Learn If the Acorns Investment App Is A Scam: My Review
Product name: Acorns
Creator: Noah Kerner
Date Created: 2012 (Mobile release in 2014)
Price: $1/month for accounts under $5,000 or .25% of the balance for accounts over $10,000
Official Website: https://www.acorns.com
If you’re on social media you’ve probably seen the ad for Acorns: The picture of some solo cups and ping pong balls along with their prices. The ad then shows the change that could be saved and invested from those purchases. It’s pretty genius marketing, really. I tried finding the ad to accompany this review but sadly can’t. Regardless, the idea seems genuine, so I wanted to take the time to look under the hood and discover if the Acorns investment app is a scam with this review.
The idea behind the Acorns investment app is quite simple: round up the spare change of your purchases to the nearest dollar (so $0.25 if you just spent $3.75, for example), then invest that money into stocks and bonds via a personal investment account. Through various tools, the Acorns app gives you several ways to grow your account.
Who Is the Acorns Investment App For?
While I am sure the developers of the application wanted to target anyone who is interested in investing or building up a savings, the true core of who has made Acorns a multi-million dollar company since its launch, is millennials. Now I’m 25. I have no problem telling you I am terrible at keeping a savings account.
My parents tried their damnedest to teach me to have savings account and constantly add to it. However, life just didn’t pan out in a way that allowed me to save much… at least for a little while.
From what I’ve read, most of my fellow millennials share a similar problem. Maybe not all of us suck at saving, but a lot of us do. Along comes Acorns: An app that rounds up pennies from each transaction and saves them for me. The idea is gold.
How it Works
We’ve already covered round ups. The round ups are the main marketing pitch for Acorns, but the app does offer a few other ways to add to your savings portfolio such as one-time and recurring additions to your account.
The money in your account is invested in various stocks and bonds, from small company and large company stocks, to real estate stocks and more. The diversity of the investments helps to keep the account relatively safe. The formula for deciding where to invest was developed with assistance from 2 Nobel prize winning economists, so that’s cool.
Features & Tools
- Round Ups, One-Time Investments, etc
- As discussed, you can choose to round up purchases to add to your account balance. You can also decide a default “round-up” investment for purchases you make that have a flat dollar balance ($.50 for a purchase that costs $22 even, for example). You can also make one-time and recurring investments for pre-determined dollar amounts.
- The Performance menu tells you how your account is doing. You can also view the dollar amount/percentage of your total account balance and where it is invested.
- Should you decide to dip into your savings, there is a withdraw funds feature
- Found Money
- Acorns has partnerships with various companies. These partnerships result in incentives to buy from the companies and in exchange help your savings grow. Sometimes these incentives are that the company will put a percentage of your total purchase into your savings account, or they will give you a fixed dollar amount
- The Grow menu is one of my favorite parts of Acorns. It features curated content to not only help youg et the most out of Acorns, but also various articles and guides on investing, saving and overall money management strategies.
- Acorns also features a referral program where you get $5 for every user that you refer. This $5 is then invested into your savings account. What’s even better is that you ALSO get $5 when you sign up through a friend’s link. So you if click this link and sign up for Acorns, we both get a $5 head start!
- Learn more about the referral program: here.
As Acorns is an investment app, it does require access to your bank accounts. If you are uncomfortable with this, then Acorns is not for you. However, if you’d like to automate your savings, then definitely give Acorns some consideration.
Additionally, since Acorns invests your money and needs to create an investment account for you, you will need to give the application your Social Security number to prove you are a legal citizen of the United States. This is also for tax reasons. If you end up earning a good profit from Acorns, you are required to let Uncle Sam know about them and report them on your taxes. I know some will be turned off by this fact, but this same requirement holds true for any investment company.
Learn more: here
More Info About Acorns Can be Found…
Nerd Wallet Review: Acorns Review 2018
Business Insider Review: REVIEW: I tried Acorns, the app that turns your spare change into investments
After All Is Said & Done, Is Acorns A Scam?
In short, no- Acorns is not a scam. Acorns is an app that links with your bank accounts, rounds up your purchases and turns those investments into a savings/investment account. Users can also make one-time or recurring monthly investments into their accounts and grow the account in various other ways.
Personally, I love using Acorns – but I am also horrible at saving. If you’re anything like me, it is worth looking more into the app. Have you used Acorns? What were your experiences with it? Have I left more to be desired? If you have any additional questions about Acorns that I may have left out, please let me know in the comments and I will do my best to find the answers for you.