This app is so brilliant, I don’t know why I didn’t come up with the idea myself! Now here’s the thing. Everybody knows the importance of investing and saving for the future but so many people find it hard to get started. To help, here is a full review of the Acorns App.
I’ve taken the Liberty of using Acorns, and I’d love to share my personal experience using the app. Will go through how the app works, its features, perks, and where it falls short.
How the Acorns App Works
Let’s start off this review of the Acorns App with how it all works. Do you have a change jar? Or maybe a little piggy bank that has spare change in it. Acorns kinda works the same way. This app is available on both IOS and Android devices.
Acorns is a simple app that combines saving money and Robo-investing. This simply means that, instead of you individually picking different stocks you want to invest in, Acorns automatically invests for you based on mathematical algorithms.
Whenever you perform a transaction on your cards, Acorns rounds up that transaction to the nearest dollar. It then takes the difference from your linked bank account and puts it in your Acorns account. Simple as that.
Acorns also allows you to transfer additional funds at any time. This is helpful if you have leftover money at the end of the month or got a bonus at work, for example. Acorns does not have a minimum amount requirement to open an account.
Advantages of using Acorns
1. It encourages saving
Since its rounds up transactions to the nearest Dollar, you don’t have to think about it. It automatically saves money for you. You might not be good at saving money, so using an app like Acorns helps you do just that and get the ball rolling.
2. It gets you introduced to investing
Since Acorns invests your money using mathematical algorithms, you don’t have to think much about wants to invest in. It’s super easy to let the computer do the heavy lifting for you, and all you have to do is fund the account. If a super easy and convenient way to get started in the world of investing and get your feet wet.
3. It provides excellent financial tips
Acorns also provides very extensive financial tips and tricks to its users. It includes stuff like how-tos, the basics of investing, and even interviews from other investors. Having easy access to loads of investing tips and tutorials is super convenient and helpful. It helps reduce the anxiety and intimidation that come with investing.
Disadvantages of using Acorns
1. Monthly fees can add up
If you sign up for the basics, a standard Acorns app account costs you $1 a month. That’s a very reasonable monthly price, but if you add an IRA account then the fee increases to $2 a month. Sure, these fees are pretty low, but if you don’t perform that’s many transactions within a month, then you might actually end up losing a few cents every month.
2. Very basic for more experienced investors
This isn’t really a disadvantage but more of an observation. Acorns is definitely designed for the novice investor. Investors with more experience would not really benefit from using Acorns. This is because there is very little control that the investor has when it comes to picking and choosing your Investments. This isn’t a problem for the novice investor that’s just getting started.
3. You could invest too little
The thing with investing spare change is that it’s just that, spare change. Think about it, if you perform a transaction and you average $0.20 I’ll spare change and 70 transactions in the month, you will only end up saving $14 a month. More like $13 a month after the monthly fee.
Although it’s better than nothing, you might want to consider occasionally depositing 20 or $50 per month if you have cash laying around. This will help the investment account grow.
Final thoughts
Spare change investment apps like the Acorns app are incredibly useful for novice/beginner investors. It takes away the complex need to keep track of your finances and consciously save and invest your money. It all happens automatically and that’s definitely a plus! Hopefully, this review of the Acorns app has given you some insight.
This is especially true for college students trying to get started saving and investing. Sure, they probably don’t have that much in disposable income, so investing spare change is definitely a good start! Highly recommended.
