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Mobile app review: Acorns

By Lance Davis ·
Saturday, March 21, 2015
Posted: 6 am ET

mobile-blog-mobile-app-review-acornsApp name: Acorns

Publisher: Acorns

Price: Free

Available on: iOS, Android and Fire OS

What's it supposed to do? Acorns helps you invest by rounding up purchases you make to the nearest dollar and investing that change into a portfolio.

Ease of use (4/5): It takes just a few minutes to get started with Acorns. You have to sync a credit card or debit card, and then a checking account. Then, answer some questions about yourself -- age, investment horizon, risk tolerance, etc. Acorns will then recommend a portfolio for you.

Features (4/5): The main way to contribute funds to your portfolio is through rounding up transactions. So if you buy something at a store for $5.45 and swipe your linked card, Acorns will round that transaction up to $6 and invest 55 cents. But Acorns also allows you to add or withdraw lump sums and set up automatic deposits.

The app invests your money in exchange-traded funds, or ETFs, across six sectors: small-cap stocks, large-cap stocks, emerging market stocks, real estate stocks, government bonds and corporate bonds. Acorns recommends a portfolio based on your personal information, but you can choose to invest in any portfolio you like; they range from conservative to aggressive.

Acorns charges a fee of $1 per month for accounts with more than zero dollars and less than $5,000. For accounts with $5,000 or more, it charges 0.25 percent per year.

Effectiveness (3/5): Acorns provides a way to dip your toes into the investing waters. It's easy to use and allows you to effortlessly invest your spare change. You can set it and forget it.

Value (2/5): However, there are two big problems with Acorns: Your account is taxable, and the monthly fees are outrageous. Chances are you're not going to make a lump-sum deposit of more than $5,000, so you're most likely going to be paying $1 per month in fees. That's insane, especially when you're investing such small amounts of money. Instead, park your money in a tax-advantaged account that invests in a fund with a low expense ratio.

Verdict (13/20): Pass. If the fees weren't so high, then I'd say go for it -- after you've maxed out your tax-advantaged accounts. Even then, I'd recommend investing in a taxable account with a brokerage firm where you have a better selection of investment options.

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January 26, 2016 at 9:05 am

What about today's show saying it only cost 1 dollar?

January 05, 2016 at 11:56 am

i think the fees are considered high in proportion to what you're investing. if you are only investing $5 per month, or $60 annually. $12 is 20% in fees. so it's subjective i guess. $150,000 would pay about $375 per year in fees. i didn't see anything on their website about a $150 fee to settle an account.

Jeff Martín
August 15, 2015 at 10:04 am

I downloaded the app and read through the entire agreement (ok, most of it, especially the fees section). Did I read it right that they charge $150 to settle your account with a withdrawal ACH transaction?

July 30, 2015 at 3:12 pm

I have the same question as Zach. The fee of .25 a year over 5000 isn't ridiculous in this market from the other offers I've seen in investing and for the majority who have less than that, 12 a year is pretty good. So the most important information would be where have you seen better rates? The customer service wasn't touched on but the administrators seem to be very helpful and direct with the customers so far. Advice doesn't appeal to everyone but extra features and stats are available too for your own decision making which is something I haven't seen in a while.

Zach Tinder
June 08, 2015 at 5:28 pm

Every review I've read says that the fee's are High. I'm trying to figure out why they are considered high. That's 12 dollars a year if I understand it properly. Why is that high? If that is so High what would be another platform similar to this that has lower fees?

I've looked into investing before but most places want minimum balance of $500 or more. At 23 years old I'm sorry but there is a lot more places that I need $500 to go to. I'm interested in this app because I can start building my investments little by little.

Lance Davis
May 11, 2015 at 1:01 pm

Good question, John. According to their FAQ page, Acorns will send a Form 1099 at the beginning of each new year.

May 11, 2015 at 12:25 pm

I like the sound of this app. I have been doing research on this to ensure it is not some sort of scam. I have even opened a separate checking account and put a little money in there to ensure they don't just steal my money. my question is if this account is connected to my checking account. I have the availability to transfer any money I make of them investing it. will they send me tax information at the end of the year so I can claim it on my taxes? I have not seen this viable piece of information anywhere.