Acorns: The Personal Savings App That’s Robbing You

Another Overpriced Financial Product

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If I asked you if you should save more money each month, what would your response be? The answer is likely yes - we all know we should be better savers, this isn’t news. A survey done by GoBankingRates in 2019 found that 69% of Americans have less than $1000 in savings.

So if we know we have a savings problem, why don’t we fix it? The likely answer is its hard. Saving is an item on everyone’s financial checklist, but it usually falls to the bottom. If you haven’t figured it out by now, there’s never money for anything at the bottom of the list. I’m not talking about how to save today - I’m talking about how NOT to save. There’s a bad actor that is using your attempt to save against you. 


Acorns, a personal savings app with over 9 million users, is an app that connects with your bank account to help you save and invest money in two ways. You may set up automatic monthly withdrawals as well as a newly popularized feature that rounds each transaction you make to the nearest dollar and invests the difference.

Example: You spend 15.64 at the gas station. Acorns rounds it up to 16 even and adds the 36 cents to your investing account.

Cool feature right? Acorns invests your money in one of five risk profiles you choose from conservative to risky. Your money goes into exchange traded funds (ETFs) that represent indexes like the SP500 or the Nasdaq.

At first glance, I love this product. I even used this product for a short time and will say its convenient. Acorns identified our inability to consciously save and found a way to automate it all from a sleek app that makes the process of investing comforting and seamless.

Is there a but coming? Yes, there is.

The Turn

You didn’t think the app that helps you invest and overcome your personal saving shortcomings came free did you? If you want quality, be prepared to pay up.

Acorns offers 3 different payment plans, Lite, Personal, and Family costing $1, $3, and $5 per month. Each tier upgrade offers you slightly more features. The Lite tier offers a simple brokerage/investment account while Personal and Family offer the brokerage account as well as retirement accounts for you and your relatives. 

But wait, I thought quality things were expensive? While the nominal monthly fee for this service appears small, understanding the pricing structure relative to the offering will show that you’re being robbed in broad daylight. Acorns pricing strategy is a red herring; a diversion to distract you from the fact that they’re marking up investing products 13x!


In my article on saving money a few weeks back, I explained why percentages, not dollar figures, should be used to evaluate saving and spending rates. Percentages level the playing field and put dollar figures into context. Acorns is counting on you not understanding this.

It costs $1, $3, and $5 for each of the respective Acorns plans which comes out to $12, $36, and $60 yearly. It still doesn’t sound like much, but let’s tap into our percentage knowledge.

Let’s say you buy a SP500 ETF in your personal brokerage account, outside of Acorns. There’s an annual fee associated with that, a percentage of how much you have into it. The fee is fixed and typically very small.

Here you can see SPY, the most popular SP500 ETF charges an expense ratio of 0.09% annually. So $1000 invested in this ETF, you’d pay 90 cents in fees per year.

Now, let’s compare that to Acorns fees. This chart compares fees paid to Acorns per year based on total dollars invested with them.

If you had the same $1000 in Acorns on a Lite pricing plan, you’d pay 1.2%, or $12 - 13.33 times the fee for purchasing SPY. 13 TIMES!

This gets even worse when I mention that the 0.09% expense ratio for SPY is an expensive ETF. You can buy an even cheaper SP500 product, as an index (which means it just trades once a day rather than constantly throughout the day), for 0.01%.

On top of the pricing disparity, in Acorns, you don’t even know what you own. All you know is what risk profile you’re in; you have no decisions about where your money is placed.

Using the math in the table above, you need ~$13,500 in you Acorns Lite account to match the pricing of something you can do yourself with $1. Does it really make sense to pay the ridiculous fees? While the app does offer convenience, there is nothing unique about this offering aside from the simple round up feature which is a gimmick. You are able to set up a brokerage account with automatic withdrawals, same as this, and pay significantly less. Don’t let the visual allure of the app suck you into needlessly paying more.

Impact of Fees

It’s important to understand the long term effects fees can have on your investment returns. Some rough calculations would tell you that the $12 annual fee would pay off eventually, but how long is that exactly?

I built an example to find that out. In the example, I assumed $1000 invested per year at 7% return. The “Acorns Total Paid” column is the total amount paid in fees up until that year, the “Spy Fees” are the percentage paid that year based on 0.09% fee, and “Spy Fee Sum” is the total amount paid up until that year.

Based on this chart, in the 19th year of the $12 annual fee (Lite plan), paying the 0.09% SPY fee actually outweighs the total sum of Acorns cost. 19 years!! For people anyone who started using Acorns when it launched in 2012, they still have another 10 years before this product pays for itself. By that point, you would have nearly $40,000 in your account.

Understanding the wealth inequality gap in America and the context of the savings problem I laid out earlier, it’s clear to see that the people struggling to save and invest are the low to middle class. Nobody in low or middle class has $40,000 in Acorns. This app is built and targeted at those of us trying to make better financial decisions and its actually charging us MORE than the alternative.

Everything costs money, but that isn’t a reason to ignore fees you pay, especially on financial products that are looking after your long term savings and retirement. If you’re curious to read another story more on how fees impact you, there’s a great article on Nerdwallet about a 1% fee over 40 years can cost someone $590,000.


My brokerage, Fidelity, offers a feature that does the exact same thing as Acorns and allows you to not only dictate where your money goes but also at the price you should be paying.

Under automatic investments in Fidelity, you’re able to set up automatic transfers for specific dates that move money from your bank and invest them into funds of your choosing. This not only removes the monthly thought of having to manually contribute money to savings/investment account, but also keeps your fees low.


Acorns doesn’t break down the demographics of their 9 million users, but if I was a betting man, and I am, I would put a wager on a large portion of their customers being overcharged. Acorns pricing is detestable, a financial threat to low/middle class savings, and borderline predatory.

Personal finance is made up of two things; knowledge and execution. This is small piece of knowledge, but what you do with it is up to you. If you Acorns or an app like it, I’d strongly recommend taking a tally of what you’re actually paying in fees.

As always, if you have questions or need help in any way, I’m always here to help. I’m not a fiduciary nor a licensed financial professional, but know more than enough to get you guided in the right direction.

I’d love some feedback on what you thought of this article.

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Thanks for reading. Talk next week