Is Acorns Safe?
If you have any concerns about the safety of Acorns, you’re on the right web page. We have compiled all the information you need, and here are the details:
Is Acorns Legitimate?
The investment arm of Acorns is regulated by both the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC). These two organizations are America’s securities watchdogs. They keep a close eye on securities brokers like Acorns and enforce sanctions whenever they violate the rules (or at least, they’re supposed to).
Acorns’ FINRA membership ID is 168172 as a broker-dealer. It also has a registration as an investment-advisory firm. This ID is 165926. The company’s SEC ID is 8-69294 as a brokerage firm, and its investment-advisory ID is 801-78602.
Acorns is registered in all 50 states and the U.S. territories. It has been registered since 2013 (for investment-advisory services) and 2014 (for broking).
Bank products available through Acorns are provided by Lincoln Savings Bank and nbkc bank, both of whom are subject to a myriad of federal banking regulatory agencies.
Is Acorns Insured?
Investment accounts at Acorns are protected by the Securities Investor Protection Corporation (SIPC).
This entity provides $500,000 of insurance on every separate capacity, which is roughly every customer (not every account).
Bank accounts at Acorns are
insured by the Federal Deposit Insurance Corporation (FDIC). This government agency delivers $250,000 of protection on cash balances. Like SIPC insurance, it is possible to increase this maximum level through a few strategies, such as opening joint and retirement accounts.
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Acorns Better Business Bureau Ratings
On top of the insurance and regulations, there are consumer watchdogs that like to evaluate how
companies are performing. One such group is the Better Business Bureau (BBB). This organization has a
profile for Acorns that shows an average customer review of 1 out of a possible 5. Although this is a low rating, there are only 12 reviews.
Besides collecting customer reviews, BBB also assesses, in its own judgment, how a company is operating. In compiling this rating, BBB uses several criteria, including the size of the business, how well the company has resolved customer complaints, and how long the company has been in business. On BBB’s profile for Acorns, we found a grade of F, the lowest possible score.
Is Acorns Safe Verdict
Although Acorns has a very low grade from the Better Business Bureau (based on just a few reviews),
it is a legitimate operation. Acorns accounts are insured under FDIC and SIPC guidelines, and there
are many regulators keeping an eye on the firm.
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Acorns Review
With verification that Acorns is not a scam, we should now look at the details of its financial services.
Investment Options
Acorns offers robo accounts that invest in a small selection of exchange-traded funds (ETFs). There are no other asset classes available, and the company doesn’t offer any self-directed trading. The automated-investing service requires a $5 deposit before it will begin trading the low-cost ETFs. Here are a few fund examples:
- iShares Core MSCI Total International Stock (IXUS)
- Vanguard S&P 500 (VOO)
- SPDR Bloomberg Barclays 1-3 Month T-Bill (BIL)
- ProShares Bitcoin Strategy (BITO)
There is a monthly fee at Acorns (either $3 or $5). While this is rather unusual and unexpected, Acorns delivers what many other investment firms don’t: bonus investments for shopping with participating retailers, a lucrative banking program, and tools to find a freelancing job.
Cash Management
Acorns’ banking service is available with either pricing plan. It comes with not just a checking account, but a list of perks that deliver many services:
- Visa debit card (made out of metal)
- Fee-free withdrawals at any Allpoint ATM
- Round-up service
- Early payday with direct deposit
- Automatic investments from direct deposits
Despite the many services available through the bank account, there are no ongoing fees, other than the monthly membership charge already mentioned. A deposit of at least $25 must be made to use the debit card, however.
Website
Acorns’ website emphasizes simplicity. Because there are no self-directed accounts here, it goes without saying that there are no self-directed trading tools. This doesn’t mean the site is without any noteworthy features.
During our investigation, we found a Chrome extension that can earn rewards for shopping with over 12,000 Acorns partners. Examples include:
- Liberty Mutual
- Walmart
- Safelite
It’s possible to earn rewards without the extension. Just look for the collection of retailers on the site’s dashboard.
Another tile on the site shows the milestones an account has reached. There are issues like number of round-ups, establishing recurring investments, and reaching a minimum account value.
Another feature we really like is the ‘View Potential’ tool. This one is located at the very top of the dashboard. It will draw a graph of an account’s projected future value based on round-ups and recurring deposits.
Mobile App
Many Acorns customers may not use a computer, and some may not even have one. That’s why the company has a really good mobile app. By good, we mean it is user-friendly and intuitive. We don’t mean it has a lot of powerful trading tools.
During our research, we found many of the same tools that are on the website, which means only one platform is usually needed. The Potential tool mentioned earlier is available. It shows both total investments over the projected lifetime of the account along with investment returns.
The bottom row of icons on the app is the software’s menu. Choices are:
- Home
- Invest
- Bank
- Learn
- Earn
The last icon, Earn, is where coupons and job postings will be found. The Learn tab has lots of articles on various topics. Examples include:
- What is an Insurance Deductible?
- 5 Tips on How to Plan for Retirement in Your 40s
- How to Create a Budget: 3 Tips
- What Happens in A Recession?
There is a mobile check deposit tool on the app, although it is only compatible with bank accounts. In various places, there are links to open further accounts with Acorns, such as retirement, custodial, and banking.
Customer Service
The Acorns website has a chat widget that is available after logging in (look in the lower-right corner for the icon). It starts in robo format and does a decent job of answering questions. Human agents are available for issues that can’t be handled by the Artificial Intelligence.
For issues that aren’t immediate, Acorns has an online form to submit a ticket for help. A login is not required for this, and attachments can be added.
Then there is old-fashioned phone service. Acorns is open 7 days a week from 5:00 am, PST, until 7:00 pm. The number is 855-739-2859.
Many Acorns customers will have common questions that can be answered simply by visiting the company’s FAQ page. It groups answers into categories, and there is a keyword search tool.
Acorns does not have any branch locations, and given its emphasis on digital investing, it probably never will.
Margin Accounts
Because Acorns only offers investment-advisory accounts in digital format, there is no margin trading.
Extra Services
Fractional Shares: Acorns’ robot uses whole dollars to buy fractional shares of funds. The round-up service has a $5 minimum purchase amount (combined from multiple round-ups).
Initial Public Offerings: Not available (remember, there are no self-directed accounts here).
Extended Hours Trading: Not available for the same reason.
DRIP Availability: Cash dividends from the ETFs in the program are used to purchase more fractional ETF shares.
Individual Retirement Accounts: In either membership plan, it’s possible to open an IRA. Acorns offers Roth, Traditional, and SEP accounts. The company also has a service to help customers roll over 401k plans from previous employers. There is no charge for it.
Awards
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Acorns Review Wrapping up
Although perfectly legitimate, Acorns doesn’t have the best grades from BBB—or from us. It obviously
fails to deliver any advanced trading tools. Nevertheless, its hybrid investing-banking service will
obtain some good benefits, and they will help to offset the flat monthly fee that we don’t like.
Updated on 1/24/2023.
Chad Morris is a financial writer with more than 20 years experience
as both an English teacher and an avid trader. When he isn’t writing
expert content for Brokerage-Review.com, Chad can usually be found
managing his portfolio or building a new home computer.
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