This App Helps You Save Money When You Don’t Think You Can Spare It

Dana Sitar sitting at home on the couch with phone and laptop
Dana Sitar uses the Acorns app as a simple way of saving and investing. Carmen Mandato/The Penny Hoarder

I’ve never been good at saving money.

The idea of it sounds great — and simple. But in practice, I seem to have trouble squeezing anything extra out of my budget, especially just to set aside without a specific goal.

But this simple savings trick helped me kick off one new year with a $100 bonus in my bank account! I think I’ve found a way that even I can save money.

In mid-October, I took my fellow Penny Hoarders’ advice and downloaded an app called Acorns onto my phone.

I connected my bank account, selected a few settings and set the whole thing aside after about 10 minutes. Then I forgot about it.

On January 8, I checked back in, and my Acorns account balance was $116.

Nice surprise, right? Here’s how it works — and how to get a free $5 to get started.

How Does Acorns Work?

What I loved about this $116 balance was it felt like free money — but that’s not really what it is.

Instead, it’s just mind-blowingly simple saving and investing.

The balance on my Acorns account came from my digital change, what Acorns calls “Round-Ups.”

The app rounds up purchases from connected debit or credit cards to the next dollar and saves the difference in my Acorns account.

Over the four months I used it, I put aside about $35 a month using Acorns.

Because the money comes out in increments less than $1, I didn’t feel an impact in my bank account.

At that rate, if I continued to use the app and withdraw my round ups each month, I’d save $420 a year — without thinking twice.

That’s a round-trip flight.

It’s Christmas presents for my whole family.

It’s groceries for two and a half months.

It’s probably the cost of the next thing that stops working on my car.

I was excited to see the surprise balance in my account in January, but I wanted to take a closer look at the app to see what I could really save over time.

Is Acorns a Good Way to Invest?

When your account hits $5, Acorns withdraws the money from your connected bank account and invests into exchange-traded funds.

You don’t have to choose exactly where to invest your money. Instead, you’ll answer a few questions to create a financial profile and state your goals.

Acorns uses this to build your investment portfolio options — which range from conservative to aggressive. If you really want to know the details, the app breaks down which types of funds comprise your portfolio. If you don’t want to dive into it, you don’t have to.

Because the amounts are so small, the gains with this kind of investing won’t blow your mind. During the four months I used the app, my account total actually dropped $6.06, or 4.11%. But that’s a small window for investment.

Let’s look at the long term.

With my conservative portfolio and an average monthly investment of $35, my account is projected to gain $1,126 over 10 years, for a balance of $5,327.

If I choose the most aggressive option (more on that below), the gain is projected to be $2,376, for a balance of $6,577.

You can also deposit money directly into your Acorns account, in addition to the automatic round ups.

For example, if I supplemented my round ups with additional monthly deposits to invest $100 total each month, my portfolio is projected to be worth $16,370 (a gain of $3,796) in 10 years.

Is it the most lucrative way to invest your money? Probably not. But when it comes to microinvesting apps, Acorns’ automatic round ups make it one of the easiest.

Acorns Review: Why I Like the App

I’m not super into investing.

I’m a bit risk-averse, and I don’t have major chunks of spare cash to invest with services like Etrade.

Acorns lets me enjoy the spoils of saving and investing with almost no barriers to entry. There’s no minimum deposit or balance and no restrictions or fees on withdrawals.

You only need a bank account and an internet connection to get started.

Is Acorns Safe?

So, when you’re giving your financial info to a company, you want to know it’s secure.

First thing’s first: Acorns has your back. Its security information is broken down with a bunch of acronyms, but I’ll translate.

Securities Investor Protection Corporation (SIPC) protects your Acorns account for up to $500,000. Basically, if Acorns fails, SIPC protects your securities and cash.

There’s also the SSL-encryption. This means Acorns’ website and app are secured with 256-bit encryption, which is what most banking apps use. If anything fishy does happen, Acorns will notify you.

How Much Does It Cost to Use Acorns?

For an account with a balance below $5,000, the monthly fee is $1 (there’s no fee for a zero-balance account). College students can use the app for free for up to four years.

Even if I don’t gain anything, or my investments lose a couple dollars over time, the cost is totally worth it for me.

I’m not using Acorns as a serious investment strategy. There are plenty of better (higher-priced) tools if you want to invest a lot of money and learn more about the stock market.

But I’m using Acorns to make saving easy.

The price is totally worth this service to help me save a few hundred dollars a year, and several thousand over several. It’s something I know I wouldn’t achieve on my own.

How Acorns Works: A Few Things to Keep in Mind

Want to start using Acorns yourself? We’ve pulled together a few details to note.

Minimum Investment $0, though to invest money, your Round-Ups must add up to at least $5
Fees $1 per month for accounts with a balance under $5,000 or 0.25% of your balance per year (charged monthly) for accounts with a balance of $5,000 or more
Mobile Access iPhone app, Android app in the U.S. and Australia only
Withdrawal Rules Anytime, as many times a month as you need
Cancellation Policy Anytime

Connecting a Bank Account

You can connect as many bank accounts (including a PayPal account) as you want for round ups on purchases.

But the money for all of your round ups will come from one connected checking account.

When you withdraw funds from your Acorns account, the money will be deposited into that checking account.

Add Your Digital Change to Your Acorns Account

Your round ups don’t have to be automatic — it’s a setting you choose.

You can also add round ups to your account manually by going through a list of transactions in the Acorns app.

Note that Acorns does not cover overdraft fees for its withdrawals. So if you tend to maintain a low bank account balance (say, less than $20), you probably don’t want to use automatic round ups.

How Does Acorns Compare to Other Microinvesting Apps?

Acorns isn’t your only option for automated savings and investing. Here’s a quick comparison:

  Acorns Stash Digit
(Read our Digit review here.)
Qapital
(Read our Qapital review here.)
Claim to Fame Rounds purchases to the nearest dollar and invests the change Start investing with as little as $5, save automatically through Smart-Save Calculates how much you can afford to save Follows personalized rules to save or invest your money
Fee $1/month for accounts under $5,000 $1/month for accounts under $5,000 $2.99/month Free
Promotions $5 sign-up bonus through The Penny Hoarder $5 sign-up bonus through The Penny Hoarder Free for 100 days N/A
Required Starting Balance $5 $5 $0 $0
Minimum Balances $0 $0 $0 $0


Here’s a 
link to sign up with Acorns — and claim that $5 bonus.

Dana Sitar ([email protected]) is a writer and editor at The Penny Hoarder. Say hi and tell her a good joke on Twitter @danasitar.

Carson Kohler, a staff writer at The Penny Hoarder, also contributed to this article.

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