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Acorns, founded by Walter W. Cruttenden, is a micro-investing platform that allows users to invest their spare change from everyday purchases. It automatically rounds up credit and debit card transactions to the nearest dollar and invests the difference into diversified portfolios of ETFs. The primary workflow involves connecting your bank accounts and credit cards, choosing a risk-appropriate portfolio, and letting the app automatically invest your round-ups. Acorns is available on iOS, Android, and through its web interface. The most used feature is 'Round-Ups,' which passively contributes small amounts to investments. All investment data and user profiles are securely stored and managed in the cloud, with bank-level encryption.
Why It’s Useful
Acorns eliminates the barrier to entry for investing by making it effortless and accessible, allowing anyone to start building wealth without large lump sums. For a college student with limited disposable income, Acorns provides a simple way to start investing in diversified portfolios without actively managing funds or making large contributions. For a busy parent, it offers a hands-off approach to saving for their child's future, accumulating small investments over time without conscious effort. Acorns charges a small monthly fee ($3-$5 for most plans), but the immediate returns from investing and the convenience often outweigh this cost, making it a genuinely valuable tool for passive savings. Compared to traditional brokerage accounts that require significant initial deposits and active trading knowledge, Acorns automates the entire process, making investing approachable for beginners. Its 'Found Money' feature, where partner brands invest a percentage of your purchase into your Acorns account, is a powerful way to accelerate savings. A non-technical person can easily link their accounts and begin investing with Acorns in under 10 minutes.
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