Acorns: An App for Saving and Investing

It is hard to save money. It is harder to think about money many years in the future. The Acorns app tries to address this problem with $1 a month. What if you could not only save, but invest money further? Now, it gets interesting.

There are a lot of these apps on the market so understanding how Acorns works is important. You will need to link a debit card or credit card to your Acorns account and every time you make a purchase Acorns rounds the purchase price up, so if you bought a $1.51 coffee, then it “cost” $2 and that extra .49 cents goes into your Acorns account.

After a month, you might have some amount of money, let’s say you buy coffee five times a week and by the end of the month on that coffee alone, Acorns has $10 to invest. That $10 is then invested in stocks using Fractional Share Investing. This means your money is invested together with other people’s money in a broad portfolio of stocks. Meaning if a share of Apple stock costs $100, then you may own $1 of one share of Apple, done to vary your risk across multiple investments.

You maintain access to your money and Acorns does all the work for you. It seems like the potential for greatness is there, depending on your comfort with other people having access to your banking information. You also have the option of investing large sums ($5–50,000) at any time.

The bottom line is the opportunity to invest such small amounts of cash is a great benefit. It won’t mean you are bringing in large sums, but your small savings will grow much more quickly than it otherwise would have.