Acorns Review 2021: Pros, Cons and How It Compares

Acorns’ spare-change savings tool and cash-back rewards program make investing easy. But the management fee on small accounts is steep.
Alana BensonOct 6, 2021

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Our Take

4.0

NerdWallet rating 

The bottom line: If you want to make the most of your spare change and get the occasional retailer kickback, there’s really no better place to do that than Acorns. The automatic roundups at Acorns make saving and investing easy, and most investors will be surprised by how quickly those pennies accumulate. The downside? At small balances, Acorns fees can cut into or completely wipe away investment returns.

Acorns

on Acorns's website

on Acorns's website

Fees

$3 - $5

per month

Account Minimum

$0

Promotion

$10 Sign Up Bonus

Pros & Cons

Pros

  • Automatically invests spare change.
  • Cash back at select retailers.
  • Educational content available.

Cons

  • High fee on small account balances.

Compare to Other Advisors

Acorns
SoFi Automated Investing
Vanguard Digital Advisor
NerdWallet rating 
NerdWallet rating 
NerdWallet rating 
Fees

$3 - $5

per month

Fees

0%

management fee

Fees

0.15%

per year (approximately)

Account Minimum

$0

Account Minimum

$0

Account Minimum

$0

Promotion

$10 Sign Up Bonus

Promotion

Free

career counseling plus loan discounts with qualifying deposit

Promotion

No advisory fees

your first 90 days of Vanguard Digital Advisor investment management (Enrollment requires a Vanguard account with a minimum of $3,000)

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Full Review

Where Acorns shines

Roundups: In addition to adding lump sums to your investments, Acorns lets you round up your purchases on linked credit or debit cards, then sweep the change into a computer-managed investment portfolio.

Cash back: Acorns offers cash back at over 350 retailers.

Where Acorns falls short

No tax strategy: Unlike many of its competitors, Acorns does not offer a tax strategy.

High fees on small balances: Because of its pricing structure, Acorns can have high fees on small account balances.


Acorns is best for:

  • Hands-off investors.

  • People who struggle to save.

  • Earning cash-back rewards.

Acorns at a glance

Account minimum

$0 to open account; $5 required to start investing.

Account management fee

Personal: $3 a month for an investment account plus an IRA and a checking account.

Family: $5 a month for all of the above plus investment accounts for kids.

Investment expense ratios

0.05% to 0.18%.

Account fees (annual, transfer, closing)

$50 per ETF to have them transferred to another broker when you close your taxable Acorns account; no charge to sell your investments and have the resulting cash transferred.

Portfolio mix

Well-diversified portfolio with exposure to domestic and international stocks, bonds and REITs.

Socially responsible portfolio options

Sustainable portfolio built with ESG ETFs available for no extra cost.

Accounts supported

Individual non-retirement accounts. Roth, traditional and SEP IRAs. UTMA/UGMA accounts available at the $5-per-month tier.

Tax strategy

Not available.

Automatic rebalancing

Free on all accounts.

Human advisor option

Not available.

Bank account/cash management account

Acorns Checking provides a checking account with no minimum balance or overdraft fees and access to 55,000+ fee-free ATMs. This checking account does not offer an interest rate.

Customer support options (includes how easy it is to find key details on the website)

Customer support is available 7 days/week from 5:00 a.m. to 7:00 p.m. PT via live chat, phone and email.

More details about Acorns' ratings

Account minimum: 5 out of 5 stars

There’s no minimum to open an account, but the service requires a $5 balance to start investing.

Account management fee: 5 out of 5 stars

Editor’s note: Acorns previously had a $1 tier that was discontinued in September 2021. All $1 tier customers will be migrated to the $3 tier automatically, unless they indicate economic hardship and would be unable to continue investing without the $1 tier.

Acorns charges $3 a month for a taxable brokerage account, Acorns Later (an IRA account) and Acorns Spend (the checking account and debit card offering), or $5 a month to include those benefits plus Acorns Early, investment accounts for kids.

Whether Acorns' fee is a pro or a con depends entirely on your account balance. Flat fees like this are less common among robo-advisors, which typically charge a percentage of your assets under management per year. A fee of only $3 or $5 a month sounds cheap, but it can be a high percentage of assets for investors with small balances. If you only contribute by rounding up your spare change, one of Acorns’ signature features, your fee relative to your account balance will be fairly high.

Account balance

Personal

$3/month ($36/year)

Family

$5/month ($60/year)

$100

36%

60%

$500

7.2%

12%

$5,000

0.72%

1.2%

$10,000

0.36%

0.60%

For context, Acorns’ competitors like Wealthfront and Betterment charge 0.25% per year, and generally offer a higher level of service including tax assistance and more diversified portfolios. Stash charges $1 a month for a brokerage account and banking access. For $3 a month, Stash gives you those offerings plus a retirement account (a traditional or Roth IRA), which is similar to Acorns Personal.

Investment expense ratios: 4 out of 5 stars

An expense ratio is an annual fee charged by mutual funds, index funds and exchange-traded funds, as a percentage of your investment in the fund. If you invest in a mutual fund with a 1% expense ratio, for example, you’ll pay the fund $10 per year for every $1,000 invested. If high, these fees can significantly drag down your portfolio returns. The expense ratios of the funds used in Acorns’ portfolios range from 0.05% to 0.18%. Expense ratios are paid in addition to your Acorns account management fee.

Account fees: 3 out of 5 stars

If you decide to move your investments out of Acorns to another provider, you'll pay a steep fee for that convenience. Acorns charges $50 per ETF to transfer investments. Acorns isn't alone in charging this type of fee, but theirs is on the high side. If you have, say, five ETFs, you're looking at a $250 fee. A more common scenario among providers is to charge $75 to transfer all investments out, and some don’t charge a fee at all.

Still, you can always choose instead to sell your investments and transfer your cash to a bank account. There's no charge for that.

Portfolio mix: 3.5 out of 5 stars

Like other robo-advisors, Acorns takes the investing reins from the user. The app considers your data — including age, goals, income and time horizon — and then recommends one of five portfolios that range from conservative to aggressive. You can accept the recommendation or choose a different portfolio that takes more or less risk.

The portfolios themselves are made up of low-cost iShares and Vanguard exchange-traded funds that cover between four and six asset classes, depending on the portfolio, including: large, medium and small company stocks, international company stocks, a variety of bonds and REITs. The sustainable portfolio also offers emerging market stocks and even more bonds.

Socially responsible portfolio options: 4 out of 5 stars

Acorns offers a sustainable portfolio made up of ETFs graded using ESG (environmental, social and governance) criteria. The platform makes it easy for existing customers to switch their portfolios over from the core portfolio to the sustainable one, but also recognizes that clients may experience tax complications if they do so.

Accounts supported: 2.5 out of 5 stars

The Family tier includes Acorns Early, which makes it easy to create UTMA/UGMA accounts for your kids. These custodial accounts allow parents to invest on behalf of a minor child, and use the money for expenses that benefit the child. Once the child reaches the age of transfer (this will depend on where they live), they gain ownership of the account and can use the money for any reason.

Custodial accounts are not the same as 529 college savings accounts. 529 accounts are less flexible, as they’re designed for education expenses, but they also offer more tax advantages and are generally considered a better way to save for college. Be sure to do your research or consult a financial advisor to determine the best account for you.

Tax strategy: 1 out of 5 stars

Acorns does not offer any form of tax strategy. Many other robo-advisors offer tax-loss harvesting, which is an investment strategy that can reduce the amount of tax you may have to pay when you sell your investments.

» Want to check out other providers? Here are our top picks for best robo-advisors.

Automatic rebalancing: 5 out of 5 stars

Your portfolio allocation, or how much of your portfolio is in stocks versus bonds or other investments, depends on factors such as your age and investing timeline. Acorns will automatically adjust your portfolio in response to market fluctuations or other factors that shift your portfolio out of its intended investment allocation.

Human advisor option: 1 out of 5 stars

Some robo-advisors offer access to a financial advisor, either for free or for an added fee. Unfortunately, Acorns does not offer its clients access to financial advisors.

Savings account/cash management options: 2 out of 5 stars

Acorns offers an online checking account and debit card. The checking account offers real-time roundups to your investment account, mobile check deposits and access to more than 55,000 fee-free ATMs around the world. It requires no minimum balance, but pays no interest rate.

Customer support options: 4 out of 5 stars

Customer support is available 7 days a week from 5 a.m. to 7 p.m. PT by live chat, phone and email. Some robo-advisors provide more comprehensive customer service, such as 24/7 phone support.

Other features you should know about

One feature Acorns is known for is its automated savings tool. Acorns sweeps excess change from every purchase using a linked account into an investment portfolio. You can connect as many cards as you want, though all roundups are taken from the same linked checking account. With each purchase, Acorns rounds up to the nearest $1 and gives you the option to transfer that change into an investment portfolio. You can do that either automatically, so every purchase is rounded up and the change transferred, or manually, by going through recent purchases on the app and selecting which roundups to transfer.

You can also invest lump sums manually or set up recurring deposits on a daily, weekly or monthly basis. Lump-sum transfers may be as small as $5.

To help flesh out your accounts, Acorns has partnered with nearly 350+ companies through its app — including Apple, Warby Parker, Walmart, Nike and Sephora — to give you cash back when you use a linked payment method at one of the partners. If you use the Acorns Google Chrome extension you gain access to even more brand partners. In most cases, you get the cash back automatically, without any additional steps. You simply use a card linked to an active Acorns account to make the purchase, and the rewards will usually land in your account in 60 to 120 days. According to Acorns, customers using the Chrome Extension are now earning between $5 and $35 a month on average in bonus investments from everyday purchases.

Acorns also has a Job Finder feature powered by ZipRecruiter. The tool gives clients access to career development content and lets them set up job alerts for new opportunities.

Is Acorns right for you?

If you want to make the most of your spare change and get the occasional retailer kickback, there’s really no better place to do that than Acorns. The automatic roundups at Acorns make saving and investing easy, and most investors will be surprised by how quickly those pennies accumulate.

The downside? At small balances, Acorns fees can cut into or completely wipe away investment returns.

How do we review robo-advisors?

NerdWallet’s comprehensive review process evaluates and ranks the largest U.S. robo-advisors by assets under management, along with emerging industry players, using a multifaceted and iterative approach. Our aim is to provide an independent assessment of providers to help arm you with information to make sound, informed judgements on which ones will best meet your needs.

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Each factor can involve evaluating various sub-factors. For instance, when gauging the investment selections offered by robo-advisors, 80% of the score is based on the potential for diversification (how well-diversified a resulting portfolio of investments could be) combined with the availability of specialty portfolios and level of customization for investors. Expense ratios form an additional 10% of the score, and low or no management fee the remaining 10%.

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INFORMATION UPDATES

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on Acorns's website