Introduction
When it comes to investing, there are numerous options available today. In recent years, Robinhood and Acorn have gained considerable popularity among investors due to their user-friendly interfaces and low fees. But which one is better for you? In this article, we’ll compare Robinhood and Acorn side-by-side to help you make an informed decision.
What is Robinhood?
Robinhood is a commission-free trading platform that allows users to invest in stocks, options, ETFs, and cryptocurrencies. It was founded in 2013 and has since grown to become one of the most popular investing apps in the US. The app is known for its easy-to-use interface, low fees, and seamless trading experience.
What is Acorn?
Acorn is a micro-investing app that automatically invests your spare change. It was founded in 2012 and has since then helped millions of users invest their money with ease. The app rounds up your purchases to the nearest dollar and invests the difference in a diversified portfolio of ETFs.
Features and Benefits
Robinhood Features and Benefits
Robinhood offers a wide range of features and benefits, including:
- Commission-free trading
- Access to stocks, options, ETFs, and cryptocurrencies
- Easy-to-use interface
- Low fees
- Instant deposits
- No account minimums
- Free stock for new users
Acorn Features and Benefits
Acorn offers the following features and benefits:
- Automatically invests your spare change
- Diversified portfolio of ETFs
- Easy-to-use interface
- No account minimums
- Invests in socially responsible funds
- Found Money program (cash back rewards)
- Acorn Spend (debit card with no ATM fees)
Fees
Robinhood Fees
Robinhood is known for its low fees. The platform charges no commissions or fees for trading stocks, options, ETFs, and cryptocurrencies. However, there are a few fees to keep in mind:
- Margin trading fees
- Wire transfer fees
- ACH reversal fees
- Returned check fees
Acorn Fees
Acorn charges a monthly fee based on your account balance:
- $1/month for accounts under $5,000
- 0.25%/year for accounts over $5,000
Investment Options
Robinhood Investment Options
Robinhood offers a wide range of investment options, including:
- Stocks
- Options
- ETFs
- Cryptocurrencies
Acorn Investment Options
Acorn invests your money in a diversified portfolio of ETFs based on your risk tolerance. The app also invests in socially responsible funds.
User Experience
Robinhood User Experience
Robinhood’s user interface is simple and easy to use. The app allows users to easily buy and sell stocks, options, ETFs, and cryptocurrencies. The platform also offers instant deposits and no account minimums.
Acorn User Experience
Acorn’s user interface is also user-friendly. The app automatically invests your spare change and allows you to set up recurring investments. The platform also offers a debit card with no ATM fees and cash back rewards through its Found Money program.
Security
Robinhood Security
Robinhood takes security seriously and offers the following measures:
- Two-factor authentication
- FDIC-insured cash balance
- SIPC protection up to $500,000
- Customizable account security settings
Acorn Security
Acorn also takes security seriously and offers the following measures:
- 256-bit SSL encryption
- FDIC-insured bank account
- SIPC protection up to $500,000
- Two-factor authentication
Customer Support
Robinhood Customer Support
Robinhood offers customer support through email and in-app messaging. The platform also has an extensive help center with articles and FAQs.
Acorn Customer Support
Acorn offers customer support through email and in-app messaging. The platform also has a help center with articles and FAQs.
Pros and Cons
Robinhood Pros and Cons
Pros:
- Commission-free trading
- Access to a wide range of investment options
- Easy-to-use interface
- Low fees
Cons:
- No dividend reinvestment
- No mutual funds
- No retirement accounts
- Customer support can be slow
Acorn Pros and Cons
Pros:
- Automatically invests your spare change
- Diversified portfolio of ETFs
- Easy-to-use interface
- Invests in socially responsible funds
Cons:
- Monthly fee
- No individual stock picking
- No retirement accounts
- Higher fees for larger account balances
Conclusion
Ultimately, whether Robinhood or Acorn is better for you depends on your investment goals and preferences. Robinhood is a good option for those who want to actively trade stocks, options, ETFs, and cryptocurrencies with low fees. Acorn is a good option for those who want to invest passively with a diversified portfolio of ETFs and socially responsible funds. Both platforms have their pros and cons, so it’s up to you to decide which one aligns with your investment goals.
