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Acorns Spend Review 2020: Is It Worth It?

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Written by Matthew Cerminaro
Updated on May 7, 2020
Acorns Spend
  • Pricing
  • Rewards
  • Integration
  • Low Minimum
  • Fees
4.6

Summary

Acorns is a solid platform for the investor who wants to automate their finances. It is great for the lazy or forgetful investor. The new Acorns Spend feature has made this an even more compelling choice. It is now easier than ever to save, spend and invest. 

Acorns Spend is a one of a kind service that offers lots of features that separate it from other checking accounts. 

On a more personal note, my first experience investing was with Acorns. Acorns provides an easy to use platform for beginners. If you are able to justify the $3 monthly fee, it is a solid choice for savers and investors. 

Pros

Solid platform for the “Hands-off” investor

Choose your portfolio based on risk tolerance

Easy-to-use, beginner-friendly application platform

Low-cost monthly fee makes it very competitive ($3/mo for Spend)

First service that helps its clients more efficiently save, spend, and invest all in one

All ATM fees reimbursed

No minimum balance required

No overdraft fees

$250,000 FDIC insurance

Cons

Not a great choice for the investor that wants to be in control, since you can only choose from 5 portfolios

Depending on account size, the $3 monthly fee may have a negative effect on portfolio gains

Most people are familiar with the spare change round up app called Acorns.

The concept is simple; you make purchases every day. Then, the spare change is rounded up and invested. Now, Acorns is expanding to other services above and beyonf the spare change round up. This has led them to offering Acorns Spend.

In this article, we will provide a complete analysis and overview regarding the features, fees, pros, and cons of this new service Acorns Spend. 

Summary

  • Acorns Spend is designed to work hand in hand with the Acorns Investment accounts
  • This investing service is best for the hands off investor who wants their money managed by someone else
  • Acorns is an extremely beginner-friendly platform in the form of an application while maintaining a slick and clean user-friendly interface
  • Investors choose from 1 of 5 automated portfolios using diversified ETFs
  • Built in dollar-cost averaging mechanism with the ability to round up purchases and set a fixed deposit schedule
  • Low monthly fees may eat up total returns for smaller accounts
  • Acorns Spend costs $3 per month and gives you access to Acorns Later, the retirement account
  • The debit card links directly with your Acorns investment accounts
  • This account is FDIC insured for up to $250,000
  • This checking account has no minimum balance 
  • They also eliminated fees, no overdraft fees and all ATM fees reimbursed
  • Acorns Spend enables you to have real-time round ups instead of delayed round ups

Sign up for Acorns Spend here!

What Is Acorns?

Acorns is focused on growing wealth for its clients by passively investing their spare change. 

Like many other robo-investing platforms, Acorns is attempting to take the complications out of investing by providing automated portfolios. Acorns allows its clients to select their risk tolerance before choosing a portfolio. Based on your risk tolerance, you will be placed in 1 of 5 prebuilt portfolios.

There are no individual stocks, ETFs, etc. Just 5 portfolios to choose from. 

Acorns is committed to planting the financial seeds for the future of all of its clients and hopes that Acorns Spend will help them accomplish this mission. They have continued to add new and exciting features over time. 

Acorns Spend Features

Basically, Acorns Spend is a type of checking account that Acorns has developed to help automate the investment process for its clients. 

In its simplest form, Acorns Spend is a checking account that links to an Acorns debit card. As its clients save more money in their Acorns Spend checking accounts, Acorns will automatically invest and earn.

Several distinctive features make this service one of a kind. 

Save, Spend, Invest

Acorns Spend is the only debit card that allows you to both spend, save, and invest all within the same account. This makes this a one of a kind service. 

The design of the debit card is slick, the app is easy to use and very beginner-friendly. This makes it a great choice for the beginner investor. 

Round Up Your Transactions & Save

Acorns Spend utilizes round ups to passively invest your money. Round ups work by rounding up to the nearest dollar for all purchases made on the Acorns debit card. 

So, as you spend, you are making small micro-deposits into your investment account. 

This way of investing is very popular among noteworthy investors such as Warren Buffett. The technique that Acorns Spend utilizes is called dollar-cost averaging

Dollar-cost averaging is when an investor gradually increases his or her principal by incrementally adding money to their investment account and investing it. 

Acorns does this automatically for you which takes the burden off of the management of your investments. After all, this strategy is backed by arguably the world’s most successful investor, Warren Buffett. 

Recurring Deposits

Acorns Spend also allows you to automatically invest money on top of your round ups. For example, you could take advantage of the spare change round up and in addition invest $25 automatically every Friday. 

Acorns Investment Accounts

Acorns invests your money in Exchange Traded Funds (ETF’s) which are well diversified and popular among retail investors

The portfolios that Acorns construct for its investors are made of these different ETFs. 

Here are some of the funds used:

  • VOO (Large Companies)
  • VB (Small Companies)
  • VEA (Developed Markets)
  • VWO (Emerging Markets)
  • VNQ (Real-Estate)
  • LQD (Corporate Bonds)
  • SHY (Government Bonds)

Sign up for Acorns Spend here!

Investment Portfolios

Each one of these ETFs is diversified and Acorns has created 5 different portfolios that hold these ETFs. 

For example, an investor that has a high risk tolerance and wants to increase the potential for gains can select that as an option in the portfolio settings of the app. 

As a result, Acorns will put more capital to the VOO (Large Cap) ETF which has more exposure to the stock market. 

On the other hand, an investor who is more risk-averse can select a more passive portfolio construction where more capital is put in the SHY (Government Bond) ETF which has less volatility and risk.

This automatic policy is something that investors should not overlook. Asset allocation is essential in proper portfolio construction and the professionals at Acorns have programmed their robo-advisory system to optimally allocate based on the investor's risk tolerance. 

Acorns Grow

Lastly, Acorns Spend offers multiple services for its clients to learn more about the investments that it is making and general personal finance tips. These tips can be found in the “Grow” section on their website. 

My first exposure to investing was through the educational resources provided by Acorns a few years ago. It peaked my interest and I would not be writing this article now unless I utilized the Acorns “Grow” educational resources!

Acorns Spend Fees

Acorns offers its service, Acorns Spend, at $0 minimum balance with no overdraft fees. 

The only fee that clients pay for Acorns Spend is the $3 monthly payment. This equates to a $36 annual fixed payment for using this service. 

Acorns Spend also offers an unlimited free or fee-reimbursed ATM service nationwide. No more $2.00 payments just to take out money at an ATM! Acorns will cover that. 

Given that Acorns is investing your money in a way that aligns with your own financial goals, the $3 monthly management fee is a good value for all of the features that Acorns Spend has to offer. But, be cautious if you have a small account, in this case these fees may be significant. 

As the saying goes, there is no such thing as a free lunch. Acorns needs to be compensated somehow by offering their services, and this fixed fee is how they can do that. 

Wrap Up: Acorns Spend

Acorns is a solid platform for the investor who wants to automate their finances. It is great for the lazy or forgetful investor. The new Acorns Spend feature has made this an even more compelling choice. It is now easier than ever to save, spend and invest. 

Acorns Spend is a one of a kind service that offers lots of features that separate it from other checking accounts. 

On a more personal note, my first experience investing was with Acorns. Acorns provides an easy to use platform for beginners. If you are able to justify the $3 monthly fee, it is a solid choice for savers and investors. 

Sign up for Acorns Spend here!

Acorns Spend Review
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