Robinhood vs. Acorns: Which Broker Is Right for You? | The Motley Fool (2024)

FAQs

Is it better to invest in Robinhood or Acorns? ›

Acorns is the better bet for investors who are hands-off and who prefer to do their checking in the same app where they do their investing. By comparing Robinhood vs. Acorns, you're already taking strides toward earning long-term income the right way.

Acorns is best for beginners to investing who prefer a straightforward, automated approach. It's particularly appealing for those with limited investment knowledge, offering a simple way to grow your wealth through automated investments and spare change round-ups.

Why we chose Chime: If you want an Acorns alternative that has numerous bank-like features to help you spend and save your money, Chime is for you. And our favorite part is that its high-yield savings account currently pays 0.50% APY. Like Acorns, you can also enable spare change round-ups to automatically save money.

Is Acorns Worth it? Acorns charges monthly membership fees, starting at $3 per month. Even though it is a very easy way to get started investing, if you don't make enough purchases each month to round up and set aside enough money, the monthly fee could outweigh the benefit.

Banking insurance: Acorns works with partners Lincoln Savings Bank or nbkc bank, Members FDIC, to make sure your funds are federally insured up to $250,000. It's also a member of the Securities Investor Protection Corporation (SIPC) which is a protection measure for customers if their brokerage firm fails.

From Acorns mighty oaks do grow. Contrary to popular belief, you don't need a lot of money to start investing. With Acorns, you can set Recurring Contributions to automatically invest with as little as $5 a day, week, or month.

Where Acorns falls short. No tax strategy: Unlike many of its competitors, Acorns does not offer a tax strategy. High fees on small balances: Because of its pricing structure, Acorns can have high fees on small account balances.

Acorns is built on long-term investing principles. With a long-term investing strategy, you stay focused on a long-term investment horizon even when short-term market volatility and your emotions might be pulling you in the other direction.

Yes, you can withdraw your funds from Acorns at any time without penalties.

You can transfer stocks, cash, and other eligible assets from your outside brokerages into Robinhood through ACATS. You can transfer all or part of an outside account. We only accept assets from individual cash, margin brokerage accounts, or traditional or Roth IRAs.

Is Acorn FDIC insured? ›

Yes! All Acorns Checking accounts are insured by the FDIC up to at least $250,000 per depositor, per ownership category. Your deposits in your Acorns Checking account are protected up to $250,000 — that's because our banking partners, Lincoln Savings Bank and nbkc bank, are both FDIC members.

Targeted at millennials, Acorns is the investing app that rounds up purchases to the nearest dollar and invests the difference.

The concept is elegant in its simplicity: each time a user makes a purchase, Acorns rounds up the transaction to the nearest dollar and invests the difference. This spare change is then diversified across a range of exchange-traded funds (ETFs) tailored to suit different risk appetites.

When tax season arrives, you may be wondering if you owe taxes on your Acorns investments. The quick answer is, it depends on your portfolio. If you sold a portion of your investment and made a profit, then you will have to pay either the short-term or long-term capital gains tax on this amount.

Acorns Visa™ debit cards and banking services are issued by Lincoln Savings Bank or nbkc bank, members FDIC. Acorns Checking clients are not charged overdraft fees, maintenance fees, or ATM fees for cash withdrawals from in-network ATMs.

No, Acorns does not charge fees for withdrawing funds from your investment account.

Acorns provides a platform for members to invest spare change in a diversified portfolio in order to grow their wealth. The company also offers retirement savings accounts, a debit card, and other basic banking services. Acorns generates revenue through member subscription fees.

Acorns offers impressive high-yield checking and savings accounts. The checking account earns 3% APY and the savings account earns 5% APY, with no minimum balance to receive the interest rate. The checking account has no overdraft fees and access to 55,000+ fee-free ATMs.