Ally Invest versus Acorns

Ally Invest vs Acorns in 2021



Overview


Acorns is a new investment firm that attempts to simplify the investing process (mostly for Millennials) by offering a simple way to invest and save. But is the company’s methodology a better alternative than what else is out there? Let’s see how it compares to Ally Invest.


Pricing


Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
Ally Invest $0 $9.95 $0.50 per contract $0 $0
Acorns na na na $3-$5 per month $3-$5 per month


Promotion Links


Acorns: Get $10 when you open an Acorns account with this referral link.

Ally Invest: Up to $3,000 cash bonus + $0 commission trades.



Category #1: Style of Investing


For a small monthly fee, Acorns offers round-up savings and investing, where purchases with a debit or credit card are automatically rounded up to the nearest dollar. The difference is deposited into an investing account that is managed by a software program. Some retailers offer an additional cash back into the Acorns investing account.


Acorns vs Ally Invest


There are only 12 ETFs available for the account: large companies, small companies, developed markets, emerging markets, government bonds, real estate, and corporate debt. There are no other investment options.

Ally Invest customers can choose between a hybrid human-robo advisor (without the round-up program) and a self-directed account. In the former, we found (more than twelve) funds from Vanguard and iShares. In the latter, there are ETFs plus mutual funds, closed-end funds, stocks, bonds, option contracts, forex, penny stocks, and OTC securities. There are no monthly fees at Ally Invest.

Paying money every month to save money makes no sense to us. Ally Invest customers can enroll in recurring deposits from an external bank account for free. Our pick in this category is Ally.


Category #2: Portfolio Management


Acorns’ investment management is a robo program, while Ally Invest has a hybrid human-robo package. Acorns charges $3 or $5 per month for its service; although college students are excused from the fee. There is no minimum balance.


Acorns Investing Review


Ally Invest’s hybrid service is free. The company is able to do this by maintaining a large cash position in the portfolio. Investments are selected by human advisors and then monitored by a computer program. There is a $100 minimum investment amount.

Pretty close in this category.


Category #3: Technology


Acorns offers a mobile app and website. They both have the same material and interface. During our testing, we found navigation of both platforms to be trouble-free. There is no trading capability because there are no self-directed services.


Ally Invest


Ally Invest has a mobile app, website, browser platform, desktop platform for securities, and 2 forex platforms. The desktop platforms have advanced features, which makes them more difficult to learn. For beginners, the other programs are a little simpler. The website and mobile app can be used to oversee a managed account.


Ally Stock Investing App


Mobile apps from both companies offer Touch ID on Apple devices. The Acorns app connects to Siri and can answer questions about an Acorns account within the app. We didn’t find mobile check deposit or Zelle transfers on the Acorns app, both of which are integrated on the Ally Invest app.

We’ll take Ally here.


Category #4: Education & Research


At Acorns, we found articles and videos on a wide range of elementary topics. Issues include retirement basics, how to save on the Acorns platform, an overview of diversification, and an intro to credit scores.

Ally Invest offers a similar selection of articles and videos on essential topics. Because the broker is owned by a bank, there are also personal finance topics available, including credit cards, budgeting, and taxes.

It’s a draw here.


Category #5: Cash Management


Acorns Spend is an FDIC-insured checking account with a debit card. The physical card is made from UV glass and tungsten. The card comes with unlimited ATM fee reimbursements. Although not currently available, Acorns promises mobile check deposit soon for the account.

At Ally Invest, customers can either attach checks and a debit card to an existing brokerage account or link a deposit account from Ally Bank. The former option carries a very steep $100,000 account balance (plus an annual fee); so the latter option seems like the better route to take. A high-yield money market account is available with checks, something Acorns doesn’t offer.

Ally looks like the better option here to us.


Category #6: Other Services


Ally Invest offers a DRIP service for self-directed traders. There are several IRAs available with the brokerage firm including SEP and SIMPLE types.

Acorns obviously doesn’t provide the DRIP for self-directed traders. It does offer IRAs, but not the SIMPLE account.

Ally Invest wins the final category.


Our Recommendations


Beginners: Acorns’ educational materials are geared towards beginners, although Ally Invest has 7am-10pm ET, 7 days a week customer support. We can recommend either company.

Mutual Fund Traders: For obvious reasons, Ally Invest is our pick.

Retirement Savers and Long-Term Investors: Ally Invest again.

ETF and Stock Trading: Hands down, Ally.


Promotion Links


Acorns: Get $10 when you open an Acorns account with this referral link.

Ally Invest: Up to $3,000 cash bonus + $0 commission trades.



Ally Invest vs Acorns - Outcome


While college students may be attracted to Acorns for its marketing, we think they would be better served at Ally.