Acorns Review: In a Nutshell, Acorns is a Useful Tool Worth Considering

Acorns is an investment platform for beginners, separated into three products: Core, Later, and Spend.

The purpose of Core and Later is to help you invest. The main difference is, one is a personal investment account while the other is tax-advantaged (for retirement). On the other hand, Spend is a checking account that seamlessly integrates with both, allowing for real-time savings with every purchase.

Sometimes, three months go by without opening the app, and when I finally remember to, my money has grown far beyond my expectations.

My Experience with Acorns

I've been using Acorns for over two years now. The app is simple and easy to use, the gains are legitimate, and it's easy to forget I'm even using it. Sometimes, three months go by without opening the app, and when I finally remember to, my money has grown far beyond my expectations. That's the magic of this app.

I have since turned several friends and family members onto Acorns, and they've reported the same experience. They hardly notice the twenty or thirty dollar deposits here and there, and a year later, they're amazed by their resulting balance. At a minimum, it's a great way to force some positive saving habits.

Investing through Acorns

I had read a great deal about index funds, and I wanted to find a way to start investing in them. That's what initially drew me to Acorns. The setup process was scarily easy, considering I had just opened an investment account with no more than a questionnaire. And, after an initial deposit of only five dollars, I was off to the races.

What I found quite fun was deciding what type of investor I wanted to be. They allowed me to choose from five different portfolio configurations based on risk and reward. For example, Moderately Conservative was heavy on bonds, whereas Aggressive focused more on international and real estate.

Acorns primarily use Vanguard index funds, which are known to be low cost. Presumably, this is why they can be so cost-effective themselves. I like that their pricing is simple and clear. It's $1 per month for the Core product, an additional $1 for Later, and finally, $1 for Spend. That's $3 per month for all of their services.

Most of their competitors charge on a percentage basis, based on your account balance, which, admittedly, has a lower entry cost. But, as your balance grows, Acorns becomes far more cost-effective. All in all, I think it's fair pricing, given how easy it is to understand.

Depositing Money into Acorns

They offer two primary ways to invest, recurring and “round-ups.” Round-ups are when your debit card purchases are rounded to the nearest dollar; the excess change is then invested for you. You can choose to use one or both methods. In either case, any earned dividends are automatically reinvested, creating a third method of investing.

Eventually, I became annoyed with the round-ups and switched to recurring deposits only. I wanted more control over what was being withdrawn from my account and when. But, I have to admit, it was a great way to get started.

Acorns are not for Everyone.

Acorns are not designed for the advanced investor, who wants full control over their investments. You must choose from one of their pre-configured portfolio options, and get no say over which underlying index funds are used. However, it should be noted that I am happy with the performance of their portfolios.

On the other hand, if you are a beginner looking for an easy way to get started investing, for short to mid-term or for retirement, Acorns is a great choice. They have an uncomplicated setup process, their pricing is transparent, and the app is easy to use. And, if you need to withdrawal your investment (from Core), your money is only a few days away.

One notable displeasure I experienced with Acorns was concerning tax season. They were slow to prepare my tax documents, and I never received a notification email when they were finally ready. Then, I could not download them from the app and had to use their web interface instead.

Overall, my experience with Acorns is a solid 4 out of 5. Its limitations seem by design, catering to the beginner, but backed by world-class Vanguard index funds. It's hardly “noobish.” If you have a set it and forget it mentality, you may be impressed by the small stockpile of cash you can marshal using this app.

Ready to give Acorns a try?  Click here to get started!


Behind the curtain: The company and people who created Acorns:

  • Acorns are based in Irvine, California.  The company was founded and launched by a father and son team, Walter and Jeff Cruttenden, in 2014.
  • Jeff Cruttenden earned his degree in mathematics from Lewis and Clark College.  His father was an investment banker.
  • Investors in Acorns include Ashton Kutcher, asset management firm BlackRock, and the parent company of CNBC.  In 2019, private investors valued the company at $860 million.
  • Acorns will plant a tree for every friend you refer to Acorns to help fight climate change.
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