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Acorns Spend Review


Written by James Ellis | Published on 7/26/2019

Acorns helps you get started with investing by saving spare change, bit by bit with every purchase you make. The Acorns Spend account is an online checking account that is an optional module available to Acorns users.

Acorn Spend is a good online checking option for savers who also want to invest with Acorns, although it is a subpar choice for anyone else. There's a $3 monthly fee, which is $3 more than what many checking accounts charge. Acorns justifies this fee by bundling its core investment functions and an IRA investment account together with the Spend account. However, if you don't have any interest in these products, using Acorns Spend doesn't make much sense.

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How does Acorns Spend work?

It’s easiest to think of Acorns and Acorn Spend as a package deal. You're not only signing up and paying for an online checking account, but also for the Acorns Core investing functionality and the Acorns Later individual retirement account (IRA). The account comes with an Acorns Visa debit card, like other checking accounts — but transactions you make with the card are automatically rounded up to the nearest dollar, and these extra amounts are placed in your Acorns Core account. These funds are then invested in one of the five preselected ETF portfolios you choose when you create your Acorns account.

Here's an example of Acorns Spend in action:

  1. You buy a milkshake with your Spend debit card that ordinarily costs $3.05.
  2. Because you're using the debit card, the transaction is rounded up to the nearest dollar — making that milkshake cost $4.
  3. The extra $0.95 cents is automatically invested in your Acorns Core account.

Acorns Spend has a few other notable features, including:

  • Unlimited ATM reimbursement: Acorns won't charge you any ATM fees, and pledges to reimburse you on a monthly basis for any third-party ATM fees you may accrue. You should note there's a $500 daily withdrawal limit from ATMs.
  • No overdraft fees or minimum deposit required: Acorns won't hit you with any of those hefty overdraft fees some banks charge customers, and it doesn't require a minimum deposit (or balance) for the Spend account.
  • Mobile banking services: This includes setting up a direct deposit into the Spend account, free bank-to-bank transfers of funds, mobile check deposit and mobile check sending. You can also transfer money to and from your Acorns Spend account and a PayPal account.
  • Selected merchants you shop with will grant you extra money for your Acorns Core account: Called "Found Money," this program results in specific merchants funding your Acorns Core account with either a set dollar amount or a percentage of your purchase when you pay with your Spend debit card. Acorns claim more than 200 merchants participate in the Found Money program.

You'll notice a lot of these benefits center around the Acorns Core account rather than Acorns Later — the investment app's IRA account. Currently, the only way to fund your Acorns Later account is by either manually making a deposit from another account or by setting up recurring payments from another account automatically. In either case, that account which funds Acorns Later can be your Acorns Spend account.

Acorns Spend charges a $3 monthly fee

A sticking point for money potential customers of the account will be the fees. While the $3 monthly flat flee sounds small, it's higher than the zero monthly fees of many online-only checking accounts, such as Ally and Simple.

Of course, online checking accounts do not usually include an investment account. Let’s compare Acorns Spend's fee with the management fees charged by other leading robo-advisors.

For example, Wealthfront charges an annual management fee of 0.25% of the funds you have invested with its accounts. A year of investing with Acorns Spend will cost you a flat fee of $36. If you invest $500 with Acorns, you'll end up paying a management fee equivalent to 7.2%.

However, the more you invest with Acorns, the better that $36 flat fee looks in comparison. At $14,440, your yearly Acorns Spend fee is equal with Wealthfront's 0.25% annual fee. All in all, you're probably going to pay a higher fee percentage-wise using Acorns than you would with other robo-advisors, but with the others, you also aren't always able to invest $0.50 in an ETF each time you buy a Slurpee. The higher fee is the price you pay for the convenience and automation for which Acorns is known.

Two classes of people exempt from Acorns' standard pricing structure are millionaires and college students. If you have more than a million dollars invested with Acorns, the management fee is $100 for every $1,000,000 invested. College students don't pay any management fees (provided you have a .edu email address and aren't employed full time), which is even more of an incentive to start investing early.

Acorns Spend is FDIC-insured, keeping your money safe

The money you deposit in your Spend account is FDIC-insured up to $250,000. The investment app has partnered with Lincoln Savings Bank, an Iowa-based bank with more than a 100 years of history.

Once your money has moved from your Spend account into either your Acorns Core or Acorns Later account, it is invested in the market and no longer enjoys FDIC protection. However it is SIPC-insured up to $500,000.

Who should sign up for an Acorns Spend account?

If you're already an Acorns customer — or interested in becoming one — the account helps you tap into the investment app's benefits by making it even easier for you to make micro-investments with your debit purchases. In addition, the unlimited ATM fee reimbursements is a strong feature for any online checking account.

However, if you evaluate the Acorns Spend account strictly from a deposits point of view, it’s most likely a pass. There are plenty of other online checking accounts with no monthly maintenance fees that also earn a decent amount of interest.

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