Both Acorns and Robinhood offer low-cost investing and access to ETFs that carry low fees. But while Acorns is a robo-advisory service offering investment portfolio management, Robinhood is a DIY investing app that offers fee-free investing in stocks, ETFs, options contracts, and even cryptocurrency.

Investing doesn’t have to be complicated (or expensive). Both Acorns and Robinhood have figured this out, and offer intuitive mobile apps that are so easy to use, even a caveman new investor can figure it out.

Acorns is an automated investing app that rounds up your spare change and invests the difference. Robinhood is the original no-fee stock trading app that forced the entire financial industry to follow suit, helping lower fees across the board, and, in their words, “democratize finance for all.”

Both Acorns and Robinhood offer low-cost investing and access to ETFs that carry low fees. They’re both designed for beginners, but which one is better for you?

We’ve reviewed the features, fees, trading tools, available assets, customer service, and security to help you find out which trading platform is right for you.

Acorns vs. Robinhood overview

Both Acorns and Robinhood offer access to a wide selection of ETFs for diversified investing. They also both offer recurring investments, allowing you to buy investments on a regular schedule.

Acorns connects to your financial accounts, rounding up purchases to the nearest dollar, investing the difference.

Robinhood offers fee-free trading of stocks, ETFs, options, and crypto.

 AcornsRobinhood
Trading feesTrading is not available in Acorns accounts● No fees on stocks, ETFs, options, or crypto trades
● Robinhood does collect a “spread” fee, which is the difference between the buy and sell price of a trade
Account feesPersonal - $3 per month

Family - $5 per month
● $75 transfer out (partial/full)
● $5/month for Robinhood Gold
Tradable assetsAcorns portfolios are built with a mix of ETFs. Individual stocks, bonds, or other investments are not available.● Stocks
● ETFs
● Options
● American Depositary Receipts (ADRs)
● IPOs (for certain companies)
● Cryptocurrency
Account minimums$0 to open ($5 to invest)$0
Mobile app available?YesYes
EducationFinancial literacy content powered by CNBC (Grow Magazine)News feed, basic articles, and videos
Customer servicePhone and email support seven days a week, 6:00am to 7:00pm PST24/7 email, social media, and ability to request a phone call within app

About Acorns

How To Make Saving Easy With Plinqit - Acorns

Acorns is a robo-advisory service that allows you to round up your purchases to the nearest dollar, and deposit those funds into an investment account. Once the balance reaches $5, the funds will be invested in a pre-selected investment portfolio.

Acorns offers five portfolio options based on risk tolerance, ranging from conservative to aggressive. It also offers four different Environmental, Social, Governance (ESG) portfolios for investors looking to invest in funds that adhere to ESG criteria. These portfolios consist of a mix of broadly diversified ETFs that carry low annual fees and a wide selection of investments.

Read more: Socially responsible investing: how to become a conscious investor

Acorns charges a monthly fee for their service, and offers two plan options for investors:

  • Personal. This account charges $3/month and gives you access to a taxable investment account, Individual Retirement Account (IRA), and a checking account. You can use the round-up feature on the app, as well as access cash back with partner brands through the app.
  • Family. This account charges $5/month and includes everything in the personal plan, plus access to an investment account for kids (custodial account).

Overall, Acorns is a solid app for beginner investors who want to automate their long-term investments, including the ability to invest small amounts through the round-up feature.

Try Acorns or read our full review.

About Robinhood

Best Micro-Investing Apps For Millennials In 2021 - Robinhood

Robinhood is a popular stock and crypto trading app that offers access to fee-free stocks, ETFs, options contracts, and crypto trading. You can also access margin to trade with leverage, a feature typically reserved for accredited investors, but available to regular investors on Robinhood.

Read more: How to invest in cryptocurrency: a beginner’s guide

Note: while the “no trading fees” feature sounds great, Robinhood does charge a hidden fee called a “spread” fee, which is the difference between the buy and sell price of an asset. This can end up costing you more, as you end up overpaying when you buy, and selling for less than the market value of your asset.

The Robinhood mobile app is one of the easiest investing apps to use for beginners, with built-in tutorials on how to place trades, simplified charts and pricing information, and a super-simple order form. Robinhood also offers options trading within the app, but makes it easy for new investors to understand. In addition to the U.S  market, Robinhood offers access to over 600 international investments via American Depository Receipts (ADRs).

Overall, Robinhood does struggle with transparency around its fees, but is still a decent trading platform for beginners. Just don’t get margin-called while investing at max leverage in penny stocks!

Try Robinhood or read our full review.

Acorns vs. Robinhood investment performance

Both Robinhood and Acorns offer access to thousands of ETFs, and Robinhood offers individual stocks and crypto investing. But how do these investments perform? The performance of any investment portfolio will vary based on the investments selected, and most users will have a differing investment selection.

While Robinhood does not offer standardized portfolios, Acorns does offer pre-built investment portfolios based on risk tolerance. These portfolios are built with a mix of low-cost ETFs that help users diversify their investments with minimal fees.

Read more: How to invest in ETFs

Unfortunately, Acorns does not share their portfolio performance data publicly, but you can see what investments each portfolio consists of on the Acorns website.

Acorns pros & cons

Pros

  • Round-up feature to invest spare change.
  • Automated investment management.
  • Earn cash back when using the Acorns shopping portal.

Cons

  • No crypto or stock trading available.
  • Monthly fee is expensive for smaller accounts.
  • $50 per ETF fee for transferring to another firm.

Robinhood pros & cons

Pros

  • No-fee trading.
  • Access to individual stocks and crypto.
  • No account minimums.

Cons

  • Spread fees are not transparent.
  • No automated portfolio management.
  • $75 outbound transfer fee.

Why choose Acorns

Simple mobile app

Acorns is an app that avoids complicated investing jargon and makes it simple to regularly invest, even when making daily purchases. If you want a set-it-and-forget-it approach to your long-term investing, the Acorns app makes it easy.

Automated investing

Managing your investments may feel overwhelming, but Acorns is built to take care of the details for you. With the ability to set up recurring investments, automatic rebalancing of your portfolio, and pre-built portfolios of diversified, low-cost ETFs, Acorns automates the most painful parts of investing.

Earn bonuses

Acorns has partnered with over 12,000 major retailers, offering cash back bonuses for shopping through the Acorns app, or using the free Chrome extension. When shopping online, you can activate a bonus offer, and receive cash back that is deposited into your Acorns account, and invested into your portfolio.

Try an investing account with Acorns.

Why choose Robinhood

No-fee investing

Robinhood offers no-fee trading on individual stocks, ETFs, options contracts, and American Depository Receipts (ADRs) for international investing. But be aware there is a spread fee collected, which may result in overpaying for an investment.

Access to crypto

Robinhood is one of the few stock trading apps that allows you to invest in crypto directly, offering access to Bitcoin (BTC), Ethereum (ETH), and a few other crypto choices. It is also launching a cryptocurrency wallet in 2022, allowing you to take direct custody of your crypto.

Margin trading

Robinhood offers access to margin for investors who have a $2,000 account balance (or more). While this may seem like a steep requirement, most other firms require accredited investor status to access margin, which means you make $200k per year, or have $1 million net worth (outside of your primary residence). So a $2k minimum is fairly generous, as are the interest rates on margin balances.

Try an investing account with Robinhood.

Summary

Both Robinhood and Acorns are designed to help beginners start investing. Both offer low fees and access to a wide range of ETFs to help build a diversified portfolio of investment.

But while Robinhood is designed for active traders who want access to individual stocks, crypto, and options trading, Acorns offers a more passive approach to investing by automating the process with pre-built portfolios and automatically investing your spare change.

Robinhood offers a simple way for new investors to access thousands of assets to trade for no fees, as well as more advanced trading features like margin trading and options trading. Acorns, on the other hand, offers fully managed investment accounts that focus on investing small amounts over time.

Active traders and those who want to try their hand at options or crypto trading will benefit from Robinhood’s intuitive trading interface and fee structure, while new investors who want to save for retirement in small amounts may benefit from Acorn’s simplified investing approach.

Featured image: M M Vieira/Shutterstock.com

Advertiser Disclosure – This advertisement contains information and materials provided by Robinhood Financial LLC and its affiliates (“Robinhood”) and MoneyUnder30, a third party not affiliated with Robinhood. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Securities offered through Robinhood Financial LLC and Robinhood Securities LLC, which are members of FINRA and SIPC. MoneyUnder30 is not a member of FINRA or SIPC.”

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About the author

Total Articles: 9
Jacob Wade has been a nationally-recognized personal finance expert for the past decade. He has written professionally for The Balance, Investopedia, Money Crashers, LendingTree, and other widely-followed sites. As a cryptocurrency enthusiast and investor, Jacob enjoys researching and writing about the latest in crypto and blockchain technology. He’s been a featured expert on CBS News, MSN Money, Forbes, Nasdaq, Yahoo! Finance, Go Banking Rates, and AOL Finance.