Making the decision between Acorns and Robinhood can be difficult. Both platforms offer unique benefits and drawbacks, making it hard to decide which one is right for you.
In this guide, we will compare and contrast the two platforms, looking at everything from cost to investment options. By the end of this article, you should have a good understanding of which platform is best for your needs!
Acorns Vs Robinhood Table of Contents
What is Acorns?
Acorns is an investing app that allows you to invest your spare change. It rounds up your purchases to the nearest dollar and invests that money into a portfolio of ETFs. Acorns also offers opportunities to invest in individual stocks and recurring investments.
What is Robinhood?
Robinhood is a commission-free stock trading app that allows users to trade stocks, options, and ETFs with zero commission fees. Robinhood also offers a premium subscription service called Robinhood Gold which gives users access to extended hours of trading, larger margin limits, and research reports from third-party providers.
What is The Difference Between Acorns and Robinhood?
The two platforms are quite different when it comes to how they make money. Acorns relies on a monthly subscription fee, while Robinhood makes its money through selling order flow and interest on uninvested cash in accounts.
What Are The Different Types of Acorns Investments?
There are two different types of Acorns investments: Core and Later.
Core is a basic portfolio that includes a mix of six exchange-traded funds (ETFs). The asset allocation is automatically rebalanced based on your goals and risk tolerance.
Later is an IRA that allows you to save for retirement with tax-deferred growth.
What Are The Different Types of Robinhood Investments?
There are three different types of Robinhood investments: stocks, options, and cryptocurrency. Each type has its own set of pros and cons that you should take into consideration before making a decision.
Stocks are the most popular type of Robinhood investment. They’re easy to understand and there’s a lot of information readily available about them. However, they can be volatile and you could lose a lot of money if you’re not careful.
Options are a more complex investment than stocks. They give you the ability to bet on the direction of the market, but they’re also riskier. If you don’t know what you’re doing, you could easily lose all of your money.
Cryptocurrency is the newest type of investment available on Robinhood. It’s very volatile and there’s a lot of speculation involved. You could make a lot of money if you pick the right coin, but you could also lose everything just as easily.
What Are The Advantages of Acorns?
The first advantage of Acorns is that it is a great way to start investing with very little money. You can start investing with as little as $0.01, which means that almost anyone can get started.
Another advantage of Acorns is that it automatically invests your spare change into a portfolio of exchange-traded funds (ETFs). This means that you don’t have to worry about picking individual stocks, which can be a daunting task for beginners.
Finally, Acorns has a feature called “Round-Ups” which allows you to automatically invest your spare change into your investment account. For example, if you spend $12.50 on a coffee, Acorns will round up to $13.00 and invest the $0.50 into your account.
What Are The Advantages of a Robinhood?
Assuming you’re just starting out, a Robinhood has several advantages. For starters, it’s commission-free. That means you don’t have to pay any fees to buy or sell stocks. This is a big deal because other brokerages typically charge $0.99-$29 per trade. So if you’re buying $100 worth of stock, you’re already down $29 before you even start.
Another big advantage of Robinhood is that it offers a ton of features for free. For example, most brokerages will charge you for access to research reports. But with Robinhood, you get access to these same reports completely free of charge. This is a big benefit for beginning investors who are looking to get an edge on the competition.
Robinhood also has a great mobile app that makes it easy to trade on the go. And finally, one of the biggest advantages of Robinhood is that it’s extremely user-friendly. If you’re new to investing, Robinhood is a great place to start because it’s so easy to use.
What Are The Disadvantages of Acorns?
The biggest disadvantage of Acorns is the fees. They have three different types of fees: the monthly fee, the per transaction fee, and the early withdrawal fee.
The monthly fee is $0.25/month if you have less than $5000 in your account, and it goes up to $0.50/month if you have more than $5000 in your account. The per transaction fee is $0.005/trade, and the early withdrawal fee is $25 if you withdraw before you turn 25 years old.
Another disadvantage of Acorns is that they don’t have a lot of investment options. They only have seven ETFs (Exchange Traded Funds) that you can invest in. And, they don’t have any mutual funds or individual stocks that you can invest in.
Lastly, Acorns doesn’t offer a tax-advantaged account like a 401k or an IRA. So, if you’re looking for a way to save for retirement with Acorns, you won’t be able to get the same tax benefits that you would with a traditional retirement account.
What Are The Disadvantages of Robinhood?
There are a few disadvantages to using Robinhood.
First, there is no customer service. If you have any problems with the app or your account, you’re on your own. Second, there is no way to deposit cash into your account. You can only link a bank account or debit card. This can be a problem if you want to use Robinhood as your primary investment account.
Finally, Robinhood does not offer any retirement accounts. If you’re looking to invest for retirement, you’ll need to look elsewhere.
So, Which One Should You Use?
The answer to this question really depends on your individual circumstances and what you’re looking to get out of a personal finance app.
If you’re simply looking for an easy way to save and invest your spare change, then Acorns is probably the best option for you. However, if you’re more interested in actively managing your investments and taking advantage of the stock market, then Robinhood is the better choice.
Of course, there’s no right or wrong answer here – it all comes down to what you’re looking for in a personal finance app. Whichever one you choose, just make sure that you’re comfortable with the fees involved and that you understand how each app works before getting started.
So there you have it – a complete guide to Acorns vs Robinhood. Hopefully, this has helped you decide which one is right for you.
What Are Some Alternatives to Using Acorns or Robinhood?
There are a few other options worth considering if you’re not set on using either Acorns or Robinhood.
Mint is a great option for those who want to get a better handle on their finances as a whole. You can connect all of your accounts, track your spending, and create budgets – making it easier to save money in the long run.
Another option is You Need a Budget (YNAB), which takes a slightly different approach to budgeting. This app focuses on helping you change your spending habits by giving you “real-time visibility” into your finances.
If you’re looking for something that’s more investment-focused, there are a few options worth considering, such as Wealthfront and Betterment. These apps offer automated investment plans, which can help you grow your money without having to put in a lot of effort.
Finally, if you’re simply looking for a way to invest without paying any fees, there are a few platforms worth considering, such as Moomoo.
What Are Some Tips For Using Acorns?
Here are some tips for using Acorns:
- start small and automate your contributions
- take advantage of the Round-Ups feature
- grow your portfolio with Acorns Later
- use Acorns Spend for smart, automated saving
What Are Some Tips For Using a Robinhood?
Here are some tips for using Robinhood:
- try to limit orders when buying or selling stocks
- be patient when trading
- monitor your portfolio regularly and rebalance it when necessary
- have a plan for what you want to do with your money and stick to it