Acorns Review 2024

August 28, 2024 09:14 AM PDT | By Team Kalkine Media
 Acorns Review 2024
Image source: Shutterstock

Who Should Consider Acorns?

Acorns is best suited for those who are drawn to its unique “round-up” feature, where purchases on linked accounts are rounded up to the nearest dollar, and the extra amount is invested. For example, if you buy something for $4.50, Acorns will round it up to $5.00 and invest the additional $0.50. This system encourages small, incremental savings without the user needing to think about it.

While Acorns offers a simple way to build savings, it may not be as cost-effective or comprehensive as other robo-advisors. Acorns is ideal for users who find its savings method motivating and prefer a streamlined, hands-off approach to investing.

How Acorns Functions

Acorns provides five key products for saving and investing:

  • Invest: A taxable investment account that uses ETFs selected based on the user’s risk tolerance and goals. Funding options include round-ups, recurring deposits, or on-demand contributions. Recurring deposits, starting as low as $5, help users practice dollar-cost averaging.
  • Later: A tax-advantaged individual retirement account (IRA) that operates similarly to the Invest account, but focuses on retirement savings.
  • Debit Card: A checking account with a debit card, featuring no minimum balance fees and ATM fee reimbursements. The Smart Deposit feature allows automatic transfers from direct deposits to other Acorns accounts.
  • Earns: An online marketplace where users earn small cash-back rewards from purchases at major retailers. The rewards are added to the user’s Invest account.
  • Early: A UTMA/UGMA account that allows parents to set up savings for their children, included in Acorns’ highest-tier plan.

How Acorns Manages Investments

Like other robo-advisors, Acorns builds diversified portfolios based on a user’s risk tolerance, goals, and basic financial information. The portfolio is made up of a selection of ETFs, with Acorns choosing from around 25 options. For example, a user with a long-term investment horizon might receive an "Aggressive Portfolio" with allocations such as:

  • 55% to large domestic companies
  • 30% to international stocks
  • 10% to mid-cap stocks
  • 5% to small-cap stocks

Acorns’ simplified portfolio makes it easy to understand while still aiming for solid returns, although it may offer fewer options than competitors like Wealthfront.


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