acorns vs robinhood

Acorns vs. Robinhood: How Do They Work? Which One Is For You?

I’ve been a Robinhood user for three years and I love it!

Stash was the first beginners investing app I tried that focused on ETFs. Stash is a great app if you’re new to investing. (Read about Stash here.)

Once I’d tried Stash, I looked for others like it and found Acorns.

Acorns has all the qualities of Stash, but it’s simpler and more fun!

First, let’s go over how these apps work, then I’ll tell you which one to go with in my Acorns vs. Robinhood comparison.

Acorns App

Grade: B+

How does Acorns work?

Short answer: Acorns is a mobile-first investment app that automatically withdraws small sums of money from your bank account to invest in the stock market via ETFs. For their services, you’ll pay $1/month or 0.25% if you have more than $5,000. Your first month is free.

Long answer: Once you’ve downloaded the app, you’ll be asked about your risk preferences and personal information. Acorns needs your social security number, and there’s no getting around it. All investment apps require you to register with a social security number. But Acorns is legit and has over a million users, so don’t worry.

After your initial investment (as low as $5), you’ll link a debit or credit card (you can link as many cards as you want) to your Acorns account, and they’ll take the spare change from every transaction with Round-Ups.

What are Round-Ups? Let’s say you buy a coffee for $2.73. Acorns will see your coffee purchase and round-up to $3 by marking $0.27 in your Acorns account. Once you accumulate $5 in Round-Ups, Acorns withdraws $5 from your bank account.

That may seem insignificant, but after a couple of months, I’d accumulated $40 in my Acorns account.

You can turn Round-Ups off anytime, and you can withdraw the money from Acorns any time as well.

Once you have money in your Acorns account, Acorns will recommend one of five ETFs based on your income, age and risk tolerance. Then Acorns automatically invests that money into the ETF you’ve picked.

What’s an ETF? ETF is an acronym for an exchange-traded fund, and it’s a type of mutual fund. They’re a selection of several individual stocks that are traded as a group. Most mimic popular index funds.

When the U.S. stock market does well, your ETF does well. Your returns will vary because there are different degrees of risk you can select. Keep in mind the stock market has gone up an average of 7% a year when adjusted for inflation.

Here are the five different Acorns ETFs:

  1. Conservative: 12% Vanguard S&P, 2% Vanguard Small Cap, 2% Vanguard REIT, 40% iShares 1-3 Year Treasury Bond, 40% iShares Inv. Grade Corp. Bond, 4% Vanguard FTSE
  2. Moderately Conservative: 24% Vanguard S&P, 4% Vanguard Small Cap, 4% Vanguard REIT, 30% iShares 1-3 Year Treasury Bond, 30% iShares Inv. Grade Corp. Bond, 8% Vanguard FTSE
  3. Moderate: 29% Vanguard S&P, 10% Vanguard Small Cap, 3% Vanguard Emerging Markets, 6% Vanguard REIT, 20% iShares 1-3 Year Treasury Bond, 20% iShares Inv. Grade Corp. Bond, 12% Vanguard FTSE
  4. Moderately Aggressive: 38% Vanguard S&P, 14% Vanguard Small Cap, 4% Vanguard Emerging Markets, 8% Vanguard REIT, 10% iShares 1-3 Year Treasury Bond, 10% iShares Inv. Grade Corp. Bond, 16% Vanguard FTSE
  5. Aggressive: 40% Vanguard S&P, 20% Vanguard Small Cap, 10% Vanguard Emerging Markets, 10% Vanguard REIT, 10% Vanguard FTSE


  • Rounds-Ups are brilliant. They may not seem significant since you could just deposit money on your own. But Round-Ups make investing more fun, and it’s entirely passive; you don’t have to think about it.
  • The app is beautifully designed. All of the menus are attractive and easy to read, and there are tons of resources, glossary terms, and projection graphs.
  • Acorns is free If you’re in college and under 24 years old.
  • Acorns keeps everything simple. You only have five ETFs to choose from, and money is automatically invested in your chosen fund. Acorns has done the research and curated funds for you. It’s easy to understand, even if you’re a true beginner.
  • The beauty of Acorns is you don’t have to know what an ETF is, and you don’t have to know what any of the brackets mean. All you need to know is your risk level, and your money will be safe because these are well-known and trusted funds.
  • You can invest more money anytime, or even double or triple your Round-Ups. Once the new money is deposited, it’s automatically invested in the market without you telling it to. If there’s money in your Acorns account, it’s been invested. I love the simplicity.
  • “Found Money” is a cash back system that allows you to earn money for doing nothing. It works the same as Ebates, Honey, and Swagbucks, except your money is invested in the stock market, rather than deposited in your PayPal account. If you’re not familiar with the companies I mentioned, here’s a quick 101: you open Acorns and tap on the store you want to shop at. Acorns brings you to the store’s site, and you shop as you normally would. After a few days pass, your Acorns account gets credited with a percentage of your purchase. For example, Groupon offers 2% cash back. If you make a $100 Groupon purchase through Acorns, your Acorns account will get a $2 deposited into it.
  • There’s a desktop based dashboard to check on your investments. That isn’t usually the case with mobile-first apps.


  • Acorns is expensive. It’s only $12/year, but that’s a lot considering it’s an app for beginners. Let’s say the market goes up 7% during the year, and you have $200 invested in Acorns. That’s a $14 return on your money, but after you pay your $1/month fee, you’re left with a net profit of $2. That’s an ideal scenario. You could be break even or lose money if the market has a bad year.
  • Acorns’ marketing is disingenuous. You’re not going to earn a return on your money by investing $5. You’ll need at least $200 to break even.
  • You have limited choices as to what you can do with your money. That’s a good thing for beginners, but it’s definitely not for people who know the market and want more control over where their money goes.
robinhood or acorns

Robinhood App

Grade: A+

How does Robinhood work?

It’s dead simple and everything is free. Find a stock or ETF that you like an buy it. Keep in mind that you can’t buy partial stocks on Robinhood.


Fees (A+):

  • Robinhood was the first app or company to offer free trades to everyone. There are no monthly fees either. That’s huge considering most companies charge at least $8. How are regular people going to buy $100 in stock when there’s an $8 fee? You’d need an 8% return on your stock just to get your money back.

Trading Options (A+):

  • You can trade cryptocurrencies like Bitcoin and Ethereum for free. For reference, the largest cryptocurrency exchange, Coinbase, charges between 1.5 to 4 percent per trade.
  • You have more freedom with over 5,000 stocks and ETFs listed on Robinhood. Unlike Acorns and Stash, you can buy individual stocks and see what you’re buying.
  • Robinhood Gold is an optional monthly service that lets you double your buying power, and give you instant funds on your deposits. Different fee tiers depend on how much money you have. For example, I have $2,000 in my account and to get my buying power doubled to $4,000 it’s $10/month.
  • You can transfer your stocks from your previous broker to Robinhood for free.


Setup (C):

  • Robinhood (the company) doesn’t understand who its customers are. It positions itself as an app for beginners but doesn’t provide guidance or basic investing information. But Robinhood isn’t for advanced investors because they don’t support mutual funds, options, or futures (although options will be supported soon). Robinhood is stuck in the middle.
  • You can’t buy portions of stocks like you can with the other apps. Stocks like Google and Amazon have prices over $1,000 per share, so it’s difficult for beginners to purchase those.

Bonus (C):

  • I’m not sure how competent their support staff is. Two years ago, my friend signed up and provided Robinhood with his information. Even after reaching out to them, his application is still pending. However, Robinhood is growing fast and that sort of issue is common with startups, and things might’ve changed.

Which one is for you?

Your first month is free with Acorns, so everyone should give Acorns a try. (If you use my link, we’ll each get a $5 bonus).

Should you stick with it after the free month is up? Yes, but only if you can keep a balance of at least $200 in your account. Or, if you’re a college student because it’s free!

Acorns is a great idea for those looking for a way to invest and get returns without much effort or thought.

If you know a little about the market and are willing to do your own research, the Robinhood app is better bet because you’ll get free trading with no monthly fees. Robinhood has a lot of the same ETFs as Acorns, and you can buy individual company stocks too.

There’s a place for both of these investing apps.

Robinhood is my favorite and the one I’ll continue to use. I don’t have to worry about trading or monthly fees, and I have the freedom to buy any individual company’s stock or ETFs. If you’re willing to do your own research and find the same popular ETFs that are in Stash and Acorns, you should go with Robinhood.

Robinhood hooks you up with a free random stock if you sign up using my link.