Nobel Prize-winning economist Harry Markowitz.
Whenever you make a purchase, Acorns “rounds up” the purchase to the next dollar and invests the change into a diversified stock portfolio. When your Round-Ups exceed $5, Acorns transfers the money from your debit/checking account to this portfolio.
Let’s say you buy a meal at McDonald’s for $6.45 using a linked credit card. Acorns would round up to $7, with the difference of .55 (round up amount) being invested.
This would happen automatically. However, it doesn’t have to be, as you can change the setting to be manual. In this setting, you would manually add round ups by selecting from a list of payment transactions.
One thing of note as well is that Acorns does not cover overdraft fees for its withdrawals.
How Much Does It Cost to Use Acorns?
They charge $1 per month for balances under $5,000 or 0.25% per year for balances over $5,000. Students and those under 24 years can use the app for free.
There are no fees on accounts with a balance of $0.
Acorns has the following security features:
SIPC Insured Accounts – Every Acorns account is insured up to $500,000 for fraud
SSL Encryption – Website and app are secured with 256-bit encryption
Account Alerts – Users are contacted about unusual account activity
Bank-level Security – Secure servers and privacy verified by physical security
Account Safeguards -Multi-factor authentication, automatic logouts, and ID verification help prevent unauthorized access
You can deposit money directly into your Acorns, account in addition to the automatic Round Ups
When you’re ready to withdraw your money, it’s in your account within a few days
Automatic rebalancing helps your account benefit from market corrections
You can change your risk profile at any time to be more or less aggressive
*NEW Feature*Found Money (Beta)
New in version 1.5.0
Shop with any of the Found Money partners, and they’ll automatically invest in your Acorns account!
You do not have to opt in – rewards will automatically be invested as long as you have a credit or debit card linked to your account. You will need to do so in order for the Found Money partners to be alerted that you’ve purchased something from them and can promptly reward you. Rewards will vary by brand.
This Found Money will appear in your account within thirty days of your purchase. You can track what you’ve earned on the history screen in your Acorns app.
Check out the Found Money page in the app fore more details!