Acorns Review: The Micro Investing App Suited for Beginners

Steve Cummings

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Acorns Investing App

Investing is not easy, especially if you have no money. That is where Acorns comes into play. The Acorns app is an investment app geared towards helping young people and young adults invest with little money. This is one of those beginner micro-investing apps. 

Right here is going to be a review of the Acorns investing app. The review will help guide you on your way to investing smarter, better, and hopefully investing more for your future. 

First of all, Acorns is guided by its company philosophy. Acorns are like the seeds that will be planted to grow many trees that will bear fruit in the future. It relates to investing. No matter if you have a little bit of money, those tiny seeds can one day produce large trees. So we are going to plant Acorns for our future. 

The company's mission is “to look after the financial best interest of the up-and-coming, beginning with the empowering step of micro-investing.”

They want everyone to have a good start with investing. Starting small is not the wrong place to start at all. 

What is the Acorns App?

Acorns is a Robo-advisor that takes spare change from credit card or debit card transactions and invests. It is linked to your checking account and helps to simplify investing. It will then invest in a set portfolio of ETFs selected based upon a questionnaire that the new investor has answered. 

The Acorns app is best for those that want automation. The users want to invest but lack the time or knowledge, so they rely on Robo-advisors to help automate the process for them. 

How Does The Automation Work?

Let's say you buy a coffee every morning. This coffee is $2.37. Acorns then round that up to $3. The additional $0.63 is then thrown into your investment account to help buy more shares. All the money will be withdrawn from your checking account. 

The Pros of the Acorns App:

  • Automation into your investment accounts
  • Robo-advisor places funds into a diversified portfolio
  • Easy to use app
  • Straightforward Pricing
  • Includes accounts for minors such as UGMA/UTMA

Some Cons of Acorns

  • No tax-loss harvesting
  • No individual stock investments
  • Low balance for a higher cost
  • No personal financial advisors to help out

Those are the main pros and cons that can be seen through Acorns. As we continue, this is a great app to help start people investing. Most people do not begin until later in life. Acorns is a company that wants to interest people in investing and help get them on their way. 

The people who would benefit from this most would be beginner investors, maybe minors, young adults, or even young families. 

Several Accounts Offered:

They offer several different accounts for people and families.

  • Taxable Account
  • Traditional and Roth IRAs
  • Custodial accounts for Children UGMA/ UTMA
  • 529s
  • Simple IRAs
  • Solo 401Ks

They offer two membership tiers that you can choose from for your account.

Acorns Personal – $3/month

Acorns Personal is your all-in-one investment, banking, checking, and retirement. This can include many things that we will break down further in the Acorns review. 

Acorns Family- $5/month

The Family account includes all children plus the investment, banking, checking, and retirement accounts. 

Acorns is not just a rounding-up feature for automatic investments; you can also deposit money monthly to create a more extensive portfolio. The larger the portfolio, the less that fee feels to you. 

The company wants you to invest in your future. They will help you build a portfolio by answering a set of questions. Then the portfolio will be created out of several different ETFs that will be well diversified. 

It is shown that when people mess with their portfolios, they often lose money in the process. Acorns know this, so they do not allow individuals to own individual stocks. This can be a deterrent. In the grand scheme of things, you can understand if you would like to learn more about finances and investments. If a robot advisor can do it all for you, that makes it simple. 

Sign-up for Acorns Here!

Acorns Come with many features:

There are many features that are packed into this investing app. It is just not investing. There is Acorns Earn, Education, and a Checking Account. Let's see what each Feature does for us. 

Recurring Investments

You can start with just $5 and have that set to be invested into your portfolio automatically. This can be set for each day, week, or even month. Time in the market is better than timing the market. The power of Dollar-cost averaging allows us not to time the market but to have our money continue to work for us. 

Knowledge Center

The Acorns App company wants to continue to increase the knowledge of its users. They believe knowledge is power, and the way to do well in investing is to continue to learn. There will be set content sent to you that is powered by CNBC that will help enhance your financial literacy. 

Earning Rewards

Earning rewards sounds like fun, but how does it work? They have partnered up with over 12,000 brands and have a job search finder with millions of jobs listed. If you like to shop or even search for jobs, you can use their services or shop regularly through their portal and will be paid with rewards and cash that can be added to your portfolio. 

Investment Options of Acorns

The Acorns app automates investment using a set of 25 different ETFs that range from over 7000 different stocks and bonds combined. They will use the spare change, manual investment, and recurring investments to help fund your portfolio. 

The portfolio consists of many different diversified ETFs that match the customer's questionnaire. The portfolio considers your age, net worth, income, and risk tolerance. 

Some of the ETFs will be several you may have seen before, like Vanguard's S&P 500 ETF (VOO) and iShares Core U.S. Aggregate Bond ETF. These two funds will give great exposure to the top 500 U.S. and U.S. investment-grade bonds. 

The bad part is that you cannot buy or sell individual stocks. You can look at Vanguard, Fidelity, or Schwab if you want to do that. These three companies also offer some of the best index funds out there. 

Sign-up for Acorns Here!

What are the Drawbacks of Acorns?

No Tax Loss Harvesting

Most Robo-advisors like Betterment are known for their tax-loss harvesting. Tax-loss harvesting is the tool that investors use to minimize taxes. If a share has a loss, you can offset some dividends and capital gains that may have been realized by selling that share. 

As a Robo-advisor, Acorns does not offer this service. It is a drawback to those hoping for fewer taxes as they invest in the long run. 

No Human Advisors

New and beginner investors may find Acorns simple and easy to use, but the app does not offer any human advisors that you may encounter with Betterment or with Vanguard. Having the ability to talk with someone is crucial as you start your journey into investing. 

Acorns have missed the mark with not offering this service. If investors want an automated set and forget it service, then the no human advisors should impact their decision. 

Other investors may want to have the ability to chat with advisors as they make more decisions with their future money. 

Fees Can Be Huge

Fees are not the thing that will attract more investors. If you have a low amount of money invested, the fees of the accounts will seem quite large and not a good use of your money. As your account becomes more significant, the fees will become minimal. 

Paying money for an investment tool is not always the thing people would like to do. Acorns offers a lot as a company, and at least the fee is a flat fee. Betterment provides a fee of 0.25% of the whole portfolio. For smaller accounts, that Betterment fee seems ideal, but as an account becomes more significant, the flat fee of Acorns seems like the perfect fit. 

Alternatives to Acorns:

Acorns is one of the best investing apps on the market. It offers so much variety and simplicity. There are other alternatives to look at if you are not interested in Acorns.

M1 Finance

M1 Finance is one of my favorite platforms for investing. You can buy and sell your stocks. The ability to create your portfolio makes it easier with fractional shares. Amazon and Google are no longer out of reach due to their high price. 

ETFs are also used to help create a great portfolio. You can make a simple 3 fund portfolio using M1 Finance


Betterment has been mentioned as one of the first Robo-advisors out there. It will ask you several questions to help create a portfolio for you using ETFs and reinvest those dividends to help buy some fractional shares for you. 

It does have a fee of 0.25%, but it allows you to speak with a human advisor, unlike Acorns. 


Stash is another app that may be an alternative to Acorns. It offers not only investments but helps out with budgeting as well. The pricing is similar to Acorns, but also provides fractional shares of individual stocks and allows the purchasing of ETFs. 

Final Thoughts

The Acorns investing app is a great way to start investing for retirement. It will help build wealth, have low costs, and allow your investments to start compounding. Their investment strategy is quite simple: using different funds and ETFs to help you on your path towards retirement. 

These investments may not outperform many others, but it is a beginning that allows you to have a well-diversified portfolio with a couple of different types of assets like stocks and bonds. 

As you are beginning to remember, investing just a little bit at a time can make a difference. As dividends and gains continue to grow, your portfolio will continue to grow. When you learn how to invest, you will have opportunities to look into other types of investments. 

Acorns may not be for everyone, but it is a good place for beginners to start. It helps people start investing now instead of waiting until they are older. 

Sign-up for Acorns Here!

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