Robinhood vs Acorns 2021: Choosing the Right Investment Platform
With everything in the world turning digital, all of the world’s top brokerages offer online and mobile account management for their consumers. However, these brokerages launched the mobile versions after launching the traditional versions. A small group of modern day brokers turned this on its head and chose to adopt a mobile first approach and gave millennial investors a lot of investment power on their smartphone itself. Robinhood and Acorns are two such brokerages. Both of them boast about their low cost (“no cost” in the case of Robinhood) and great user experiences. Robinhood vs Acorns is a battle of two of the biggest names available today. Let’s find out which one wins.
Robinhood vs Acorns: Important Things to Know
What is Robinhood?
Robinhood is a commission-free trading app that is broadly divided into two sections: Robinhood Financial and Robinhood Crypto. Robinhood Financial helps users conduct stock trading (along with ETFs and options). Robinhood Crypto, as the name suggests gives investors the option to trade in cryptocurrency. Robinhood doesn’t have any base charge for users.
What is Acorns?
Acorns started out in this field by offering automated investing for $1 per month and kept on expanding via acquisitions to provide retirement accounts and bank accounts as well. Acorns Core is still available for just $1 per month. Acorns Core + Acorns Later (retirement account) costs $2, and the whole suite of Acorns Core, Acorns Later, and Acorns Spend (checking account with a debit card) is $3 per month. If keeping all your finances in one app is very important for you, Acorns is definitely one of the best options available for you. While it may not be “free” like Robinhood, it is still a low-cost and attainable option for new investors. Acorns has many ways investors can contribute to your account. You have the option to have automated recurring investments, round-up change from debit or credit purchase. You can also get bonus cash if you choose to shop with partner brands.
Robinhood vs Acorns: The Similarities
Both Robinhood and Acorns offer many features. First, let’s take a look at how they’re similar.
- Minimum Investment — None of the services requires a minimum investment to begin.
- Investment Account Types — Both come with taxable accounts.
- Investment Types — Both allow you to invest in ETFs.
- Mobile Apps — Both come with very good Android and iOS apps.
Robinhood vs Acorns: The Differences
Let’s take a look at the areas where Robinhood and Acorns differ.
- Robinhood has no commission-fees and no account fees for its basic account.
- Acorns charges $1–9 per month based on your tier of service.
Robinhood allows investors to invest in individual stocks while Acorns doesn’t.
Robinhood vs Acorns: Unique Features
- Robinhood’s basic account is free to use for everyone and no commissions are charged on any trades. You can enjoy buying a wide range of stocks, ETFs, and other investments without paying any fees. However, if you are a beginner investor, there isn’t a lot of guidance material or educational resources. Unless you are a savvy investor/do your research elsewhere, Robinhood might not be a good place to start.
- While it does support cryptocurrency and options trading, it’s not recommended for the average investor.
- Robinhood’s USP is the fact that it’s a full service stock broker that is almost free to use. You can do commission free trades in stocks, funds, options etc.
- Acorns offers unique and fun options to fund your account and takes care of the investments for you. While Acorns doesn’t allow its users to select individual stocks, it does make it easier for beginner investors since it frees them from the trouble of choosing the stocks for themselves.
- The three types of accounts available with Acorns are not free but very competitively priced.
- Acorns comes with some fantastically fun and unique options that can be used to fund your account. Take this for example, you have the option to round up your purchases and invest the spare change. You also have the choice to earn investment rewards when you shop with Acorns’ partner outlets.
Robinhood vs Acorns: Annual fees
- As discussed before, Robinhood offers commission free trading and a basic account without any charges. If you want additional features such as margin trading, you can opt for the Gold account at $5 per month.
- Acorns has three plans, priced at $1, $3, and $5 per month.
Robinhood vs Acorns: Customer service
Both Acorns and Robinhood offer support only via email. There’s no number to call. This might be problematic at times.
Robinhood vs Acorns: Security
Both Robinhood and Acorns utilise industry-standard security and encryption. Just make sure your password is strong, not something like “password” and your account will stay safe and secure. Both the companies are regulated and comply with federal laws.
Robinhood vs Acorns: Who Are They Best For?
- If you are an active trader, Robinhood should work very well for you. If you are an experienced trader in need of low cost, self-directed stock, ETF, options, and cryptocurrency trading, try Robinhood out.
- Acorns if best for people who are not very keen on long term investing. It works best for people who want to “set it and forget it”. It’s perfect for people looking for hands off long term investing..
Robinhood vs Acorns: Conclusion
So which is the best? The true answer to that is that it actually depends on you.
- If you can trade by yourself without a lot of assistance, Robinhood is great.
- If you can’t and want to pay someone for help, Acorns is excellent. However, the cost that you will have to shell out, will come out of the gains you make with your investment. Even though $1 per month doesn’t seem a lot, it can add up over time.
Calling investment apps like Robinhood and Acorns technological marvels isn’t that much of a stratech if you think about it. Just a few decades ago, it was almost unimaginable to think that investors will be able to carry out as many trades as they want with the help of a tiny electronic device in their pockets. However, the mobile phone revolution has changed the world so much that it’s impossible to imagine a world where we would do it any other way now. The battle of Robinhood vs Acorns boils down to the investor in the end. There is no loser in this battle. Both apps have some fantastic features which can be incredibly useful for all kinds of investors. Just be mindful of your own investment and financial goals and choose the investment platform accordingly. You will most probably make the correct choice.