Acorns App Review – Investing Spare Change With Ease

DISCLAIMER: This is not a paid review – I just love this app.

Acorns is a neat investment-based application that allows users to save whilst they spend. The application is super easy to use with an extremely user-friendly design that I believe will be a game-changer in the way the next generation budget. The major attraction of Acorns is that it ‘Rounds up’ transactions on an account of the users’ choice to any amount of their choosing up to $1 and invests the difference in one of six investment portfolios that have been designed with the help of Nobel prize winner Dr. Harry Markowitz. Acorns also gives users the option of setting up regular investments at a custom frequency or they can simply transfer lump sums across into their investment portfolio if they find that there is a little extra cash lying around before the next pay day.

As a final little cherry on top, Acorns has begun to integrate cashflow tracking software with the ability to forecast spending over the next month. The AI behind the estimated spending is a little weak at the moment but the app is moving in the right trajectory to give you a complete 360 view on your spending habits whilst providing you with a platform to get a better return on your money.

Let’s go into a little more detail about why this app should be on the front page of your phone screen.


A huge factor for people engaging with an application like Acorns is the security, and in this case the concerns are on two fronts. Firstly, am I making my own personal account less secure by logging in through Acorns and giving them access to my transaction history and creating the functionality to deposit money with the click of a button, and secondly how safe is the company holding the money itself?

Fortunately, Acorns have taken security concerns extremely seriously and have partnered with a company called Yodlee to scrape the data of your financial transactions. Whilst it is yet another third-party company that is now involved in the process, it’s the same company that works with ANZ to assist them with their MoneyManager application. Yodlee has been around since 1999 and has been utilised by many big players in the fin-tech space during that time and has a great reputation in that space.

In terms of your money being at risk, accounts are insured up to the value of $500,000 and if any of you have an Acorns account larger than that you definitely should not be listening to me. The money that you invest is also not held directly by Acorns but in a Trust on your behalf by Australian Executor Trustees Limited which is a member of IOOF Holdings Group. In layman’s terms, it means if Acorns goes bust and ceases to exist your money is still safe as it’s being housed by another company.

As far as a company can go in eliminating cyber risk, Acorns has done a great job in protecting their users.


As I mentioned in the introduction Acorns gives users the option of investing money in 6 different diversified portfolios. In short, the portfolios designed with the assistance of Dr. Harry Markowitz, who is the father of the Modern Portfolio Theory, are centred around achieving the best returns with the least amount of risk in a portfolio.

The different portfolios are all based on a trade-off on ‘risk’ vs ‘reward’ meaning that if users are super conservative and have previously been put off investing their money because they’d hate the thought of seeing their money go backwards too far, there’s a portfolio that suits their needs. Conversely if users are happy to deal with the short-term volatility of investments and aim for the greatest return they can achieve over the long-term, there is a portfolio designed for them too.

Acorns have recently added the ability to invest in a socially responsible investment portfolio. It can be hard to understand whether a managed fund or even a super account is supporting industries that an investor doesn’t believe in, so it’s a powerful addition for those people who are passionate about the environment because Acorns do the arduous work to identify socially responsible investment options for their users.

Unfortunately there is a limitation within the application for the slightly more sophisticated investors out there who would love to have a little more control over the make-up of the portfolio in which they invest. It turns out that Acorns are very protective of Dr. Harry’s portfolios and haven’t provided any flexibility over the holdings or enabled the capacity to mix and match the diversified funds. Acorns have designed the app to be super easy to use for everyone and as cheap as possible to run, so it’s a trade-off that they are willing to make to get the application into the hands of the masses.

Automatic Round Ups

The ‘Round Up’ feature is the biggest drawcard in my opinion. The app is replacing the old school money box and bringing it into the new world. So many young kids when I was growing up right through to my Grandparents generation had a tin lying around their house to stash their coins in after being out for the day.

The problem with saving your change nowadays is that most people use bank cards which doesn’t lend to all that many coins lying about anymore. Acorns has tapped into the old philosophy of savings pennies to look after the pound by adding the functionality into card transactions. Users can set-up Acorns to round up or save the difference between each transaction and the next dollar. If a card is used quite a lot, as most people do, this can become a surprisingly large sum of savings, however if that amount is too steep to keep transferring every month with the click of a few buttons users can change the amount that is rounded up in their linked account.

Users also have the capacity to select whether the funds are automatically transferred across to their investment portfolio or they need to be manually actioned. This feature enables the ultimate flexibility on saving habits and allows for total customisation for the online piggy bank.

Savings Transfers

The ability to transfer a designated amount is fantastic and I’ve taken full advantage of this feature. Personally, I’ve set up a small transfer of $25 per week into the fund which has just become a part of my monthly expenses and I don’t even notice it any more. I’ve added this on top of the monthly transfer of savings into a separate account and it’s allowed me to build my savings much faster than I would have otherwise been able to do.

Effectively I’ve now replaced my everyday savings account with Acorns by using this feature. Whilst there is obviously more risk involved in having money in an investment portfolio than in a bank, the return on my money in that portfolio is significantly better over the long-term and it’s actually far more interesting to keep track of my savings. I also know that if I’m ever in a situation where I want to access the money that I can get it in less than a week (Recently transferred $1,250 and it arrived in 5 days) but it’s not so easy to access that I can ‘accidentally’ spend it on a night out.

Lump Sum Transfers

The lump sum transfer is as simple as transferring money online between accounts, which makes it incredibly easy at the end of the month before next pay day to jump into the application and send some extra funds across into the investment portfolio. A little extra at the end of each month can make a huge difference over the course of 5 years and can really help users of Acorns to nail their mid-term goals.

The added benefit of this feature is the ability to contribute a large amount upfront. I’ll touch on why this is a good idea in a moment when we discuss fees but it allows users to transfer money that’s sitting in a savings account right now across into the application as if they were just changing bank accounts and get them started with a bang.


As I just touched on, there is always a cost when it comes to investing. Acorns is incredibly competitive when it comes to pricing and delivers the ability to invest as cheaply as anywhere I’ve seen. Acorns also charge a flat fee with no transaction costs so users aren’t penalised when they put funds into their application on a regular basis which is great for investors who want to contribute little amounts at a time. Just a quick summary:

  • $0 Funds Invested  ->  NIL Fees
  • $0.01 – $5,000 Funds Invested -> $1.25 Per Month
  • $5,000+ Funds Invested -> 0.275% of Account Balance (calculated daily and charged monthly)

The downside is the cost of the application per month for people who are just starting out. Whilst it seems like a seriously insignificant amount $1.25 per month actually chews into your savings quite a lot if you are only adding $10 per month.

My suggestion would be to have at least $500 to start your acorns investment account so that the returns that Acorns provides exceed what people would get in a bank account after fees. Without a solid contribution upfront, people will be adding risk to their savings accounts without much benefit outside the ability to save with round ups.

Referral Bonus

A neat little feature of Acorns is the ability to refer a friend and get a $2.50 bonus for both users. It’s a great touch for the app to create its own virality through organic sharing but it’s also nice for the users to get a little kick-back for putting their reputation on the line with friends and family.

There is also a feature in-built that users get a bonus when they shop at Acorns affiliated stores. Currently it’s only accessible with online purchasing and for stores that you’ve activated within the app. For some more detail around the technical functionality of the feature have a look at this great post about Found Money. I am super excited about where this feature might go in the long-term as the application generates more traction within Australia. Previously the relationships haven’t been that great for us over here as they had an American focus but when I look through the names that are involved now, with the likes of Virgin Australia, Cotton On , Bonds and Dan Murphy’s to name a few there will be some nice rewards just for shopping in the right place.

I feel as though a Woolworths or a Big W, a big name brand that is struggling a little in the current climate, getting on board with something like this would be a great strategic decision to try and attract the younger generation to shop in their online stores. Hopefully we see some more big retail chains like David Jones getting involved soon which will add some serious value to the Acorns application.

My Rating – 8.5

As you will note at the beginning I’ve rated the application an 8.5/10. I know that I’ve been glowing all through the review and I might be a little critical given how unique the product is in the marketplace but the reason for the reduction of points is twofold.

The ability to track spending is a great addition but there needs to be a little more work done in this space before it becomes a relevant feature. As it stands right now it doesn’t really compete with other free applications like Pocketbook so it’s adding a little complexity to the app that I don’t feel is necessary at the moment. It does however look like it’s headed in the right direction and I’ll be very interested to see where it ends up in the next 12-24 months.

The main reason why it lost marks for me is that I’m not sure how well new, young investors understand the cost of the $1.25 per month and how it affects their savings long term. Ideally Acorns users should have a decent initial deposit in the application so that over time the investment returns will cover the cost of administration. An example of the possible downside would be someone that is just using the app for the round up feature and is transferring between $20-$30 per month into the application. Over the course of the year, the user is going to save about $300 from using the round up feature but are going to spend $15 on the application which will leave them with $285 plus investment returns at the end of the year.

This means that the investments need to return 5% just to break even on the savings and another 3% to be more beneficial than just putting the money in the bank account.

Now, I think that the added advantage of users saving when they spend money more than compensates for the cost of using the application but it would really be an easy solution to make it absolutely transparent to people when they are signing up to the app that it would be best to transfer $500 into your portfolio to get you started. It might cost you a few users up-front but I think transparency wins in the long run every time.

The Future

Acorns is a flagship financial application of our modern world. The application is probably slightly ahead of the curve and is continuing to push development into the AI world that will be coming to our smartphones over the next decade. The obvious capabilities for high-level AI integration into the application to give users real-time feedback on their spending habits will provide serious competition for cashflow monitoring applications like Olivia AI that’s being produced in the U.S. Whilst Olivia has superior capacity in the AI space right now, Acorns has the power of collecting investment revenue from the masses to support its development and has the potential to develop into a huge market player in the Robo-Investment side of the business.

The barrier that Acorns will struggle to overcome is the knowledge around investments and how they work as there will be a lot of savers who pull their cash out of the application at the next financial crisis. If they can successfully navigate through this period then I think the sky is the limit for them. I think a feature they should seriously consider incorporating is a news feed that users can turn off and on in their application regarding the market with a particular focus on the portfolio that user is invested within. A dedicated news feed will provide the comfort that there are people behind the machine who actually care about their money and position them as a leader within the millennial generation.  Hopefully through education of how the investment world works Australians will trust the application more and they can take full advantage of an application that makes modern day saving as easy as spending money.

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