M1 Finance

Charles Schwab vs Acorns

Compare Acorns versus Charles Schwab Intelligent Portfolios - which stock broker is better in 2021? IRA/Roth accounts, online investing fees, broker mutual fund rates, and differences.


A new method of investing has been launched by Acorns. The broker hopes to attract Millennials with its modern style of money management. But is it really better than what other brokers have to offer? Let’s compare to Schwab and see if one looks like the better bet.


Broker Fees Stock/ETF
Mutual Fund
Annual IRA
Charles Schwab $0 $49.95 $0.65 per contract $0 $0
Acorns na na na $1-$3 per month $1-$3 per month

Promotion Links

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

Charles Schwab: Get commission-free online stock trades.

Category #1: Investment Approaches

Acorns offers a grand total of 12 ETFs. That’s the extent of its investment vehicles. The broker does provide a round-up service (for a fee, which is waived for college students) that transfers a small amount of change from a debit or credit card transaction to an Acorns account. Recurring deposits from a linked bank account can also be set up. A software program oversees the target allocations among the ETFs, and there is no self-directed alternative.

Acorns vs Charles Schwab

At Schwab, there are self-directed and managed accounts. The former provide trading in stocks, bonds, thousands of ETFs, option contracts, mutual funds, closed-end funds, and futures. The latter start with ETFs and expand into the other investment types. Automatic periodic transfers from an external account can be established at no charge.

Instead of paying a monthly fee to transfer money from card transactions, it seems like a better idea to set up recurring deposits from a linked bank account for free. Schwab wins the opening category.

Category #2: Managed Account Details

Acorns’ service costs $1, $2, or $3, depending on the account type (taxable v. retirement) and the features added (debit card or not). The broker’s digital advisor takes answers from a questionnaire and chooses the IRA type. It also determines target allocations for the 6 funds in both taxable and retirement accounts. Because the fee is a flat fee and not a percentage of assets under management, it might be a good deal for large accounts, but not small accounts. The company requires $5 to start investing.

Schwab’s robo program is free. The brokerage house is able to offer it at this unbeatable price by keeping a large percent of the account in cash. Schwab also makes money off of the ETFs that are traded. There are 53 funds from several fund families. Schwab is the most common. There is a $5,000 minimum to start.

Charles Schwab vs Betterment

Schwab also has a hybrid system that pairs the computer program with a human Certified Financial Planner ™. The cost is $30 per month with a one-time financial planning fee of $300.

Finally, Schwab provides old fashioned service that carries higher minimums and costs between 0.65% and 1.35%, depending on the assets traded.

Schwab wins the second category.

Category #3: Software Platforms

Acorns clients can use either a website or a mobile app or both. Because there are no self-directed accounts, the two platforms don’t have any trading functions. There are account management tools, and that’s it. On the positive side, the software is easy to navigate.

Schwab offers a mobile app (actually two of them), a website, a browser platform, and a desktop program. They all have different functions and features, and trading is certainly one of them. Futures contracts can be traded on the browser platform, which also boasts some very good charting. The desktop system offers live streaming of CNBC and some very advanced features, such as Level II data.

Again, Schwab.

Category #4: Research & Education

Acorns publishes articles and a few videos on its website. They also make an appearance on the mobile platform. They cover very basic topics like credit scores and how to use the round-up system. While the resources do try to present information in a very elementary way, there’s not very many of them.

At Schwab, we found many more resources. The company publishes a quarterly magazine called On Investing. Some of the articles we found include 401(k) management, saving for education, understanding ETF fees, and details on managed bond funds.

Much more exists on Schwab’s website. Resources include security screeners with lots of search variables and free stock reports from multiple analysts.

Definitely Schwab.

Category #5: Other Services

Schwab customers can sign up for a free DRIP plan that converts cash dividends into additional shares of stocks and ETFs. Acorns’ has a dividend reinvestment service for its 6 ETFs.

As for IRAs, Schwab offers the SIMPLE IRA, which Acorns doesn’t have. Both brokers have Roth, traditional, and SEP plans. Only Schwab offers a self-employed 401(k).

Schwab offers robo deposits into mutual funds.

Acorns loses the final category.

Top Competitors

Broker Review Promotion
Mutual Fund
Annual IRA
WeBull Get 2 FREE stocks valued up to $1,850 + $100 in ACAT reimbursement. $0 na $0 $0
Firstrade Get 2 FREE stocks and $0 commission in ALL trades! $0 $0 $0 $0
TD Ameritrade $0 commissions + transfer fee reimbursement. $0 $49.99 $0 $0

Our Recommendations

Beginners: Schwab offers 24/7 customer service in addition to its many branch locations and excellent learning resources. New traders should pass on Acorns.

Mutual Fund Traders: Of course Schwab.

Long-Term Investors and Retirement Savers: Schwab again.

ETF and Stock Trading: Schwab, no contest.

Promotion Links

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

Charles Schwab: Get commission-free online stock trades.

Charles Schwab vs Acorns - Outcome

Acorns didn’t win a single category. Enough said.