What is Acorns' Investing Fee?

What is Acorns' Investing Fee?

Acorns is a popular investment platform that allows users to invest their spare change automatically. The platform has gained popularity due to its ease of use and lowinvestment fees. However, it is important to understand how Acorns' investing fee works and the impact it can have on your investment returns.

How does Acorns' investing fee work?

Acorns charges amonthly feeof $1, $2, or $3, depending on the plan you choose. The Lite plan costs $1 per month and includes a basic investment portfolio. The Personal plan costs $2 per month and includes a retirement account and a checking account, in addition to the basic investment portfolio. The Family plan costs $3 per month and includes investment accounts for up to four children, in addition to the features of the Personal plan.

In addition to the monthly fee, Acorns also charges an investment fee. This fee ranges from 0.25% to 0.50% depending on your account balance. The investment fee is charged annually and is based on the average daily balance of your account.

What is the impact of Acorns' investing fee on your returns?

The impact of Acorns' investing fee on your returns depends on the amount you invest and the length of time you hold your investments. For example, if you invest $1,000 and hold your investment for one year, the investment fee would be $2.50 to $5.00, depending on your account balance. If your investment returns 5% over the year, your net return after fees would be 4.50% to 4.75%.

While the investment fee may seem small, it can add up over time. For example, if you invest $100 per month for 30 years and earn a 5% return, the investment fee would total $1,103 to $2,207, depending on your account balance.

Is Acorns' investing fee worth it?

Whether or not Acorns' investing fee is worth it depends on your investment goals and preferences. The platform is a good option for those who want to start investing with small amounts of money and do not want to manage their investments themselves. Acorns' investment portfolios are also diversified and low-risk, which can be appealing to conservative investors.

However, if you have a large account balance or prefer to manage your investments yourself, Acorns' investing fee may not be the most cost-effective option. In this case, you may want to consider otherinvestment platformsthat offer lower fees or more advanced investment options.

Conclusion

Acorns' investing fee is a small but important aspect of the platform's investment services. While the fee may seem insignificant, it can add up over time and impact your investment returns. It is important to understand how the fee works and consider your investment goals and preferences before deciding if Acorns is the right investment platform for you.