Review on the Savings App: Acorns
Have you got lose change in your bank account then think about investing in an app like Acorns. It is an automated savings tool that uses a robo advisor model. This is a new way of micro saving.
Review of Acorns
of micro saving.
You do not need to have an account minimum to start the account and the management fees end up being between 1 to 2 dollars a month.
A California-based father-son team created Acorns with the intention of removing any mental roadblocks or anxiety about becoming a regular investor.
How does acorns work?
When you spend $4.73, Acorns rounds up your purchase to $5 and invests the 27 cent difference. Acorns will round up a $9.36 to $10 and invests 64 cents once your round-up balance reaches $5. After these two purchases, your round-up balance is 91 cents so you have $4.09 to go before Acorns withdraws $5 from your checking account and makes an investment.
Acorns adheres to the Nobel Prize-winning Modern Portfolio Theory by investing in stock and bond index ETFs that try to match the overall market performance (passive investing) instead of trying to “beat” the market (active investing) with low fund expense fees so you can earn the highest return possible without betting the farm.
During the signup process, Acorns will ask you a few questions to gauge your investing goals and risk tolerance. Based on your responses, Acorns will a recommend a portfolio with an investing strategy that ranges from aggressive to conservative.
The good, bad and ugly:
Let’s start with the good first:
- The tool is easy to set up. Go to your app store, download the app, connect your bank account and boom you are ready to save.
- It is good for novice investors and for college students. They do offer promotions to college students.
- You do have the ability to schedule additional deposits from your bank account.
- Cash back rewards when you shop online at select retailers.
- Ability to change your investment option for free.
The bad and ugly:
- I am not a millennial and found it a bit overwhelming navigating my way through the app. The menu is set up in a way that it pushes you to signing up for the debit card and the IRA. Me no like that!
- The app does not allow one to tailor their investments as they invest based on your risk tolerance.
- Watch this video on acorn:
All in all it is fun to see where your spare change is at with acorn and see the growth.
You won’t grow rich from investing in acorn but it is a good way to start teaching your college bound kids or even younger the value of investing.
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