Several applications on the market analyze users’ expenses and then provide them with advice or solutions to better manage or invest their financial assets.
Linked to users’ bank accounts, Acorns offers a new way to save money: rounding up purchases and investing the remaining change on the market.
So, if you are interested in setting up an account, here’s all the necessary information you need to start earning money with Acorns.
Micro-investing might be the best investment strategy for people who find some difficulty with saving money.
Even if you are investing small money every time, you might end up gaining a significant sum over time. Besides, you wouldn’t even have to do the work yourself because it is a totally automated process.
Acorns is among the best micro-investing platforms available on the internet, and it is a very efficient tool for money saving as well.
The main feature of this app is that it converts your spare change into higher gains.
What is Acorns?
Founded by Jeff Cruttenden in 2014, Acorns is an award-winning micro-investing and money saving application. It adopts a very simple investment strategy: saving money by investing your spare change. The process is done automatically through a robo-adviser emerged with automated savings tool.
You need to link your credit or debit card(s) when creating an Acorns account. When you make purchases through the app, it rounds up the change to the next buck and saves it to your account.
Then, when the accumulated savings reach $5, all the money is automatically invested into a portfolio of ETFs.
What makes Acorns even more exciting is the fact that you are effortlessly saving and investing money, which is undoubtedly an excellent investment strategy for new investors.
How does Acorns work?
You need to have a minimum of 18 years of age, be a resident in the U.S, and have an active checking account to be eligible to open an account.
You can sign up to Acorns through the website or the mobile app. You can create a 4-digit PIN code to access the account quickly. Also, you will need to fill in your personal information, add your bank account, select your financial goals, and designate your risk tolerance. That’s all you need to set up an account in Acorns.
Now you move on to choosing your portfolio.
Pick Your Portfolio
Choosing a portfolio in Acorns is based on:
- Net Worth
- Yearly Income
- Timeframe (saving period)
- Employment Status (self-employed, part-time, full-time, student, retired, or unemployed)
- Investing goals (significant purchases, retirement)
Also, you can select one of five reasons to invest:
- Major purchase
- Long-term investment
- Short-term investment
Also, there are five investment portfolios you can choose from. Bear in mind that Acorns recommend picking one option, but you are free to add more or change the existing one at any time.
The investment portfolios are:
- Aggressive: Bond 0% | Stock 90% | Real Estate 10%
- Moderately Aggressive: Bond 20% | Stock 72% | Real Estate 8%
- Moderate: Bond 40% | Stock 54% | Real Estate 6%
- Moderately conservative: Bond 60% | Stock 36% | Real Estate 4%
- Conservative: Bond 80% | Stock 18% | Real Estate 2%
These different investment portfolios come with different risk tolerance. The conservative has the lowest risk-reward proposition, while the aggressive has the highest risk-reward proposition.
In addition, low-cost Exchange Traded Funds are included in each portfolio and are from BlackRock and Vanguard.
Here are the different Exchange Traded Funds that are currently available via Acorns (they may vary):
- Real Estate: Vanguard REIT Index Fund ETF Shares | VNQ
- Emerging Markets: Vanguard Emerging Markets Stock Index Fund ETF Shares | VWO
- Small Company Stocks: Vanguard Small-Cap Index Fund ETF Shares | VB
- Corporates Bonds: iShares iBoxx $ Investment Grade Corporate Bond ETF | LQD
- Large Company Stocks: Vanguard 500 Index Fund ETF Shares | VOO
- Government Bonds: iShares 1-3 Year Treasury Bond ETF | SHY
- Int’l Large Company Stocks: Vanguard FTSE Developed Markets Index Fund ETF Shares | VEA
Once you picked the right asset class for your next investment, click “Confirm Portfolio” to lock your choice and you should be done with setting up your account.
Moreover, you don’t need any minimum deposit to create an account in Acorns. However, you have to round up to $5 to actually start investing. You can save $5 very quickly with the “Round-ups” feature.
It is important to note that if you want to withdraw your money from Acorns, it might take five to seven days to receive it.
Funding Your Account
One of the best features about Acorns is the “round-ups.” With this feature, the user invests $32 a month on average, which is a pretty decent amount of money that can build-up over time.
Gaining money with the “round-ups” is very simple:
- Link your debit or credit card(s) to you Acorns account
- Acorns will monitor each purchase you make and round it up to the next dollar
- The round-up balance is invested into your account once it reaches $5
For instance, if you spend $3.65 at Starbucks, it will round up to $4, and the 0.35 cent will be invested in your account.
You can manually pick which purchases you make to round-up or let the app manage it automatically.
In addition, you use the Acorns round-up multiplier to improve your contributions. You can choose whether to multiply the round-ups by 2, 3, or 10.
For instance, with the 3x multiplier, your $10 round-up becomes $30.
You can add money to your Acorns account when you shop from the different partners of Acorns. This cash-back program is referred as Found Money.
You can earn Found Money with two options:
- Simply spend; where you make purchases on the partner brands with your card linked to Acorns
- Tap and Get; where you can make purchases through the Acorns app
You will get a confirmation email within 24 hours after making the purchase. Also, the cash-back investment takes between two to four months.
You can schedule periodic deposits or only one investment from your savings or checking account.
You can make these periodic investments on a daily, weekly, or monthly basis.
Besides, the dashboard offers the opportunity to invest any amount of money divisible by 5 starting from $5 or any other custom amount.
Other Amazing Features
You will find beneficial educational materials in Acorns, where you can learn all the different aspects of investing and have a better understanding of how to effectively invest your money.
When you sign up to the app, you will find three different educational sections:
- Learn where you will find educational materials on the fundamentals of investing as well as FAQs.
- Grow where you will find news, interviews, and tutorials.
- Potential where you will find new tools that can be used to forecast your investments and savings as well as the others of different users.
Acorns Gift Cards
You can buy Acorns gift card for $25 or more, for in-stores and online use, which can be used to create an account as well. So, you can spoil your siblings, relatives, or friends with these Acorns gift cards and encourage them to get into investing.
The original investment app of Acorns costs $1 a month where you will get the opportunity to utilize the “Round-ups” feature for money saving, the “Found Money” feature to gain cash-back, and the chance to set periodic investments on pre-fixed intervals to save more money.
Also, if you are a college student, you can access all these features for free.
Furthermore, you can benefit from all these different features in addition to the chance to put your money in a tax-advantaged retirement account for $2 a month when you subscribe to the Acorns + Acorns Later package. You can choose from different retirement accounts, including traditional IRA, Roth IRA, or SEP IRA.
On top of these two account options, you can further benefit from a digital checking account as well as all the features mentioned above for $3 a month when you subscribe to the Acorns + Acorns Later + Account Spend package.
The Acorns Spend, which is a checking service, is a full-service that comes with direct deposit, debit card (Visa), mobile payment, mobile check deposit, and fee-reimbursed withdrawals from ATM (unlimited). In addition, you will benefit from the custom spending strategies, real-time Round-ups, and higher value Found Money cash-back.
Acorns Customer Service
You can get in touch with the customer service by filling up the contact form on the website. Typically, you will get about one to two days for a response. Besides, you can check the different videos and articles on the website under the “Acorns Support” section where you will find very helpful information as well as great responses to the most commonly asked questions of users.
Who is Best-suited for Acorns?
As long as you are an investor with minimum knowledge on how to use an app or website, you are eligible to invest your money with Acorns. In fact, Acorns is very simple to use and an excellent way to boost your savings, especially with its automated investing service.
Moreover, a key feature about Acorns is that college students have the chance to use it for free for up to 4 years.
So, if you want to learn more about different aspects of investing, make low-maintenance investments, save your money, or even gain free money, then you should definitely opt for Acorns.
Investing in Automated
Getting started might be the toughest part when it comes to saving money. Fortunately, when opening an Acorns automated investing account, you can set in and totally forget it since everything is managed automatically.
Cash-back on Purchases
With Acorns, you can get cash-back (found money) from the different partners like Nike, Apple, and Macy’s.
Nike: 5% of your purchase
Apple: 1.2% of your purchase
Macy’s: 5% of your purchase
It is important to note that the cash-back is invested within two to four months.
Low Minimum Investment
The minimum first investment in Acorns is $5, but you can still create an account without making any deposit.
Free for College Students
If you are a college student, then you can join the automated investment account of Acorns without any charges. You can benefit from this advantage for up to 4 years as long as you sign up with your college email (make sure to type “student” under employment section).
There are different monthly fees in Acorns:
- $1/month for Acorns automated investment account
- $2/month for Acorns Later retirement IRA account + Acorns
- $3/month for Acorns Spend checking account
The management fees are relatively higher compared to other competitors and might be an inconvenience if you are willing to invest with few bucks.
Bear in mind that acorns isn’t a savings account, which means that the value of the invested money highly depends on the market value. You might lose some money when the market drops down, but Acorns is still a lot safer and less risky than other investment platforms.
Acorns merges the robo-advisor with an automated savings tool, which makes it easier to generate high revenues. Besides, it has great features and charges very low monthly fees without any minimum deposit to open an account. That makes the investment even more affordable for every investor. Even more, college students have the chance to open an account for free. After all, it is definitely worth it to start your investment journey with Acorns. Happy investing!