The Acorns savings and investment app takes a different approach to long-term wealth-building. This micro-investing platform is mainly suited for folks who have trouble saving and could use a push to do so.
As its name suggests, you start with something small and watch it grow over the next 30 to 40 years. Instead of a massive oak tree, as an investor, you’ll see your small, regular investments in stocks, ETFs, or mutual funds grow with compound interest into retirement.
If you’re an inexperienced investor, don’t worry. Acorns does this automatically so you don’t have to worry about what investments to pick. As with any investment app, you’ll have to provide your social security or tax identification number, link your bank account, credit, or debit card. But can you trust Acorns to protect this data?
Although we cannot give you official financial advice, we can give you a look into our experience with the Acorns app. We’ll take a look at its security, privacy, and usability in our full Acorns review below.
Acorns: Short Review
|Zero fees and commissions on ETF trades||High monthly fees for low balance accounts|
|Biometric authentication for mobile app (facial ID or fingerprint)||Limited portfolio options|
|Website and app secured by strongest-available 256-bit encryption||High fees for transfers|
|Two-factor authentication for login from new devices and available for all logins||No access to a human investment advisor|
|Bank-level physical security||Lacks diversity: no single stock trading|
|SIPC-insured up to $500,000 for securities, up to $250,000 cash.||No tax strategies are available|
|No significant data breaches or platform outages|
|Access to tax-friendly Individual Retirement Accounts (such as Roth IRA) and investment accounts for minors|
|Only $5 required to start investing|
|Good rewards and cash-back programs (Acorns Earn)|
|Builds good financial habits|
|Customer support via phone (5 am – 7 pm), chat (24/7), and email|
|Strong educational resources|
Acorns is a mobile (and now web-based) trading platform that is relatively new to the investment scene. Currently only available to U.S. citizens, users are required to provide a U.S. bank account and a social security number to open an account.
Acorns’ low investment minimum, spare-change savings option, and cash-back rewards program make investing an attractive option for new investors. Their target demographic is Millennials (26-41 year-olds) and Gen Z (10-25 year-olds) looking to build wealth long-term. Their flagship program — rounding up debit card purchases to the nearest dollar and investing spare change in exchange-traded funds (ETFs) — is what they’re famous for, and most accounts use this feature.
The investment app makes investing almost painless with the low investment minimum and more hands-off investing approach. The user just links a bank account and Acorns does the rest. This low investment minimum is, however, at odds with the monthly fees Acorns charges. These fees are relatively expensive compared to the fees of other robo-advising investment app options. There are also no free trials or options to start without first paying this monthly fee — even before linking your bank and funding the Acorns investment account. This means, of course, if you want to try it, you’ll need to buy it.
Though its history may not go back as far as other brokerages, it has proven to take some of the most advanced cybersecurity measures that are currently available. When it comes to these, we can certainly give Acorns the green light. Your sensitive data should remain secured and protected if you use the proper security functions. Self-directed and active traders should look elsewhere.
Acorns offers an attractive package for new investors, with great instructions and a high level of user-friendliness. At the same time, its monthly fees might make some smaller investors turn away. As a result, we gave Acorns an overall score of 8.7/10, earning it a spot among the best investment apps we’ve reviewed.
|Investment choices||Stocks, ETFs, options, mutual funds, annuities, certificates of deposit, and bonds|
|Fees per trade||$0|
|Stock per trade||$0|
|Options trade||$0 + $0.65 per contract|
|Account fees||Monthly fees: $3 for personal, $5 for family, $50 per ETF to transfer to another broker when you close your taxable Acorns account|
|Customer support||24/7 customer service|
|Mobile app||Android and iOS|
Safety: Is Acorns Secure?
As a newer company, Acorns launched with all the latest and greatest cybersecurity measures and so far, these measures are working well to protect customers. Unfortunately, there is no independent cybersecurity score available for Acorns so far. Even without the proven track record of a brokerage with big bank backing, Acorns receives a 9.5 out of 10 for security, and here are the main reasons why:
- Acorns has two-factor authentication and offers facial ID and fingerprint biometrics.
- The website and app are secured with military-grade encryption.
- It offers bank-level physical security.
- Acorns is SIPC-insured.
In this section, we’ll discuss these and other Acorns security practices and protocols more in-depth.
Acorns security features
Acorns has the cybersecurity features necessary to protect your securities and funds from outside attacks. They’ve also provided essential tools for you to protect yourself. Here’s a rundown of what Acorns offers customers security-wise:
- Multi-factor authorization: Sometimes referred to as two-factor authentication, you can verify your identity by entering a code linked to your phone number, email, or authenticator app. Acorns will do this for logins from unrecognized devices, but we advise you set it up for each login for extra protection.
- Biometric logins: For mobile logins, users can verify their identities with fingerprint or facial recognition scans.
- High-grade encryption: Acorns uses 256-bit encryption. This means the app and website are protected by one of the highest encryption methods currently available.
- Automatic logouts: Acorns logs you out automatically if you’ve been inactive for an extended amount of time. This will protect you from unauthorized users getting into your Acorns account.
- Failed logins: In the case of repeated failed logins, Acorns will make you contact customer support to regain access to your account. This is a standard security protocol that protects you from brute force hacking attempts and password-guessing software.
- Account alerts: Acorns will notify you if any suspicious activity is happening on your account.
- Bank-level security: Acorns uses both physical and online security protocols that meet legal requirements. Though 128-bit encryption is considered “bank-level,” Acorns uses “military-level” encryption protocols.
Is your money safe with Acorns?
Though it may be newer to the game, Acorns actually has some of the strongest cybersecurity features of any investment app. The app and website use the same military-grade encryption that the best VPN providers use. This in itself brings it a step ahead of other brokerage apps.
Here’s a brief overview of Acorns security points worth pointing out:
- Securities Investor Protection Corporation (SIPC): With Acorns, your securities are covered up to $500,000, and FDIC insured up to $250,000 in cash. This is basic coverage that every solid brokerage should provide.
- SEC-regulated: The government-operated Securities and Exchange Commission (SEC) regulates financial markets, enforces US financial laws, takes legal action against and imposes penalties upon violators. Acorns is registered with and regulated by the SEC.
- FINRA membership: Acorns is also a member of the Financial Industry Regulatory Authority (FINRA). FINRA is a government-approved nonprofit that oversees brokerages and works with the SEC to root out fraud or other violations and prevent investor losses.
Has Acorns had a data breach?
There have been no significant data breaches or significant attacks on Acorns’ systems. At the time of writing, customers have not experienced financial loss from outside cyber attackers or data breaches.
In the summer of 2021, Acorns mistakenly sent out an email to customers stating they’d been locked out of their accounts. Many customers suspected the company had been hacked after receiving the bizarre message. Acorns released a statement shortly thereafter that the mass security alert had been sent in error.
Privacy: How Does Acorns Handle Data?
Staying anonymous while investing is next to impossible. State and federal laws require investment companies, even app-driven ones, to collect and store sensitive data on the investor to open a brokerage account. Unfortunately, you can’t invest using the stock market without providing this information.
Acorns is one of the most secure investment apps on the market because of its military-grade cybersecurity and bank-level physical security. Your sensitive information, such as your social security number, banking information, and login details seem to be secure.
For these reasons, our Acorns review resulted in a score of 8 out of 10 for privacy.
What information does Acorns collect?
- Identifying information: Social security number, driver’s license or government ID numbers, birthdates, and so on
- Contact info: Your name, email address, mailing addresses, and telephone number
- Financial data: Bank or brokerage account numbers, credit card numbers, billing address, and investments
- Access authorization data: User names, passwords, PINs, and security questions and answers
Acorns also collects information from your computer and mobile devices. If you don’t use a VPN and the privacy settings aren’t optimized on your browser or operating system, they can pull data such as:
- Device identifiers: This could be your IP address, type of device, operating system, or mobile network info.
- Browsers: Type of browser, language, settings, login timestamps, and so on
- Site and app interaction: Pages you visit, links you click, patterns like keystrokes, mouse click, movements, swipes, and other gestures on the site or apps
- Interaction: Your interaction with the site, app, and its products
- Transactions: Transaction amounts, the date and time it was executed, and the type of transaction (for both investments and product purchases from Acorns)
How does Acorns use your information?
Privacy-conscious online users are often careful about giving up their sensitive data. When companies collect your device identifiers, IP address, and site interaction, it can feel very invasive. Even so, not all reasons for data-gathering are so bad, such as fraud protection.
Acorns might use your information for different purposes:
- Sharing with third-party services: Acorns uses other companies to perform services for them. For example, your information will be shared with Plaid, Inc. This fintech company makes communication between Acorns and your bank easier and links accounts. Acorns might also share data with other companies they do business with, such as fraud protection services, banks, or identification verification agencies.
- Analytics and marketing purposes: Usage and device data might be used for market research and marketing purposes, as well as for the betterment of the site and app.
- Advertising: Whether it’s through cookies gathered online or usage data gathered from your device, Acorns can tailor advertising for you. If this bothers you, make sure to block cookies in your browser, and tweak your privacy settings to stop this kind of data collection.
- Legal concerns: Acorns clearly states it will hand over personal data to the government authorities in the case of a subpoena or an order by law enforcement.
- Fraud protection: Data might be used to send an alert when unusual activity is occurring on your account.
How does Acorns make money?
Acorns primarily makes money through its monthly advising fees, which are $3 for personal investment accounts and $5 for family accounts. While that’s Acorns’ primary money-maker and provides most of its top-line revenue, they also make money off their debit card plan. In order to participate in Acorns’ round-up investing plan, you need to sign up for their debit card. So a secondary revenue stream comes from Acorns’ interchange fees that merchant bank accounts must pay for each transaction.
How to use Acorns as anonymously as possible
Investment apps will always collect your most sensitive data by their sheer nature. By federal law, you’re required to hand over all sorts of personal information, and besides that, Acorns also collects your IP address, device and browser specifics, usage details, and more.
If you’re looking to limit data collection and sharing — like marketing and advertising — there are steps you can take:
- Disable cookies in your browser to prevent much of your usage data from being collected, stored, and used. This is generally good practice, but Acorns customer service also recommended it. Tracking cookies and other tracking technological pull and store data on you like your internet service provider (ISP), IP address, type of device and operating system, which browser you’re using, date and time stamp, and a unique device or account ID. By disabling your cookies, you can stop data collection at the source.
- Contact Acorns customer service. We weren’t able to find any privacy settings within the app or platform. Instead, you’ll have to email [email protected] or call (855) 739-2859. Customer support was very quick and responsive when we reached out about data collection and sharing. If you provide a list of data you don’t want to be shared (see our lists above) they will ensure you’re opted out of all marketing or advertising-related data sharing.
Remember that you’ll never be able to use Acorns or any investment app completely anonymously. However, taking these actions will help you take some control of the information the company has about you and how they use it.
Usability: How User-Friendly is Acorns?
If we scored Acorns on just how easy the app is to use and how quickly you can get a hold of customer service, we’d score it 10/10 for sure. However, it’s more complicated than that. We look at the entire customer experience, including how trustworthy the investing platform is. For example, we lowered our useability score for Robinhood due to their gamification of investing that, much of the time, came to the detriment of their investors.
Now, Acorns doesn’t have shady practices or seem to push their customers into possibly harmful investing choices, but there are a few issues that dropped this Acorns review to our 8.5 out of 10 usability score.
Here are the main conclusions we drew about Acorns’ usability:
- Acorn is an easy investment app to sign up for, requiring less information than other options.
- Acorn makes investing easy, since it’s almost completely hands-off after the initial setup.
- It doesn’t require large amounts to invest ($5.00 minimum).
- Acorn checking account users can automatically round up purchases to invest their spare change.
- The fees are relatively high compared to other options for lower account balances.
- Users cannot purchase single stocks or choose what specific companies they invest in.
- Customer service is available (in some form) 24/7.
- Customers cannot speak to human advisors.
How to sign up for Acorns
The signup process for Acorns is simple and quick. With the exception of verifying your bank account, the entire process takes minutes. Acorns’ current investment account requirements ask that applicants:
- Provide a valid email address.
- Are U.S. citizens with a valid U.S. Social Security Number or ITIN
- Provide a valid physical address in the U.S.
- Share the login details or routing/account number for the bank to fund the account
Additionally, a photo ID is sometimes required as well.
System requirements for the app are as follows: iOS (14.0 or higher) or Android Version 7 (Nougat) or higher.
To install Acorns, follow these steps:
- Open the Apple App Store and Google Play Store and download the app.
- Open the app.
- Provide your email address and create a unique password.
- Fill in your legal name and birthday. Also, ensure “I am a U.S. Citizen” is toggled.
- Provide your U.S. address and phone number.
- Provide your U.S. Social Security number or ITIN.
- Choose your security question and provide the answer.
- Answer a few investor questions.
- Link your bank account. If you complete this manually — by adding your routing number and account number — you will have to verify two small deposits that the company will make to your account. This usually happens in one to two days.
- Provide your employment information, income, net worth, investment goal, and financial education.
- Choose the type of portfolio you would like to use. Acorns offers both core portfolios and ESG portfolios. The main difference between the two is that the ESG portfolio only includes businesses with a focus on environmental, social, or governance issues.
- Set up your investing by clicking on “Set up Invest.” You can choose an ongoing automatic investment or complete a one-time transfer to invest with.
Now you’re set up with an investment account.
Software usability and options
Acorns offers several options depending on your level of subscription. Below are a brief overview of those features.
Acorns Later feature
Acorns’ Later future is a retirement account available with either the Personal plan or the Family plan. Customers can set up an IRA and retirement portfolio within minutes. Options include the Roth IRA, Traditional IRA, and SEP IRA.
Acorns Early feature
Parents and guardians will be happy to hear that Acorns offers an easy way to invest for their kids. The Acorns Early feature offers financial literacy content for families to help them understand investing and the power of compound interest. Multiple minors can be added with no additional fee and funds can be easily transferred to the child once they reach 18 years of age. This feature is only available with the Family plan.
Checking account feature
An Acorns checking account is like any other checking account in many ways. However, there is one advantage to using a checking account with Acorns: it is currently the only way to utilize Acorns’ spare change investing option.
Imagine you’re shopping for some sunglasses. You pick a pair, pay for them with your credit card, and are charged $10.74. Acorns will round that spare change up to the nearest dollar (the remaining .26 cents) and automatically apply it to your investment account. Once you hit $5, automated robo-advisor puts it in ETFs, stocks, or “other.”
Acorns really holds your hand through first-time investing, more so than any other investment app we’ve reviewed. It’s made for newcomers and beginners. While the managing fees are quite high, users can feel confident in letting Acorns guide their financial decisions.
They’ll let you determine your risk based on when you’d like to take your money out. For example, if you’re looking to put some cash to work for 30 years, they’ll set up your investments accordingly — which could pose a higher risk. For a five-year timeline, they might choose a very conservative allocation of funds. However, even if you’re looking at a 30-year horizon and have a low-risk tolerance, they’ll steer you toward such.
All in all, their robo-advising and educational resources offer excellent insight into your investments and how much risk you’re willing to take. At no point would you be pressured to leap headfirst into something you’re uncomfortable with.
Pricing and fees
There are a lot of brokerages offering $0 fees and no commissions on tradings — like Robinhood, TD Ameritrade, and Merrill Edge — Acorns has a slightly different model. Acorns offers their service for a monthly fee. You’ll need a $5 minimum to start investing.
- Personal plan for $3 per month
- Family plan for $5 per month
There is also a $50 fee to transfer each ETF out to another brokerage.
Although their pricing is upfront, it is pricey when you look at who they market the service for, namely those having issues with budgeting and those looking to invest small amounts.
Their target market is likely to invest less and thus have smaller balances. This makes their monthly fee a higher percentage compared to other options. For example, if someone only invests $100 a month, the fee could be 5%. If someone only invests $50, that makes it a 10% fee. Now take into consideration that the average return on investments is only 10% conservatively.
Acorns customer service is attentive and fast. First, you have your choice of how to communicate with the customer service group. You can send an email, jump on a chat session, or give them a call.
When we signed up for an investment account, we received several follow-up emails welcoming us to the platform. We also received emails with information about features and educational resources. It seems that Acorns wants its customers to feel supported without bugging them or selling them more products.
When reaching out to customer service, we did have to provide our full name, email address, the last four digits of our social security number, and our date of birth. Without this, you can only ask general questions.
Warning: beware of phishing
Be careful about giving out sensitive information over the phone, chat, or email. Before providing any personal information, ensure that you’re on the official website and not a fake site used for phishing. If you receive a call from someone claiming to be from the company, do not reveal any personal information. This could be a scam.
We recommend telling the agent that you will feel more comfortable calling them back through the phone number listed on the website. Request their extension or ask what department to request when you call back. If this is truly an Acorns representative, they will provide the information or tell you that any representative can assist upon your return call.
What to Do in Case of an Acorns Breach
Acorns is a newer investing platform that has not yet experienced a breach. Its extensive security measures, both digitally and physically, make it an attractive option for security-conscious investors. With that being said, it has not really proven itself due to its age. That is why you should know what to do in case of an Acorns breach.
- Determine what data was compromised. Different levels of data being stolen require different levels of response. If cybercriminals get your email and name, watch for targeted phishing emails. If your social security number is compromised, your credit will need to be monitored. You may also have to contact the IRS (for tax reasons) and even contact law enforcement. Check your local laws, and keep in mind that some law enforcement agencies cannot file a report until there is at least an attempt at identity fraud.
- Change your passwords. If your password has been compromised, even partially, you should change your password immediately. Use a strong password that you don’t use for any other account. If you have a lot of account logins to remember, check out a secure password manager like 1Password to save you the hassle of remembering them.
- Use fraud alerts and credit freezes. Due to the rise in cybercrime and specifically identity theft, credit bureaus such as Experian, Equifax, and TransUnion offer free fraud alerts, as well as free credit freezes. If you utilize the fraud alert, potential creditors will receive a message to call you directly to verify your identity. If you choose a credit freeze, potential creditors cannot even run your credit without you either temporarily lifting the freeze or by you providing them a one-time code to access your records. To set up a fraud alert or credit freeze, complete the required forms at the Experian fraud alert center, the credit fraud alert section of Equifax’s website, or the TransUnion fraud alert center.
- Get a credit monitoring service. If you’ve suffered a data breach, you might be offered a free credit monitoring service for a year or more. However, you can sign up for a credit monitoring service like Lifelock even before a breach occurs.
Is Acorns Right for Me?
If you’re a new investor, Acorns certainly makes it easier than ever to get started. According to 2022 figures, the micro-investing brokerage now has 8.2 million customers, with more than $3 billion in assets under management. Acorns provides access to Individual Retirement Accounts (IRA), including the tax-friendly Roth IRA.
The biggest downside to Acorns is the monthly transaction fee. If you’re not looking to invest large sums of money, those robo-advising costs will start to add up quickly. There are other apps that offer advisor fees for cheaper. Let’s say that for 2022, you set up an Acorns personal account for $3 a month, and you’re only investing $30 a month — which is the estimated average spare change round-up amount. You’re paying a 10% advising fee per month. The average brokerage advisor charges 1% to 2% to manage assets. You’d have to invest $3,000 every month to make the monthly advisory fee worthwhile.
Having said that, Acorns could be a good option for:
- People who have trouble saving: People who need a push to save will benefit from the spare-change roundup and good saving habits that Acorns can force you into.
- Beginners: New investors will benefit from the good habits that Acorns instills early on. If you’re in school or thinking about investing and don’t know where to start, Acorns is a good starting point.
- Passive investors with $10,000 or more to invest: Though the monthly fees are high, if you’ve got a good chunk of money to start investing with, Acorns’ robo-investing and account management could be worth paying for. Investors who don’t want to deal with the stress of setting up a strong portfolio can let Acorns organize their retirement or long-term accounts. The fees become competitive when higher account balances become a factor.
If you’d rather check out some other investment app options, have a look at these other reviews:
Got questions about the Acorns micro-investing app? Click on any question below for the answer.
Acorns is a legitimate and safe app to use. They are SEC-regulated and SIPC-insured up to $500,000 for securities. They also take necessary cybersecurity measures to protect your sensitive data like social security numbers, credit card numbers, and bank account information. For more information about Acorns’ safety, have a look at our Acorns review.
Yes, Acorns is SIPC-insured for up to $500,000 for securities and $250,000 for cash deposits. They also use military-grade 256-bit encryption to protect their website and app from cyberattacks. They also provide the necessary verification security features to protect your account from fraudulent activity.
The only glaring downside to Acorns is its high robo-advising fees. If you keep a low investing balance, $3 per month is a very high management cost. You’d have to have about $10,000 or so to invest to make the fee worthwhile compared to other automated advisors.