![]() The difference is being added into your Acorns Invest account, where it is being invested in one of five pre-built portfolios. Whenever you make a purchase with the card linked to your Acorns account (or with your Acorns Visa debit card), Acorns will automatically round up your purchase to the nearest dollar and invest the difference. Round-Ups is a fancy name for spare change investing. The real magic happens with the Round-Ups and Acorns Invest features. However, those features are not the backbone of the app. How to use Acorns to improve your financesĪcorns has many unique features that have been developed over the years, such as checking account services and retirement accounts. Now that you know the basics of how Acorns works, let’s discuss how you can actually use Acorns to improve your financial life. These algorithms are highly intelligent and have gotten smarter over the years. Instead, a robo-advisor is a complex computer algorithm that uses specific data to make investment decisions for you. However, don’t think of actual robots sitting behind computers investing your money. This was the original idea that popularized Acorns.Īnd the term robo-advisor, what does that mean? A robo-advisor is exactly what it sounds like. In other words, rounding up your purchases to the nearest dollar and investing the difference. It’s very common to see the term micro-investing being used when describing spare change investing. This type of investing used to only be reserved for people with fat wallets. Micro-investing allows you to start investing in major indexes like the S&P 500 with as little as $1 or even less. ![]() The term has gained popularity because of apps like Acorns. Micro-investing simply means investing small amounts of money. ![]() How Acorns works The basicsĪcorns is a micro-investing and robo-advisor service that makes investing your money easy. The app is highly praised for its intuitive features and remarkably easy interface. ![]() Since then, it has expanded its features to include FDIC insured checking account services, retirement IRA products, and more.Īcorns has over 814,000 reviews on the App Store, and Google Play combined with a total rating of 4.7 out of 5 stars. The alternative is traditional brokerage firms, which can be intimidating and have high fees and minimum investment amounts - Acorns’ minimum is $5.Ĭurrently, Acorns charges a $1 monthly fee for accounts with a balance under $5,000, and 0.25% per year for accounts larger than that.Acorns is a financial services app that specializes in micro-investing and robo-investing.Īcorns has over 4.5 million users and over $1.2 billion in assets under management.Īcorns was founded in 2012 and originally only offered the spare change investing feature. Acorns’ automation is what’s appealing to users, he said. When asked what he thought about similar apps for investing like Robinhood, which lets people track and invest in public stocks from their smartphones and without paying fees, Cruttenden said he doesn’t see them as competition. And an Acorns clone, Lawnmower, which invests in Bitcoin, the popular digital currency, launched last week.Īlthough Acorns is looking into offering tax-advantaged accounts and possibly more investing options eventually, it plans to stick to investing in ETFs for the time being. In recent years, other automated investment tools such as Wealthfront and Betterment have surfaced to offer investment management with little to no contact with human investment advisors. Of Acorns’ 650,000 registered customers, 75% are under the age of 35, Cruttenden said.Īcorns’ six portfolio options are designed with different risk levels, and are regularly and automatically balanced based on their performance. “What we see is that once people get started, they get in” – as in investing and using the app frequently.Īcorns’ two-pronged approach to making investing approachable by automating the process and incorporating a smartphone app is paying off with younger users. “We wanted to connect it to something you’re already doing, which is spending,” Acorns co-founder and CEO Jeff Cruttenden told Fortune. For example, if you buy a coffee for $2.40, Acorns will take an extra 60 cents and invest it in an exchange-traded fund. Users link their bank accounts to the app, which then automatically rounds up the cost of all transactions to the nearest dollar, withdraws that spare change and invests it. Acorns, a eight-month old smartphone app built for exactly that purpose, said Wednesday that it had raised $23 million in additional funding.Īcorns’ app was designed to help people, especially first-time investors, get started in investing with small automated investments into a portfolio of exchange-traded funds, or ETFs, that the company selects and balances.
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