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In this post, I discuss Acorns, an easy-to-use program that can help you effortlessly save and invest some extra money. If you join now, you’ll get $5 to get started.


Photo by 401(K) 2012 is licensed under CC BY-SA 2.0. This content uses referral links. 

Estimated Reading Time: 10 minutes

I have been using Acorns for several years to help me slowly grow my savings. Acorns is an easy-to-use, set-it-and-forget-it financial app that allows me to save just a little bit of money at a time.

I first discovered this app when I was at my first duty station in the Air Force in 2015. I have been using it ever since, and I have no intention of ever quitting.

Below, I have described Acorns, what it offers, and my own experience with it. If you sign up today, you’ll get $5 to help get you started.

If you have any interest in using an app-based financial savings program, I’d encourage you to check it out. Acorns may not be right for everyone, so, after reviewing it, you may decide this isn’t for you.

If, however, after reading about my own experience, you decide Acorns can help you reach your financial goals, head over to Acorns to open an account.

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Acorns Grow Into Oaks

The basic idea of Acorns is that you can build up significant savings over time by saving just a little bit with each purchase you make. The program helps you do this by turning all of your purchases into even dollar amounts, rounding up to the next dollar amount and saving the difference.

So, for example, if you spend $0.75 on a candy bar, Acorns will automatically move $0.25 from your checking into your investment account. It’s essentially a way to tell yourself to “keep the change” with every purchase you make.

It doesn’t matter the size of the purchase, the amount saved is always a small, manageable sum. So, if you buy a new television for $999.99, Acorns will put aside $0.01.

It doesn’t sound like much, but these small transfers, while easy to miss at the time of purchase, can grow into a significant amount over time.

All you have to do is link your debit and credit cards to Acorns, and it will track every purchase you make. It will round up the difference and transfer that amount of money out of your checking account into your Acorns account.

It’s really that easy. It takes just a few minutes to set it up, and then everything happens automatically after that.

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Acorns Investment Options

What’s better, these little funds don’t just sit around like spare change in a piggy bank at home. Instead, Acorns puts it into an investment account, so that your small savings can accumulate and continue to grow.

You simply determine your risk tolerance, and Acorns will help you build a diversified portfolio that puts your money to work.

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You can invest automatically in ETFs diversified to meet your risk tolerance and investment horizon. Also, Acorns offers a wide range of asset classes in which to invest, even with very little money.

For example, you could put your spare change to work investing in blue-chip stocks, real estate, government bonds, small-cap stocks, emerging markets overseas, and corporate bonds.

There are no complex investment decisions for you to make on your own. You simply let Acorns know how aggressive or conservative you want to be, and it will put together a diversified portfolio to help you get where you want to go.

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You can choose from among the following portfolios: (1) Conservative; (2) Moderately Conservative; (3) Moderate; (4) Moderately Aggressive; and (5) Aggressive.

If you simply want to save up a bit of money to have in case of an emergency or for a vacation, you may want to pick a conservative fund that offers moderate returns for less risk.

If, however, you have a much longer time horizon, you may want to invest in the Aggressive fund that has the potential to bring you the greatest return on your investment.

Acorns will also help you pick the portfolio that is right for you. The program will ask you a series of questions to determine your goals and make a recommendation.

You are not obligated to follow Acorn’s advice, but this is an excellent way to help you get started.

And all of this is through simply saving your digital loose change. It’s all automatic, and there’s no minimums or trading fees.

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Extra Savings

If you like Acorns and want to be more aggressive with your savings, you can. You can transfer additional funds into your investment account whenever you’d like. You can make one-time contributions, or you can setup automatic recurring transfers. It’s all up to you.

This is in addition to the spare change savings contribution, which can help you build up your savings that much faster.

You do not, however, have to do this. You can simply stick with saving your spare change and watching your savings grow automatically every time you make a purchase.

Those few cents here and there invested in a diversified investment portfolio can grow into a significant little nest egg over time.

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Acorns Found Money Program

In addition, to help you save money even faster, Acorns has established partnerships with a large number of companies through its Found Money program. Purchases you make with these companies will automatically result in bonus funds being added to your account.

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Corporate Partners

Current partnerships include:

And there are many others available. These are just a few of the hundreds of examples.

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How It Works

A company sets a spending condition. If you spend with them and meet their requirements, you’ll get a bonus amount deposited right into your Acorns account. Terms vary by partners, but here are some examples of current offers.

New customers with Blue Apron will receive $25 deposited right into their account. GrubHub customers using the mobile app will receive $0.50 when they make a purchase. Sunglass Hut will deposit 3% of whatever you spend with them into your Acorns account. Walmart will deposit 1% of what you spend with them into your Acorns account.

These are just a few examples of the bonus opportunities currently being offered. There are a great many more. Acorns’ partnership list has grown significantly since I first joined several years ago. They now have more than 350 corporate partners participating in this program.

(Please note that these offers change all the time, as do the associated companies, so I encourage you to check it out for yourself. By the time you read this, new offers may be available, and current ones may have expired.)

This is an excellent way to save some extra money on things you would buy anyway. Check out the Acorns website to learn more about this program and all the offers that are currently available.

Some offers are for first-time customers, while others are continuing cash-back opportunities. Acorns is a great program and an effortless way to save money.

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Spending Account

For those who are interested, Acorns also offers a spending account with its own Visa debit card. This allows you to link all your spending and investment accounts together through one system. Acorns designed it for those who are interested in an even more straightforward way to save.

I have never used this program. I prefer to link my current credit and debit cards to Acorns rather than use their system. I, therefore, cannot speak for its efficacy.

I can say, however, that it is not required and is simply another feature Acorns offers for those who are interested in jumpstarting their savings.

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Saving For Retirement

Acorns offers more than just the regular investment account described above. If you’d prefer, you can also use Acorns to save for retirement. Acorns offers retirement accounts to help you effortlessly put away a little bit at a time to prepare for retirement.

It does this by offering Individual Retirement Accounts in addition to its standard investment account. Acorns offers both Traditional and Roth IRAs.

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Traditional IRA

If you choose the Traditional IRA, Acorns will transfer money into this account automatically, as described above. In addition, these contributions are tax-deductible, meaning at the end of the year, you could receive a lower tax bill—and potentially a bigger tax refund—as a result of using Acorns.

In addition, if your income is below a certain level, you could receive a tax credit instead of a tax deduction, resulting in even more significant tax savings.

Also, over multiple decades of savings, you could build up a sizable retirement fund that will be waiting for you when it’s time to retire.

It’s easy to forget about saving for retirement, particularly if it seems a long way off. Why not get started through this easy to use and automatic savings program, putting aside just a little at a time?

Note, however, that, as with all traditional IRAs, if you withdraw your savings before you reach 59.5 years old, you will owe significant tax penalties. (There are some exceptions to this rule, and this should not substitute for advice from a personal tax advisor.)

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Roth IRA

Acorns also offers a Roth IRA option. With a Traditional IRA, you receive a tax deduction for your contributions. Then, when you retire, your withdraws are treated as taxable income. So, you’re essentially deferring the taxes due on your contributions.

With a Roth IRA, however, you don’t receive a tax deduction when you make your contribution, but your contributions grow tax-free. Then, when you retire, you can withdraw the funds tax-free as well.

Say, for example, you put $100 into your IRA, and it grows to $1,000 by the time you retire. With a Traditional IRA, you receive a $100 tax deduction today. Then, when you take out the $1,000 when you retire, you pay taxes on the $1,000 you withdraw.

With a Roth IRA, however, you don’t receive a tax deduction for that $100 you deposit today. When you withdraw the $1,000 at your retirement, however, you don’t owe any taxes on that money. The withdrawal is tax-free.

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Early Roth Withdrawals

In addition, if something comes up and you need to withdraw funds from your Roth IRA early, you can withdraw your contributions without penalty.

Say, for example, you put $100 into your Roth IRA today, and one year from now, it has grown to $110. At that time, you could withdraw $100 without a tax penalty.

You could not, however, withdraw the earnings on your investment without a significant tax penalty. So, if you withdraw the full $110, you’ll owe taxes plus penalties on the $10 it earned. You have to wait until retirement to withdraw the earnings tax-free.

Still, I believe Acorns is an excellent way to establish a Roth IRA. It allows you to put money away for retirement while still keeping your contributions available for you for emergencies. Given the little amount of money you’ll be putting away at a time, this allows you to use your Acorns savings as both a retirement and a savings account.

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Tax Rules

Please also note that there are a variety of rules that apply to IRA contributions and withdrawals. There are annual contribution limits—$6,000 as of 2020—and other limitations, depending on your income, the type of IRA you want to open, and your access to a workplace retirement account.

For someone making an average income, these limitations probably won’t be an issue, but it’s important to know that they are out there.

These are just general rules. Everyone’s tax situation is unique, and you shouldn’t take anything I wrote here as tax advice. You should only rely on your own personal accountant or tax advisor for personalized counsel.

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Cost of Acorns

Acorns offers two plans: Lite and Personal.

The Lite plan costs only $1 per month. The Personal Plan costs $3 per month.

The main difference between the two is that the Lite plan gives you access to a standard investment account, while the Personal Plan also gives you access to the Retirement and Spending accounts.

I use the Lite plan. I think the $1 per month would be worth it even if all Acorns did was help me save a little extra money through the roll-up program.

I find, however, that I more than make back the monthly fee through access to an investment account that earns me money through investment growth and dividends and the Found Money program that allows me to earn some bonus cash.

$3 per month for a retirement account, however, seems perfectly reasonable, and it is something that I am considering going forward. I plan to sign up in the next few days. I find the Roth retirement account option particularly appealing.

Get $5 for Signing Up Today

If you think Acorns may fit your needs, I encourage you to sign up today. If you sign up using one of my links, you’ll receive $5 to help you get started. Just click here.

Full disclosure, if you use my link, I may also get a $5 commission at no additional cost to you. I was using Acorns for years before I started promoting it, however, so I recommend it whether you use my referral link or not.

While I would appreciate your support, if using my link makes you uncomfortable, I still recommend Acorns. Just navigate over to the Acorns website to check it out for yourself. 

Acorns is a great program. I love using it, and I love the way that it helps me save money without my having to think about it. (As a graduate student, that has proven particularly useful.)

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You have nothing to lose and a lot to gain. Having some extra money on hand is always helpful, whether for emergencies or just to help build a more financially secure future. Acorns is an excellent program for getting you there.

Even if you don’t want to use Acorns as your primary savings or investment account, you can use it to help you save. Then, you can transfer the money out whenever you’d like.

I tend to transfer money out every year or two for a variety of reasons. Still, I know that I wouldn’t have that money at all were I not using Acorns to help me automate my savings. It is, indeed, a great program, and I cannot recommend it enough.

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