Acorns Savings/Investing

Do you encourage people to use acorns? For saving/ investing? What’s your opinion on it?

I like Acorns! I think it’s super easy to use, low barrier of entry, beautiful interface, etc. I agree with their investment philosophy (buy and hold a diversified set of ETFs).

I guess the “round up” your change thing is a little gimmicky to me. I would want to put a focus on larger, automated, early and often investments. They also charge a small monthly fee which isn’t terrible, but there’s other brokerages that offer the same or more benefits without the fee. I haven’t done a deep dive on their entire product line though, so take this with a grain of salt.

Hi Katelynreiss,

In my opinion this depends on what you are investing in and how much. Target date index funds are great, I am not sure if you have those on Acorns. I would highly advise you to look if Acrons has those. If not, I would see if they have the following etfs: VTI, VXUS, BND, and BNDX. I am not saying to blindly put money into those, you would have to figure out your risk preference and asset allocation.

Personally I do not like Acrons since the basis is that it takes the remainder of every sale and then invests it. Personally, every financial decision is rooted in your budget. Acorns does not look at the budget and your investment needs. It is another vehicle to get people saving/investing so I am glad it’s available, but I would advise Vanguard, Fidelity, a.


For what it’s worth, I actually like Acorn’s investing strategy. They do have an automatically set assortment of ETFs. Basically all the benefits of a target date index fund (except it doesn’t reallocate towards bonds as you age, but that’s not a huge deal). According to their site, this is what they invest in on users behalf:

So not the exact same four you mentioned. The break VTI into large and small cap. And they break international into developed and emerging markets. They add REITs. Personally, I like your 4 ETFs better as they’re simpler and will do the same thing, but broad strokes this portfolio is going to do about the same, especially if a robo is doing the asset allocation automatically.

I did not know this, is this visible through the app? I agree these are good shares and going to perform well. Obviously the allocation will change dynamically. The question is that if this is a taxable account then the fees from REITs might change since you are taxed on those on top of your regular income. I like visibility into my investments because if it is a taxable account I don’t like to have REITs and Bonds in it, because it is not tax efficient. I think it was part of the Bogleheads philosophy.

I am just splitting hairs, I think the only reason to worry about those is if you acorns portfolio grows a decent amount. From my understanding the dividends and returns from Bonds will be taxed on top of your income and if you can’t control the asset allocation then you might have to pay taxes on dividends that are getting reinvested anyway.

For taxable accounts I like to pick VTI, VXUS, or VUG etfs since the dividends are low and I won’t have to pay taxes on the reinvestment.

1 Like

I think Acorns also offers Roth IRAs too, which makes the tax issue moot. FWIW, I don’t actually have an Acorns account, but they’re pretty transparent with their investing strategy on their site:

I agree it’s not the brokerage for me, but if it can turn a non-investor into an investor, I think that’s a pretty great thing to do! :slight_smile:

1 Like