You get access to Invest, Later and Checking. There are two Acorns membership tiers, both of which charge flat monthly fees: Maybe you’re better off going with the cheaper ETF and donating the savings to a cause of your choosing.Īcorns bills itself as a low-fee option, but that really depends on how you measure this platform’s fees. ESGU’s top investments include Apple, Alphabet (Google) and Facebook, all of which have engaged in questionable social practices (from claims of inhumane work conditions to pilfering privacy to facilitating child pornography). But you should ask yourself what that really means. Perhaps you’re fine forgoing those funds in the name of socially responsible investing. To get a sense of how much, consider the following: if you seed your account with $1,000 and contribute an additional $300 monthly for 30 years with a 7% return, you’ll pay nearly $10,500 in fees with ESGU compared to more than $2,100 with VOO. The problem is many of the companies you end up investing in often fail a common-sense SRI test.įor instance, Acorns uses the iShares ESG Aware MSCI USA (ESGU) that comes with a 0.15% expense ratio, which is five times as high as the Vanguard S&P 500 ETF (VOO) that Acorns uses in its non-SRI fund. Wall Street loves these funds because they have higher fees. This is a pretty standard course of action for robo-advisors, especially as younger investors have shown an interest in them. Those so inclined may opt for Acorns’ new socially responsible investing ( SRI) portfolio. You can change to a different portfolio, but be careful: Your customized portfolio is based on the questionnaire, so by going against the grain you may end up holding too little risk, rather than too much. On the other hand, a portfolio consisting entirely of stocks, even for a risk-tolerant younger worker, may be a bit too risky. This simplified approach makes your investments much easier to understand without sacrificing returns. Unlike other competitors such as Wealthfront, our Acorns portfolio consisted of just four low-cost ETFs, all with miniscule expense ratios-the operating fees charged by the funds you invest in. 5% to small-cap stocks through iShares Core S&P 500 Small-Cap (IJR).10% to mid-cap stocks through iShares Core S&P 500 Mid-Cap (IJH).30% to international stocks through iShares Core MSCI International Stock (IXUS).
55% to large domestic companies through Vanguard S&P 500 (VOO).Acorns came back with an “Aggressive Portfolio” that allocated: Forbes Advisor signed up with a profile for a young, upper-middle-class worker with a long investing horizon. Acorns picks your portfolio from a roster of nearly 25 ETFs. You’ll be asked your age, net worth, income and when you may need to access the funds. Like most other robo-advisors, Acorns gives its customers a diversified portfolio of low-cost ETFs suited to their risk tolerance and goals, based on how they answer a handful of questions. Available to those paying Acorns’ most expensive tier, this is a UTMA/UGMA account, allowing parents to set up accounts for their children without dealing with sticky red tape. The cash back that you earn shopping on Earn is placed in your Acorns Invest account. An online marketplace that offers a small percentage back on purchases made at hundreds of major retailers, including Walmart. Another feature, called Smart Deposit, allows you to siphon money automatically from a direct deposit in your Acorns debit card account into other accounts, like Invest. A checking account that comes with a debit card and eschews many fees, such as minimum balance fees. All investing is for the long haul, whatever the goal. We found the Invest/Later nomenclature a bit confusing, since it’s not as if your Acorns Invest funds are meant for day-trading or immediate use. Like Acorns Invest, your portfolio is made up of ETFs. This is a tax-advantaged individual retirement account ( IRA). Setting up recurring contributions-Acorns lets users contribute as little as $5 at a time-is your best bet, taking advantage of dollar-cost averaging to build your portfolio. You may fund the account via round-ups, recurring deposits or on-demand deposits. This is a taxable investment account that puts your money into exchange-traded funds ( ETFs), chosen for you based on your risk tolerance and financial goals. Acorns offers users five main saving and investing products: Invest, Later, Debit, Earns and Early.
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