Let’s be real: Investing in the stock market as a beginner can be… tricky. But it’s also one of the best ways to build wealth–especially if you start when you’re young! 

So, if the idea of using an investing app like Acorns is exciting to you, we completely understand! The Acorns app makes it easy to start investing with very little money and a basic understanding of how the stock market works.


It’s also not your only option for a beginner-friendly investing app. That’s why, in this Acorns review, we’ll be helping you decide whether you want to use Acorns to invest by looking at:

  • How the Acorns app works
  • The major pros and cons of Acorns
  • Whether Acorns is a good choice for college students and recent grads

Disclaimer: Now, it’s important you know the information we’ll share here is meant to be educational only. It should not be taken as financial advice. For that, you’ll need to speak to a professional financial advisor. Our blog posts may also contain affiliate links that, at no cost to you, may earn us a small commission.

But if you decide you do want to give Acorns a try, we’ll also walk you through how to sign up for Acorns and begin using the platform to invest. But, first, let’s talk a little bit more about…

What Is Acorns?

Acorns is one of the most popular investing apps on the market with over 4.7 million subscribers. One of its defining features is that it helps you save and invest your spare change.

For example, if you have $0.50 to spare, Acorns can help you invest that money in a portfolio of ETFs (exchange traded funds).

Now, if you know anything about how much even a single share of stock costs, then you also know $0.50 usually isn’t enough to invest in much of anything. But with Acorns, you can. So…

How Does Acorns Work?

The premise behind Acorns is simple: the app rounds up purchases made using your credit or debit card so you can invest your spare change into the stock market. 

For example, let’s say tomorrow your lunch costs $12.50. The Acorns app will round up your purchase to $13 and put the extra $0.50 into your investment account.

Round-Up investments from your checking account will be swept to your Acorns investment account when your accrued Round-Ups® reach or exceed $5.  But you can also directly deposit money into your Acorns investment account to get started right away.

But, still, how is that $5 minimum enough to make an investment? Micro-investing.

What’s micro-investing?

Micro-investing is an investment strategy that allows you to invest small amounts of money into stocks, bonds, ETFs and other securities. When you micro-invest, you don’t need to have enough money to buy an entire share of stock. Instead, you buy a fractional share.

What’s a fractional share?

A fractional share is a piece of a company’s stock. When you buy fractional shares, you’re buying a percentage, rather than a full share of stock.

It may not sound like much, but over time those fractional shares can add up! And that’s where the Acorns app comes in… For a while, it may seem like you’ve barely invested enough money to matter. But, if you stick with it, you’ll (hopefully) see your account balance begin to grow over time.

Why did we say “hopefully”?

You need to know that with any investment strategy, tool, or app–there is some risk. There is no way of guaranteeing that you’ll make money when you invest in the stock market. Why? The stock market is ever-changing, which means that the value of stocks can go up or down without any warning.

So, what does that mean for you and the Acorns app? It’s important to remember that when you’re using Acorns (or any other investment tool), your investments are subject to market risk. That means that you could lose money. But, still, it also means you can make money.

How Much Does Acorns Cost?

Acorns charges a monthly subscription fee and the cost depends on which plan you choose. Your options are the Personal Plan or the Family Plan.

The Acorns Personal Account costs $3 per month and includes:

  • An investment account
  • A retirement account
  • A checking account

The Acorns Family Account costs $5 per month and includes:

  • An investment account
  • A retirement account
  • A checking account
  • An investment account for kids

The Pros and Cons of the Acorns App

There’s no perfect way to start investing. You’ll have to experiment a bit to find the method that works best for you. Here are the major pros and cons of the Acorns app to help you decide if it’s the right investment tool for your financial goals.

The Pros of the Acorns App

If you’re new to investing, you’ll likely enjoy the following pros of using the Acorns app.

You don’t need a lot of money to start investing

It’s a great way to start investing in the stock market, even if you don’t have a lot of money. The Acorns app rounds up your spare change to the nearest dollar and invests that money for you. You can get started with as little as $5.

It’s a hands-off way of investing

Once you’ve set up your account and completed your investment profile, the Acorns app can do the rest of the work for you.  It will recommend a portfolio based on your goals, automatically invest your money if elected and rebalance your portfolio as needed.

You can learn about investing 

The Acorns app is a great way to learn the basics of investing. You can see how the stock market works and how investments perform.

The app is very user-friendly and easy to navigate

Even if you have no experience with investing, you’ll have an easy time seeing your account activity, reviewing performance and increasing your investment knowledge.

There are no fees for withdrawals or deposits

One of the great things about the Acorns app is that you can withdraw your money at any time without any fees. This is great if you need to access your money for an emergency or unexpected expense.  (There may be tax implications associated with selling holdings in your portfolio.  Please consult a tax advisor with questions regarding your personal tax treatment.)

The Cons of the Acorns App

While the Acorns app does have some great features, it’s not perfect and may not be the right investment app for you. Here are the major cons of the Acorns app.

There are subscription fees for using the app

Of course, there are some fees associated with  your Acorns account. And while those monthly subscription fees are relatively low ($3 or $5 per/month depending on the tier you choose), they can add up if you’re only using Acorns to invest a small amount.

Your investment options are limited

On the Acorns app, you’re only able to invest in a limited number of investment options. You’re not able to choose individual stocks, which means you have less control over your money. However, Acorns has recently made it possible to invest in a bitcoin-linked ETF!

You don’t get personalized investment advice

The Acorns app doesn’t offer much in terms of personalized investment advice.  If you’re new to investing, you might not know where to start, which investing strategies are suitable for your goals, or how much risk you should take on. In which case, you may want to speak to human financial advisors.

There’s no tax-loss harvesting

Acorns accounts also don’t offer tax-loss harvesting, which is a way to reduce your taxes by selling investments that have lost money and using those losses to offset any capital gains you might have.

So, Is Acorns a Good Investment App for College Students and Young Adults?

There really isn’t one definitive answer to this because it depends on your individual circumstances. If you’re someone who is just starting out and wants to get your feet wet in the world of investing, Acorns may be a great way to do it. The app makes investing super simple and easy to understand.

However, if you’re looking for more features and customization, you might want to look into other ways of investing, such as traditional brokerage firms.

How to Create an Account with Acorns

If you’ve decided you want to open an Acorns investing account, here are all the steps you’ll take to get started. It’s pretty simple and only takes around 5 minutes!

Step 1: Go to the Acorns website and click “Sign Up”

You’ll need to decide whether you’d like to sign up for a Personal or Family account. Once you decide on your account type, you’ll be asked to enter your preferred email address and create a password.

You can also do this on the Acorns app, which you can download in the Google Play Store or Apple Apps Store.

Step 2: Connect your bank account

You’ll need to enter your bank login information and details about the credit or debit card you’d like to link. That way, the Acorns can connect to your linked account and begin withdrawing the spare change from your purchases. You can also use your linked bank account to add funds to your investment account. 

Step 3: Add your personal and contact information

Next, you’ll be asked to enter your:

  • Legal first and last name
  • Date of birth
  • Social security number
  • U.S. citizenship status
  • Address
  • Phone number

Step 4: Verify your phone number

Next, you’ll need to verify the phone number you shared during step 3. You’ll be sent a verification code by text message.

Step 5: Protect your account with security questions

After that, you’ll be asked to create security questions. These will be used to verify your identity if you ever need to reset your password.

Step 6: Answer questions about your investing goals and risk tolerance

Now, you’ll need to answer some questions about your current financial situation, investment goals, and risk tolerance. This will help Acorns get to know you and make a better investment recommendation for you.

Step 7: Answer questions about your familiarity with investing

Next, you’ll be asked if you are any of the following:

  • Affiliated with a broker-dealer
  • A 10% shareholder or director of a publicly traded company
  • Subject to backup withholding by the IRS  

If your answer is ‘no’, you’ll just click “None of these apply to me.”

Step 8: Review your investment recommendation

Based on the information you’ve entered, Acorns will recommend a portfolio of ETFs that are aligned with your goals.  You can decide to override this recommendation after the registration process if you wish.

Step 9: Accept the referral disclosure

The final step is to sign and accept the referral disclosure. This lets you know that another account may receive compensation if you sign up for the app using a referral link.

And that’s it! You’ve now successfully set up your Acorns account and can start investing. Of course, you still may be wondering…

How to Start Investing with Acorns

Now that you’ve set up your account, it’s time to start thinking about how to make your first investment. There are a few options. And, if you’ve never invested before, it can be confusing. So, let’s go through the two basic steps to help you get started! 

Deposit money into your account

When you first open your account, your balance will be $0. So, the first step is transferring funds from your linked bank account.

To do that, you’ll click on the button that says “One-Time” at the top of the app. Then, you can choose how much money want to invest, with a minimum of $5. 

It may take 1-3 business days for the money to appear in your Acorns account. You can also choose to set up a recurring deposit so that money regularly transfers from your bank account to your Acorns investment account.

To learn more, you can also check out our beginner’s guide to investing

Final Thoughts

Overall, Acorns may be a good way for college students and young adults to get started with investing. It’s easy to use and low cost, making it a great investment tool for beginners.

However, there are some drawbacks — the main one being the subscription fees, which can eat away at a low investment balance. You’re also not able to purchase individual stocks on Acorns

That being said, Acorns’s round-up to the nearest dollar feature and automatic investments are great if you want a hands-off approach to investing over time. So, if that’s what you’re after, sign up today to open an Acorns investment account.

And, if you’re looking for more beginner finance tips, check out the rest of our blog where we share advice on things like how to save money in college and how to build credit fast!


Important Disclosures

The content is for informational purposes only and should not be considered a replacement for individualized financial advice.  This is an Ad for Acorns and the material may be biased.  Compensation creates an incentive for the promoter to recommend Acorns.  The content was not created by a financial professional.  
Investing involves risk, including loss of principal.  Please consider, among other important factors, your investment objectives, risk tolerance and Acorns’ pricing before investing.  
Round-Ups® are transferred from your linked funding source (checking account) to your Acorns Invest account, where the funds are invested into a portfolio of selected ETFs. Only purchases made with Round-Up accounts linked to your Acorns account with the feature activated are eligible for the Round- Ups® feature. Round-Up investments from your funding source will be processed when your Pending Round-Ups® reach or exceed $5.  
A properly suggested portfolio recommendation is dependent upon current and accurate financial and risk profiles. Clients who have experienced changes to their goals, financial circumstances or investment objectives, or who wish to modify their portfolio recommendation, should promptly update their information in the Acorns app or through the website. 
Acorns Subscription Fees are assessed based on the tier of services in which you are enrolled.   
Acorns is not a bank.  Acorns Pay, LLC offers an Acorns Checking deposit account, FDIC insured up to $250,000.  Acorns Visa™ debit cards and banking services are issued by Lincoln Savings Bank or nbkc bank, Members FDIC.  
The ETFs comprising the portfolios charge fees and expenses that will reduce a client’s return. Please read each prospectus carefully before investing.
Acorns does not provide access to invest directly in Bitcoin. Bitcoin exposure is provided through the ETF BITO, which invests in Bitcoin futures. This is considered a high-risk investment given the speculative and volatile nature. 
Acorns Earn provides subscribers access to shop with our partners and earn bonus investments into your Acorns Invest portfolios when purchasing items from the partner brands.  
No investment strategy and no level of diversification or asset allocation can ensure profits or guarantee against losses.
Investment advisory services offered by Acorns Advisers, LLC (Acorns), an SEC-registered investment advisor. Brokerage services are provided to clients of Acorns by Acorns Securities, LLC, an SEC-registered broker-dealer and member FINRA/SIPC.