Acorns is a financial technology company that offers a mobile app that rounds up purchases made with a linked debit or credit card and invests the spare change into a diversified portfolio of exchange-traded funds (ETFs). The company’s mission is to make investing easy, accessible, and affordable for everyone.
Acorns was founded in 2012 by Walter and Jeff Cruttenden, who wanted to make it easy for people to start investing their money. The app was launched in 2014 and has since grown to over 8 million users. The app is available on both iOS and Android platforms and is free to download.
One of the unique features of Acorns is its “round-up” feature, which rounds up each purchase made with a linked debit or credit card to the nearest dollar and invests the spare change into a diversified portfolio of ETFs. For example, if a user makes a purchase of $4.50, Acorns will round it up to $5.00 and invest the spare change of $0.50 into the user’s investment account.
The app offers a variety of investment portfolios that are tailored to different risk levels and investment goals. Users can choose from portfolios that are focused on conservative, moderate, or aggressive investments. The portfolios are composed of ETFs that are chosen by Acorns’ investment team based on their potential for growth and diversification.
Acorns also offers a feature called “Found Money” which allows users to earn cash back on purchases made through partnered retailers. These cashbacks are automatically invested into the user’s account.
Acorns also provides options for retirement and custodial accounts, making it easy for users to start saving for their future. Users can open a Traditional IRA, Roth IRA, or SEP IRA account, as well as custodial accounts for children under 18.
The app also includes a feature called “Learn” which provides educational resources and articles to help users learn more about personal finance and investing. Users can also access webinars and other resources to help them make informed investment decisions.
Acorns has been positively reviewed by many financial experts, with some praising its easy-to-use interface and low fees. However, some critics have raised concerns about the app’s fees, which can be quite high when compared to other robo-advisers. Additionally, Acorns does not offer the same level of customization as other robo-advisers and does not offer a human advisor option.
Overall, Acorns is a great app for people who want to start investing their money but may be intimidated by the process. The app’s round-up feature makes it easy to start investing small amounts of money, and the app’s educational resources can help users learn more about personal finance and investing. While Acorns may not be the best option for more experienced investors, it is a great tool for people who are new to investing.
What is the Minimum Investment?
The minimum investment required to open an account with Acorns is $5. This means that you need to have a minimum of $5 in your account to start investing with the app. After that, there is no minimum deposit required to maintain your account, so you can invest as little or as much as you want. The app’s round-up feature also allows users to start investing small amounts of money by automatically rounding up purchases made with a linked debit or credit card and investing the spare change into a diversified portfolio of ETFs.
What is the Average Roi?
The average return on investment (ROI) for Acorns will vary depending on the investment portfolio that you choose and the current market conditions. The app offers a variety of investment portfolios that are tailored to different risk levels and investment goals. These portfolios are composed of exchange-traded funds (ETFs) that are chosen by Acorns’ investment team based on their potential for growth and diversification.
The conservative portfolio has the lowest potential returns but also the lowest risk, while the aggressive portfolio has the highest potential returns but also the highest risk. The average ROI for the conservative portfolio is around 3-5% while aggressive portfolios can have average returns of 7-10%.
It’s important to note that past performance is not indicative of future returns. The stock market is subject to fluctuations and investment returns can never be guaranteed. It’s always a good idea to consult a financial advisor before making any investment decisions.
It’s also important to note that the app charges a monthly fee of $1, $2 or $3 depending on the plan you choose, this fee will decrease the overall returns of your investment.
What is the Minimum Withdrawal?
The minimum withdrawal amount for Acorns is $5. This means that you must withdraw at least $5 from your account at a time. Once you have initiated a withdrawal, it typically takes 3-5 business days for the funds to be transferred to your linked bank account.
It’s important to note that some withdrawal transactions may be subject to taxes and penalties, depending on the type of account and the amount being withdrawn. For example, if you withdraw funds from a traditional IRA before age 59 1/2, you may be subject to an additional 10% penalty tax. Always consult a tax professional before making any withdrawals from your retirement account.
Additionally, if you have a custodial account, you should be aware that there are certain restrictions on withdrawing money from it, depending on the state you live in and the age of the child. It’s a good idea to check the terms of the custodial account before initiating a withdrawal.
Conclusion:
Acorns is a financial technology company that offers a mobile app that makes it easy for people to start investing their money. The app’s unique “round-up” feature allows users to invest spare change from purchases made with a linked debit or credit card, and the app offers a variety of investment portfolios that are tailored to different risk levels and investment goals. The minimum investment required to open an account with Acorns is $5 and the app has a minimum withdrawal of $5. The app has been positively reviewed by many financial experts, with some praising its easy-to-use interface and low fees. However, some critics have raised concerns about the app’s fees, which can be quite high when compared to other robo-advisers. Additionally, Acorns does not offer the same level of customization as other robo-advisers and does not offer a human advisor option. Acorns is a great tool for people who are new to investing and want to start small, but it may not be the best option for more experienced investors. It’s important to consult a financial advisor before making any investment decisions.
You may want to read “How to Invest Your Money in Robinhood?“