Question: What do you do with your spare change?
Chances are pretty good you leave those excess pennies, dimes, nickels, and quarters lying around with no real purpose. Maybe you empty your pockets into a jar on your dresser and vow to spend your coins sometime in the future.
Unfortunately, there hasn't been a good way to make use of our spare nickels and dimes until now. Acorns, an investing and savings app, lets you put those coins to good use.
Acorns is a beginner friendly investment platform that makes saving seamless. The Acorns platform will round up your debit card purchases to the next dollar, and invest the difference. This way you can begin investing small sums over time. Acorns caters to investors who would like to get started, but may struggle with saving or committing capital to investments.
Acorns is a robo-advising, micro-investing platform that does the saving and investing for you. Right now, more than 9 million people are using the Acorns platform to save and invest their spare change.
On Acorns, there are no deposits or account minimums to maintain, no commission fees and no penalties to pay and what’s more, Acorns charges just $3 per month for its basic service.
Perhaps the most interesting feature of Acorns is automatic round-ups. To use this, simply link a credit or debit card to your account, then buy groceries, Friday night dinner, gas, Nikes, you name it! Acorns will round-up the amount you’ve spent to the nearest dollar. It will take that change, no matter how small, and funnel it into your investment portfolio.
For example, let's say your coffee costs $2.67. After this transaction, exactly $0.33 will be earmarked as an investment in your Acorns account.
Once your round-ups total $5, the money is withdrawn from your linked checking account and invested, where it will continue to grow in your carefully chosen portfolio.
This loose change comes from any purchases made from a linked debit or credit card or even your PayPal wallet, making it extremely easy to invest your spare change.
Acorns seamlessly transfers those spare coins into investments diversified across more than 7,000 stocks and bonds that are automatically rebalanced with market fluctuations.
You can add to your wealth by making one-time investments from anywhere. Got an extra $25 from cutting coupons and making coffee at home? Shuttle that right into your Acorns investment account.
With Acorns, everything can be set up automatically. Simply set it and forget it. Not only will that spare change be going toward your future, but it will also eliminate the need for a plastic jug to store those coins for years.
You can help your investments grow faster by setting up additional deposits in set amounts on a daily, weekly, or even monthly basis.
This could be a smart move, particularly given the fact that automatic round-ups will be smaller amounts. For example, earmarking $100 a week from your paycheck will help your investment account grow considerably faster!
Another option is to set up one-time investments to fund your account during a particularly lucrative time, such as when you get your bonus from work or receive your tax refund.
You can also opt to use the round-up multiplier to increase the amount stashed away in your portfolio by two, three, or ten times for each total purchase. You can try this out and if it doesn’t work well for you or if you’re feeling the pinch, you can turn the multiplier off.
The founders of Acorns have taken to heart their mission of planting seeds for future growth.
As a company they are dedicated to caring for the environment by planting thousands of trees. Here are just a few of the reasons the company has taken on this challenge:
Over 700,000 trees have been planted to date and more than 550 acres of forest land have been restored.
To join Acorns, you must meet the three requirements:
You will also need to link your credit and debit cards to Acorns if you want to participate in the round-ups program. If not, you can still add to your account on a regular basis with scheduled deposits.
You can sign up for Acorns in two levels of membership:
This is the basic level and includes an Individual Retirement Account (IRA) and a checking account.
This includes everything in the lower tiers, plus Acorns Early, which lets you open investment accounts for kids.
Are you a risk taker? Or do you prefer slow and steady?
Whatever your personality dictates, Acorns will tailor a portfolio for you. Just answer some short, simple questions about your lifestyle and financial goals, and a mix of Exchange Traded Funds (ETFs) will be suggested as your portfolio.
You may want to give some thought to your financial future when you figure out your investment objective. This will be helpful because you’ll need to boil it down to one of five options:
Your Acorns account is a Limited Trading Authority account. You will be directed (or can choose for yourself) into one of five Acorns investment portfolios, but the ETFs in the portfolios are previously selected.
Keep in mind that your investments could earn dividends that you can direct Acorns to re-invest in more shares, a move that will also grow your portfolio.
Acorns Earn is a feature of the platform that allows you to earn money back when you shop at certain retailers. A long list of retail partners will let you earn an extra 5 to 10 percent of your transaction in cashback to your Acorns brokerage account.
These retail partners include:
Acorns Checking is a debit card for a checking account with Acorns built in. The account has no minimum balance requirement, no overdraft fees, and unlimited free or fee-reimbursed ATMs nationwide.
If you connect your Acorns checking account to your direct deposit from work, you can receive your paycheck up to two days early. You can then easily invest this cash into your Acorns investment accounts.
Your cash is protected by FDIC insurance up to $250K per account.
Acorns gives you access to an online library of videos, articles, a variety of tutorials, and other educational content to help you learn more about the fundamental knowledge about everything from writing a budget to saving for college.
Recent topics have included:
Why should you open an Early account?
Consider this: If you invest just $5 a day in a child from birth, considering an 8% average annual return, they could be a millionaire by 50. As a parent or other family member, you can now do more than just save for a child's future. You can invest in it.
Acorns Early is a UTMA / UGMA account. This means that, unlike a 529 that can only be used for education, you can use the funds for anything that benefits the child.
Your Early UTMA / UGMA account can be transferred easily to the child at a specified age of transfer as they enter adulthood.
Acorns Early comes with the Acorns Family account which is just $5 per month.
These are Individual Retirement Accounts (IRAs) both traditional and Roth.
Acorns experts will recommend an IRA for you based on your goals, employment and income, then keep you posted on how it’s doing. IRAs allow you to save money without all the tax implications of other investments.
More than 250,000 people have already signed on as Acorns Later investors. And if you already have an IRA or 401k, Acorns professionals will help you roll it over into Acorns Later.
This feature comes standard with the Acorns Personal account but is also accessible if you are paying for the Acorns Family membership.
Acorns is a micro-investing platform, which means your investment portfolio isn’t going to grow in leaps and bounds overnight. However, some might find solace in the fact that you won’t be choosing the stocks and ETFs that make up your portfolio. This could be a welcome relief for many who have avoided investing because they are unsure what to invest in.
At the very least, Acorns will help you become aware of what you’re needlessly spending – even if it’s a few pennies or nickels. If that loose change is stowed away into an investment account, you have something to show at the end of the day.
One important consideration is the monthly fee in proportion to the account balance. If you are signed up for the family membership plan, you are spending $5 per month or $60 per year. If your investment account only has $100 - $200 in it, you could be paying a really high fee for your investments.
The benefit is that when your account balance is exceptionally high, this fee as a proportion to your balance decreases significantly.
If this has sounded intriguing as an investment option, click the link below to sign up!