Acorns Investing App Review 2021: Is Acorns A Scam?

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If you’re asking yourself, “is Acorns a scam,” or you’re simply looking to learn more about this app, then you’ve come to the right place.

In this Acorns investing app review, I’m going to tell you everything that I know about this platform.

I’ll also share some Pros and Cons to help guide you on your way, if you’re on the fence about this robo-advisor. Because let’s face it, not all platforms are created equal.

Let’s get started.

What Is Acorns?

Established in 2014, Acorns is a micro-investing platform that is designed based on the modern portfolio theory concept. The platform is a robo-advisor whose service is ideally centered on the concept of saving your spare change.

This idea is known as spare change investing or micro-investing.

The platform effectively rounds up all your debit or credit card purchases to the nearest dollar and then invests this change that is leftover into a distinct portfolio of ETFs (Exchange-traded funds).

Everything is performed online and is all automated, allowing you to simply set it and forget it. These services mainly target millennials who are having challenges saving money or who are relatively new to the idea of investing.

Key Terms With Acorns

While getting started with Acorns is relatively easy, there are a few specific terms you should familiarize yourself with. Those are as follows:

Round-Ups: This is the change between your purchases and your next dollar. The platform rounds up all your purchases on your linked credit or debit card and automatically invests it.

Found Money: This is extra funds added to your accounts by shopping with the various Acorns partners.

Acorns Invest: Also known as Acorns Core, this is the platform’s primary offering. It is their micro-investing account, which enables you to invest your ‘spare change’/round-ups.

Acorns Later: This is the exclusive Acorns retirement account (IRA).

Acorns Spend: This is the new Acorns checking debit card and checking account. It invests and saves for you with each purchase. It requires no manual account linking.

How Does Acorns Work?

Similar to most Robo-advisor platforms, Acorns is based on the principle of Modern Portfolio Theory established by Dr. Harry Markowitz.

This investment app features five optimized portfolios, which you have to choose from. Which will automatically rebalance your portfolio and then reinvest the payment of the dividend recurrently.

The platform does also allows the user the option to invest manually. However, this would require that you explore a list of every purchase you make and subsequently decide the one that you should round up.

In addition to this, it allows you to transfer funds from your bank account into your Acorns account. Ideally, the roundups in this platform are invested in real-time.

The Acorns IRA accounts facilitate saving for retirement. This is through making recurring contributions.

Essentially, the recurring investments allow you to invest virtually any amount starting from as low as $5 per day/week/month.

These funds are then effectively distributed across ETFs through the platform’s partner Vanguard. This way, your investment is diversified by being distributed into more than 7000 stocks.

Acorns App

To register, you can get started on the Acorns website or download the platform’s app to your mobile device and then answer several questions.

The app will offer its recommendations on an appropriate portfolio best suited for you.

When you complete the signup process and finish creating your investment account, the app will proceed to process your distinct portfolio.

You can simply view this portfolio for a list of tips, ideas, and investment advice.

Each of their portfolios comprises of Exchange Traded Funds (ETFs) distributed across multiple classes of assets. These particular ETFs feature internal expenses that are equal to about 0.10% of your overall investment over time.

Acorns Porfolios

Below is an outline of how the Acorns portfolios are classified:

1) Conservative

Ideally, Acorns will put most of your money in corporate and government bonds that do not gain value quickly, but are not likely to lose value.

2) Moderately Conservative

Together with bonds, a substantial portion of your money will be put into large company stock ETFs that are stable.

3) Moderate

This porfolio contains large company stocks and bonds and will consist of approximately two-thirds of your overall portfolio.

The remaining one-third includes real estate, international, new company and small company stocks.

4) Moderately Aggressive

Bonds consist of just 20% of your overall portfolio. The remainder comprises mostly of small and large-company stocks with emerging and real estate market stocks mixed in.

5) Aggressive

In this level, none of the money is invested in typical bonds. Approximately 10% of your overall investments go towards emerging market stocks, with 20% going towards international stocks.

The remainder is then invested in real estate and more established stocks.

NOTE: The Aggressive level boasts the highest potential for earning, although it has the highest likelihood of uncertainty. On the other hand, although the conservative option won’t result in much rapid growth, it is, however, the most stable tier.

In essence, the process of how Acorns works can be summarized in the following few steps:

1) Selecting a portfolio

After you sign up and create your account, you then answer several questions concerning your investment goals, the duration to achieve these goals, as well as your comfort level with risk.

Usually, the platform recommends one of the five distinct portfolios they feature, developed by Dr Harry Markowitz.

Ideally, you can either decide to go along with what the platform refers or pick something else. In the end, you are only limited to these five investment options.

2) Making investments

Afterward selecting a portfolio, you then outline how much you want to invest.

Usually, it can start from as low as $5. You can either invest a substantial lump sum or subsequently establish a recurring investment from your earlier linked checking account.

The rest is handled by Acorns, reinvesting the dividends as well as keeping your portfolio balanced automatically on autopilot.

3) Withdrawals and Changes

Typically, you can change your standard investment schedules at any time or withdraw any time by making a few changes in the app.

4) Rounding up purchases

This is perhaps the most novel of Acorns’ features. It is merely the ability to link both your debit and credit cards to the platforms’ app and have the app round up all your purchases as well as invest the difference.

The platform downloads your purchase history from your linked debit and credit cards, then tallies the ‘spare change’ from these purchases and as soon as the change goes beyond the standard $5 threshold, it withdraws this amount from the checking account and proceeds to invest it.

How To Join Acorns

Acorns is accessible to US residents who are above 18 years in age and hold a legal social security number.

Signing up for this platform is quite an easy process, and it usually begins with downloading the app for free from Google Play, Amazon, or iTunes. You can also visit the Acorns website to get started.

Is Acorns A Scam

To create your account, you must follow a a few steps to complete the process.

The first step to creating your account is to enter a valid email and set your password. This will act as your login credentials.

The next step is to link your bank with the platform to allow the platform to collect round ups. This particular step is skip-able, and it can be added later.

After this, the other step will require you to fill in your details, including your name, birth date, and other personal details like your social security number, and your citizenship.

In this step, you will also be required to put in your state, address information, city, as well as phone numbers before you can gain access to the next form. Which requires that you set a security question to verify your account.

As earlier mentioned, this platform operates under a theory that comprises of five unique portfolios.

To get the ideal portfolio, you will need to answer several questions, which will be used to evaluate your suitability as well as determine both your risk tolerance as well as the ideal investments for you.

These questions include your:

  • Annual income
  • Employment status and time frame
  • Net worth
  • Reason for investing

Based on your answers, this platform will outline how your portfolio is structured. Although you can change this later on your app if needed.

It highlights the percentages every dollar you have is broken into as well as how and where they have been invested.

This platform will also ask you to set a distinct recurring amount that will be invested weekly. Starting from a minimum of $5 to $50 every week.

Your account will be approved between 2 and 5 days. After which, you will be ready to begin your investing process.

Fees With Acorns

When it comes to the fees, Acorns has a distinct set of fees every month, which range from $1 to $3. Those are broken out as follows:

  • $1 per month for the Acorns Invest, which is an exclusive automated investing account.
  • $2 per month for the Acorns Invest together with the Acorns Later IRA.
  • Finally, $3 per month for both accounts as earlier mentioned in addition to another account, the Acorns Spend, verifying the account as well as a debit card.

The platform does not charge any withdrawal or transaction fees. In fact, for typical college students, Acorns Invest is absolutely free!

However, to qualify as a typical college student, you need to select the employment status option as ‘student’ and then use your college email address (.edu) when registering your Acorns account.

Acorns Competitors

Acorns is purposely built for the young investor and college students alike with little or no constant income.

Similar to other Robo-advisors, Acorns affords numerous types of accounts that can aid you in your investment plan, whether through retirement or taxable accounts.

There are many other similar platforms, but the most common ones include:

  • Stash
  • Robinhood
  • Betterment

So how does Acorns compare to these different platforms? Let’s find out.

Acorns vs. Stash

Stash and Acorns are quite similar, especially considering that they both facilitate the process for the user to begin investing with only $5. Not to mention, they boast a similar fee structure.

However, compared to Acorns, one key difference is that Stash doesn’t invest on your behalf. They provide recommended ‘themes’ and you are tasked with making the actual investment.

Acorns vs. Betterment

Acorns and Betterment are both standard Robo-advisors, although their similarities end there.

With Betterment, they are primarily focused on actual retirement savings in comparison to saving your ‘spare change’.

The difference with Acorns is it ideally suits the investor who is not only serious with his/her investments, but is also looking for a hands-off approach with its robo-advisor aspect of it.

Acorns vs. Robinhood

While Acorns is focused on auto-investing for the young investor, Robinhood is geared towards the individuals who can effectively pick their own investments.

What is exceptional about the latter is the fact that it charges no commission to trade the stocks. Therefore, it is ideal for beginners looking to invest without losing some money to standard monthly fees. However, it doesn’t do the investing on your behalf.

Is Acorns A Scam?

Of course, before investing, it is critical that you figure out whether Acorns or any platform where you put your money, is a scam or legitimate way to invest.

The nice thing about Acorns, is that it is backed by some Big players and investors in the industry. These include names such as:

  • PayPal
  • BlackRock
  • BainCapital
  • DST Global
  • NBCUniversal

As per their official website, your funds are transferred to a distinct SIPC account, which is the brokerage and investing world’s equivalent to FDIC insured.

Acorns is not a scam. It is a solid start for young investors. And if you have little available to save, the monthly deposits are too little to be viewed as a serious saving approach towards retirement.

One thing that was surprising with Acorns was their rating with the Better Business Bureau. At the time of this review, the company carries an F rating with the BBB. This F rating was issued due to failure to respond to 9 complaint(s) filed against the business.

Pros and Cons of Acorns


  1. No minimum charges for opening an account.
  2. The platform only needs a minimum of $5 to start investing.
  3. You can use your spare change to set up an IRA account.
  4. It offers customized portfolios that are based on the details you provide as you sign up.
  5. No withdrawal/ transaction fees.
  6. Easy to use the app.
  7. Educational content to help members increase their knowledge can be found right inside the app.
  8. Offers free management for college students. This platform waives the standard management fee for approximately four years for any student with a valid college (.edu) email address.
  9. If you are just investing, the standard round-ups feature saves you a lot of time.
  10. Over 4.5 million people save and invest with the app daily and the company has over 1.2 billion in assets.


  1. Limited investment options for the seasoned investor.
  2. No tax benefits or tax-loss harvesting.
  3. This platform only dispatches your 1099, but only if your account activity warrants it.
  4. Relatively high monthly fees, which can be a challenge for investors that have significantly low account balances.
  5. No human advisors.
  6. Probably not a fit for the investor looking for large gains.
  7. An F rating with the Better Business Bureau.


I hope you found this handy guide useful and you learned more about Acorns. As you can see there are pros and cons to this app as there are with most apps of this kind.

I shared some competitors and what makes Acorns unique in the marketplace. If you could use a jump-start to help you get in the game of investing a modest amount of money, Acorns might be right for you.

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