How it works:
Acorns helps you build an investment account with very small micro investments that are rounded up from each purchase you make in your day-to-day life. Those funds are then invested for you which gives you the opportunity to earn a higher return than a regular savings account. You can also set up for small recurring deposits each day, week, or month with a minimum denomination of $5.00 increments. The recurring investments are optional so you could choose to just opt in for the round up the change program.
For example, if you purchase something and the total is $5.44 then it will deduct $6.00 for the transaction and put $0.54 into your Acorns account to be invested.
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Tiers and Fees:
Lite: $1 per month
This is the basic package that allows you to invest your round up change, set up auto deposits and gives you the opportunity to earn bonus investments that are discussed below. If you are just looking to get start with Micro Investing, then this is a great cheap option.
Personal: $3 per month
In addition to the Lite features this level gives you the option of quickly opening a retirement account which will give you the tax advantages that go along with them. You will also have access to a checking account through Acorn.
Family: $5 per month
All the features and benefits of the Personal Tier and the ability to set up investment accounts for each of your kids that can easily be transferred to them in the future.
Sign Up Process:
The sign-up process was very easy and they make it very easy to link the App to your banking site and set up initial and recurring investment deposits. You have the option of entering certain criteria about yourself to create an investor profile. Doing this is quick and easy with just 7 questions to answer and it helps Acorns to suggest the best Micro Investment path to set as your default.
Acorns gives you micro Investment options of Daily, Weekly, or Monthly with the minimum amount being $5.00 so there are options for everyone.
Round Up the Change: This is the Acorns feature that rounds up every purchase and bill that comes out of your linked account to the nearest dollar and turns that money into a micro investment account. You can also choose to multiply the roundups by 2X, 3X or 10X!
Acorns has partnered with over 350 name brand companies who are willing to invest in your account if you shop with or in some cases sign up for a membership. If you do or are planning on buying from any of these companies, it’s an added bonus as they will make the contribution for you doing so!
How Micro Investing and Acorns Could Help You
Pay off Debt:
Wait until this builds up to a specified amount of money then transfer out of Acorns and make another payment to a debt. Maybe set this for either the minimum payment amount or whatever amount you pay each month. You won’t really notice this money leaving your account and overtime it will turn into a bonus payment for you!
Save For a vacation:
You could use this fund for vacation savings or at least a portion of it each year. If you and the family go on vacation every year wouldn’t it be great to tap into this account and have all your
Invest for the future:
Acorn allows you to open a Retirement Account and realize the tax advantages while saving for your Retirement. $50 per month that earns 7% each year would turn into over $55,000 in 30 years. Not a bad little retirement present for yourself just from rounding up your change.
Invest for your kids:
Acorns makes it easy to set up investment accounts for each of your kids and gives you the ability to transfer the funds to them later. $50 per month that earns 7% each year would turn into over $24,000 in 20 years which would allow you to really help them get off on the right foot financially when they enter adulthood.
If you are a serious and savvy investor, then I do not think Acorns will give you the control options you are looking for as it is somewhat limited. If you are new to investing or have trouble saving money this could be a great option for you. It is very easy to set up and it does not take long to see your account start to grow, all while not really noticing the Micro Investments that it is round up for you!