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Acorns is a fintech company best known as a micro-investing platform that allows users to set up automated investments into a portfolio through Round-Ups: Acorns rounds up a debit or credit card purchase made on a linked card to the nearest dollar and invests the change on behalf of the member. Investments are made into one of five portfolios carrying different levels of risk. The website also offers basic banking services at low fees.
Key Takeaways
- Acorns provides a platform for members to micro-invest spare change in a diversified portfolio.
- The fintech company offers retirement savings accounts, a debit card, and other basic banking services.
- Acorns generates revenue through member subscription fees.
Acorns’ Industry
The company divides its services into three primary categories. The first enables members to invest spare change in exchange-traded funds (ETFs) and individual stocks. The second allows users to create and fund an IRA through the platform, and the third provides members with a debit card provided through companies such as Visa, Inc. (V).
Acorns offers subscriptions for $3, $6, and $12 per month for packages of different services. The average Acorns member invests $627 through Round-Ups, the company’s signature program. The company’s competitors include Chime Financial Inc. and Stash Financial, Inc.
Acorns’ Financials
As of May 31, 2024, Acorns has over 10 million users who have invested $15 billion through its platform. Acorns Invest, Later & Early accounts are SIPC-insured up to $500,000. The company has raised funding from backers including NBCUniversal Media LLC, Paypal Holdings Inc. (PYPL), and Black Rock Inc. (BLK).
History and Leadership
Acorns was founded by the father-and-son entrepreneurial team Walter and Jeff Cruttenden and launched in 2014. Walter Cruttenden also founded Roth Capital and was the founder and CEO of the investment banking unit of E*Trade. In 2024, Noah Kerner is the company’s CEO. Kerner has attracted investors including high-profile celebrities like Jennifer Lopez and Alex Rodriguez.
Recent Developments
In 2023, Acorns partnered with GoHenry, a global leader in money management and financial education for kids. The company introduced the Mighty Oak debit card for saving and spending in 2024.
Where Does Acorns Invest?
Acorns invests an individual’s savings in five Acorns Core portfolios and four Acorns ESG Portfolios composed of exchange-traded funds ETFs.
What Banking Features Does Acorns Offer?
Acorns banking features include 2.42% APY on Checking Accounts, 3.82% on Emergency Funds, debit cards, early payday options, and paycheck split options to encourage saving.
How Do Round Ups Work?
Individuals can link their credit and debit cards to Acorns. The app will round up the spare change from purchases made on these cards to the nearest dollar. Once your Round-Ups® reach at least $5, the platform will then save that amount to the Acorns Invest Account..
The Bottom Line
Acorns is a platform that allows individuals to participate through micro-investing using spare change. The company offers retirement savings accounts, a debit card, and banking services.
