A micro investing app for beginners
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For those just starting out on their investing journey, going public can be a daunting process. But a number of fintech investing apps have beginner-friendly features like no minimum account, educational resources, and streamlined interfaces that can make the transition to investing much less daunting. Many newcomers can opt for Acorns, which has many of these features.
Acorns is an app specifically designed for novice investors looking to learn about the stock market. It offers access to its robo-advisor platform, tax-efficient IRAs for retirement, as well as a checking account. Its main micro-investing feature allows aspiring investors to start small by investing small change from their daily purchases.
For example, when you buy a coffee for $3.75, Acorns rounds to the nearest dollar and invests the 0.25 cent reserve in the market. The idea of micro-investing is that over time your contributions will accumulate. This is a good strategy for beginners who want to dip their toes into the investment pool before diving deep.
Below, Select reviews Acorns investment options, features and fees to help you decide if this platform is right for you.
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Minimum deposit and balance
Deposit and minimum balance requirements may vary depending on the investment vehicle selected. No minimum required to open an account, $5 minimum to start investing
Fees may vary depending on the investment vehicle selected. Monthly plans include: Personal ($3 per month) and Family ($5 per month)
Diversified ETFs including over 7,000 stocks and bonds
- Minimum deposit of $0 to open an account
- Invests your spare change from your daily purchases
- Customizes users’ portfolios based on their financial goals, time frame, and risk tolerance
- Automatically rebalances the portfolio
- Offers Acorns sustainable portfolios for ESG investing
- Access to instructional articles and videos to learn more about investing
- Monthly fees can be high if you don’t invest a lot
- Investment options are limited
Acorns acts as a robo-advisor that invests your spare change – and any other contributions you make – in a selection of around 25 low-cost, diversified ETFs (which include over 7,000 stocks and bonds). Users can fund their accounts with manual deposits, automatic recurring deposits, and Acorns’ Round-Ups®, which are added from round-up dollar purchases to your linked credit and debit cards once they reach $5.
ETFs are selected for you by Acorns after you complete a survey about your financial goals, investment schedule and risk tolerance. Factors such as your age, income, and net worth are all considered when creating your portfolio. ETFs in your Acorns portfolio could include ETFs like the Vanguard S&P 500 ETF, which mirrors the popular S&P500 stock market index, or the iShares Core US Aggregate Bond ETF which offers broad exposure to investment-grade US bonds.
However, investors cannot currently buy or sell individual stocks through Acorns, although the company is planning to launch this feature in 2022, such as Charles Schwab, Vanguard or Robinhood.
In addition to Acorns Invest, a taxable brokerage account, there is also Acorns Later, which allows you to open and manage a traditional IRA, Roth IRA, SEP IRA, and/or 401(k) Rollover. Acorns Early is offered as an investment account for children.
What sets Acorns apart is its hands-off managed portfolio and its Round-Ups feature that automatically helps you grow your money in the market. Acorns will automatically rebalance your portfolio so you can keep your investments on track. Round-Ups makes it easy to put investing on autopilot, and because your contributions can be so small with this tool, it makes investing accessible to almost anyone.
You can even choose to create an ESG portfolio that will be made up of ETFs that provide exposure to more sustainable companies.
Acorns also offers a checking account that has many of the features of a traditional bank account, including direct deposit, mobile check deposit, debit card, and free withdrawal from over 55,000 Allpoint ATMs worldwide.
If you’re serious about learning the ropes of the stock market, Acorns offers personalized financial literacy content on the go. His educational resources include a “Money Basics” blog and the Grow + CNBC website.
The Acorns app is available for free download in the App Store (for iOS), where it has 4.7/5 stars, and on Google Play (for Android), where it has 4.6/5 stars at the moment. this article was written. .
Acorns offers two levels of membership:
- Personal plan for $3 per month that includes a checking account, an investment account, and a retirement account.
- $5-a-month family plan that includes the three accounts you get with the personal plan, plus additional investment accounts for your children.
Although the app touts an affordable investment option for beginners, the monthly fee can eat into a big chunk of your returns if you only set aside a few dollars a month. To really take advantage of this, set up a larger recurring deposit to your Acorns investment account, in addition to any spare change that gets swept away.
Investment platforms like Robinhood don’t charge any fees for stock trading or monthly fees to maintain a basic account, but they don’t have a robo-advisor service. SoFi offers its own robo-advisor through its SoFi Automated Investing service and charges no management fees. Moreover, you can also open a cash management account with them at no cost.
At the end of the line
For those who want to invest their money but don’t know where to start, Acorns is a platform accessible to beginners. It has a simple interface and a micro-invest feature that works every time you make a purchase. Plus, your investments will be safe in low-cost diversified funds.
If you’re looking for something a little less entry-level, consider a robo-advisor like Betterment. It’s a solid choice for those who still want to leave their investments untouched, although more advanced investors have the option of customizing their flexible portfolios.
Disclosure: NBCUniversal and Comcast are investors in Acorns.
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Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff only and have not been reviewed, endorsed or otherwise endorsed by any third party.
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