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Acorns review 2022

Bankrate reporter Brian Baker covers investing and retirement. He has previous experience as an industry analyst at an investment firm. Baker is passionate about helping people make sense of complicated financial topics so that they can plan for their financial futures.

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Acorns Logo

Best For

  • Newer savers and investors
  • Parents looking to teach their children about investing
  • Those looking to invest while spending

Acorns is a good app that’s particularly useful for new investors and can help people learn about the benefits of saving and investing, even in small amounts. With a minimum investment of just $5, investors can begin to build a portfolio of ETFs that meets their financial goals. Acorns also allows users to “round up” purchases to the nearest dollar, investing the additional money into their portfolio. These small investments can really add up over long periods of time. 

While Acorns can be a good choice for those just starting out due to its low minimums and simple structure, its fees can be above-average for those with small sums to invest. You also won’t get certain features common among other robo-advisors such as advanced tools or tax-loss harvesting. Wealthfront and Betterment provide a more comprehensive offering overall and SoFi Automated Investing is also worth checking out for those looking to speak with financial advisors at a low cost.

Acorns at a glance

Star Rating

3.5
  • Cost: 3.5 of 5
  • Investments and Portfolios: 5 of 5
  • Account Types: 3 of 5
  • Features and Tools: 3 of 5
  • Customer Experience: 5 of 5
  • Account Minimum:
    $0 to open an account; $5 to start investing
  • Management Fee:
    $3 a month for investing account, IRA and checking account; $5 a month for investing, checking, IRA and kids account
  • Account fees:
    $50 transfer-out fee for each ETF
  • Portfolio Mix:
    22 ETFs
  • Fund Expense Ratio:
    Range: 0.03%-0.25%
  • Account Types:
    Individual taxable accounts; Roth, SEP and traditional IRAs; rollover IRAs; custodial investment account for kids
  • Cash Management Account:
    Yes, with mobile check deposit, 55,000 free ATMs, debit card
  • Customer service:
    Phone, 8 a.m. - 10 p.m. ET 7 days a week, email
  • Tax Strategy:
    None
  • Rebalancing:
    Yes
  • Tools:
    Basic planning tools
  • Promotion:
    None

Pros: Where Acorns stands out

Two service tiers – plus custodial accounts

Acorns offers two tiers of service – Personal and Family – each of which gives you a type of investing account at a different monthly price point ($3 and $5, respectively): 

  • Personal – This tier gets you an individual investing account plus an IRA and a cash management account. 
  • Family – The highest offering gets you the benefits of the Personal tier, and also allows you to open any number of custodial accounts for your children.

The Personal plan will help you get started with investing, save for retirement and even comes with a cash management account. At $3 a month, it’s a pretty good deal unless you’re dealing with small sums. But as your account grows, the fee will decline on a percentage basis. 

Your portfolio will be made up of ETFs that align with your overall investing goals and risk tolerance.

The perk of the family plan is that it allows you to set up custodial plans for your children. This feature is largely unavailable at other brand-name robo-advisors. So if this feature matters to you, it’s a solid reason to go with Acorns, helping your kids invest or investing for their benefit. 

Simple plans to get you investing

Acorns ties spending to investing with some plans that get money into your accounts while you’re out spending. One of its best known is what Acorns calls “round-ups.”

When you set up round-ups, Acorns can automatically round up any purchase to the next dollar and move that extra amount from your linked bank account into your investing account. When you’ve accumulated at least $5 in round-ups, Acorns invests that amount in your target portfolio. If you don’t want to invest it every time, you can set up a manual transfer process, too. 

In addition, you can have extra money deposited into your account through a program called Acorn Earns. Refer friends and receive a small bonus or receive a deposit when you spend at one of the more than 350 brands partnered up with Acorns, part of its Found Money program.  

Of course, you can also use a recurring transfer to get money into your investing account. That’s a smart way to keep your portfolio growing relentlessly. And you’ll also be able to use the “smart deposit” feature to squirrel away funds from your direct deposits (more below). 

Reasonable fund expenses

The ETFs used in Acorns’ portfolio are reasonably priced, costing in a range of 0.03 percent to 0.25 percent of invested assets annually, or a cost of $3 to $25 for every $10,000 invested. Many of the stock funds sit right at the low end of that range, too, so if you’re opting for the more aggressive portfolios, you’ll be paying fund expenses that are near the bottom of the industry. 

Most of the funds come from Blackrock, an industry leader, while at least one fund from low-cost leader Vanguard tips the scales, too. And remember you’ll pay ETF fees regardless of which robo-advisor you choose, so it’s important to try to minimize those costs where you can.  

Quick comparison of Robo-Advisor options:
Robo-Advisor Overall Rating Cost Rating Investments and Portfolios
Acorns logo
3.5 5 of 5
Wealthfront review 2022 logo Read Our Review
5 4 of 5
SoFi Automated Investing review 2022 logo Read Our Review
5 3 of 5
Stash review 2022 logo Read Our Review
4.5 5 of 5

Cons: Where Acorns could improve

Pricing

Three dollars each month for the personal tier of service doesn’t sound like much, but for the newer investors courted by Acorns, those fees may comprise a surprisingly large portion of their portfolio. 

For example, that modest $36 a year is a solid 3.6 percent of a $1,000 portfolio. Even at $10,000, an investor would be paying 0.36 percent annually – still solidly above the standard management fee (0.25 percent) of many robo-advisors. 

That said, Acorns’ fees remain constant as you grow your portfolio, so that fee could become tiny as your portfolio grows much larger. 

Transfer-out costs

The transfer-out costs for ETFs in the Acorns investing account are at the high end of the industry. Acorns charges a steep $50 per ETF to transfer your account to another broker. That’s in contrast to $75 per account at many robo-advisors and free at some companies. So that fee seems excessive relative to Acorns’ peers. 

That said, you can always sell the ETFs and move your money cost-free out of the account. That might ding you a little in capital gains taxes, but it still might be better than coughing up hundreds of dollars to keep your ETFs, depending on what kind of gains you’re sitting on. 

Tools and rebalancing

Acorns offers only bare-bones planning tools, compared to sophisticated offerings from Wealthfront and Betterment, for example. 

Acorns rebalances investment positions when they diverge more than 5 percent from their target allocation. In practice what it may mean is that outperforming assets are trimmed as they rise too much (relative to target allocations) and underperforming assets are purchased after they fall too far. Rebalancing can be a sensible practice and many robo-advisors offer it. 

Where Acorns might improve, however, is to move newly deposited cash into a lagging fund rather than selling the outperforming fund and likely incurring a taxable gain. The net effect is a rebalanced portfolio without the taxable consequence. It’s a small point, but worth noting. 

Tax strategy

Acorns doesn’t offer a tax strategy to help minimize clients’ tax bills. Many robo-advisors offer this through tax-loss harvesting strategies or by including municipal bonds in some portfolios. Tax-loss harvesting involves realizing investment losses to offset gains or claiming the losses to reduce your taxable income. 

Wealthfront, Betterment and Schwab Intelligent Portfolios all offer tax-loss harvesting as part of their services, but you’ll need at least $50,000 in assets to take advantage of it at Schwab and $100,000 at Wealthfront.

Bottom line

Acorns’ app offers some valuable features, especially if you’re a newer investor and starting to learn about investing. While Acorns’ fees are not large in an absolute sense, they can dent the nest egg of newer investors, though investors bringing a lot of money to the table may really like the fixed costs. Despite some highlights (such as low-fee funds) overall Acorns just doesn’t offer the same quality of features as rivals and may charge more than they do despite that fact.

Investors focused on low management costs could turn to SoFi Automated Investing or even Schwab Intelligent Portfolios (if they can bring some money to the account.) Wealthfront and Betterment are also solid picks for their investing chops and strong cash management accounts, while Ellevest may be a pick for those looking for a friendly fixed-cost pricing structure. 

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