Acorns Review: Invest Your Spare Change (Pros and Cons)

Acorns is a roboinvestor that helps you invest in a mix of ETFs based on your investing timeline and your risk tolerance.

What Are ETFs?

"In the simplest terms, Exchange Traded Funds (ETFs) are funds that track indexes like the NASDAQ-100 Index, S&P 500, Dow Jones, etc. When you buy shares of an ETF, you are buying shares of a portfolio that tracks the yield and return of its native index. The main difference between ETFs and other types of index funds is that ETFs don't try to outperform their corresponding index, but simply replicate its performance. They don't try to beat the market, they try to be the market."

Source: Nasdaq

Why Should You Invest in ETFs?

The big benefit with ETF's is diversification, and even with other tools like Robinhood, I strongly encourage people to use ETFs.

The core idea is that ETFs help you invest automatically. Acorns does this in 4 ways:

  1. Transferring Funds
  2. Automated Transfers
  3. Found Money (cash back portal)
  4. Roundups

Interested in trying Acorns? Use our referral link to earn $5 when you invest:

Transferring Funds

Transferring funds is not a unique feature. Most investment apps will let you invest and withdraw funds whenever you want without any hassle. 

Automated Transfers

Automated transfers let you setup recurring daily, weekly, or monthly investments. This is a good feature if you are an impulse shopper, but pointless for financially responsible who already have an investing plan.

Found Money (cash back portal)

Found money sounds good on the surface because Acorns works with brands to "find you money." However, after running through the rates, you are getting paid significantly less compared to other platforms.

This makes me question whether other platforms are taking a loss leader approach to get customers or whether Acorns is taking a spread.


Roundups are taken from a bank account, and not credit card purchases. The idea is that Acorns will roundup the the nearest dollar. Again, this may be good for some people and pointless for others.

For example, if you make 60 transactions and round up $0.50 on average, you'll save $30.


$30 in savings sounds great, but that's before considering the cost of the app. Acorns charges $1 /month if you have between $0 and $5,000, and 0.25% if you have above that amount.

Acorns is free for college students if you have an EDU email address for four years from the date of registration.

If you're starting from scratch and only doing roundups, that's $1 / $30 = 3.33% a month in fees. You're essentially paying $12 a year to save $360.

Even increasing it to 120 transactions (adding in breakfast and dinner) = $60 = 1.6% for something you can do for free.


"Not true though; they're providing investing services." The two other platforms you can compare Acorns to are Robinhood and Wealthfront.

Robinhood is not automated, but you can still buy the same ETFs by investing in VTI (Vanguard Total Stock Market ETF) or SCHB (Schwab US Broad Market ETF). 

Join Robinhood and we’ll both get a share of stock like Apple, Ford, or Sprint for free. Be sure to use the referral link:

Alternatively, you can use Wealthfront, which is fee-free up to $10,000. After $10,000, they charge 0.25% in fees.

Recurring transfers also exists with other platforms, so the only real feature that standout with Acorns is roundups.

Acorns vs. Wealthfront

How does Acorns compare to Weathfront?

At $1,000 = Acorns (1.2%) and Wealthfront (0%)
At $5,000 = Acorns (0.25%) and Wealthfront (0%)
Above $10k = Both charge 0.25%

To be fair, we're talking about $12 per year with Acorns, but with long-term investing, you're expecting 7% ROI. Understanding that 1% will be deducted is important.


If you're someone who already is financially responsible with saving money and have a plan for investing, then Acorns is not the app for you. 

If you're a student, I think this is a good starting point, especially since there are no fees to get started. 

Interested in trying Acorns? Use our referral link to earn $5 when you invest: