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Acorns helps you grow your money

For many of us, investing can seem overly complicated and somewhat intimidating if we don’t know the ins and outs. Acorns intend to simplify and demystify this process through a revolutionary mobile app.

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The app was created to remove any mental roadblocks or anxiety about becoming a regular investor. Using modern portfolio theory, it recommends optimized portfolios and keeps them on track with automatic rebalancing and dividend reinvestment.

Acorns offers a microinvesting app that helps people save and invest for their future. Over 3 million Americans use Acorns to help set aside a little from their everyday purchases.

How Does Acorns Work?

Acorns is a smartphone app that “rounds up” your spending to the nearest dollar and invests that difference. You link a credit card and checking account, and Acorns does the rest. This microsavings app makes investing almost painless because you’re spending only pennies at a time.

The Acorns app is targeted at younger, tech-savvy generations since the entire investment experience can be created and managed from a smartphone. However, Acorns recently unveiled a web-based version for desktop and portable users as well.

Essentially, this app is a great starting point for anyone who hasn’t invested yet or needs a bit of guidance in the beginning, and you can make money using it.

That approach is certainly a useful tool to save more. Acorns offers three levels of membership:

  • Lite: $1 a month. Includes a taxable investment account.

  • Personal: $3 a month. Adds on an individual retirement account and a checking account.

  • Family: $5 a month. Includes everything in the lower tiers, plus Acorns Early, which lets you open investment accounts for kids.


Acorns Features

Minimum Investment $0
Fees $1/month under $1 million; 0.25%/year over $1 million; FREE for under 24 and in college; IRAs are an additional $1/month; $3/month for Spend and Later
Mobile Access iPhone AppAndroid AppBlackberry App
Website Access
  • Traditional IRA
  • Roth IRA
  • Rollover IRA
  • Checking
  • Savings
  • Money Market

How Acorns’  Round-Up Feature Works

Once your account is approved, Acorns will withdraw the initial deposit and your account will be ready for investing. The Round-Up transfers come from monitoring your linked account and rounding up the purchases to the nearest dollar.

For example, I spent $22.43 at the gas station this week. That amount was rounded up to $23, and the extra 57 cents were added to my Acorns Round-Up balance. Once the round-up balance reaches $5, the money will be withdrawn from my bank account and added to my Acorns investment.

You can choose which transactions you want to include in your Round-Up amount or set it to “automatic,” in which case Acorns will apply the feature to all eligible purchases.

However, you can also turbo-charge the power of Round-Ups by as much as ten times.

So instead of pitching in just those 57 cents from my gas station purchase, I can elect to invest as much as $5.70 for that transaction automatically. The potential to magnify the savings is enormous.

Additionally, you can deposit cash reward bonuses from your bank or other rewards programs that you currently have. Or you can choose to invest lump-sum amounts in addition to your Round-Up deposits. If you prefer, you can set up recurring deposits on a daily, weekly, or monthly schedule.

Acorns is similar to Bank of America’s Keep the Change program, which rounds up purchases made with your debit card to the nearest dollar and then moves the difference into a savings account. With Acorns, however, the money goes into an investment account with the intention of long-term savings and growth potential, rather than a simple savings account.

Acorns Found Money Feature

One of Acorns’ unique features is Found Money. With this feature, every time you use an Acorns-linked credit or debit card at a partner retailer, that retailer will contribute an extra amount into your Acorns account.

There are over 300 Found Money participants. Here are some of the top ones and the amount they’ll contribute (as of July 2020):

Airbnb Up to 1.8% of your booking subtotal
Disney + $5 when you sign up
Blue Apron $25 when you sign up
Birchbox 3% invested when you subscribe
Chevron 25 cents for each $20 or more fill-up
Dish $50 when you sign up
Dollar Shave Club 2% of your purchase when you spend $20 or more
Earnest $100 when you refinance a student loan of $10,000 or more
Expedia 4% of your purchase
Groupon 2% of your purchase
Liberty Mutual Insurance $5 per auto or home insurance quote
LifeLock $25 with a new purchase
Levi’s 5% of your purchase
Macy’s 4% of your purchase
MeUndies 20% of your first purchase
Nike 5% of your purchase
Sephora 3% of your purchase
Stitch Fix $10 with a new purchase
Walmart 1% of your purchase
Postmates $5 for new customers

How to Create an Acorns Account

Signing up for an Acorns investment account is a relatively easy process and starts with signing up on the web or downloading the app for free from iTunes, Amazon or Google Play. The app is available for iPhone or Android mobile devices.

The three-step signup process starts with entering a PIN access code, which you will use when you log into the app in the future. Creating an Acorns account is currently available only to U.S. citizens.

1. Choose a Round-Up Account

Your Round-Up account is the one that you will monitor; choose which transactions you want to round up and invest the change. Choose from the most popular banks, including Chase, BoA, Citibank, Wells Fargo, U.S. Bank, USAA, etc. If your bank isn’t listed, click the “Next” button and type your bank’s name in the search bar.

Then you’ll be prompted to log into your bank using your online sign-in credentials. Next, click the account you’d like to use in your round-ups. You can connect more than one account if you’d prefer.

2. Connect Your Checking Account

Your checking account is different from your Round-Up account (this was confusing to me at first, too) and is the account from which funds will be transferred into your Acorns account. Connect an existing checking account from the list and sign in using your online credentials, or input your routing and account numbers manually from a different bank.

It took several minutes for my Chase Bank account to sync using my online ID and password. And don’t worry about connecting your banking information, because Acorns encrypts and protects all of the data with bank-level security.

3. Create an Investment Account

You’ll be asked to type in your first and last names, phone number, and birth date and to choose a security question/answer. Then it’s time to fill in your address and check if you’re a U.S. citizen or not.

Next, you’ll be prompted to answer three questions:

  1. Are you or have you been affiliated with a broker-dealer?
  2. Has the IRS notified you of being subject to backup withholding?
  3. Are you a 10% shareholder of a publicly-traded company?

If none of these apply to you, leave them unchecked. These are standard questions required by the SEC when you open any brokerage account.

Investing With Acorns App

Logging into the Acorns app allows you to view your portfolio, check the performance of your index funds, see what the market is doing and much more.

Within your preset investment portfolio, the Acorns app gives seven options for basic index funds offered through iShares and Vanguard.

Acorns Investing Portfolios

After the signup process is complete and you’ve created your investment account with Acorns, the app will process your portfolio. Simply view your portfolio to see a list of advice, tips, and ideas.

To see a change in projected value over time, you drag the graph (either right or left and up or down) to change the amount invested each month. You don’t have to stick with the recommended portfolio. Just click on the different types of portfolios to find one that’s a better fit.

There are five portfolios to choose from:

Portfolio Stock % Bond % Real Estate %
Conservative 100%
Moderately Conservative 36% 60% 4%
Moderate 54% 40% 6%
Moderately Aggressive 72% 20% 8%
Aggressive 90% 10%

Next, you can explore the ETFs and select an asset class you want to invest in. When you’re ready, simply click “Confirm Portfolio.”

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