Save and Invest Easily With This Phone App

Man investing on his phone
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Investing can be intimidating, and it’s easy to let excuses keep you from getting started.

You might not think you have enough money, or know enough about it. Maybe you worry that you’re not good at saving or that you’ll have to meet with an overbearing and overpriced investment adviser.

Acorns is an investing app that addresses all those concerns. With just your phone and a few bucks per month, you can get started building your retirement today.

It’s an easy way to begin investing, even if you don’t have a lot of cash to spare and don’t know an ETF from an APY. (If you need help with financial terminology, check out our story “14 Financial Words You Need to Understand.”)

There’s no minimum investment to get started, and the app will do the heavy lifting for you.

How Acorns works

The main idea of Acorns is to get your savings rolling with money you won’t even miss. It does this with “Round Ups,” which round up the price of your everyday purchases to the nearest dollar.

It takes that rounded amount (your “change”) and automatically invests it in ETFs, or exchange-traded funds, which Money Talks News founder Stacy Johnson calls “a great, low-cost way to buy, own and sell diversified groups of stocks and/or bonds.”

That diversity is key to minimizing the risk commonly associated with investing in the stock market — as with any investment, you could potentially lose money. But spreading it around through an ETF is less reckless than guessing which stocks to buy yourself, and you also get to decide how much risk you want Acorns to take on your behalf.

Once you link the app to your credit card or checking account, it can do this automatically, instantly turning your everyday spending into a way to invest without extra work on your part.

For instance, say you buy a bag of groceries for $10.45 and pay for it with your linked credit card. The price charged to the card is rounded up to $11, then Acorns debits the difference (55 cents in this case) from your account and invests it.

Acorns also has “Found Money” partnerships with more than 350 brands that work like cash back on a credit card — except the money is earmarked for investment. When you shop with these companies using your Acorns-linked credit or debit card, some of the cost of your purchase is invested back into your account.

Depending on the partner, “Found Money” can take up to 120 days to find its way back to you. But it’s automatically invested, and you can track it in the Acorns app.

Acorns alone likely isn’t going to give you a satisfying nest egg for retirement. However, if you’ve put off saving and investing money, it can be a very practical and rewarding nudge in the right direction.

How much does it cost?

Acorns charges a flat fee of $1 to $5 per month depending on the features you want. The basic tier, Lite, is enough to get started saving and investing. For $1 a month, Acorns will start making better use of your spare change with “Round Ups.”

The higher Personal tier is $3 per month, and includes retirement and checking accounts plus access to money advice. It lets you set up recurring contributions in an IRA, a popular type of retirement account.

The $5 per month tier, Family, lets you set up investment accounts for your kids.

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