Acorns Investment App – Scam, or Legit?
Here’s my honest review of Acorns App. You’ve probably heard of Acorns already, and you may even know it’s a smartphone app that automatically invests your spare change. In this Acorns app review, we’re gonna dig into the ins and outs, and plusses and minuses, and help you decide whether Acorns is right for you.
One thing’s for certain, you get $10 just for joining.
They also offer great incentives for referring new customers. At the moment, they give you an extra $1,000 if you send 12 people their way a month. Crazy, right??
What is the Acorns App?
Most people avoid investing because it’s complicated and risky. It’s counterintuitive, and it can feel like we’re losing control of our money.
But we know from all those great Wall Street movies, the ones full of smug men in suits yelling at each other over piles of cocaine, the ones that are always “based on a true story”, that investment is a way to make a lot of money.
So what if a simple smartphone app did the work and the thinking for you? Skip the suit, skip the cocaine, skip the hair gel and skip NYC altogether. That’s the idea behind Acorns App.
The goal of Acorns is to get you started investing, using the money you won’t miss (literally your spare change).
Acorns was founded in 2012 by a father and son team, Jeff and Walter Cruttenden.
How does the Acorns App work?
It’s simple, and brilliant.
They take and invest the change from your everyday purchases. For Acorns to work, you have to connect the app with your bank accounts as well as debit and credit cards that you use everyday.
Then, you make your purchases and go about your life like normal. The Acorns app rounds up all your purchases to the nearest dollar, takes that spare change, and invests it.
Example: you buy a $6.50 sammich for lunch. Acorns rounds up your lunch to $7.00 and the extra $0.50 is invested. So with Acorns, you’re automatically investing your spare change every time you buy something with your debit or credit card.
You can also set up deposits directly from your checking account, if you want to grow the account more quickly. Acorns lets you make unlimited deposits and unlimited withdrawals without penalty.
How do you grow your money with Acorns?
It all depends on how much money you spend normally with your debit and credit cards. If you buy a lot of stuff, you’ll see all of those purchases rounded up, and the change adding up to serious dollars in your Acorns investment account.
You can also set up a recurring daily, weekly or monthly investment, anywhere from $5 to $50,000 But that’s not the only good thing (hint…PASSIVE INCOME OPPORTUNITY ALERT!)
Acorns App Referral Program
You can add $ to your Acorns account by referring friends and family (and strangers, honestly) to the app. And if you’re taking my advice and starting your own web-based business, you can recommend the Acorns App on your own blog and tell the world about how awesome it is.
When one of your referral joins Acorns, you get $10, and so do they. Win-win.
At the moment, if you send 12 people a month to Acorns, you get an extra $1,000. Isn’t that unbelievable??
Is it free to sign up for Acorns?
Yes, it’s absolutely free to sign up.
If you’re a college student, Acorns is absolutely free to use, from four years from registration date, and once you have a valid .edu email address.
If you’re not a college student, Acorns will assess a fee of $1/month for balances below $5,000. For balances over $5,000, you pay 0.25% per year.
You do the math: it’s way less what a bank or brokerage firm would cost.
Is it easy to sign up for Acorns?
Yes, it’s easy to sign up.
You can join Acorns on their website and click sign up, and then register. Or you can use the app, which you can get on Google play, or you can download it from the app store.
Because you’re setting up an investment account, you will have to provide personal information, including your social security number.
Let’s look at some detailed pros and cons of Acorns.
The Acorns app minimum investment amount is $5, so it’s easy to get started, especially if you’re not loaded to begin with, or still suspicious about the whole idea.
Plus, you don’t have to physically go to an investment or brokerage firm; it’s all automated, and from the convenience of your smartphone.
With Acorns, your nest egg is on autopilot. It grows with each purchase you make and you’ll hardly miss the money with each purchase rounded up some cents amount less than $1.
Reduced risk with Index funds
Acorns’ portfolio options invest in index funds, which are funds that bet on the stock market performance as a whole. Every chunk of spare change you invest is automatically diversified across 7,000 stocks and bonds to reduce risk, and improve your return.
You do have some choices
Acorns offers a few different portfolios with different risk levels, depending on how aggressive you want to invest, and how much risk you want to tolerate. The portfolio options are:
Conservative –> Moderately Conservative –> Moderate –> Moderately Aggressive –> Aggressive
Here’s what it looks like inside the app, at the “Aggressive” level, investing $280/monthly for 10 years:
As with everything, there are a couple complaints and concerns from users, and it’s important to know about them before jumping in.
Glitches in the app
This app is getting older, so more people are enjoying it glitch-free, but sadly not everyone. There have been a few complaints of people being unable to sign up because of error messages. Others sometimes experience problems with the rounding up mechanism.
Not every bank is on the list
A few people with small, local banks found that their bank wasn’t on the Acorns App list of banks. So, if you happen to use a smaller bank or credit union, check with them and make sure yours is. If not, it might be worth reaching out to Acorns support to expedite the process.
Investing Means Market Conditions Matter
Because your money is invested in a portfolio of exchange-traded funds or ETFs, your earnings will depend on how the market performs as a whole. That will be true whether you invest through Acorns or anyone else.
What’s an EFT? Exchange traded funds are large groups of stocks from different sectors of the economy, which allow you to invest in all of them at one time rather than each individual stock.
Acorns have different EFTs for different levels of risk – meaning, you can choose to invest in a very low-risk, safe EFT that is largely comprised of government bonds, or even a high risk EFT largely comprised of things like tech and new business stocks. Totally up to you!
Acorns states that its portfolios were designed by a Nobel prize winning economist. I don’t have a degree in economics, but I’m inclined to trust someone who’s won a Nobel prize in that field 🙂
Is Acorns Legit or Scam?
And it’s a great way to dip your big toe in the big scary waters of investment, especially if you’re new to it.
The best thing about Acorns is that it’s connected to your existing spending. The saving mechanism piggybacks on existing spending, so you spend and save at the same time.
It’s also a great way for young people and college students to get started, since the Acorns app is free for them. If you’ve heard anything about investment, it’s that compound interest is king, and you really need to start investing money, even small amounts, early in life, in order to make the most of it.
But if you’re looking for a completely safe and more lucrative way to grow your wealth, without fussing with the stock market, get a jump on building your very own web-based businesses using my #1 recommendation.
That’s a wrap for my Acorn review! I always welcome your feedback and questions, so let me know what you think! And if you use Acorns, definitely leave a comment and share your experiences!