What Is Acorns?

Acorns is one of the most popular investing apps on the market with over 4.7 million subscribers. One of its defining features is that it helps you save and invest your spare change.

For example, if you have $0.50 to spare, Acorns can help you invest that money in a portfolio of ETFs (exchange traded funds).

Now, if you know anything about how much even a single share of stock costs, then you also know $0.50 usually isn’t enough to invest in much of anything. But with Acorns, you can. So…

How Does Acorns Work?

The premise behind Acorns is simple: the app rounds up purchases made using your credit or debit card so you can invest your spare change into the stock market. 

For example, let’s say tomorrow your lunch costs $12.50. The Acorns app will round up your purchase to $13 and put the extra $0.50 into your investment account.

Round-Up investments from your checking account will be swept to your Acorns investment account when your accrued Round-Ups® reach or exceed $5.  But you can also directly deposit money into your Acorns investment account to get started right away.

But, still, how is that $5 minimum enough to make an investment? Micro-investing.

What’s micro-investing?

Micro-investing is an investment strategy that allows you to invest small amounts of money into stocks, bonds, ETFs and other securities. When you micro-invest, you don’t need to have enough money to buy an entire share of stock. Instead, you buy a fractional share.

What’s a fractional share?

A fractional share is a piece of a company’s stock. When you buy fractional shares, you’re buying a percentage, rather than a full share of stock.

It may not sound like much, but over time those fractional shares can add up! And that’s where the Acorns app comes in… For a while, it may seem like you’ve barely invested enough money to matter. But, if you stick with it, you’ll (hopefully) see your account balance begin to grow over time.