Is Acorns a Safe Way To Begin Your Investment Journey?

Investing might feel overwhelming. There’s so much risk in putting your money into stocks and bonds that you may feel like it’s best to just avoid it. But it can set you up long-term for a comfortable retirement or safety net in case of emergencies. If you’re new to investing or aren’t sure how to begin, services like Acorns make it easy and affordable. 

Acorns has a low monthly maintenance fee for all of its plans and even allows you to round up your purchases to the next dollar amount and then invest the difference in a personalized portfolio.

Let’s walk through safety concerns, an overview of how the service works, and if it’s a good idea to use Acorns. 

How does Acorns work?

Essentially, and this is a gross oversimplification, Acorns takes little bits of money in a process called micro-investing and invests it through a variety of stocks and bonds to build you an investment portfolio. This type of investment portfolio is known as an exchange-traded fund or ETF.

Since Acorns targets people who don’t have a lot of start-up capital, it uses a lot of small investments. Additionally, Acorns is a robo-advisor, meaning it robotically advises your investments rather than meeting with a traditional financial planning professional. This makes it perfect for beginners or those without a robust retirement account.

Different types of portfolios will be offered based on a questionnaire you fill out before beginning, and you choose the Acorns plan you want. The service also has a banking option that works in tandem with your investment portfolio.

Acorns is a long-term investment strategy focused on building your retirement funds. Depending on your age and financial situation, Acorns can advise how aggressively you should or shouldn’t invest.

Acorns accounts

The primary Acorns accounts offered are Bronze, Silver, and Gold. Each plan costs less than $15 a month and works with or without an Acorns checking account. You also have the option of earning additional portfolio options by shopping with Acorns retailers or making friend referrals. 

Acorns has investment, retirement and banking options. You also have access to ATMs and direct deposits that integrate with Acorns’ investment platform. The investment option on its own charges low-cost monthly management fees, but allows you to customize your experience based on your age and needs. It does this by assessing your risk tolerance and creating a diversified portfolio.

Each Acorns account comes with investment, retirement, and banking tools:

• Acorns Invest works with Acorns Banking to round up the spare change from your purchases to the next dollar amount and invest that amount.
• Acorns Later recommends a traditional or Roth IRA or SEP retirement account for your investments. All plans include a Later retirement account.
• The Premium account also offers the Acorns Early investment account for kids and Benefits, a tool to help you create a will.

Spare change investments

Acorns offers a program where you can automatically round up your change from purchases to use in your investments. Acorns claims users of the program invest on average around $30 extra per month. It’s a flagship feature of the entire Acorns system and helps you make investments regularly without succumbing to decision fatigue.

There are two ways the program works:

1. You use your Acorns debit card attached to your Acorns banking account. With the automatic Round-Up toggled on, any purchases made on this card rounds up to the nearest dollar amount and is invested. You do have the option to toggle this off, but since it’s one of the main benefits it’s likely you’re using an Acorns banking account for this reason.
2. You link a separate bank account as a primary on your Acorns investment account. This allows the service to access your banking transactions and round up the amount of your purchases in the same way you would using the Acorns banking account. Again, you have the ability to toggle this off if it’s not a program you want. If you use another online banking option, this can help with accruing those round-up benefits that increase your portfolio over time.

Cash-back rewards

Acorns Earn is a program included with all Acorns subscriptions that allows you to earn extra investments by shopping with Acorns partners. To do this you can shop through the app, install a browser extension for online purchases, use your card linked to your Acorns account, and even have a side hustle like DoorDash or Uber.

Acorns partners with a lot of recognizable brands for the Earns program. If you’re already receiving a BarkBox, shopping at Kohls, or fueling up at Chevron, you may as well be earning investment opportunities to increase your portfolio value.

Additionally, if you choose to move your investment portfolio off the platform, you’ll pay a fee for transferring your investments to another company. There’s no charge to sell your investments and liquidate your assets.

Acorns online security features

Acorns appears to take privacy and security seriously. Both the site and the app are protected by 256-bit encryption and Acorns has both PINs and biometrics in place to protect your login credentials. Acorns also uses two-factor authentication (2FA) and ID verification to increase security.

The mobile apps are available in the Apple App Store and the Google Play Store. If you choose to use the Acorns mobile app, make sure to only download it through an official store and follow the recommended security instructions.

Since Acorns accesses your financial information, it’s best to only use the app on a phone that hasn’t been jailbroken. Jailbreaking a phone opens it up to a host of security issues.

Acorns investment app security at a glance

Security feature	Acorns app
Two-factor authentication	PIN and biometric login
Encryption	256-bit
Investment insurance	SIPC up to $500,000
Checking account insurance	FDIC-insured up to $250,000
Crypto wallet	No
Fraud protection	Unusual activity alerts
Customer support	Help center and 24/7 live chat

• Two-factor authentication (2FA): 2FA is automatic when you log in using your email and password. If you have FaceID activated on the Acorns app, 2FA isn’t required. However, if Acorns suspects a login to be suspicious, you login from a new device, or if you change your email or phone number within the app, you’ll be prompted to complete two-factor authentication to finish the action.
• Secure encryption: Secure Sockets Layer (SSL) encryption is implemented across the Acorns website and app to make sure your data is secure. 256-bit encryption is one of the safest ways to transmit data across the internet. You can increase this security by using a virtual private network (VPN) on your device as well.
• Alerts: Acorns alerts are in place to make sure you have accurate and up-to-date information during both your initial account creation and when any changes are made. Existing customers may receive an alert when an information change request like a new address or phone number is submitted.
• Hacking protection: Acorns helps prevent hacking by employing multi-factor authentication (MFA) as well as auto-logouts and ID verification. You may also receive an account-locked status if someone incorrectly guesses your password too many times.
• Banking insurance: Acorns works with partners Lincoln Savings Bank or nbkc bank, Members FDIC, to make sure your funds are federally insured up to $250,000. It’s also a member of the Securities Investor Protection Corporation (SIPC) which is a protection measure for customers if their brokerage firm fails.
• Registered with SEC: Registration with the Securities and Exchange Commission (SEC) means that Acorns is recognized by the commission as being a legitimate brokerage firm.
• FINRA member: The Financial Industry Regulatory Authority (FINRA) is a government-authorized nonprofit that oversees U.S. broker-dealers. Acorns membership means it’s committed to fair trading practices.
• Fraud protection: If Acorns detects any unusual activity on your account, you’ll be alerted immediately.

Has Acorns ever had a data breach?

Yes. In August 2022, Acorns announced the company suffered a data breach. Names, addresses, dates of birth, driver’s license numbers, financial account numbers, Social Security numbers (SSN), and other account-related information were compromised by the unauthorized party. Acorns responded by contacting those affected and letting them know what they could do to protect themselves against fraud.

When your data is leaked in a breach, it’s important to change passwords and enable 2FA and MFA when possible. You can help protect yourself by using a password manager and unique, complex passwords as well as checking credit reports from the three major credit bureaus and your financial accounts for suspicious activity.

Acorns online privacy and data protection

Acorns encrypts website and app data in an attempt to protect your privacy, but it also collects and shares a lot of your information. The privacy policy clearly states what data is collected, such as your name, SSN, and financial account information. It also states if the data is shared and if you can request the data not be shared.

Most services you sign up for, especially if they come at a lower cost, collect and share your data. You can opt out of some of the data sharing by visiting the privacy policy’s page and following any opt-out instructions.

What personal info does Acorns collect?

• Name
• Address
• Phone number
• Email
• Government-issued ID
• Other contact information
• Information from other sources
• Social Security number
• Transaction history
• Income information
• Account transactions
• Checking account information

Does Acorns share your personal info?

Yes, your information is shared for the purpose of conducting business with Acorns products and services. It’s also shared with Acorns affiliates for a variety of reasons. These include providing products and services, marketing, and other reasons as permissible by law.

Most companies with low monthly prices share your data for marketing purposes to recoup some financial losses. It’s a trade-off for the lower operating costs. If you’re a resident of California or Vermont, laws there protect your data from being shared.

8 tips to make Acorns safe and private

You don’t have to rely solely on the safeguards provided by Acorns. There are measures you can take to protect your Acorns account along with your other internet traffic. Many of these tips can be applied to every aspect of your online life.

1. Sign up for identity theft protection: Services like LifeLock and IDShield protect your identity by monitoring your SSN for fraudulent activities. Similar services like Incogni can also help you remove your data from data brokers across the internet.
2. Use a password manager: This helps safeguard your passwords and keeps them all in one place. The best password managers even let you enter your bank account information for secure shopping or bill paying online.
3. Opt out of Acorns data collection: For residents of California or Vermont, state laws protect you from data sharing. If you live in a state without these laws, you can visit the privacy page or call (855) 604-5130 to opt out of data sharing.
4. Use a VPN app: A great VPN helps safeguard your internet connection by encrypting your traffic and hiding your location. This can be an additional layer of security when using a service like Acorns that stores and utilizes sensitive information like your SSN or financial information.
5. Install an ad blocker: Ads might be annoying but they can also contain malicious, data-stealing code. Using an ad blocker may help you avoid those data thieves by blocking ads from your device.
6. Scan your device with antivirus software: If someone is able to download malware onto your device, scanning it with antivirus software can help you isolate and clean the problem.
7. Create backups: Creating safe backups of your hard drive will let you recover your information in the event of a virus or malware infection that can’t be cleaned.
8. Delete browser cookies: Deleting your browser cookies can help eliminate trackers from following you around the web. The more you’re tracked, the more complete a profile criminals can assemble to steal your information.

FAQs

Bottom line: Is Acorns legit?

Yes, Acorns is a legitimate service with a fun hook — Round-Ups — that allows you to begin building an investment portfolio without a large amount of money to start. If you pair it with Acorns banking services, you get the most bang for your buck. This is a real investment service that allows you to create a plan for your financial security down the road.

If you are looking for a way to make money quickly, Acorns is not the service for you. There are various options for investing based on your age and needs, but this will not give you a large payout in a month or even a year. Investing is a good way to build a safety net or retirement fund for yourself, so even though you won’t see immediate returns, it’s a solid foundation to give your future self.

When using a service like Acorns, it’s important to make sure you have security features enabled and working. For device security, consider using the best antivirus protection and a VPN app. There are other physical security features you can use like an anti-spy screen protector for your phone or computer. Anti-spy covers make it difficult to view your screen from an angle.

Also, make sure you have built-in safety features enabled like 2FA and biometrics like FaceID if they’re available to you. Your finances are nothing to leave to chance, and there’s no such thing as overkill when it comes to protecting your financial present and future.