Acorns is an investment management organization that provides a wide range of products and services, such as automatic portfolio management, job search, and Round-Ups and Smart Deposit, which allow you to boost your savings and investments.
The brokerage services provided by Acorns are provided by Acorns Securities LLC, which is situated in Irvine, California. The broker was created in 2012 by Walter Wemple Cruttenden III and Jeffrey James Cruttenden. It’s a new player in the investing and retirement savings space that wants to differentiate itself by making it simpler for people to save and invest in appropriate portfolios.
Over 9 million people have registered on the platform’s website. In 2020, he will be in charge of $ 3 billion in assets. Acorns Advisers LLC, a SEC-registered business, operates the website. Acorns Securities LLC is also a member of the Financial Industry Regulatory Authority and has a Securities and Exchange Commission registration (FINRA).
Acorns clients can invest in Exchange Traded Funds (ETFs) (ETFs). These are stocks or a basket of stocks that closely resemble a particular index, commodity, or stock. ETFs are similar to mutual funds in that they may be freely bought and sold on the market. Many ETFs are useful for risk management since they automatically diversify your portfolio and employ internal risk management.
Government bonds, corporate bonds, company stocks (small, medium, and large capitalizations), and other assets are included in Acorns’ ETF portfolios (a mixture of securities with varying levels of risk and annual returns). Portfolios labelled “conservative” are often more bond-focused, whereas portfolios labelled “aggressive” are more stock-focused.
The stocks included in the funds are chosen at random by the investors. Rather, investors place their money into a well built and balanced Acorns-based managed portfolio. While the broker may indicate which portfolios are best for you, investors have the option of going against the broker’s advice and picking a more conservative or aggressive portfolio.
Acorns also offers long-term portfolios of assets carefully selected for their environmental, social, and governance characteristics. Although it is unclear if they produce the same returns as traditional portfolios, their popularity is growing.
It’s also worth noting that the website never invests any of its users’ money in cryptocurrencies (such as BTC or XRP).
Regardless of how much money you invest ($30, $300, or 30,000), Acorns charges a fixed monthly fee for each of its two accounts. For $ 3 each month, you may access your own Acorns account, which includes Acorns Invest (investment account), Acorns Later (retirement account), and Acorns checking accounts. The majority of investors will find this to be a suitable fit, and there is an Acorns Family account for parents who wish to set up accounts for their children. This looks to be a personal account. Acorns Early, a caregiver account, may be passed on to children as they become older.
These expenses are fairly low for persons who invest large quantities. At the same time, the organization allows customers to contribute as little as $5 every day, week, or month. For smaller investors, a flat price may be a disproportionate expenditure to the client, and it can have a significant impact on any return on investment. It’s worth noting that some rivals, like as SoFi, don’t charge admin fees.
Due to automated rebalancing, Acorns consumers may not need to view their accounts as frequently as a conventional day trader, but the firm has made it simple to do so with a simple website and mobile app available on the Apple App Store and Google Play. The investing software received positive customer feedback on the App Store, with an average rating of 4.7 out of 5 stars from over 770,000 reviews. The app is not available in the United Kingdom or other countries where the platform is not supported.
Deposit requests submitted before 5:00 p.m. PT must be deposited the next business day, albeit the investment may take up to 2-3 days to complete. Account contributions received early or late will be handled within 5-7 business days.
Acorns Checking account deposits typically take 1-3 business days. Unfortunately, the firm does not accept deposits using mobile payment apps such as Zelle, however you may send money to your bank account using PayPal wallet.
Withdrawing funds from an Invest, Early, or Later account may take 3-6 days. Although Acorns requires funding sources to be validated, withdrawals may be done easily using the broker’s website, iOS or Android apps. Withdrawals made before 11:00 a.m. PST on a market day are usually processed on the same day.
Clients should be aware that withdrawals from an Individual Retirement Account (IRA) may result in tax consequences. Later invoices are processed concurrently with investment invoices.
Transferring funds from a current account to a linked account takes 1-3 business days.
Processing times may be longer than usual since the company must either buy or sell shares in your portfolio when you make a deposit or withdraw funds from an investment account.
Regulation and licensing
Before investing, investors should carefully evaluate the broker’s credibility. The fact that the platform is a registered and insured investment organization would excite clients. The Federal Deposit Insurance Corporation (FDIC) insures the current deposit account up to $250,000.
Acorns Securities LLC is a member of the Financial Industry Regulatory Authority and is registered with the Securities and Exchange Commission (FINRA). He’s also a member of the Assets Investor Protection Corporation (SIPC), which protects securities in your investing and retirement accounts up to $ 500,000 ($ 250,000 for cash claims).
If a client’s investment actions meet the IRS reporting requirements, they will get a Form 1099. If you took money out of your later account in the previous year, the company will issue you Form 1099-R by January 31st. For example, if you resign from Acorns after the end of 2020, you will get a Form 1099-R on January 31, 2021. Navigating tax documents, whether a W-2 or an 8949 form, can be time-consuming, but investors must be aware of the tax implications.