We’ll answer this question for you in this detailed comparison of Acorns vs Robinhood.
Both Robinhood and Acorns provide access to a wide range of financial products and are great avenues for micro-investing a few dollars at a time. They both have competitive fees and a variety of product offerings that include stocks and ETFs, bonds, and cryptocurrencies.
Both are easy-to-use platforms with mobile apps offered in the app stores for iOS or Android devices. They also have superb customer support teams.
Now let’s dive in and discuss the finer details between Robinhood vs. Acorns so you can choose the right investing app for your needs.
TLDR: Acorns Vs. Robinhood
Who Is Best For You?
Robinhood also allows you to trade stocks in your brokerage account for free with no commission fees. If you want to trade on a mobile device, Robinhood has a user-friendly app for this.
Acorns is the best micro-investing app for hands-off investors. If you’re looking to invest automatically and frequently, without much active trading or management, Acorns will be great for you.
It allows you to invest small amounts of money on a daily basis that you won’t miss from your paycheck, but can still grow passively without you spending time on the investment platform.
Acorns is also a great option for those looking to get started now rather than later is because of its “Round-Ups” feature. This allows you to round up your purchases and deposit your spare change into your investment account. It automatically invests this money for you so you don’t have to spend mental energy managing your investments.
Robinhood is a stock trading app that you can use to make commission-free trades. You can make money on Robinhood with stocks and ETFs, options, and cryptocurrencies. Their mobile app is user-friendly and makes it easy to invest wherever you are.
If you want to have consistent and frequent control over your investment portfolio, Robinhood is perfect for you. Robinhood offers taxable brokerage accounts only – you can’t invest in retirement accounts like IRAs or 401ks.
Commission Free Trading
Trading with Robinhood will help you save money on trading fees.
It offers commission-free trades, meaning you don’t pay fees for any assets you buy or sell. You can buy and sell stocks, ETFs, options, and cryptocurrencies for free.
This sets Robinhood apart from other investing apps and companies because when you trade on other platforms, you’ll usually pay a fee based on the amount of money you invest in that stock or option.
You can trade cryptocurrency on Robinhood’s trading platform. Their cryptocurrency trading works in conjunction with a company called Apex.
Apex makes crypto transfers secure and seamless for Robinhood’s customers, while Robinhood supplies trustworthiness and ease of use for first-time investors.
Robinhood’s trading platform will allow you to trade in fractions of shares, even in a basic account. This is especially useful if you’re looking to invest small amounts, as this can be a problem with some trading apps that only let you buy whole shares.
You can place a fractional share order by either dollar amount or share amount. Robinhood doesn’t offer fractional shares for all stocks, but most stocks worth over $1.00 per share with a market capitalization of over 25 million dollars are supported.
Cash Management Accounts
Robinhood has two types of accounts you can use to purchase assets in your brokerage account: a cash management account or a margin account.
If you choose a cash management account, you can invest in stocks using the money in your bank account plus any funds from selling off investments on Robinhood.
Margin, on the other hand, lets you borrow money to invest in stocks, but you need to be careful! This could be risky as a stock that loses value could put your margin balance into debt.
You will need a Robinhood Gold account to be able to trade on margin.
Robinhood Gold is an upgraded account tier that gives you access to detailed market data and professional research to keep you informed. You’ll also be allowed to make instant transfers (up to the value of your portfolio) from $5,000 to $50,000.
Plus, you can trade on margin if Robinhood approves your account. Robinhood Gold will cost $5 per month. There is no contract and you can cancel at any time.
Robinhood does not have an account minimum for cash accounts. For margin accounts, you are required to have at least $2,000 or 100% of the asset’s purchase price in your account.
Robinhood portfolio asset classes include stocks, ETFs, options, and cryptocurrencies. You can even invest in index and mutual funds using Robinhood.
Ease of Access
Robinhood makes it easy to access your investments using their mobile app. You can trade stocks on your mobile device, and you get real-time market data wherever you are.
Robinhood’s customer support is available to help you with anything from finding information about a specific stock to transferring an account. There are also forums where Robinhood users and staff can discuss any trading questions you may have.
Open An Account- Free Stocks!
If you open a Robinhood account, you’ll get a free stock when you fund your account with at least $1,000. They will randomly choose a stock to give you.
Pros & Cons of Robinhood
- Commission-free trading
- No minimums for cash accounts
- Easy to get started
- Get free stock when you sign up
- Fractional shares allow you to invest in small amounts
- Not many investor educational resources
- Allows trading on margin which can be risky
- No mutual funds
- No retirement accounts
If you’re looking to invest in stocks, Acorns makes it incredibly easy to do so with their mobile platform.
There are small fees associated with having an account, but they are worth it when you consider how much time you save (and how much money you’ll put away) by automating your investing.
Acorn Roundup- Automation For The Win
Acorns helps you use psychology to your advantage when it comes to investing.
When you connect Acorns to your debit card or credit card accounts, it rounds up your purchases to the nearest dollar. Then, it invests your rounded-up amounts automatically.
These roundups enable new investors to clear the mental hurdle of thinking they lack enough money to invest by making the act of investing passive and invisible.
This automation will allow you to invest consistently, in small amounts, and automatically so that you are building your investments slowly but surely without even having to think about it.
Acorns allows you to invest your roundups with ease by taking care of the investment process for you. You can choose from five portfolios based on their goals and risk tolerance, such as aggressive or conservative.
Be sure to take into account your age and income level when figuring out how much risk is appropriate for your portfolio. You can tailor each allocation to fit a specific amount of shares, from 100 to 10,000.
The Acorns Earn feature allows you to make money by signing up for offers and doing small tasks. It’s similar to cashback sites like Ebates, except that the rewards are invested in your portfolio instead of getting deposited into your bank account.
Acorns offers a checking account that you can use to buy things beyond investing, whether that be food or gas for your car. You’ll get a debit card that allows you to save, invest and earn as you spend.
This checking account is linked to all the great features that Acorns offers like Acorns Earn, and Round Ups. Acorns checking is a great feature for young investors or people who are looking to invest in their future.
Acorns Early & Later
Acorns Early allows you to open investment accounts for kids. It also gives you access to educational resources to help grow your and your family’s financial literacy.
The Acorns Later Plan feature allows you to open a Roth or Traditional IRA to invest in for retirement or simply future use. Acorns will consider your lifestyle and goals, then automatically select the right kind of IRA account for you.
If you already have an existing 401k or IRA, Later will allow you to roll it over to the Acorns platform.
There are three types of accounts.
Acorns Lite is the most basic type of account, which costs $1 per month. This account allows you to use the Acorns Invest feature, and also includes Round Ups and recurring investments to make automatic investing easy.
The mid-tier Acorns Personal account is $3 per month and includes all of the features of Acorns Lite plus access to Acorns Later and an Acorns Checking account.
Acorns Family is the top tier, which costs $5 per month and includes Acorns Invest, Acorns Later, Acorns Banking, and Acorns Early.
Acorns does not have a minimum requirement to open an account, but you must have money in your account to begin investing. It requires only $5 in investments to start building up your portfolio with them.
This means that you don’t have to wait around for years or even months before seeing some financial growth. There is no minimum balance required for your Acorns account.
Acorns will automatically invest your money into Exchange Traded Funds (ETFs), which means you can own a diversified set of stocks and bonds. This includes index and mutual funds.
Acorns automatically rebalances your portfolio to make sure you stay on your target allocations. This means that your risky stocks are balanced out by safer bonds and other diversified investments to help earn you the most possible returns.
Ease of Access
Acorns is easy to use and offers several ways for you to access your funds. There’s a mobile app that provides easy access to your account, and a website interface as well.
You can also set up an Acorns Checking Account so that you can make purchases anywhere a debit card is accepted. Many different payment options are available in the mobile app, including ACH transfers.
Acorns is also very simple to set up. You start by creating an account with basic information such as your name, email, and you’re then given links to let you connect accounts that are eligible for Acorns’ investment platform.
The customer support team at Acorns is available to you through email, phone, or live chat. You provide your basic information and then a member of their support team will reach out to you shortly after that. The customer service team prides itself on responding to customers within 24 hours.
Open An Account
To invest your spare change today, open an Acorns account. Once your account is open and you’ve linked your financial accounts, you can round up your purchase transactions.
Pros & Cons
Pros of Acorns
- Easy to use
- Invest passively & automatically (set it and forget it!)- portfolio rebalancing is a huge plus!
- Invest with small amounts
Cons of Acorns
- Fees are a little higher than a basic Robinhood account
- Fewer investment options (i.e. no cryptocurrencies)
- Lack of customizability with accounts- 5 portfolios may not be what investors want
Acorns Vs. Robinhood: Key Differences
Because both of these apps have great customer support teams, easy access to your accounts, and they are very simple to use, both are recommended for beginner investors. You can also invest very small amounts at a time with either investing app.
Whether you plan to invest passively or actively is a key difference between the two options.
Acorns rounds up all your purchases to the next $1 and automatically invests this spare change, whereas, you will need to remember to transfer money from your savings or checking account into Robinhood.
This makes Robinhood a more active investment platform compared to Acorns’ passive investing style.
Another key difference is the number of fees that you are charged- you’re all probably looking to avoid fees as much as possible!
Acorns accounts have a monthly fee ranging from $1 to $5, while you can trade on Robinhood commission-free.
Both Robinhood and Acorns have no account minimum balance, but Acorns does require at least $5 for investing. Acorns also allows you to open a tax-advantaged retirement account such as a Roth or Traditional IRA, or rollover your 401k, while Robinhood is simply a taxable brokerage account.
Not sure how to get started?
Our guide can help you invest like a pro! Give it a read, then all you have to do is sign up for an investing platform and transfer your first investment.
Then, your money will start working for you even while you sleep.
The younger you are when you begin investing, the more your investments will grow. And you’ll never be younger than you are today!
Take advantage of free stock programs
Several investing apps and websites offer free stocks for signing up, including Robinhood and Webull. Why not start your investments by getting some stocks for free?
You often can’t pick which kind of free stock you receive, but free stock is basically free money. And, it’s a great way to dip your toes into investing without fronting any of your own cash.
Use tax-advantaged retirement accounts
It’s important to understand different investment account types. Some accounts are tax-advantaged because you don’t have to pay taxes on either the money you invest initially, the growth of your investments, or both. Here’s a primer on IRAs and 401ks so you can decide which is right for you based on your goals.
Do your research
It’s important to research your investments and to also understand how investing and the stock market works. Investment books can help immensely with building this knowledge base.
Investment apps also often offer resources to help you understand their offerings and how investments work on their platforms. Be sure to do your research before starting to use an investment company.
Automatically investing ensures that your investment nest egg and retirement funds are always growing. The easiest way to do this is by using an investment app like Robinhood or Acorns.
Or you could have a service make investment choices for you – called a robo-advisor – such as M1 Finance and Betterment. You can see our M1 Finance or Betterment reviews to check out more options, and decide if one of them is better than Robinhood or Acorns.
If you want full control over your investments, it is probably better to stick with Acorns or Robinhood rather than a robo-advisor. Robo-advisors do have some benefits, so it’s good to check all your options.
Acorns and Robinhood are both very good options if you are looking to start investing. While they are roughly similar in size, the different ways that you can invest with them make each platform unique.
When you’re choosing between Acorns vs. Robinhood, here are a few differences to consider.
Robinhood is a great option if you want to invest actively and make your own trades. Acorns is better for those who plan to invest passively, and don’t have the time or interest in trading stocks.
If you’re looking to start investing, open an account on either platform today!