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Acorns Review 2023: Pros and Cons Uncovered
Swen Keller
- URL: https://www.acorns.com/
- Year Founded: 2012
- Headquarters: Irvine, California
- Monthly/Yearly fees: Starts from $3 monthly
- Account types: Acorns Invest (Savings account), Acorns Later, Acorns Early, Acorns ESG Portfolios, Acorns Earn, and Acorns Banking (Checking account)
- Physical Card: Yes
- Platform App: Mobile, Web
- No. of Cryptocurrencies: Bitcoin via Bitcoin ETFs
- Fiat Available: USD
- Deposit Methods: Bank transfer, credit card, and debit card
Acorns Review: Our Opinion
Acorns offers a beginner-friendly micro-investing platform that allows users to begin investing with “spare change”. For the price of a latte, Acorns offers users a checking account, Acorns investment account, custodial accounts, access to its robo-advisor platform, socially responsible investing, retirement savings accounts, and much more.
That said, in comparison to its competitors that target advanced users, Acorns’ investment account offers limited options for investing.
Acorns also only support residents of the United States, which limits its scope of use globally.
What is Acorns?
Acorns is a neo-bank that helps you invest your money according to your financial goals using the principles of micro-investing and allowing you to overcome the financial entry barriers to investing.
The automated Acorns investment account offers no minimum requirement allowing you to get started with just $5 and your spare change automatedly.
To help achieve this Acorns offers the following products:
- Acorns Investment Account: This product helps you invest your money.
- Acorns Later: With Acorns Later you can invest for your retirement.
- Acorns Banking: This product gives you access to a checking account with investing at the centre of it.
Other products include investment accounts for kids, tax loss harvesting, and earning bonus investments while you shop.
An Overview of Acorns
Launched in 2012 and headquartered in Irvine, California, Acorns was founded by Father and son duo Walter Wemple Cruttenden III and Jeffrey James Cruttenden.
The current CEO of the company is Noah Kerner with David Hijirida as its president.
Other top executives include Marissa Dulaney (Chief Experience Officer), Seth Wunder (Chief Financial Officer and Chief Investment Officer), Denise Chisholm (Chief Compliance Officer), Pete Johnson (Chief Data Officer), and Kennedy Reynolds (Chief Education Officer).
Acorns is backed by industry-leading investors such as PayPal, BlackRock, Bain Capital, NBCUniversal, Comcast Ventures, Greycroft, Capital Group, TPG, Headline, Rakuten, Sound Ventures, and DST Global.
Acorns are also backed by individual investors including Ashton Kutcher, Dany Garcia, Dwayne Johnson, Kevin Durant, Shlomo Benartzi, Dana Settle, Brent Callinicos, Chris Jones, Richard Thaler, and Gabrielle Sulzberger.
The goal of the company formation is to promote incremental and passive investing. To achieve this, Acorns allows users to invest automatically for retirement, their kids, etc. with every purchase using spare change via its financial products which include Acorns Invest, Acorns Later, Acorns Earn, Acorns Early, and Acorns Bank.
Currently, Acorns hosts over 10 million customers who have invested more than $15,000,000,000.
That said, Acorns Securities has had its fair share of controversies as in 2017 the company was fined by FINRA (The Financial Industry Regulatory Authority) alongside Global Markets a total of $2 million for improper retention of customer records.
Acorns failed to store 9.5 million records including messages, order tickets, and other transaction-related files between March 2014 and July 2017.
The Financial Industry Regulatory Authority also accused the cash management account platform of failure to comply with auditing requirements related to electronic bookkeeping.
Acorns agreed to pay the fines without admission of wrongdoing.
Pros
- Beginner-Friendly
- Low maintenance fees
- No transaction fees
- It offers personalized portfolios based on the traders' risk tolerance and investing goals
Cons
- Only available to users in the United States
- Poor customer service
Unique Features
Acorns Early
Acorns Early is a Uniform Transfer/Gift to Minors Account (UTMA/UGMA) that makes it easy for you to invest for your child or any child in your life.
This account is different from the traditional college savings funds as it offers more flexibility.
The funds can be used in other ways that directly benefit the child aside from education. This includes extracurricular activities or the child’s first car.
The Early account has a low minimum account balance. You can start investing with as little as $5.
The account opening process is easy. All that is needed to sign up is a name, birthday, and Social Security Number.
You can transfer the funds in the Early account to the Acorns Invest account when the child is an adult.
Depositing into the Acorns Early account is automatic and recurring. With Acorns Smart Deposit, a portion of your paycheck is automatically invested in the account.
It is built into Acorns Checking and is also included in your Personal Plus tier subscription plan at no extra cost.
All you need to do is to allocate a percentage of your paycheck to your Early or Invest accounts. You can start with just 1% and change it at any time.
Acorns Early account holders enjoy exclusive bonuses and can earn bonus investments when they shop with friendly brands like The Honest Company, Disney+, and ABC Mouse.
All Early customers are placed into Acorns’ Aggressive Portfolio.
Children can access the funds in their Early account when they reach the age of transfer which is between 17 to 25. The specified age of transfer is determined by each state. Acorns will notify you when the age of transfer is approaching.
How to Buy Crypto with Acorns?
Acorns Invest does not offer access to start investing directly in Bitcoin, it only supports cryptocurrency. Rather, Bitcoin exposure is provided via ETF BITO which invests in Bitcoin Futures. Simply put, you are not buying Bitcoin coins directly from Acorns.
To invest in Bitcoin ETF on the Acorns mobile app do the following:
- Tap on Invest
- Next, hit Acorns Portfolio
- Go to the bottom of the screen
- Tap “Diversify your portfolio with Bitcoin ETF”
- Go over the FAQs and review other information on your screen
- Tap on Add to your Portfolio
- Next, press “Add” to confirm the allocation
- Lastly, Tap Done
That’s all! The steps are the same if you use Acorns web.
How is Crypto Stored?
Acorns offers Bitcoin-linked ETF so there’s no need for additional apps, passwords, or digital hot crypto wallets to store Bitcoin. You simply get exposure to Bitcoin from the Acorns app.
Cryptocurrencies Available on Acorns
Acorns only supports Bitcoin ETFs at this stage. It allocates up to 5% of users’ Acorn Portfolio towards a Bitcoin Linked ETF through its ProShares Bitcoin Strategy (BITO).
The percentage invested in Bitcoin ETFs is determined by the customers’ investment profile, which includes their money goals, income, and age.
Acorns Fees
Acorns does not charge transaction fees for investing in Bitcoin ETF, rather it charges a management fee of less than 1%, which is added to your Acorns subscription. There are no surprise fees.
Security: Is Acorns Safe?
Acorns is a federally registered investment adviser, qualified to conduct investment advisory business in all 50 US states, the US Virgin Islands, the District of Columbia, and Puerto Rico.
It is subject to regulatory oversight by the SEC and FINRA and has strict measures in place for account approvals in compliance with all regulations.
As a member of SIPC, the Securities in clients’ accounts are protected up to $500,000. Deposits in Acorns Checking accounts are insured up to & $250,000.
Acorns has several security measures in place to prevent unauthorized account access and to ensure the overall security of the platform.
Security measures include 256-bit encryption of the website and app, two-factor authentication, Account Alerts, and Account Safeguards.
Account Alerts allows Acorns to contact you if there is any unusual activity in your account while the Account Safeguards include automatic logouts and ID verification.
Staking Rewards and Cashbacks
Acorns allow you to earn more money when you shop at supported stores.
It can also help you earn more money by finding you a job via Earn Jobs which offers more than 9 million job opportunities right in the Earn section of the Acorns platform.
Most rewards are earned by shopping via offers available on the Earn section of the Acorns app.
It also offers some “Simply Spend” rewards that allow you to earn automatically when you shop using a card connected to Acorns.
Plus, you can install the Earn Chrome and iOS Safari Browser Extensions to get rewards when you shop online.
Once installed, whenever you go to the website of a supported merchant you’ll see the offer details pop up, activate the offer, and you’ll get the reward after purchase.
You will typically get a reward confirmation email as well as the reward pending notification in the Earn section of the Acorns app within 3 to 7 days of finalizing a shopping transaction.
The accrued reward will be invested within 60 to 120 days which gives you a lot of time to return any item as rewards can be adjusted due to cancellations or returns.
Supported Countries
Acorns is only available to legal residents and citizens of the United States.
It also makes exceptions for active Armed Services personnel who are temporarily overseas but maintain US addresses.
Acorns Licences
Acorns Adviser LLC and Acorns Securities LLC are registered with the US Securities and Exchange Commission (SEC)
It is also a member of the Financial Industry Regulatory Authority Inc. (FINRA) and The Securities Investor Protection Corporation (SIPC).
Opening an Acorns Account
To open an Acorns account go to https://www.acorns.com.
Next, tap on Get Started in the center of the page.
Enter your email address and tap on the Looks Good icon pop-up.
Input your password and tick the box that states “Yes, I am a Resident, 18 years or Older, and Agree to the Program Agreement, Privacy Policy, and Auto Debit Authorization”.
Enter your first name, last name, and date of birth.
Enter your address, zip code, and phone number on the next page.
Next, verify your phone number by entering the code sent to it.
You’ll then need to link your bank account by tapping on the available options or searching for them.
Next, answer security questions, and investment questions, and enter your social security number.
You’ll then need to connect a funding account.
That’s it! You’ve created an Acorns account and can start investing.
Acorns Card
The Acorns card is a Visa debit card that allows you to spend from a linked bank account on the go.
It is a heavy metal, laser engraved Visa card issued by Lincoln Savings Bank or NBKC bank, members FDIC.
Acorns does not charge cardholders overdraft, maintenance, or ATM fees for cash withdrawals made using the card.
Cardholders also have access to over 55,000 fee-free ATMs within the AllPoint Network around the world.
When you use your Acorns card, any spare change from your purchase is rounded up to the nearest dollar and instantly invested.
You do not need to wait to hit the $5 minimum for the Round-Ups.
The Acorns card can be accessed through the Checking account. Once your request for the card is approved, it will take about 14 business days to arrive from the time of approval. Acorns will send you an email notification containing the tracking link once your card has been shipped. You can track the status of the card in transit from your Acorns account.
When your card is delivered to you, you will receive an in-app notification to activate the card.
If you can’t locate the notification, you can activate the card by doing the following:
Log in to your account, click on “Bank” and tap on the Gear icon at the top right corner.
Scroll down and click “Activate Card” and agree to the Terms and Conditions by clicking “Accept and Continue”
Next, enter the last 4 digits of your card (this is found at the back of the card) click “Set Debit Card PIN” and set your PIN.
Click on ” Card Features” and Retype the PIN for confirmation
Tap “Activate Card” (Scroll through the Acorns Checking features and tap “Activate Card”).
Once this is done you will receive a success screen with the message “Your Card is Activated”.
Acorns automatically ship out a new card in advance if the expiration date for your card is approaching.
That said, if you have not engaged with your Acorns card for over 90 days, an opt-in process is required via mail.
Acorns Mobile App
Acorns App is a saving and micro-investing app that helps you save, invest, and grow your money.
With the mobile app, you can automatically invest in any of Acorns’ diversified ETF portfolios built by experts. Acorns selects ETFs that align with your risk tolerance, investing timeline, and overall investing goals
The app gives you access to a Custom Investment Portfolio option that allows you to invest in stocks from a list of over one hundred public US companies.
The mobile app has an automatic Round-Ups feature that allows you to round up your spare change to the nearest dollar and invest.
It also gives you access to the Early account for kids as well as a retirement account which allows you to save money with easy IRA investing options like Traditional and Roth plans.
You can also access the Acorns Checking account, set an Emergency Fund goal, and automatically start saving a piece of each paycheck for emergency expenses.
Acorns give you bonus investments and exclusive deals on your favorite brands when you shop with over 15000 brands.
The app also has other exciting features like the Job Finder which allows you to search for millions of jobs.
It also offers Financial literacy content which can help you grow your knowledge on money, saving strategies, investment, etc.
Acorns Deposit and withdraw methods
Acorns offers 3 deposit and withdrawal methods that allow you to turn your spare change into automatic deposits including credit card, debit card, and bank transfer.
Customer Service
Acorns offers customer support via Live Chat, email, and Phone.
Live Chat is available 24/7 while phone support is available 7 days a week between 5 am to 7 pm PST.
The platform also has a FAQ page with many support articles to help users solve common problems.
Acorns Compared with its Competitors
Acorns’ 2 main competitors include Wealthfront and Ellevest.
Wealthfront users can invest in cryptocurrency ETFs, regular stocks, and REITs. However, unlike Acorns it has a $500 account minimum and a 0.25% annual management fee.
Wealthfront also doesn’t offer human financial advisors or online chat options to help users make the right decisions.
With the Ellevest investment platform, users can invest in mutual funds and ETFs as well as ESG options. It targets women primarily and lets users round up savings deposited in their savings accounts.
Ellevest does not enforce account minimums or advisory fees but charges users management fees which get up to $9 monthly, which is more than Acorns monthly charge.
What is a NeoBank?
A neobank is a direct bank that functions strictly through online banking without conventional physical branch networks.
How to Choose the Right NeoBank for Your Needs?
To choose the right neobank consider the following:
- Ratings and Reviews: Go to the Google Play Store or Apple App Store and read the reviews of the neobank app
- Products Offered: Explore neobank’s website to find out if the products that offer will satisfy your needs
- Deposit Insurance: All banks aren’t FDIC-insured (or the particular nation’s relevant body) so you’ll need to verify that the neobank you’re considering is partnered with an FDIC-partnered conventional bank
- Regulation: You need to find out what licenses it holds and what regulatory bodies the neobank reports to
Acorns Review: Conclusion
Acorns is a beginner-friendly neobank that offers popular investment features like a checking account, custodial accounts, direct deposit functions, exchange-traded funds, tax loss harvesting, and much more.
It is also one of the most affordable monthly subscription options as it costs a few dollars and uses an ingenious idea of investing spare change with the Round-ups feature.
However, it has a limited target audience (United States residents only) and supports only 1 cryptocurrency Acorns invest account product.
In the competitive world of banking, broadening one’s knowledge base is key. Our thorough Wealthsimple review introduces you to a Neobank that’s been making waves, thanks to its features and user-friendly interface.
FAQ
Most frequent questions and answers
Acorns only support users in the United States and offers only Bitcoin ETF for crypto investment.
Yes, Acorns is a legit neobank that has been in operation since 2012 offering a taxable brokerage account, checking account, direct deposit funding, custodial investment account, and much more. It is fully regulated in the United States.
Yes, Acorns goes for $3 a month and based on its investment strategy of investing spare change it is worth the cost.
Robinhood is better for advanced users looking for a wide range of investment products while Acorns is for beginners looking to have a hands-free investment solution.
No, however, Ashton Kutcher is one of Acorns’ investors.
We always try to provide the most accurate information available, and make sure our team follow through.
If you want to know more about our Crypto Exchanges Review Methodology follow the link below
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