Acorns is an online investing tool that rounds up every transaction on credit and debit cards linked to your account, and invests the difference automatically. These micro-transactions are an easy way to start investing, or to add another source of passive investing to your investment strategy. It’s a painless way to invest if you’re not ready to shell out hundreds of dollars at a time.

Acorns has registered Assets Under Management (AUM) of $257 million across 1,116,000 accounts. That makes it a popular option, but with an average account size of $230, it isn’t well-invested in. It only offers taxable accounts, so don’t look to transfer your IRA or 401(k) under its management.

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Acorns is a passive micro-investing tool. (Image from

Fees and investing

Fees include $1 per month up to $5,000, then 0.25% thereafter. Fees are waived for current students with a valid .edu email address for up to four years., and it’s free to sign up. While Acorns likes to say that you’re investing change from your purchases, the money isn’t actually tacked on to purchases, but is deducted from the checking account you register with Acorns in $5 increments. For example, buy a coffee for $3.50 on your debit card and Acorns tallies $0.50 (by rounding up to the next dollar). After nine more coffees, Acorns’s tally hits $5, and then money moves. Acorns deducts $5 from your checking account and invests it in your portfolio.   You can also set up recurring or one-time transfers.

Another source of cash is Found Money. Found Money is an affiliate program where you get cash in your account when you make purchases with one of Acorns’s partners using a linked payment method. The reward is posted to your account within 30-60 days, and the offers and partners can be seen under the Found Money link in the app or on the website.

Signing up

You need to be a US resident over 18 to register for an account. You’ll be asked for your primary reason for investing. Options include long- and short-term investment, saving for a major purchase, children, and general saving. You’ll also answer questions about your income, net worth, and employment status, and investment timeline.

Based on your answers, Acorns creates a projection calculated with a suggested monthly contribution and a recommended portfolio. There are five portfolio options, divided into categories of risk. You can change your choice at any time.

You’ll then be asked to make an initial investment, which is optional, and to link a bank account, which is required for investing but not for signing up. Finally, you also need to provide your Social Security number.

What you get

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Acorns offers a mix of asset classes in each portfolio. (Image from

The portfolios are made up of Exchange Traded Funds (ETFs). ETFs are a broad holding of stocks or bonds, traded on a market. Like most ETFs, the ETFs offered are based on well-known, passive indexes. These ETFs are meant to track with the market so your holdings grow (and shrink) along with the market, instead of trying to “beat” the market like more actively managed funds. Many robo-advisors invest in passive ETFs because of the low expense ratios.

The ETFs offered cover six asset classes: large and small company stocks, emerging market stocks, government and corporate bonds, and real estate stocks. Each of the five portfolio options consists of a mix of these ETFS, except for the most aggressive portfolio which forgoes government and corporate bonds for riskier options. The mix is automatically rebalanced to maintain the same level of risk that you initially choose, regardless of whether one of your ETFs outperforms another.

The Upshot

Acorns is very easy to set up and use. It’s eminently understandable, with well-defined terms, and a whole section of content, Grow Magazine, aimed at educating and informing new investors. It’s relatively painless, with low investment requirements and virtually no minimum.

At low investment levels, the $1 per month can be a relatively large percentage to pay on your investment, but at $12 a year, it’s not exactly highway robbery. Once you reach $5,000, your fee is 0.25%, which is on the low end for robo-advisors. If you don’t have much money to invest, or are new to investing, this is a great product to start with.

Sign Up With Acorns