Acorns FAQ: The Ultimate Guide to Micro-Investing

Why Acorns is Your Best Bet for Micro-Investing
Imagine building wealth without even noticing. Acorns make it that easy. Micro-investing apps have become a dominant force in personal finance, allowing you to grow your wealth by rounding up your daily purchases and investing the difference. Acorns is leading the way. But why? The idea is simple: invest spare change from your everyday purchases into diversified portfolios. This article will answer every question you might have about Acorns, its features, fees, and potential for growth.

What is Acorns?

Acorns is a micro-investing platform that automatically invests your spare change by rounding up the amount you spend on everyday purchases. For example, if you spend $3.75 on coffee, Acorns rounds up to $4.00 and invests the extra $0.25 in a diversified portfolio. It works seamlessly with your linked bank account, offering the simplicity of automatic investing while eliminating the need for you to actively monitor your investments.

How Does Acorns Work?

Once you link your bank account, Acorns rounds up your purchases to the nearest dollar and transfers that amount to your Acorns account. These small amounts are invested in a portfolio based on your selected risk tolerance and goals. Acorns users can choose from five main portfolio options ranging from conservative to aggressive.

Acorns also offers an Acorns Later option, which helps users invest in retirement plans (IRA), and Acorns Early, which allows parents to create investment accounts for their children.

How Much Does Acorns Cost?

Acorns pricing is structured in three tiers:

• Acorns Personal: $3 per month, includes an individual investment account, retirement account, and checking account.
• Acorns Family: $5 per month, includes everything in Acorns Personal, plus accounts for children.
• Acorns Premium: $9 per month, offering expanded features like financial advice and priority customer support.

Though the fees may seem high for smaller accounts, the automation and ease of use make Acorns appealing to beginners.

Is Acorns Safe?

Acorns is backed by top-tier security measures. The platform uses 256-bit encryption, bank-level security, and fraud detection. Plus, Acorns accounts are insured up to $500,000 through the SIPC. However, like all investments, Acorns is subject to market risk, so you could lose money.

Who Should Use Acorns?

Acorns is best for those who are new to investing or prefer a hands-off approach. If you're someone who finds it difficult to save or invest on your own, Acorns does the work for you. It is also a good choice for people who want to start investing with small amounts of money, as the minimum to start is just $5. Acorns' automatic round-ups ensure you’re continually investing without needing to actively transfer funds.

How Much Can You Make with Acorns?

This is the million-dollar question. Acorns is not a get-rich-quick scheme, but it can grow your wealth slowly over time. Let's break down some potential returns:

Timeframe	Amount Invested (Monthly)	Average Annual Return (7%)	Portfolio Value After Timeframe
1 year	$50	$3.50	$626.50
5 years	$50	$21	$3,573.87
10 years	$50	$42	$8,215.40

The key is consistency. The more you invest over time, the larger your returns will grow.

What Are the Drawbacks of Using Acorns?

While Acorns is great for automating your investments, there are some downsides:

• Fees Can Be High for Small Balances: If you only have a few hundred dollars in your Acorns account, the $3/month fee can eat into your returns.
• Limited Control Over Investments: You don’t have the flexibility to choose individual stocks or funds. Acorns chooses a portfolio for you based on your risk preferences.
• Withdrawals Can Take Time: Withdrawing your funds isn't instant. It can take 3-6 business days for your money to transfer back to your bank account.

Acorns vs. Other Micro-Investing Apps

Acorns isn't the only player in the micro-investing space. Let's compare it to its competitors:

Feature	Acorns	Stash	Robinhood
Cost	$3/month	$1-$9/month	Free
Round-Up Invest	Yes	No	No
Retirement Acct	Yes	Yes	No
Stock Choices	Limited	Customizable	Customizable
User Base	9 million+	5 million+	22 million+

Acorns is by far the easiest and most hands-off. Stash offers more personalized stock-picking options, while Robinhood is better for active traders.

Can You Use Acorns for Retirement?

Yes, Acorns offers Acorns Later, a retirement account that allows you to open a Traditional, Roth, or SEP IRA. You can set up recurring contributions or just invest your spare change into your retirement fund. While the fees remain the same, the benefit is that you're consistently putting money into your retirement without needing to think about it. It's an easy way to set it and forget it for long-term growth.

Acorns for Families: A Path to Financial Literacy

One unique feature is Acorns Early, which allows you to set up investment accounts for your kids. This means your children can benefit from compounding returns over time. Teaching kids about money early can set them on a path to financial success. The feature is included in the $5/month Acorns Family plan, which allows you to create multiple accounts for your children at no additional cost.

Can You Get Financial Advice with Acorns?

For users who need extra guidance, Acorns Premium offers one-on-one financial advice. This is particularly useful if you’re unsure about how to balance investing, retirement savings, and debt management. At $9 per month, this premium service could be worth it for individuals looking for personalized financial planning help.

Conclusion

Acorns is an excellent platform for anyone who wants to invest but doesn’t have the time or expertise to actively manage a portfolio. Its simplicity, automation, and user-friendly interface make it a standout choice in the world of micro-investing. While the fees may be a downside for smaller accounts, the long-term benefits of regularly investing spare change far outweigh the costs for most users. Whether you're just starting out, planning for retirement, or investing for your kids, Acorns offers a comprehensive solution to grow your wealth effortlessly.