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.
| Acorns | Robinhood | |
|---|---|---|
| Trading fees | Trading 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 fees | $3 – $9 per month depending on plan tier selected | ● $75 transfer out (partial/full) ● $5/month for Robinhood Gold |
| Tradable assets | Acorns 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? | Yes | Yes |
| Education | Financial literacy content powered by CNBC (Grow Magazine) | News feed, basic articles, and videos |
| Customer service | Phone and email support seven days a week, 6:00am to 7:00pm PST | 24/7 email, social media, and ability to request a phone call within app |
About 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 makes it easy to start investing (even if you know nothing) and provides helpful tools to help you save more automatically. In under 3 minutes, start investing spare change, saving for retirement, earning more, spending smarter, and more.
- Effortless automated investing
- Easy-to-use savings features
- Low-cost solution to manage money
- Flat monthly fee more expensive for smaller accounts
- Can use more robo-advisor features
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.
Acorns charges a monthly fee for their service, and offers three 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.
- Personal Plus. This account charges $5/month and includes everything in the personal plan, plus an optional emergency fund connected to your checking account and an extra 25% match on bonus investments you earn ($200 max applies). You can also get help with a live Q&A with investing experts with this plan.
- Premium. This account charges $9/month and includes everything in the first two plans and quite a bit more. You can customize your portfolio with individual stocks when you choose this Acorns Premium plan and that 25% match noted for Personal Plus is now 50% (though the same $200 max applies). You’ll get a no-cost Will from Trust & Will valued at $259 or a discounted Trust, a free GoHenry account to help teach your kids about money with a debit card while providing you visibility, and more. Acorns Premium is the best option if you want a tier that serves your whole family.
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.
» MORE: Open an account with Acorns or read our Acorns review.
About 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.
Robinhood is an intuitive stock trading and investing app that offers zero-commission trades on thousands of investments.
The slogan behind Robinhood is “We’re on a mission to democratize finance for all,” which speaks to the company’s obsessive focus on keeping investing approachable.
- Commission-free trading
- Easy to use, well-displayed dashboard
- No minimum account balances required
- No bonds or mutual funds
- Crypto fee transparency
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!
» MORE: Open a Robinhood account or read our full Robinhood 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.
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.
» Set up an 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.
» Open an 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.
