Easily Invest Your Spare Change Automatically with Acorns (Our Review)


Acorns free app (which is also available in a desktop version) aims to demystify the process of investing, using money that new investors will not miss from their bank accounts.Knowing how to invest your money ought to be a basic life skill—like changing a tire, budgeting, and cooking for yourself.

But the sad truth is that many people are intimidated by investing, and it can feel impossible to fill in this particular skill gap.

Thankfully, that’s where the Acorns mobile investing app comes in.

This free app (which is also available in a desktop version) aims to demystify the process of investing, using money that new investors will not miss from their bank accounts.

Acorns offers users an introduction to investing that can help even the most nervous would-be investors to get over their mental blocks and anxiety—and master this life skill.

Here’s how Acorns works:

Rounding Up Your Purchases

Much like the Bank of America Keep the Change program, the big hook for Acorns is the fact that it links to the spending account(s) of your choice—such as a credit card, a checking account/debit card, or Paypal account—and rounds up each transaction to the nearest dollar.

However, unlike Keep the Change, you will not see the money transferred from your account with each round up. Instead, the Acorns software will keep track of what would have been rounded up with each purchase, and will then make a transfer to your investment portfolio once you have reached a minimum of $5 in roundups.

This means that you must designate a single, specific checking account from which funds will be transferred into your Acorns investment portfolio. For instance, my husband and I make the majority of our purchases with our Upromise reward credit card, which makes it the natural spending account for us to link to Acorns for rounding up.

We will also link one of our two checking accounts to Acorns as the designated account for withdrawals. Our Acorns round ups will look like this:

  1. I link our Upromise credit card to Acorns.
  2. I purchase lunch for $13.23
  3. Acorns calculates the amount to round up as $0.77. The app does not transfer money yet, as we have not yet reached the $5 minimum.
  4. I make several more purchases, and Acorns keeps track of the rounded up amounts until it reaches $5.
  5. At the $5 point, Acorns transfers the $5 from the designated checking account, even though the round ups were on our credit card.

In addition to the roundup option, you may also set up a recurring transfer on a daily, weekly, or monthly basis, or you may make single lump sum transfers. The transfers will be listed as “Acorns Investment WEB PMTS” on your bank statements.

Choosing Your Investment Portfolio

The designers of the Acorns app partnered with Nobel prize-winning economist Dr. Harry Markowitz to create the optimized portfolios offered to users. Dr. Markowitz is widely considered to be the father of Modern Portfolio Theory, which serves as the basis for most online advisors’ investment methodology.

Once you have signed up with Acorns and provided information about your age, goals, income, and investing time frame, the app will recommend one of five investment portfolios ranging from conservative to aggressive. Each portfolio is exclusively made up of exchange traded funds (ETFs) that are chosen and rebalanced by a group of advisors that includes Dr. Markowitz.

The ETFs come from investment firms such as iShares, Pimco, and Vanguard, and they include exposure to large-cap, small-cap, real estate and emerging market stocks, as well as government and corporate bonds.

While the app recommends a specific type of portfolio to each user, you can choose a different one if you prefer. You can also manually select an asset class you are interested in investing in. Once you have made your choices, you will click “Confirm Portfolio.”

If you need to access your money, you have the option of withdrawing your funds from your Acorns investment account at any time, and the money will arrive in your checking account within five to seven business days. There is no limit on how much you can withdraw.

Acorns Fees and Taxes

Acorns has three different fee structures. Users with more than $5,000 in their investment portfolios will pay 0.25% of their holdings per year. Those who haven’t hit the $5,000 mark pay $1 per month for the service. This cost can be pretty steep for Acorns beginners. For instance, a $200 portfolio will pay $12 over one year—which equals a painful 6% fee.

Students and young adults have a third option for fees—paying nothing. The company recognizes that many investment newbies can’t necessarily afford their fee, and so as of July 8, 2015, adults younger than 24 and full-time students of any age do not have to pay fees on any accounts, no matter the size. To take advantage of this incredible deal, students over the age of 24 should sign up using their .edu email address and list their employment as “Student.”

In addition to fees, don’t forget that the portfolios offered by Acorns are exclusively taxable investment accounts. That means you will owe taxes on any capital gains your Acorns investments realize, although capital losses can offset the tax you owe. Acorns does not offer assistance to users for mitigating their taxes, as other robo-advisors often do.

Acorns Apps

Acorns Security

Acorns offers its users the highest level of security available. Both the website and the mobile app are secured with 256-bit SSL encryption, and the app uses multiple account safeguards such as automatic logouts after inactivity, multi-factor authentication, and ID verification. You will also receive account alerts in the case of unusual account activity.

In the unlikely event that Acorns goes belly up, your invested money is Securities Investor Protection Corporation (SIPC) insured for up to $500,000. (SIPC is the investing and brokerage version of FDIC insurance.) However, no investment is risk free, and you need to remember that SIPC insurance is only there to protect you from Acorns’ failure, not from losses to your principal.

The Bottom Line

Acorns has created an app that makes investing money pretty much painless. By lowering the bar to entry, the app offers excellent support to newbie investors as they learn the ins and outs of growing their money.

While the fees can be somewhat steep for new users, the elimination of fees for adults under 24 and for full-time students indicates that the team behind Acorns really wants to help people learn to invest.

It is my hope that young investors will use Acorns while it is free for them until they know the ropes and feel confident making investment decisions on their own.

Get started: Start automatic investing with Acorns!

Up next: Want to compare Acorns with Stash Invest? See our full Stash Invest review.

About Emily Guy Birken

Emily Guy Birken is a former English teacher and respected personal finance blogger. She lives in Milwaukee, Wisconsin with her engineer husband and two high-energy little boys. She has written four books: The Five Years Before You Retire, Choose Your Retirement, Making Social Security Work For You, and End Financial Stress Now. Emily's thoughts on parenting and life in general are found at The SAHMnambulist.


  1. You could review Robinhood App. Free trades. Unfortunately it takes three days for funds to settle. That’s where they make money.

    Would love to hear your opinion.