Full disclaimer: I’m not saying these results are typical. I can be scatterbrained and messy and forget that I have an app for a long time, even if I see it pulling a few dollars from my bank account here or there. Add to that that I have my iPhone set to delete apps that I’m not using… Look, I was saving and investing a lot of money on an app that I didn’t even have on my phone anymore. If that doesn’t tell you how I can sometimes be as a person, I don’t even know.
What even is Acorns?
The Acorns app combines the functionality of a shopping extension like Rakuten or Capital One Shopping with automatic investing and features that kind of… how to put this… trick you into funding your savings?
This review is for the Bronze plan with only an Invest account, none of the Acorns bank accounts, retirement plan, emergency fund, educational tools for kids, or debit card active. This is the super bare-bones version of the service.
Where does the money come from?
You can make manual or recurring contributions to your Acorns account directly from your bank account, AND/OR you can navigate to cashback offers from online retailers through the app/browser extension to get a percentage of your purchases deposited into your Acorns account.
Here’s the twist: you can also opt to fund your account using Round-Ups, a system of automatic withdrawals of small amounts of money from any checking account. The app determines amounts you won’t miss based on your spending habits and transfers it over.
Everything is invested automatically.
Investing? But without having to think about investing at all?
Here’s the thing that sets Acorns apart from all the other cashback apps: all of the money that goes into your account is invested in a portfolio that you can have a say in customizing (or not)! If all you want to do is pick a risk-tolerance level from a multiple choice list, that’s fine. Acorns will do the rest.
If you want to choose ETFs and stocks for your Acorns portfolio, you can do that, too, with a premium subscription.
You can withdraw funds at any time (with no fees), which takes 1-3 days.
Is it effective?
My Acorns portfolio did better than my IRA last year, so I guess it has been working for me! Obviously, everyone’s results will vary, and so will the stock market.
Round Ups (which are optional) made me skeptical at first. How can a program know how much money is no trouble at all for me to invest? I’m a freelancer. I can barely answer that question myself. I decided to give it a whirl, completely terrified. But, you know, science? I found that Acorns only transferred about $5-10 a month in Round Ups from my linked bank account into my investment account. I really didn’t miss that amount. It could have taken more and still gone unnoticed.
It would be great if there were some kind of transparency on how the dollar amount of the Round Ups was calculated. I would have opted in earlier if I’d known how small the numbers were going to be.
I was really expecting some sort of hassle involved in having the cash back sitting in an investment portfolio instead of being digitally paid out to me periodically, but I was pleasantly surprised. There’s no hassle or fees involved in withdrawing funds. Transfers in and out of your account take 1-3 days, which makes this a bit more convenient than waiting for a quarterly Rakuten payment.
How does it stack up?
Cash Back offers are frequently comparable to those available on Rakuten and Capital One Shopping, but sometimes Acorns has the best deal by far. If I’m making a big purchase online, I check current cashback rates for all three companies. None of the services consistently outpaces the others.
Of the other services I’m aware of in the cashback sphere, Upromise’s functionality is the most similar to Acorns’, but still worlds apart. Through Upromise, you can choose to either receive your cashback as a direct deposit to a bank account or you can choose to automatically transfer it to a 529 (college savings) account once per month. Upromise itself does not host investment accounts.
I’m not aware of any other services that blend cashback with investing. If you know of any others, leave them in the comments!
The Biggest Drawback
There’s no longer a free version. The set-up I’m using (Bronze) now costs $3/ month.
The Verdict
I love the Acorns app. It is a perfect way to effortlessly form a little pocket of savings if you’re overwhelmed and don’t have the time or bandwidth to get organized around that. Honestly, I kind of forgot about the app for a year and then I opened it up to find more than $400 that I didn’t realize I had accumulated. Obviously, because you are investing, you assume risk, and it is not guaranteed that you will even retain the money that you add to the account.
Would you try Acorns?
If you’re interested in taking Acorns for a spin, you can use my link to get $5 free after you fund your account with $5 or more.
